Risk management in the tendering process A survey of risk management practices within infrastructural construction

The construction and infrastructure sector is associated with complex projects with high risk exposure. The project related risks compel companies to a structured risk management process to enable successful projects. The project complexity generates a high amount of information which creates a demand for computer based tools. However, there is currently a lack of adequate risk management support tools. Previous studies show that the risk exposure is at its highest level during the tendering process and it is therefore vital to examine how risk management tasks are performed during this process. The purpose of this thesis is to examine and evaluate how contractor experts manage risks during the tendering process for large scale infrastructural projects. The aim is to provide knowledge that will contribute to improvements of a risk management support tool in the studied company. The improvements should be based on an analysis of behavioural practices and attitudes in a project tendering team. To enable a detailed risk management study, one major infrastructural contractor has been examined. The methodology is based on a broad literature review of risk management in construction and the company’s internal documents and policies. Additionally, 11 semi structured qualitative interviews with key persons in the tendering process and one observation of a risk meeting have been carried out. Finally, the Monte Carlo simulation technique has been used to simulate risks in two completed infrastructural projects. Findings indicate that the present risk management process is acceptable but can be improved by a better structure. Furthermore, result shows that the respondents have different risk definitions and that the risk management process will be enhanced if threats were separated from opportunities, both in the identification phase and in the analysis phase. Other findings reveal that there is a suitable risk management support tool within the company but it is not used in the tendering process. Findings indicate that the tool will contribute to a better structured risk management process. To enable a successful implementation, the software has to increase its usability. To improve the risk analysis, a function to perform Monte Carlo simulations and a possibility to create a suitable risk structure for tendering has to be integrated in the software.