Course details

Overview ?

Introduction

One of the major functions of contracting is to ensure that risks to owners and contractor are identified and managed in a way that both parties are satisfied with the project outcome. While a contract cannot, of itself, make risk “go away”, it can, and should, identify the risks, determine who is responsible for managing each individual risk, and for the consequences should the risk occur. We has developed this interesting and fast paced seminar to provide participants with:

Critical understandings of the risk mitigation process.
Knowledge to move contracts from the tactical to a more important strategic focus.
Ability to identify risks that can arise.
Skills in allocating contract and procurement risk.
Examples of Contract Terms and Conditions which allocate risk.

Objectives

The Primary Objectives of the Seminar are to help Delegates to:

Provide an understanding of how risk arises·
Compare different methods of identifying and assessing 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·
Review risk management techniques during the life of a contract·

Training Methodology

Participants will increase competencies through a variety of instructional methods including lecture by an experienced practitioner and consultant, cases/exercises, reviewing published articles, checklists, and group discussions covering current practices and their relationship to the implementation of new concepts.
Delegates are encouraged to bring real problem examples with them, for discussion on a confidential basis, and to share their experience of particular issues in their company or industry. Time will be allowed for general discussions, and for one-to-one discussion with the trainer.

Organisational Impact

The organisation will benefit by:

Expanding the expertise of personnel involved in contract development and management will allow project 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.
Clear allocation of risk will reduce the possibility of disputes, and any that do arise should be settled more quickly, with less cost, delay and disruption.
Reducing project failure, costly changes, and cost overruns resulting from poor understanding and management of risk.
Implementing better risk management 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.

Personal Impact

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

Increased understanding of risk
Better ability to allocate risk, and to select the appropriate contractual regime to achieve your aim
Develop risk identification and assessment skills
Heighten understanding of the alternative methods of allocating risk
Improve understanding of different approaches to managing risk during a contract
Improve the ability to reduce the negative impact of poorly-managed risk on a project or a company

Who Should Attend?

Contracts, Tendering, Purchasing, Procurement, and Project personnel
Contract Administration, Engineering, Operational, and Maintenance personnel
Risk, Claims, Financial, and Audit personnel
And all others who are involved in the planning, evaluation, preparation and management of tenders, specifications, awards, and contracts that cover the acquisition of materials, equipment, and services and who are in organizations whose leadership want high levels of competency in those involved in these activities

SEMINAR 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

DAY 2 : 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 3 : Risk Related Terms & Conditions

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

DAY 4 : 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 5 : 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

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Day 2

Day 3

Day 4

Day 5

Training Methodology

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