Managing project risks through a teambuilding approach

The next wave of power plant construction activity should be accompanied with a new system of contract risk management which has emerged from the negative lessons of the past. As discovered through the hard knocks of the last two decades, there is no silver bullet that can solve all the construction industry's problems. Tough, one-sided contracts proved to be counterproductive. At the other extreme, open-ended, cost-plus contracting resulted in the disallowance of significant construction cost overruns. In addition, adversarial job site relationships frequently resulted in a loss to all the project participants. New efforts in the industry seek to build and to maintain more effective contractual relationships, with the emphasis on avoiding disputes and win/win thinking. These new tools for managing risks cannot work in isolation. Rather, a systematic approach is required to ensure cost effective, successful projects and to keep the parties out of litigation. Managing contract risks requires a series of activities that relies heavily on Teambuilding. Teambuilding on projects emphasizes a spirit of trust, respect and mutual goals among all the participants. The risk management system for successful projects should include tree main phases focused on Teambuilding concepts: (1) a realistic allocation of risks during contracting preparation,more » (2) techniques for mitigating conflicts and (3) collaborative methods of resolving disputes.« less