Contract and Project Risk Management and Compliance Course

These courses can be delivered either as open public training courses or in-house and typically involve additional study, assignments and assessments. Not only do these training courses prepare you for the qualification but they also focus on providing practical skills and techniques which are directly transferred to the workplace.

One of the critical outcomes of contract and project management is to ensure that risks to owners and contractor 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

The following are the highlights of the course:

• Knowledge to move contracts and project management from the tactical/reactive to the more important proactive/strategic focus
• Critical understandings of the risk mitigation process
• How to examine both the threats and opportunities facing contracts and projects from both a top-down and bottom-up perspective using a proven risk management process
• Skills in allocating contract and procurement risk
• Ability to identify the warning signs of cost overruns, schedule delays, and poor quality, as early as possible in the project to minimize or mitigate the impact

Objectives

The primary objectives of the course are to help delegates to:

• Apply useful techniques to identify, analyse, mitigate and monitor 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

Training Methodology

The training methodology is interactive with group exercises and is suitable for all employees involved in functions management. The pace and level of the training workshop is customized to the understanding of the delegates. Ongoing back-up and support are available after the training on request to the supplier, and the training course is also available for in-house presentation as well as for “Competency Transfer”.

Participants will increase competencies through a variety of instructional methods including lecture, exercises, reviewing published articles, checklists, videos, and group discussions. A comprehensive course manual enabling practical application and reinforcement is provided.

Delegates are encouraged to bring real problem examples with them, for discussion on a confidential basis, and to share their experience of issues. Time will be allowed for general discussions, and for one-to-one discussion with the trainer.

The organization will benefit by:

• Expanding the expertise of personnel involved in project and contract development and management will allow project, contract, and general management teams to be more effective
• The total cost of ownership will be understood and reduced by properly identifying and managing the risks during the project life cycle
• Clear allocation of risk will reduce the possibility of contractor disputes, and any that do arise should be settled more quickly, with less cost, delay and disruption
• Reducing project failure, poor quality, costly changes, and cost overruns resulting from poor understanding and management of risk
• Implementing better risk management through the understanding of the relationship between scope, cost, and time which improves the chance of project success
• Developing an appreciation of the true effect of contractual indemnities which will enable better decision-making as to contract structures and ensure that risk is passed to others properly and in a cost-effective manner

Attendees will gain by participation in this course as a result of:

• Increased understanding of risk and opportunities through the development of risk identification and assessment skills
• Able to control multiple project risks using concise strategies
• Make risk and opportunity integral components of your next project plan
• Better ability to allocate risk, and to select the appropriate project processes and contractual regime to achieve the organizations goals
• Improve the ability to reduce the negative impact of poorly managed risk on a project or a company
• Identify threats and opportunities and weigh their relative value in your project

Who Should Attend?

Attendees will gain by participation in this course as a result of:

• Increased understanding of risk and opportunities through the development of risk identification and assessment skills
• Able to control multiple project risks using concise strategies
• Make risk and opportunity integral components of your next project plan
• Better ability to allocate risk, and to select the appropriate project processes and contractual regime to achieve the organizations goals
• Improve the ability to reduce the negative impact of poorly managed risk on a project or a company
• Identify threats and opportunities and weigh their relative value in your project

Course Outline

Day (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

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

Day (2)

Risk Related Terms and Conditions

• External events
• Force majeure
• Strikes and other labour disputes
• Risk and Title
• Use of ICC Inco terms
• Assignment and Novation
• Other clauses that need to flow down to sub-contractors
• Risks associated with Sub-Contractors

 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

Day (3)

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 and question and answer session

Risk Management Framework and Planning Introduction

• Key definitions
• Project Management Body of Knowledge (PMBOK® Guide) - six risk management processes
• Project risk management goal
• Purpose of risk management
• Benefits of risk management
• Responsibilities in risk management
• Integrating risk management into the project management process
• Components of risk
• Types of risk  

Six steps of risk management 

• Plan the approach to risk management
• Risk Identification
• Risk Assessment & Quantification
• Risk Response Plan Development
• Risk management plan execution
• Evaluating risk response results

Risk Planning (Step 1)

• Plan the approach to risk management
• Planning inputs, tools and outputs 

Day (4)

Risk Identification (Step 2)

• Identification inputs and tools
• Identification guidelines
• Risk identification techniques
• Risk categories

Risk identification outputs

• Review of Cost and Schedule Estimating in Relation to Risk
• Cost estimating classes and types
• Cost estimating methods
• Accuracy, allowances, contingency and management reserve
• Work Breakdown Structures (WBS)
• Schedule diagramming - critical path method (CPM)
• Resource management
• Earned value method (EVM)
• Baselining

Day (5)

Risk Assessment and Quantification (Step 3)

• Risk analysis inputs
• Risk analysis guidelines
• Probability analysis
• Impact analysis
• Risk analysis approaches - qualitative and quantitative
• Risk analysis tools and techniques
• Statistical sums in risk analysis
• Program Evaluation and Revue Technique (PERT)
• Monte Carlo simulation
• Decision trees
• Project risk rating and prioritizing
• Risk analysis outputs

Risk Response Plan Development (Step 4)

• Risk response development inputs, tools and techniques
• Risk response strategy guidelines
• Response strategies for threats
• Response planning and network diagramming
• Response analysis
• Alternative responses
• Reserves - contingency and management
• Response planning outputs
• Risk Response Control

Risk management plan execution (Step 5)

• Risk response control tools
• Risk response control guidelines
• Risk strategy execution

Evaluating risk response results (Step 6)

• Risk documentation
• PMI, PMBOK are registered marks of project Management institute