Risk management of design and build warehouse projects for domestic and commercial clients
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ID: 285129
2023
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Abstract
A prevalent construction procurement method in the Philippines is Design and Build (D&B). In D&B, a single contractor assumes the risk and responsibility of designing and building a project. This procurement strategy is favored by some owners over the traditional Design-Bid-Build (DBB) due to its advantage of being able to overlap the design and build timelines and due to its convenience in coordination with only a single entity. However, there are several risks to D&B. These may include changes in quantity or scope of work, design changes, delay in design, difficulties or delays in availability of materials, equipment, and labor, inadequate quality of work and need for correction, and inadequate specifications.
The type of client for the D&B project may also affect the level of these risks due to their characteristic differences. Domestic clients are those individuals carrying out a construction project for their home that is not part of any business, while commercial clients are those individuals or organizations carrying out a construction as part of a business. Domestic clients tend to have less safeguards against client-initiated changes as compared to D&B commercial clients because of easier access to their own funds. They also tend to be less aware of the risks involved in D&B. Moreover, D&B projects owned by domestic clients usually cost less than Php 50M, while those owned by commercial clients are typically larger in scale, costing more than this amount.
The study aimed to quantify the levels of risk associated with warehouse D&B projects considering the application of HH Consulting’s standard project workflow. Furthermore, the study aimed to differentiate the risk scores, or the levels of risk quantified, of the two types of D&B clients and propose risk responses covered by the tendering stage. It was found that the proposed risk controls had a significant effect only to those D&B projects owned by domestic clients while its effect to the risk scores of commercial clients were not significant.
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| Authors | Facun, Shiela Marie M. |
| Journal | Malay Journal |
| Year | 2023 |
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