Risks in road maintenance service contracts. Risk management methods

The main objective of the Finnish Road Administration's project Risks in Road Maintenance Service Contracts was to develop a risk assessment system which helps to identify the main risks inherent in maintenance service contracts reliably and even before the possible risks materialize. The idea is to tell the contractors of the identified risks already in the invitation to tender documents. The created system makes proactive risk identification and prevention possible in the planning, bidding and implementation phases. When continuously updated the risk management plan can be used throughout the contract cycle and the system can also be used in comprehensive risk assessment of the maintenance service contracts. The system satisfies the risk assessment needs of the road manager, service provider, subcontractor and subsidiary contractor. The working methods used in the project included analysis of background documentation and expert seminars, as well as a questionnaire study concerning risk sharing between the client and contractor. The identified risks concerned for example depreciation of the road network value, markets and competitive situation, quality, accuracy and interpretation of contract documents, initial data made available as well as knowledge and skills, and resources. The project work produced tools supporting risk identification and assessment. The tools include a risk chart for the different phases of the maintenance service contracts and a risk matrix as well as a risk management plan for reporting purposes. This report gives concise instructions on how to use the tools and risk management methods. The instructions cover the methods of making risk analyses and documentation. The risk management system strengthens comprehensive risk management of the service contracts. Incorporating the identified risks in the invitations to tender makes it possible to discuss the risks and risk sharing between the client and contractor. Sufficient and suitable solutions for risk prevention and management are agreed upon before signing the contract agreement The risk assessment system of the road maintenance service contracts will be commonly used in all road maintenance contracts in the future. The idea is to make the provision of risk information and discussing it an integral part of the tendering procedure of the road maintenance service contracts, which has been made possible by using the risk assessment tools and methods developed in this project. This report uses the terms Finnish Road Administration and Road Regions. The terms "client" and "Finnish Road Administration" are here used as synonyms. At the beginning of 2010 the Finnish Road Administration, Finnish Rail Administration and Finnish Maritime Administration are merged into the Transport Infrastructure Agency. Road Regions, Regional Environment Centres, Employment and Economic Development Centres, Employment Services and State Provincial Offices will be merged into 9 Regional Centres for Transport Services, Environment and Industry. The total number of such centres will be 15. In addition, 6 Regional State Administrative Agencies will be founded to operate executive, control and monitoring tasks of leg. This report may be found at http://alk.tiehallinto.fi/julkaisut/pdf2/3201145-v-riskit_hoidon_palvelusopimuksissa_menettelytavat.pdf