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talking point

Risk remains a game, but it is one that need not have opposing sides, says Alan Cardinal.

When I was much younger, Risk was a board game made by Waddingtons.Its sole aim was for players to invade and take over as many countries as they could.

Time moves on and, although over the years we have seen the game's principles being enacted in several areas of the world, 'Risk'is currently enjoying everyday use within the construction industry, and the foundations sector in particular.

Risk has become a subject in itself, driven primarily by design involvement and procurement methods, with 'risk registers'being an accepted part of the tender and negotiation process.Auditors are increasingly interested in how well companies identify, assess and handle risk.So, how have things changed from 20 years ago?

One of the main changes is that in the past clients would employ an engineer to design a project, including the foundations.

Nowadays, foundation design is invariably being placed in the contractor's package, and with this goes associated risks.

This move can, on occasions, be compounded by a lack of detail within the enquiry documents.Previously, bonafide changes would have been taken on board by clients and covered by the issue of variations; now this is not always the case.

Introduction of the partnering ethic was heralded as one way to identify and treat risk differently.But it is disappointing to see that the initial enthusiasm to promote partnering has waned for nearly all but the very large infrastructure type projects, and we are seeing an increase in 'Lump sum all risk'type contracts, where perhaps neither the client or contractor are totally happy with the final contractual arrangement.

Often the client feels that there may be too much risk money in the price and, if the risk does not materialise, these monies will be converted directly to profit for no apparent effort.Conversely, the contractor feels pressurised that he is taking on board too much risk for too little consideration, purely to secure the works.

The reality is that the construction cost component of the job is virtually identical for all bidders.It is the subsequent addition of risk monies that converts the process into a poker game, where he who dares wins - or loses, as the case may be.

In situations where risk is to be borne by the contractor I would liken the tendering and procurement process to watching a group of six-year-olds playing football, with the ball as risk.

The ball goes round and round, backwards and forwards, and at the moment of contact the player will attempt to kick it away as far as possible, hoping it will not come back.Better still, the player hopes that someone else will collect it, run with it, and eventually score a goal, with only time telling if that goal was for the right side.

Whatever the final outcome, it is certain that, during the game, whenever the ball goes off the field, it always comes back on again, until eventually someone puts it in the net.Perhaps the brave among us simply take the bold decision to go for goal at an early stage.And we are all too aware of where this can lead!

I believe we have to applaud and encourage existing and future clients who are willing to get away from the adversarial ways of playing the game and who have a will to own the ball, with agreed sharing of it in an atmosphere of total trust.However, we must avoid the pitfall of everybody energetically setting off on what they all think to be the right route without having first done sufficient groundwork.

That route will only twist and turn a number of times and result in everybody arriving late at the wrong place.Feeling exposed, and having by this time expended considerable resource - possibly baring underwear if not their souls - all the players are then very loath to lose their investment to date, and an uneasy compromise results.

What is needed now is for people to share knowledge so that we are able to reap the benefits of experience gained from successful partnering projects.This will ensure that the required contract mechanisms for future projects can be carefully thought through with the selected contractor.

When the project starts, all parties should then be absolutely clear and comfortable with the apportionment of risk and how it is to be dealt with.And, most importantly, both client and contractor should feel that a win-win situation will result.

If we can achieve this then we should want to risk it again, shouldn't we?

Alan Cardinal is chief estimator for geotechnical contractor Bachy Soletanche.

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