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The Value of Mitigating Risks in Preconstruction
Steve Dell’Orto • 06 Oct 2023

The Value of Mitigating Risks in Preconstruction

At the inception of any project development there is a lengthy list of risks that could put the overall success of your project in jeopardy. Preconstruction is the broad definition of all of the work that is done by the design team, the builder and the owner, to design and manage the cost of the […]

At the inception of any project development there is a lengthy list of risks that could put the overall success of your project in jeopardy. Preconstruction is the broad definition of all of the work that is done by the design team, the builder and the owner, to design and manage the cost of the project and ensure it meets the owners pro forma objectives. In the preconstruction phase, an often overlooked facet of a project development is de-risking the project.

Risks to a project can come in many forms — economic, legal, political or general market conditions. Most projects are set up to deal with risks in a reactive way or to pass the risk on to others, whether or not they are equipped to handle that risk or not. The most successful projects are the ones that constantly inventory and add mitigation plans to drive the risk out of the project. The value of mitigating risks in preconstruction ultimately helps you and your team:

1. Eliminate unexpected costs

Unforeseen expenses found in construction can lead to significant cost impacts to the project. In order to drive risk out of a project and decrease the likelihood of unexpected costs, teams must recognize the importance of not understanding market capacity, long lead materials and equipment and unforeseen land conditions. 

Tip: When developing plans to mitigate risk, it’s important to include value engineering, a detailed site analysis and project scope, and a comprehensive risk assessment of both internal and external risks.

2. Prevent schedule delays 

When it comes to a project’s schedule, time is money. Time is the one thing you cannot buy back. Understanding how to solve a risk rather than padding the contingency plan with more time or money to make up for the risk is not the most ideal solution. 

Tip: Develop a well thought out logistical plan around how to build the project within preconstruction management software. Plan with resource capacities and labor in mind and include the permitting process as well as the inspection process. Closely monitoring your team’s progress and consistently communicating clear expectations about responsibilities and deadlines in order to promptly address any emerging issues. 

3. Increase stakeholder satisfaction and improve collaboration

When project stakeholders communicate clearly and effectively, it often results in a smoother project execution with fewer challenges. The strain on the relationship between the stakeholders can be as significant as the costs or risks itself. Establishing clear and understandable objectives and regularly reporting and monitoring project progress will inevitably enhance relationships between members of your project team.

Tip: Using a platform approach to facilitate open channels of communication promotes early stakeholder engagement, conflict resolution and access to real-time progress reporting. Streamlining communication can be done more efficiently when systems are in place to regularly review, discuss and execute project expectations. 

ConCntric is a preconstruction management software that manages risk factors on a project, while at the same time designing, budgeting and planning the project from a cost and time perspective. To learn more about ConCntric’s platform and how you can mitigate risk on your next project, book a demo here

LinkedIn: ConCntric  |  Instagram: @concntric  |  X (formerly Twitter): @concntric

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