Contract & Project Risk Management & Compliance
Overview:
Introduction:
One of the critical outcomes of contract and project management is to ensure that risks to owners and contractors are identified and controlled in a proactive way so that both parties are satisfied with the project outcome. While world-class project and contract management cannot, of itself, make risk “go away”, it can, and should, identify the risks and opportunities, determine who is responsible for managing each individual risk, and for the consequences should the risk occur.
Course Objectives:
At the end of this course the participants will be able to:
- Apply useful techniques in identifying, analyzing, mitigating, and monitoring risks in the project life cycle
- Use a practical, six-step process to manage project risk
- Review the impacts of different approaches to risk allocation
- Explore different contract types to transfer risks
- Consider the contractual techniques to ensure effective risk allocation
- Learn how to create an effective risk monitoring plan and risk management strategies
Targeted Audience:
- Contracts, Tendering, Purchasing, Procurement, and Project Personnel
- Contract Administration, Engineering, Operational, and Maintenance Personnel
- Risk, Claims, Financial, and Audit Personnel
- Project Management Professionals
- And all others who are involved in the planning, evaluation, preparation and management of tenders, specifications, awards, and contracts that cover the acquisition of materials, equipment, and services and who are in organizations whose leadership want high levels of competency in those involved in these activities
Course Outlines:
Unit 1: Types and Management of Risk:
- The Need for Contractual Relationships
- Defining Risk
- Categories of R for Both Sides of a Contract
- Risk Assessment Process
- Managing Risk
- Qualifying Suppliers
- Defining Internal Control
- Proportionality of Control
Unit 2: Minimizing and Transferring Risk:
- Transferring Risk through Contract Types
- Firm Fixed Price or Lump Sum Contracts
- Cost Reimbursable Contracts
- Incentive Contracts
- Award-Fee Pricing Arrangements
- Indemnities
- Cross Indemnities
- Insurance
Unit 3: Risk-Related Terms & Conditions:
- External Events
- Force Majeure
- Strikes and Other Labour Disputes
- Risk and Title
- Use of ICC Incoterms
- Assignment and Novation
- Other Clauses that Need to Flow Down to Sub-contractors
- Risks Associated with Sub-Contractors
Unit 4: Dealing with Financial Risks:
- Controlling Risk Associated with Payments
- Currency Risk
- Economic Risk
- Fraud and Corruption
- Limiting or Excluding Liability
- Distinctions between Liability in Contract, and The General Law
- “Gross Negligence”
- A Review of Some Sample Clauses from Standard Contracts, and Other Real Documents
Unit 5: Remedies When Bad Stuff Happens:
- Mistakes and Misrepresentations
- Impracticability of Performance
- Remedies Generally
- Types of Remedies
- Liquated Damages
- Warranties
- Cover
- Discussion of Real Examples (delegates are encouraged to bring real or made up examples for discussion)
- Review of Course, Question and Answer Session