Activity

Description of risk

Risk borne by Contractor

Risk borne by Authority

Comments/Actions to be taken to minimise risk

E. Construction/ Refurbishment Works Risk

Inadequate interpretation of output specification

•  cost of redesign

•  delay in receiving full Unitary Charge if failure to meet programme date

•  potential cost of provision of alternative accommodation

•  potential termination if long stop date exceeded

•  Detailed Method Statements and Data Room Data information

•  Bidders should make their own assessment of the necessity for risk pricing by bidder and sub-contractors

•  Pass through of risk to Sub-Contractor

Consequential refurbishment works costs including damage or disruption to tenant decorations, fittings and fixtures e.g. laminate flooring to the extent a Contractor responsibility

•  Cost of repair or replacement

•  Decorations allowances or decorations works costs

•  Consequential refurbishment works costs to the extent a Council responsibility

•  Possible risk sharing arrangement - refurbishment works only

•  Setting out and review of risk ownership and potential liability in respect of essential internal works to tenant /  leasehold dwellings during procurement

•  Council and Bidders to agree allocation of risk on value for money basis i.e. Contractor or shared risk

•  Bidders should make their own assessment of risk pricing by bidder and sub-contractors for consequential works costs

Increased labour and materials costs during the contract

•  any costs in excess of budget borne by contractor

•  Pass through of risk to Sub-Contractor

Vehicle parking outside or in immediate vicinity of properties for loading and unloading

•  any costs in excess of budget

•  Discussions with appropriate Council Officers pre and post contract close

•  Bidders should make their own assessment of the necessity for risk pricing by bidder and sub-contractors

•  Bidders to ensure pricing of parking fees

Site/buildings conditions/interference by adjoining owners

•  any costs in excess of budget

•  Bidders should make their own assessment of the necessity for risk pricing by bidder and sub-contractors

•  Pass through of risk to Sub-Contractor

•  Part wall agreements put in place

Access to Services

•  any costs in excess of budget

•  Council warranty on forms of lease

•  Bidders should make their own assessment of the necessity for risk pricing by bidder and sub-contractors

•  Licence arrangements

•  Relief provisions

Site safety and security

•  any costs in excess of budget

•  Contractor / Sub-Contractor site security

•  Adequate preparation pre and post contract close and consultation with appropriate Council officers

•  Adequate training and site H&S

CDM (Construction Design Management) and all Health and Safety requirements

•  any costs in excess of budget

•  Comprehensive and integrated approach to Health and Safety by Bidder with Sub-Contractors pre and post contract close

•  Discussions with Council Health and Safety Officer and other appropriate officers pre and post contract close

•  Insurances

Changes in Authority works requirements

•  failure to meet programme dates without compensation

•  potentially increased capital and/or unitary charge if design requirements are more costly

•  Will be covered by the Authority Change Protocol and procedures in the Contract

Delayed hand over of accommodation to Authority

•  delay in receiving full Unitary Charge if failure to meet programme dates

•  reduced Unitary Charge for failure to meet milestone dates

•  potential costs for provision of alternative accommodation

•  potential termination if long stop date exceeded

•  failure to meet programme dates without compensation

•  Contract includes usual OGC Standard Guidance Relief Events, Force Majeure Events, Long Stop Events and also certain project specific Compensation Events

•  Agreed Robust Certification procedures that clearly address certification and "snagging" e.g. when certification is and is not appropriate

Industrial action by contractor staff

•  delay in receiving full unitary charge if failure to meet programme dates

•  reduced unitary charge for failure to meet completion date

•  General industrial action in construction industry will be a Relief Event

Construction Sub contractor default

•  delay in receiving full unitary charge if failure to meet programme date

•  costs in excess of budget if alternative supply is more costly

•  risk of not recovering full losses from the defaulting subcontractor

•  potential of costs of providing alternative accommodation

•  potential termination if long stop date exceeded

•  Bidder and Sub-Contractor partnership development work pre and during procurement process and due diligence on Sub-Contractor

•  Pass through of risk to sub-contractor until liability cap reached

Disruption to Materials supply

•  delay in receiving full Unitary Charge if failure to meet programme date

•  reduced Unitary Charge for failure to meet completion date

•  costs in excess of budget if alternative supply is more costly

•  Contract will include usual OGC General Guidance Relief Events

Exceptionally adverse weather

•  delay in receiving full Unitary Charge if failure to meet programme date

•  potential costs of providing alternative accommodation

•  potential termination if long stop date exceeded

•  Not a Relief Event.

•  Pass through to Sub-Contractor

Vandalism to/theft of contractor works / materials

•  delay in receiving full unitary charge if failure to meet programme dates

•  costs in excess of budget if alternative supply is more costly

•  potential liquidated damages for alternative accommodation

•  potential termination if long stop date exceeded

•  Contractor / Sub-Contractor site security

Industrial action by a supplier, transporter or manufacturer of materials

•  delay in receiving full unitary charge if failure to meet programme dates

•  failure to meet programme dates without compensation

•  General construction industry industrial action will be a Relief Event

Loss of dwelling due to RTB/RTM

•  should be no better no worse position

•  costs of any works not covered by proceeds of sale

•  not straight line write down of costs

•  Covered by Dwelling Numbers and Tenure Change procedure and mechanism

Discriminatory and Specific Changes in Law

•  Cost of Complying with legislation

•  Discrimination and specific changes in law are only Compensation Events for Services

General Changes in Law

•  delay in receiving revenue full Unitary Charge if failure to meet programme dates

•  increased costs

•  increased costs, as per Authority's progressive cost share

•  Risk sharing arrangement

•  Will be agreed cap on capital expenditure by reference to a progressive cost share by the Authority

Damage to Contractors works

•  increased costs/remedial works

•  potential liquidated damages for alternative accommodation

•  potential termination if long stop date exceeded

•  construction all risks insurance

•  delay start up insurance

•  potential Relief Event

Decant

•  provision of alternative accommodation in excess of that provided by Authority

•  increased costs

•  potential delays in programme

•  provision of decant accommodation and temporary loss of use of accommodation

•  Risk sharing arrangement

•  Risk share through decant provision by Council with Contractor taking excess decant risk

Compensation to tenants / leaseholders for loss of services and amenity due to works

•  increased costs

•  Home Loss and Disturbance Allowances

•  Clearly setting out risk ownership and potential liability in respect of essential internal works to tenant /  leasehold dwellings during procurement

•  Bidders should make their own assessment of risk pricing and risk allocation for bidder and sub-contractors for consequential works costs

•  Detailed preparatory design work by Contractor and Sub-Contractor on works approach by trade to minimise risk

•  Pilot property and dwelling works for review between Contractor / Sub-Contractors