Either the Project Manager or the Contractor may instruct the other to attend a risk reduction meeting, where those who attend co-operate in:

• making and considering proposals for how the effect of the registered risks can be avoided or reduced;
• seeking solutions that will bring advantage to all those who will be affected;
• deciding on the actions which will be taken and who will take them; and
• deciding which risks have now been avoided or can be removed from the Risk Register.

The Project Manager revises the Risk Register to record the decisions made at each risk reduction meeting and issues to the Contractor. If the agreed action following the risk reduction meeting involves a change to the Works Information, the Project Manager should instruct the change.

The Risk Register is a schedule of the risks which are listed in the Contract Data and risks which the Project Manager or the Contractor has notified as an early warning matter. It includes a description of the risk and a description of the actions which are to be taken to avoid or reduce the risk.

Risks which are not expressly carried by the Employer are carried out by the Contractor.

The key objective of the Risk Register is to apply pre-assessed and documented risk management procedures to specific, identified hazards. The Risk Register should:

• identify the risks inherent in a project;
• set out how the risks should be managed; and
• identify the time and cost consequences to the Parties and Others if the risk event occurs.

To supplement and analyse the information contained on the risk register, a traffic light colouring/weighting probability and impact matrices can be used to determine the significance of individual risks.

Where design is involved, it is important to distinguish between design development and design change. The impact of the latter, if not notified in an early warning, can have a dire impact on the works that could ripple throughout the project.

To effectively manage the change control process requires the involvement of all members of the project team, from designers, engineers, planners and commercial.

If the event has already happened, then the opportunity to avoid or mitigate is lost and a notification of a compensation event is issued. The Contractor then risks:

• having the later compensation event assessed as if the early warning had been given, in which case actions that could have been done to avoid or mitigate, will be taken into account in the Project Manager’s assessment;
• in the case Options C, D, E and F, having disallowed costs levied.

We have extensive experience in the management and administration of NEC projects from a contractual, cost and programming perspective. Please let us know if you would like our assistance.