Risk Management In Construction: Analysis Of Fagg Mitre 10 Project Essay.

Question:

Discuss about the Legal Risk Management for Fagg Mitre.

The construction industry is one of the key complex industries in the world and identified industry, which involves a lot of risks. There is no single project in the construction industry which is considered to be risk free and Fagg Mitre 10 project is not an exception. Therefore, the risk management is and was a key factor which has to be involved in the construction of this project. In addition, the different risks in this industry are able to involve different personnel who are responsible in mitigating them and ensuring that the work progress moves as it was planned (Osipova & Apleberger, 2007). The demand of the risk management from the different stakeholders has been able to increase over the past decade due to the increase of the risks involved. Moreover, the different risks are able to originate from the initial stages such as the pre-construction phase to the construction phase. The uncertainty of projects is one of the key area which is able to increase the risks in the construction industry during the different phases. According to Smith, Merna and Jobling (2006), the level of the risks in the construction industry is able to reach the highest level during the construction phase. There are several risks which are able to occur during the construction and pre-construction phases of the construction industry. This paper will analyze the different risks which are able to analyze some of these key risks and the people who are responsible to eliminating them. In addition, the paper will analyze the different identify the dispute resolution process which can be used to solve these risks between the key stakeholders who are Fagg Bros Pty Ltd, Lyon construction and P. J. O'Reilly & Associate.

During the pre-construction phase, there are several construction risks which are able to emerge. One of the key risk, which may emerge in this phase, is the lack of communication leading to withholding of information between the different stakeholders (Zou, & Sunindijo, 2015). Proper communication between Fagg Bros Pty Ltd, who us the client, P. J. O'Reilly & Associate, who is the architect and Lyon construction who is the contractor is needed. This risk may lead to lack of cooperation during the pre-construction processes and therefore hinder the progress of the projects. Moreover, the key information may mean that other stakeholders will be unable to handle their responsibilities to ensure continued progress of the projects (Edwards, 2009). The communication at this stage is a key factor to ensure that different issues of the construction project are resolved (Bunni, 2011). In order to control the risk, Fagg Bros Pty Ltd has to play a key role of ensuring different parties are able to enhance the communication and passing the key information. Fagg Bros Pty Ltd  has the main powers at this stage to choose the different stakeholders who will be able to coordinate and ensure that these issues do not arise due to miscommunication. In addition, Fagg Bros Pty Ltd is able to ensure that none of the parties is able to withhold which is key for the construction industry (Canada Mortgage And Housing Corporation, & Marsh (FIRM), 2005). In terms of solving the risk, Fagg Bros Pty Ltd is able to have meeting with the concerned parties and therefore instruct them to release the information to other parties. Fagg Bros Pty Ltd can call all the parties and offer the instructions on resolving the issue. Fagg Bros Pty Ltd  will ensure that he or she is able to instruct the parties on the mode of communication and what to pass to other stakeholders.

Lack of communication

Another key risk, which can be experienced at this stage, is the design changes by the Fagg Bros Pty Ltd or P. J. O'Reilly & Associate. The changes in the design may cause some key difficulties for other parties and lead to step back of the planning of the construction phase (Bunni, 2011). The changes risk is able to affect the progress of other parties in the construction industry and this is able to enhance the lack of continued working. The change risk is real when Fagg Bros Pty Ltd needs to have different design aspects and this is able to cause the risk of withholding the construction and design. Moreover, Fagg Bros Pty Ltd  and P. J. O'Reilly & Associate, can solve this risk. In cooperation of the design parameters which Fagg Bros Pty Ltd need will be able to resolve the risk and enhance the construction (Engineers, 2006). Quick in cooperation of these changes will be the key way to ensure that the different aspects are able to change and enhance the continued construction process. The key process, which may take place in order to risk this risk, may start with Fagg Bros Pty Ltd. Fagg Bros Pty Ltd may instruct P. J. O'Reilly & Associate to in cooperate the design changes in his designs (Zou, & Sunindijo, 2015). Then P. J. O'Reilly & Associate will be able to forward the changes to the engineers for him to in cooperate the same changes in his designs. The engineer and P. J. O'Reilly & Associate will be able to resolve the design parameters and then update the other stakeholders concerning the issue.

