Sample Risk Element Performance ssues Ill. Al. Scope development The initial agreement to stay within scope was not followed by the owner whe spent $3 million more than budget without increasing the project schedule Ill. D8. Schedule The follow-on schedule compression had severe impacts on the contractor and resulted in increased labor workloads, costs, and availability on other projects ILA2. VAT The government sold the project to private investors and the sale impacted the Il. B6 Relationship with contractors financing, cash flow, and the schedule. To maintain schedule, the overnment ontractor had to use $3 million of its own fund that resulted in vat and IIL D8. Sc other tax issues IlL. C. Local design service The requirement to have a local architect and engineer approve plans and III D8. Schedule specifications was not taken into consideration and project contingency was used to pay for the added cost of additional design services and schedule delays 9 I1.C3. Religious differences The observance of holidays, daily prayer times, an k schedules(local III D8 Schedule work week was Saturday to Thursday) decreased and cultural differences required the contractor to more on-site management than originally planned Ill. A2 Technology The use of experimental technology by process techn IIL D8 Schedule plant capacity and process water system specificati Ill.E2. Facility turnover However there were unforeseen problems with the during start-up and this adversely affected both cost and schedule. The contractors site staff was required to work with the client and technology provider to resolve the problems 12 I1. C1. Traditions and business In-country building practices made it difficult to achieve plans and practices ecifications. As a result the owner required the construction manager to [IL. D12. Quality increase the number of supervisors to monitor project performance Figure 5. Selected Examples of Unforeseen Project Risk Issues Impacting Performance In addition, we developed detailed risk status reports as outputs of the full IPRA assessments for the ongoing projects used in the sample. These assessment sessions took from one to four hours each and proved that the tool was an effective mechanism to identify and evaluate a wide spectrum of risks on real international projects using either a team or an individual project participant. In each case, the IPRa gave project participants a viable platform to discuss project specific issues and helped identify critical risk issues. Members of the research team were involved directly in observing the usage of the tool on most of these projects and used the information to modify the assessment sheet slightly and to help in writing instructions on its application for field use As summarized in Figure 6, we performed a variety of activities and received input from 113 different industry experts in developing and testing the IPRA. Although the consistency test used a relatively small non-random sample of 22 projects, and is susceptible to bias, the collective results from this phase of the research show that the tool is a comprehensive and sound method to identify and assess the relative impact of the majority of risk issues encountered on international capital facilities(Cll 2004)10 Sample Project Risk Element Performance Issues 1 III.A1. Scope development process III.D8. Schedule The initial agreement to stay within scope was not followed by the owner who spent $3 million more than budget without increasing the project schedule. The follow-on schedule compression had severe impacts on the contractor and resulted in increased labor workloads, costs, and availability on other projects. 2 II.A2. VAT II.B6. Relationship with government III.D8. Schedule The government sold the project to private investors and the sale impacted the contractor’s financing, cash flow, and the schedule. To maintain schedule, the contractor had to use $3 million of its own fund that resulted in VAT and other tax issues. 5 III. C.3 Local design service III.D8. Schedule The requirement to have a local architect and engineer approve plans and specifications was not taken into consideration and project contingency was used to pay for the added cost of additional design services and schedule delays. 9 II.C3. Religious differences III.D8. Schedule The observance of holidays, daily prayer times, and work schedules (local work week was Saturday to Thursday) decreased productivity. The religious and cultural differences required the contractor to provide more on-site management than originally planned. 9 III.A2 Technology III.D8. Schedule III.E2. Facility turnover The use of experimental technology by process technology supplier increased plant capacity and process water system specifications for this remote project. However there were unforeseen problems with the technology that occurred during start-up and this adversely affected both cost and schedule. The contractor’s site staff was required to work with the client and technology provider to resolve the problems. 12 II. C1. Traditions and business practices III.D12. Quality In-country building practices made it difficult to achieve plans and specifications. As a result the owner required the construction manager to increase the number of supervisors to monitor project performance. Figure 5. Selected Examples of Unforeseen Project Risk Issues Impacting Performance In addition, we developed detailed risk status reports as outputs of the full IPRA assessments for the ongoing projects used in the sample. These assessment sessions took from one to four hours each and proved that the tool was an effective mechanism to identify and evaluate a wide spectrum of risks on real international projects using either a team or an individual project participant. In each case, the IPRA gave project participants a viable platform to discuss project specific issues and helped identify critical risk issues. Members of the research team were involved directly in observing the usage of the tool on most of these projects and used the information to modify the assessment sheet slightly and to help in writing instructions on its application for field use. As summarized in Figure 6, we performed a variety of activities and received input from 113 different industry experts in developing and testing the IPRA. Although the consistency test used a relatively small non-random sample of 22 projects, and is susceptible to bias, the collective results from this phase of the research show that the tool is a comprehensive and sound method to identify and assess the relative impact of the majority of risk issues encountered on international capital facilities (CII 2004)