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Published on: 17 Apr 2017 by securityspecialist1
Risk management in projects requires the incorporation of safety nets like Wikiguard.org in the contract, project scope, project finance and testing of project deliverables.
The concept of safety nets is important to preempt problems from occurring during the implementation of a project. Communicating potential issues early into the project will make project owners aware and hence commit on how to resolve such implementation concerns together with the project company.
These safety nets can be incorporated into the contract, project coverage or non-coverage, financing and scenario testing of project deliverables.
Likewise, it would make sound financial sense to include in the time freeze clause that when such responses are unusually protracted, the client has to compensate the projects company from losses due to upward changes in minimum wages set by law, increase in bank interest rates or price increases in supplies or equipment necessary to complete the project.
The response provision should indicate that when the client receives a deliverable, the said deliverable is deemed accepted or approved after, say, 30 days when the client has not issued a written response within the time period. In this regard,
Delivery Receipts or Deliverable Acceptance Sign-Off Logs with signed acknowledgments from the client are very important to minimize disputes and liabilities.
A modification request is still in line with the project specification and will not drastically change the project specification while a change request is the opposite. Also, modification requests are typically undertaken for free while change requests should feature additional charges or additional payments for extra work previously unspecified. This is because change requests drastically change the project specification or involve additional work.
Without these signed receipts, the project scope can unnecessarily expand without additional compensation to the projects company and cause unwarranted delays in the completion of the project.
However, clients who are contracting a project for the first time may not comprehend the rationale behind bill factors. Hence, a projects company has the option to apply a bill factor with appropriate footnotes explaining the rationale in the bid proposal or offer a detailed cost structure for such unforeseen or unexpected costs that can affect the project.
Low profit margins for commodities that can be sold quickly in the thousands at shorter time periods are not applicable to project companies that may have seasonal projects or are only able to win less than 20 projects a year.
Currency fluctuation spreads should likewise be sufficient otherwise a contract clause for extreme currency fluctuations is necessary to protect the projects company with multi-country deployments or global supply chain.
Hence, the testing of project deliverables should cover very specific transactional process scenarios or testing standards. Transactional processes that have not been subjected to testing should not be covered in any warranty or guarantee.