Vendors face difficulties executing construction projects, leading to increased risk, additional liabilities, and problems with third parties, according to risk experts.
Warren Black, Engineer and Risk Professional at risk firm Complexus, says vendors face challenges in the current market.
“Many vendors are forced to go into joint ventures because they can’t afford to execute the contract by themselves. This, in turn, causes liability issues, 3rd party issues, clashes in culture and operating method, and so on.”
Difficulties balancing demands and deliverability can make create “financing tensions”, Black says. “Asset owners want high quality and low cost,” he added.
He says project managers find it challenging to juggle demands for quick delivery, high quality and low cost. Typically, project managers can only really deliver on a few of those points at once, he adds.
Black says: “All asset owners want their assets delivered as quickly as possible, to the highest quality and the lowest cost. Project managers can, in most cases, only deliver on one of these three expectations.
“So asset owners either have to choose which two expectations they are prepared to compromise on or spend their time passing unrealistic expectations onto their Project Managers…. guess which is more prevalent in the construction industry,” Black added.