Every construction project comes with some risk. Proper identification and management of risk require careful and skillful planning. It also requires the ability to decide quickly. That’s because if a risk becomes a reality, it can affect the successful completion of a project negatively. Here are the most common construction project risk factors that both contractors and project owners should know.
One of the major risks that you’re likely to face when pursuing a construction project is a labor shortage. You risk lacking enough construction workers and this can hinder you from achieving productivity goals. Without adequate manpower, your construction project will experience delays. What’s more, you risk lacking skilled workers with the expertise and experience required to complete certain tasks at a construction site.
Safety and Health Hazards
One of the major responsibilities of a project owner and contractor is to keep everybody at the construction site safe. But, rapid changes in the conditions of a construction site can cause unexpected hazards. A major accident at a construction site can cause serious injuries or even fatalities to the workers. A serious accident can lead to a delay or even stopping the work.
Default by Subcontractors
General contractors face the risk of dealing with subcontractors that do not perform. Defaulting subcontractors can wreck a construction project. They can hinder the ability of a contractor to complete the project on schedule. What’s more, they can increase the estimated costs of the project because some defaults can necessitate reworks. Therefore, be careful when hiring subcontractors and monitor their work proactively.
Change orders form part of any construction project. And, these are a common risk factor if not managed properly. A change order is an amendment or addendum to the original scope or contract for the project. This can increase costs and cause delays in achieving the contract milestones. It can also interrupt the workflow or timely completion of the project.
Other construction project risk factors include design errors, incomplete drawings, unknown conditions at the site, improperly defined scope, unexpected material costs increases, and poor management of the project. Identify these risk factors and then come up with better ways of managing them to ensure the successful and smooth completion of your project.