Globally, every project experiences certain amount of risks.

The client, prime and sub-

contractors usually experiences challenge that make them vulnerable to other risks. Risk is the

major difficulty that requires proper assessment with set strategies. From financial concepts for

owners to extensive performance review, prime contractors have variety of simple options to

address such probable risks in project management. The paper will focus on the risks between

the owner, ABC construction and the sub-contractors and probable mitigation measures.

Firstly, the risk that concerns subcontractors in this project is operation risk (Dandage,

Rahul V., et al, 156). There is a higher possibility for failure in the subcontractor’s core

operations and extension of review of loan terms. Most of the subcontractors on the low bid basis

might be forced to delay the production line to fulfill the lender requirement. The 30 days’

review of each payment request is a creeping factor that disrupts the chain of supply system.

Second is Scope creep. there is a great possibility for uncontrolled development of the project

scope (Farok and Jose, 15). The risk might occur as a result of lapses in the main scope of the

project. There is a possibility of circumventing the contract terms to manage additional

requirements. I might incorporate undocumented assumptions and expectations as asserted by the

owner. For example, the exclusion of construction cost such as the hard rocks, building permits,

architecture and sales tax. Lastly is Project planning risks; Subcontractors are more likely to

experience scope creep. In an event the owner fails to include the ABC construction in the low

bid as part of the contract or accept the requirements as it is, some subcontractors can skip

requirements validation. The project manager might be forced to halt other activities of the scope

management and deliver on the best effort basis.

If the owner refuses to include ABC Construction bid as a contract document, there is

likely to be dispute and legal risks. The dispute will emanate with ABC construction,
subcontractors and the owner of the company. The disagreement will be as a result of failure to

meet counterparty contractual obligation. For example, exclusion of activities such as hard dig

and sales tax in the initial contract price might result to scope creep and quality risk.

In essence of solving the hard dig exclusion with the owner, I intend to Introduce new

contractual terms through negotiations (Bi, Hua-ling, et al, 29) The contract should contain

additional cost for hard dig and architecture. The uncertain contractual language should be

addressed to prevent claims against ABC construction by the subcontractor as a result of contract

meagre provision. To mitigate disputes and legal risks, the newly flanged contract should

propose ownership responsibilities and obligations towards the owner for the addition work, as it

is assumed by the ABC construction. Besides, the contract should introduce alternative

conditions that obliges subcontractors to indemnify ABC construction and the owner for failures

and quality performance to the same degree as the prime contractor is responsible towards them.

The terms are critical for the hard dig process as it enhances reciprocity and helps to keep the

owner, ABC construction and the subcontractors accountable. Additionally, I can include dispute

resolution and contingency clauses that addresses management issues with subcontractors to

make the new contract secure and strong.

Also, I can Introduce insurance requirements to prevent unforeseen circumstances. The hard dig

exclusion might result to derail or delay the project for an indefinite period of time. As the

project manager, there is need to avoid excessive costs and enhance accountability against

insurance claims. The insurance requirements are critical in project management as it helps to

avoid delay and defaults.

Conclusion

The path towards implementation of this project is long and has full of risk. It is paramount to

identify the most challenging aspect and apply simple and streamline risk management. Basic

mitigation measures not only help to avoid crisis situations but also preventing secondary risks to

occur.

Work cited

Bi, Hua-ling, et al. "Schedule risk management of it outsourcing project using

negotiation mechanism." Proceedings of the 23rd International Conference on Industrial

Engineering and Engineering Management 2016. Atlantis Press, Paris, 2017.

Dandage, Rahul V., et al. "Analysis of interactions among barriers in project risk

management." Journal of Industrial Engineering International 14.1 (2018): 153-169.

Farok, G. M. G., and Jose A. Garcia. "Scope creep monitors level of satisfaction, cost of

business and slippery slope relationships among stakeholders, project manager, sponsor

and PMO to execute project completion report." Journal of International Association of

Advanced Technology and Science (JIAATS) 2.2 (2016): 15-23.