Every construction project, no matter it’s size, involves risk. The fact that each project brings its own unique challenges only complicates successfully identifying and managing risks. However, it is critical to the safety and success of the project to analyze, manage, and mitigate construction risks through effective construction risk management.
Types of Construction Risks
Construction risks can be both internal or external and tend to group into categories such as environmental, financial, operational, and contractual. These risks include safety hazards, labor shortages, inferior project management, material cost increases, change order management, severe weather, equipment failure, or subcontractors issues.
Construction Risk Identification
It is best to start construction risk management as soon as possible in the project. Risks to the project need to be identified to develop a risk management plan to reduce their impact and consequences. The owner needs to rely on the expertise and experience of the project team. Together, the owner and project team are responsible for identifying as many negative scenarios as possible. This evaluation is not to eliminate all risk, as that is not possible, but to have plans in place to provide solutions to potential problems. A review of similar projects can help to identify and mitigate any risks to the current project.
Risk Mitigation Processes
Once you have identified a potential risk, it needs to be ranked according to high, medium, or low-risk probability. Consider each risk to determine what it will take to resolve them if they arise. Consequently, you can work through the list based on each risk’s priority. High-risk issues need the most urgent attention and allocation of resources to mitigate them.
Gundlach Champion has helped clients with a wide variety of commercial projects across the Upper Peninsula of Michigan and Northern Wisconsin through the initial steps of a construction project. The GCI team brings over 350 years of combined experience to every commercial construction project, from new buildings to renovations. To discuss your next project, contact us at gcfirst.com.