Preface

      The idea for me to write this book came about from the many questions I received from colleagues when I was assisting Project Managers in the compilation and updating of the Risks Registers for the primary risks particular to their Engineering, Procurement and Construction (EPC) Projects. At the same time, I was often involved in chairing the Risk Management Meetings on behalf of those Project Managers, and then following up the required actions with my colleagues. My participation in those tasks came about despite my principal role having been to undertake the contract administration functions for the mega EPC Projects I had been allocated to. This was simply because most other managers seemed to believe that risk management was more suited to my line of work than theirs. In the course of undertaking those tasks, some of my co-workers from whom input was required told me that the concept of risk management was a mystery to them, and it was therefore a subject that they shied away from. I had a fair degree of sympathy for them, largely because, when I first embarked on studying the subject of project risk management in the mid-1980s (as part of a project management course I was undertaking in pre-internet days), I was overwhelmed by the almost pure academic treatment of the subject (as compared with the practical application I had been looking for). Sadly, I find that this is still the case today, as my research on the internet has revealed.

      Even sadder is the fact that, despite the initial great hopes for the EPC Project approach, many of the completed mega projects failed to make the profit level that the contractors had anticipated, and a great number of such projects ended in financial disaster for the contractors involved. My base discipline of quantity surveying, coupled with the contract/claims administration and risk management work I undertook, provided me with the ideal standpoint to see where and why things had gone wrong financially on the projects I had been directly associated with. I also observed the same problems occurring with monotonous regularity from one project to the next. My analysis of the countless loss-making issues I had to deal with led me to conclude that the vast majority of problems occurred for the same basic reason. Simply put, many people whose responsibility it had been for handling the work effectively were not fully aware of all the risks involved (or the fact that it was their direct responsibility to take care of such risks). Because of that, they had not taken steps to ensure that suitable mitigation plans were put in place to prevent those risks turning into ugly problems.

In principle, managing construction projects well is predominantly all about the contractor applying common sense, but it quite obviously is nowhere near as easy as that may sound. As I was in the throes of writing this book, news of the demise of Carillion plc came through (it went into compulsory liquidation on 15 January 2018). That undoubtedly sent shivers down the spines of a number of other large contractors across the globe. Almost certainly, it was the improper handling of the day-to-day major risks by the senior management team that brought Carillion down, and which was therefore a highly preventable outcome. In the construction industry, such disasters are rarely brought about by sudden unexpected events. I am sure that the Carillion management team applied common sense in their business, but I am equally sure that it could not have been applied 100% of the time, and certainly not to the most important risks.

      Today, the term ‘operational excellence’ is very much in vogue, and most likely the Carillion management team also thought they had that subject cracked. However, I consider that, without attention being paid to excellence in risk management at all levels, meaningful operational excellence will remain a pipedream for most contractors. I therefore decided that it was perhaps time I put down my findings in a book, based on the experience I have gained over the last 20 years working on EPC Projects, about where the major risks lie for the EPC/Design-Build contractor, and how best to handle those risks. My primary objective was simply to try to help put the profit back into EPC and Design-Build Projects for the benefit of those contractors who are struggling with that issue.

      This book is not aimed at Tier-1 contractors (because otherwise I would quite rightly be accused of trying to teach a grandmother to suck eggs). Rather, my target audience is mid-range construction companies and their individual managers (or aspiring managers, still learning the ropes) who would like to see a comprehensive overview of where the major risks lie in wait for them on EPC/Design-Build Projects. Many such contractors are way off being Tier-1 standard operators. However, I have met many contractors' directors who think their respective companies have made it to the big league when, in reality, their companies still have a long way to go before they could be considered to be leaders in their field. If any contractor is experiencing the situation where too many of the problems outlined in this book are regularly occurring in their organisation, then I would suggest that some urgent training/re-training is needed for their management teams.

The many different standard forms of contract used in the construction industry (as well as all the bespoke contracts I have seen) incorporate certain key words/terms as proper nouns. In an attempt to make the technical content of this book as easy as possible to read, I therefore chose to use those same words/terms in capitalised form, as well as add in a few extra words/terms of my own. Further, for the purpose of ensuring clarity, I tried not to use too many ad-hoc abbreviations in the body of the book (e.g. after the first appearance of the title ‘Engineering Manager’ it could thereafter have been replaced throughout with the initials ‘EM’). Instead, due to the huge