University of Twente Student Theses


Enhancing the risk management process in the tender phase of infrastructure projects

Rodink, T. (2019) Enhancing the risk management process in the tender phase of infrastructure projects.

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Abstract:This research problem resulted in the following main research question of this research: What are the reasons for the unstructured, incomplete and inefficient risk management process, in the tender phase of Heijmans Infra, and how can these problems be overcome? To answer this research question a theoretical and empirical research has been executed. A literature review, based on scientific literature, is held to determine how the risk management process can be structured to be complete and reliable in construction tendering. At first the terms risk and project risk have been investigated to determine a baseline for this research. Thereafter risk categorizing and risk management are extensively investigated. This resulted in the following process steps to come to a complete and reliable risk management process: 1. Risk management planning: deciding how to approach and plan the risk management activities 2. Risk identification: determining which risks might affect the project and documenting their characteristics. 3. Qualitative risks analysis to prioritize the effects on project objectives 4. Quantitative risk analysis: measuring the probability and consequences of risks and estimating their implications for project objectives 7 5. Risk response planning: developing procedures and techniques to enhance opportunities and reduce threats to the project’s objectives. 6. Risk monitoring and control: monitoring residual risks, identifying new risks, executing risk reduction plans, and evaluating their effectiveness throughout the project lifecycle. The empirical research consisting of case studies and interviews gave an answer to the question why the current risk management process is unstructured, incomplete and inefficient. In the case studies five projects were analysed. These case studies gave more understanding in the result of the risk management process during the tender. Based on the analysis the following conclusion have been made: 1. Risks are missed during the risk identification in the tender phase. 2. The risk management analysis is not complete because control measures are missing. 3. On average only 50% percent of the risks is financially quantified in the tender phase 4. The risk budget from the tender phase coffers on average only 22% of the top-10 financial budget overruns. The tender and project managers explained the results of the case studies during interviews. This led to the following conclusions why the risk management process is unstructured, incomplete and inefficient. 1. The role of the risk manager during the tender phase is not explicit enough 2. The tender team is not the same from the start of the tender until the end, which makes it difficult to instruct the tender team. 3. The format of the risk register used in the tender phase is not suited to quantify the risk effectively and not suited to register the control measures. 4. The main reason for de incompleteness of the risk register is related to the period of economic crisis, in which Heijmans was desperate for work. As a result, risks were deleted from the risk register, which resulted in a lower risk budget. Which resulted in the construction phase that when risks occurred there was no budget for the corrective control measures which resulted in the cost overruns. Based on the literature review and the conclusions from the case studies, a process plan for risk management in construction tendering is developed to make the risk management process in the tender phase better structured, complete and reliable. This process plan is validated during a validation session with the risk managers from Heijmans Infra. It is the product resulting form this Master Thesis.
Item Type:Essay (Master)
Faculty:ET: Engineering Technology
Subject:56 civil engineering
Programme:Construction Management and Engineering MSc (60337)
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