| 4.00 Construction- The cost base for this category is the construction and design portion of the contract value | ||
| 4.01 | Weather | Risk that delays occur due to adverse weather conditions. |
| 4.02 | Construction Delays | Risk that delays in the construction schedule could result in a delay to the handover of the facility. Delays will result in additional costs for the contractor. This could have detrimental effect on the liquidity of the contractor and ultimately result in bankruptcy. A delay in handover could result in additional or duplicate operating costs for the Province at the existing facility. In a traditional project, delays extend the schedule, under the DBFM the proponent will attempt to mitigate delays. |
| 4.03 | Failure to build to design | Risk that project is not constructed in accordance with the design documents. This could result in a dysfunctional building. |
| 4.04 | Acceleration to maintain schedule -Construction Impact | Risk associated with the construction contractor having to accelerate the schedule to achieve the completion date. This could result in additional costs for the construction contractor but could also result in substantial quality work due to subtrades working longer hours. |
| 4.05 | Acceleration to maintain schedule - Labour Impact | Risk associated with increased labour costs for the construction contractor having to accelerate the schedule to achieve the completion date. |
| 4.06 | Construction safety obligations | Risk that the construction contractor does not satisfy its safety obligations resulting in an increased incidence of lost work days for site labour. This could affect the overall schedule and profitability of the project for the construction contractor. |
| 4.07 | Force Majeure | Risk of delays and additional costs due to force majeure risks. Such events typically result in the construction contractor is given an extension of time to complete the project. |
| 4.08 | Adequacy of Insurance | Risk that the insurance provided by the construction contractor is not sufficient for a particular occurrence. Risk with adequacy of Bonding, especially major sub-trades. Risk of Bonding capabilities of General Contractors and sub-contractors. |
| 4.09 | Acute Market Conditions | Risk associated with construction costs being higher than estimated by the construction contractor. This results in higher costs and a reduced profit margin for the contractor. |
| 4.10 | Deficiencies as Work Progresses | Risk that defects are discovered during the construction of the project. This results in increased financial pressure on subcontractors and could result in reduced profit margins or even bankruptcy for the subcontractor. |
| 4.11 | Latent Defects | Risk that latent defects are discovered after substantial completion. |
| 4.12 | Resource Availability; equipment | Risk that equipment resources are not available when required for the project, resulting in delay and increased costs for the construction contractor. |
| 4.13 | Resource Availability; materials, cement, steel, etc. | Risk that critical materials may not be available when required, resulting in delays and additional costs. Risk associated with lead time for materials, impact of major commercial and institutional projects sourcing the same materials especially Mechanical Head end equipment and Electrical distribution equipment. |
| 4.14 | Resource Availability; Labour | Risk that labour resources are not available when required for the project, resulting in delay and increased costs for the construction contractor. |
| 4.15 | LEED / Other Performance Requirements | Risk associated with the contractor's obligation to meet the LEED requirements stated in the contract documents. |
| 4.16 | On-Site Security during Construction | Risk that on-site security is inadequate resulting in theft or damage. This will involve additional costs for the contractors and, in some cases, a delay to the schedule. |
| 4.17 | Non-Payment: Cost & Delay to Substantial Completion | Risk that the Finance Company defaults and is unwilling to meet financial obligations, resulting in delays to substantial completion. |
| 4.18 | Construction Contractor Default | Risk that the construction contractor defaults and has to be replaced. This could result in delays to the delivery of the facility and additional costs for the Owner. In DBFM the Consortium Lead and/or the Lender would take over in this situation. |
| 4.19 | Pre-tendered materials | Risk that pre tendered materials are not procured early enough and result in delays to the overall schedule. Risk associated with lead time for materials. |
| 4.11 | Latent Defects | Risk that latent defects are discovered after substantial completion. |
| 4.12 | Resource Availability; equipment | Risk that equipment resources are not available when required for the project, resulting in delay and increased costs for the construction contractor. |
| 4.13 | Resource Availability; materials, cement, steel, etc. | Risk that critical materials may not be available when required, resulting in delays and additional costs. Risk associated with lead time for materials, impact of major commercial and institutional projects sourcing the same materials especially Mechanical Head end equipment and Electrical distribution equipment. |
| 4.14 | Resource Availability; Labour | Risk that labour resources are not available when required for the project, resulting in delay and increased costs for the construction contractor. |
| 4.15 | LEED / Other Performance Requirements | Risk associated with the contractor's obligation to meet the LEED requirements stated in the contract documents. |
| 4.16 | On-Site Security during Construction | Risk that on-site security is inadequate resulting in theft or damage. This will involve additional costs for the contractors and, in some cases, a delay to the schedule. |
| 4.17 | Non-Payment: Cost & Delay to Substantial Completion | Risk that the Finance Company defaults and is unwilling to meet financial obligations, resulting in delays to substantial completion. |
| 4.18 | Construction Contractor Default | Risk that the construction contractor defaults and has to be replaced. This could result in delays to the delivery of the facility and additional costs for the Owner. In DBFM the Consortium Lead and/or the Lender would take over in this situation. |
| 4.19 | Pre-tendered materials | Risk that pre tendered materials are not procured early enough and result in delays to the overall schedule. Risk associated with lead time for materials. |
| 4.20 | Project Management Team Experience (Contractor) | Risk that the contractor's Project Management Team does not have sufficient experience to manage the construction contract. Risk that management team is not familiar with the procurement model. Risk that Project management team are unfamiliar with the particular challenges of the type of building to be constructed (for example, health care versus a detention facility). Risk of inadequate information flow within the Project Team. In traditional model, if the project is delayed due to the Contractor's inexperience, the Province will accept the delay. In DBFM, the Proponent receives a penalty from the Lender for delays and therefore has its 'A' team assigned to the project. |
| 4.21 | Project Management Team Experience (Owner/Province) | Risk that the Owner/Province's Project Management Team does not have sufficient experience to manage the construction contract. Risk that management team is not familiar with the procurement model. Risk of inadequate information flow within the Project Team. |
| 4.22 | Scope Changes by Owner - During Construction | Risk that the scope of work is changed by the Owner during the construction period. |
| 4.23 | Cash Allowance Amounts | The risk that the amount included in the contract documents for cash allowances is insufficient. Cost increases will result in a higher overall cost to the Owner. In traditional, cash allowances are included for items not fully designed in detail. In DBFM, these incidents are mitigated. |
| 4.24 | Design Co-Ordination / Completion | Risk that change orders are issued during construction due to design coordination/design completion/design gaps. Includes the risk that method of pricing of change orders is not fully prescribed in the contract resulting in change order costs exceeding estimated amounts. |
| 4.25
| Construction variations due to equipment selection
| Risk that there are construction scope changes as a result of equipment selection by the Owner. This could result in additional costs for the construction contractor. Under DBFM, although the risk has been mitigated by transferring the co-ordination to the contractor, there still remains inherent risk in Owner changes. |
| 4.26 | Impact on Schedule due to F.F.&E. | Risk that equipment selection changes and construction variations as a result, could impact the schedule. Under DBFM, although the risk has been mitigated by transferring the co-ordination to the contractor, there still remains inherent risk in Owner changes. |
| 4.27 | General Strike | Risk that a general strike could delay the overall schedule and result in additional costs. |
| 4.28 | Strike Specific to Contractor | Risk that a strike specific to the construction site could affect schedule and result in additional costs. |