The effectiveness of existing strategies and controls are taken into account when assessing the magnitude of the consequences of an event, should it occur, and the likelihood of the event and its associated consequences occurring. An event may have multiple consequences and affect different objectives.
Consequences and likelihood are combined to quantify the risk. These two factors can be estimated using statistical analysis and calculations. In the case of alliances, there will typically be no reliable or relevant past data available. Therefore the most relevant information sources and techniques should be used regarding alliances. These may include:
• the past claims record of the alliance members;
• practice and relevant experience in wording in design and construct arrangements, as well as alliances;
• relevant published literature and market research on alliance members;
• the results of consultation with alliance members;
• economic, engineering or other models; and
• specialist and expert judgements.