Another key risk in the pre-construction phase is the existence of the variations by the Fagg Bros Pty Ltd. Fagg Bros Pty can be able to make different changes concerning the different aspects of the construction. From the size of the construction to the design aspects, the client has the power to be able to change them (Construction Industry Publications, Ltd, & Construction Confederation, 1999). The changes are able to affect the plans which the other stakeholders have concerning the progress of the construction. The variation of the size for instance, may be able to change the material requirement and the tendering process requirements. This means that the choice of the relevant contractor, which is able to lie on this phase, will be affected. In addition, the client may be able to change other factors such as the financial aspects, the commencing dates among other things. These will be able to affect the execution of the pre-construction process of the construction (Ludhra, 2015). Fagg Bros Pty Ltd and the procurement departments can be able to resolve the risks concerning these changes. The major process, which can be followed, is where Fagg Bros Pty can forward the change to the respective concerned department and ensure that the change is updated. For instance, the change of the date may be forwarded to the procurement to enhance the changes in the selection of the qualified contractor. This will ensure that the other stakeholders will be able to get the required update after the respective departments are able to resolve the issues.

Design changes

In addition, the construction phase is couple with different construction risks. One of the key risk, which is found on this phase, is the changes in the economic factors. This is able to change the cost factors of the construction project meaning that the increase of the funding is needed (Smith, Merna & Jobling, 2014). Due to these changes the Fagg's Mitre 10 redevelopment is estimated to run for a cost if between $5 million and $10 million. As the construction continues, the change in economic factor may lead to increased cost of the project. The changes in the economic factors will be able to change the cost of the different factors such as materials. The economic parameters are key essential factors, which are able to enhance the continued construction phase of the projects. The major responsible personnel to resolve this risk is the Lyon construction who is charged with the execution of the construction works (National Research Council (U.S.), 2009). Lyon construction is required to have included the existence of such risks in his initial quotation of the price of the project. In order to resolve this risk, Lyon construction will be able to contact the main departments with his operation s and ensure that they are able to finance the additional cost on the project (Manseau & Shields, 2005). Moreover, if the cost was not provided in the initial bid, Lyon construction will be able to contact Fagg Bros Pty Ltd concerning the increase. In the process, Lyon construction will be able to ask for the additional financing from the client in order to cover such increases. 

Another key risk, which can be found on the construction phase, is the delay in the design approval for the different construction drawings (Hughes & Ferrett, 2016). The design and approval; of construction documents is a key process which the construction phase is able to depend on to enhance the success of the projects. This means that Lyon construction will be unable to continue with the construction phase without these key documents, which they are needed to enhance this phase of project. The delay in the design is a key element, which will be able to affect the construction phase. The approval of the key document is need to be timely to ensure that Lyon construction is able to commence the construction phase (Burtonshaw-Gunn, 2017). In addition, some of the documents can be signed and approved while the construction phase is in process. Failure to have these approval will mean that the contractors works will be hindered. The architect P. J. O'Reilly & Associate and the engineers are the major responsible stakeholders who have to make sure that the delivered construction documents are approved for the construction. The major channel which P. J. O'Reilly & Associate and engineers are able to use will include that P. J. O'Reilly & Associate and the engineers will conduct the approving authorities (Wu, 2011). After that, they will present the documents to Lyon construction and ensure that the contractors have the key approved documents, which need to be used in the construction phase.

Existence of variations

Another key risk, which is found on this phase of construction, is errors, omissions and discrepancies in the design. The design process is the key process, which is able to enhance the successful completion of the construction phase. The errors in the design means that the construction will lead to the wrong completion of the project will may lead to changes in future. This will be able to lead to additional cost after the construction due to the changes which will be required. Any discrepancies in the design are able to affect the continuous construction phase of the industry (Öztas And Ökmen, 2005). In addition, any key omission on the design is able to mean that the construction process will be stalled. This means that the project cannot be completed with the proper design and Lyon construction work will be hindered highly (Lingard & Rowlinson, 2005). The best personnel to resolve the risks, which happen in the design, are the engineers and P. J. O'Reilly & Associate. These key personnel will be able to hold meetings together and resolve any design risks which might happened. In addition, they will be able to involve Fagg Bros Pty Ltd to ensure that he or she is aware of the construction status. After that, P. J. O'Reilly & Associate and engineer will be able to call Lyon construction and update him about the changes which has been done to resolve these risks.

In conclusion, the risks in the pre-construction and construction phases of a project are able to stall the successful completion of construction projects. These key risks have different people who are responsible for their resolving. The client, architects, engineer and the contractors are some of the key personnel who are responsible for resolving these risks. The key elements and risks resolving is able to enhance the continuation of the construction and completion of the construction projects.

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