Risk assessment

Chapter 1

Purpose and importance of risk assessment

 Risks affect value for money

 Risks affect Smooth running of procurement process
 To increase efficiency
 Transparency and fairness
 Quality
 Prevents delays
 Prevents disputes
 corruption

Chapter 2

Risk management process

 Risk assessment
 Identify risk mitigation measures
 Assign ownership of measures
 Monitor progress
 Update risk assessment
 Risk treatment (Avoid Reduce Transfer Accept)----not the scope of book

Chapter 3

Risk assessment

 What is risk assessment

 Common Types of Procurement Risks and their consequences
Chapter 4

Risks in need identification and planning the purchase

1. Understatement of the need

2. Overstatement of the need
3. Misinterpretation of user needs
4. Insufficient funding
5. Impractical timeframe
6. Probity issues

Chapter 5

Risks in the specifications

1. Narrow definition or commercial specification (eg. use of brand name)

2. Definition of inappropriate product or service
3. Biased specification
4. Inadequate statement of requirements

Chapter 6

Selecting the purchasing method

1. Failure to identify potential sources

2. Selecting inappropriate method
Chapter 7

Risks in purchasing documentation

1. Terms and conditions unacceptable to tenderers

2. Providing inadequate information

Chapter 8

Inviting, clarifying and closing offers

1. Failure to adequately address enquiries from tenderers

2. Actual or perceived favoritism in providing information
3. Actual or perceived breach of confidentiality
4. Insufficient number of responses
5. No response from known quality suppliers

Chapter 9

Risks in evaluating offers

1. Failure to follow effective evaluation procedures

2. Breaches of security
3. Offers fail to meet needs
4. Failure to identify a clear winner
5. Decision made on subjective grounds
Chapter 10

Risks in contract management

1. Variations in price and foreign exchange

2. Unwillingness of the supplier to accept the contract
3. Failure of either party to fulfil the conditions of the contract
4. Inadequately administering the contract
5. Commencement of work by the supplier before contract is exchanged or letter
of acceptance issued
6. Unauthorised increase in scope of work
7. Loss of intellectual property