Risk management in tendering housing projects

Pao Yue-kong Library Electronic Theses Database

Risk management in tendering housing projects


Author: Wong, Siu-hung
Title: Risk management in tendering housing projects
Degree: M.Sc.
Year: 1999
Subject: Construction industry -- China -- Hong Kong -- Management
Risk management -- China -- Hong Kong
Housing management -- China -- Hong Kong
Project management -- China -- Hong Kong
Hong Kong Polytechnic University -- Dissertations
Department: Multi-disciplinary Studies
Dept. of Building and Real Estate
Pages: ix, 80, 6 leaves : ill. ; 30 cm
Language: English
InnoPac Record: http://library.polyu.edu.hk/record=b1485227
URI: http://theses.lib.polyu.edu.hk/handle/200/553
Abstract: The Hong Kong Housing Authority is the largest client in Hong Kong's Construction Industry (HKHA). In tendering for HKHA projects, risks are inherent to both client and contractors. Based on desk study and questionnaires, variation orders and inclement weather are the two major risks on the Client's sides. These risks affect both time and cost of projects. It is generally accepted that in tackling risks, Client would use conditions of contracts to transfer certain amount risks to contractors. The results from questionnaires show that the current conditions of contracts used by HKHA match with Abrahameson's principles in risk allocation, except for 'inclement weather' and 'change of regulations'. Under current conditions of contract, the client would grant Extension of Time (E.O.T.) due to inclement weather. The results of this study suggested that the main contractor would bear all effect from inclement weather. However, HKHA shall also consider the drawback of increasing disputes in granting E.O.T. The risk of change of regulation is born by the contractor under current conditions of contract. However, the result of this study suggest that the main contractor should not be required to bear the risks of change of regulations or legislation after the return of tender. E.O.T. and / or loss and expense may be granted. Moreover, both desk study and questionnaires study indicated that 'variation orders' is another one of the major risks for both client and contractors. In order to minimise this risk, tendering drawings shall be as detail as possible and aimed to be finalised before tendering. The issue of variation orders during construction period shall also be minimised. In addition, providing more drawings and sufficient time for the main contractors in tendering Housing Projects may reduce their risks in guessing the construction details. Consequently, their tenders would be more realistic and better planning in their programme and construction methods. In conclusion, good risk allocation can create a less contentious environment. Projects can be run more smoothly. It can prevent excessive mark up by main contractors as a premium to tender. HKHA's mission to ensure cost-effective use of public money can be achieved. This is also definitely beneficial to the Hong Kong's Construction Industry.

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