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Project Risk in Construction
Some young construction contractors dispute the risk factors that banks, sureties and others assign to construction projects. He just doesn't believe that the risk is there. The confidence which the youthful contractor shows is needed if he is to weather all the ups and downs of this business. However, risk in construction is a given. In any town in the United States, there is a local story of a bankrupt contractor.
A Contractor's Risk on a project is caused by two potential events.
1) Unaccepted work by the client
2) Higher than estimated project costs
Most contractor's project defaults generate from these two sources. Sureties, banks and investors know these risks and take conservative financial approaches to manage them.
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Matt Stevens is a management advisor who works only with construction contractors. He has performed training and business consultation for the contracting community since 1994. Matt can be reached at mstevens@stevensci.com.">mstevens@stevensci.com.
Construction, lawyers, failures, claims, litigations
Posted by Matt Stevens at May 5, 2006 2:32 AM
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