10

common risks during

the pre-contract
stage

&
Strategies to mitage
them
 Inaccurate Cost Mitigation
1 Estimates Risk
Conduct
Underestimating thorough site
project costs can surveys, engage
lead to budget experienced
overruns estimators, and
utilize historical
data for accurate
cost estimation.
Maintain
contingency
funds for
unforeseen
expenses
 Unclear Project Mitigation
2 Scope Risk
Ambiguous or Clearly define
incomplete project project objectives,
scopes can result in deliverables, and
misunderstandings specifications.
and disputes Develop a detailed
scope of work to
avoid
misinterpretations
 Bidder Mitigation
3 Qualifications Risk
Selecting Establish pre-
contractors qualification
solely based on criteria for
the lowest bid bidders, evaluate
may lead to their past
inexperienced or performance,
unreliable and consider
partners factors beyond
cost, such as
experience and
track record.
 Regulatory
4 Compliance Risk Mitigation
Issues
Failure to comply Engage with
with local regulatory
regulations and authorities early,
permitting understand and
requirements comply with all
can lead to legal
delays and legal requirements,
complications and obtain
necessary
permits before
commencing the
project
 Incomplete or
5 Delayed Design Risk Mitigation
Documents
Incomplete or Make sure that
delayed design all design
documents can documents are
impede the complete and
bidding process available before
and construction soliciting bids.
commencement Establish clear
communication
channels with
designers to
address any
delays promptly
 Market
6 Fluctuations Risk Mitigation
Economic Monitor market
changes can trends,
impact material incorporate price
prices and escalation
contractor’s clauses in
availability contracts, and
maintain
flexibility in
project
schedules to
accommodate
potential delays
 Ownership and
7 Legal Issues Risk Mitigation
Economic Title Conduct
disputes, zoning thorough due
issues, or diligence on
ownership property titles,
conflicts can resolve legal
hinder project issues
initiation beforehand, and
secure necessary
permissions and
approvals
 Unrealistic
8 Project Risk Mitigation
Schedule
Setting an overly Develop a
ambitious realistic and
project schedule achievable
can lead to project schedule,
rushed decision- considering all
making and aspects of
compromise planning, design,
quality and approvals.
Include buffer
time for
unforeseen
delays
 Communication
9 Breakdowns Risk Mitigation

Inadequate Establish clear

communication lines of
between project communication,
stakeholders can hold regular
result in meetings with all
misunderstandings stakeholders,
and delays and use project
management
tools to facilitate
collaboration.
 Financial
10 Stability of Risk Mitigation
Contractors
Choosing Assess the
contractors with financial stability
financial of potential
instability may contractors,
pose risks during request financial
the construction statements, and
phase consider
performance
bonds to ensure
project
completion