Tendering and estimating 11

Time Risks

• Delays caused by adverse weather conditions.

• Sequencing problems leading to work stoppages or inefficiencies.

Cost Risks

• Unexpected expenses arising from unforeseen circumstances.

• Cost overruns due to inaccurate estimates or scope changes.

Types of risk to consider in terms of time and cost

1. Current workload or the need to turnover

2. Site and location factors

3. Programme factors

4. Financial issues

what’s Current workload

refers to the volume of projects, tasks, and commitments an organisation is already handling at the time of preparing a tender.

The need to turnover

reflects the organisation’s requirement to secure new work in order to maintain revenue, staff utilisation, and business continuity.

Why It Must Be Considered in Time & Cost Risk Analysis

1. Resource availability affects delivery time

2. Cost estimates may be unrealistic

3. Impact on quality and compliance

Site-Specific Risks

• Ground Conditions

• Contamination

• Protected Species

• Security requirements

• Local climate condition

• Local labour agreement

what are Programme factors

Programme factors are the time-related elements that influence how a project will be scheduled, started, sequenced, and delivered.

They directly affect project duration, resource planning, and cost risk during tendering.

Programme factors

1. Commencement date: The planned start date can significantly impact cost and time because it determines what external conditions and constraints will apply

2. Duration: How long the project is expected to take affects overheads, staffing plans, and exposure to risks.

3. Specific contract condition: These are clauses in the contract that influence how the work must be organised or carried out. They can heavily affect both time and cost.

Financial factors

Financial issues are the monetary factors that influence a contractor’s cash flow, financial stability, payment security, and ability to deliver a project without financial risk.

Types of Financial factors

1. Cash flow forecasting: Predicting how money will flow in and out of the project over time.

2. Contract bonds: A financial guarantee (e.g., performance bond) provided to the client.

3. Retention percentage: A portion of payment withheld by the client until work is completed.

4. Financial checks on client: Before tendering, contractors must confirm the client’s financial reliability.

5. Payment period and frequency of payment: How often payments are made (e.g., monthly) and how long the client takes to release funds.