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Risk Register
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4.1
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Risk assessment
Where it is provided in the Purchase Order that the Supplier is responsible
for the preparation of the Risk Register, the Supplier will be responsible
for carrying out (with assistance from any relevant members of the Supply
Chain and any other Project Participants) an initial risk assessment to
identify: -
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potential risks relating to the performance of the Services and/or
the delivery of the Project the occurrence of which are capable of
adversely affecting the time for completion, cost or quality of the
Project;
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the probability of these risks occurring;
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a financial estimate of the most likely consequences of each risk
occurring (the "risk allowance"); and
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those risks that are within the control of, or are best managed
by, the Purchaser, the Supplier or another Project Participant.
The results of this risk assessment will be set out in the Risk Register.
Where the Supplier is not responsible for the preparation of the Risk
Register, the Supplier will nevertheless provide all reasonable assistance
in this process where it considers it may have relevant input and/or is
requested to provide assistance.
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4.2
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Updating the Risk Register
Where it is provided in the Purchase Order that the Supplier is responsible
for the updating and amendment of the Risk Register, it will carry out
these tasks, (seeking the assistance of other Project Participants as
considered appropriate) and will arrange regular meetings with the Client
and other Project Participants to review and update the Risk Register
and to consider:-
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any new risks that have arisen since the date of the last review;
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the steps taken to prevent/mitigate previously identified risks;
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risks which have been successfully prevented/mitigated (which can
be removed from the Risk Register); and
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the prioritisation of all continuing risks and agreement of an action
plan in respect of, and risk owners for, all risks prioritised as
serious risks.
Where the Supplier is not responsible for the preparation, updating and
amendment of the Risk Register, the Supplier will nevertheless provide
all reasonable assistance in this process where it considers it may have
relevant input and/or is requested to provide assistance.
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Risk allocation schedule
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4.3
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The Risk Allocation Schedule
Before the date of the Purchase Order, the Supplier and the Purchaser
will have completed the form of Risk Allocation Schedule referred to in
the Purchase Order to agree and set out: -
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the allocation (as between the Purchaser and the Supplier) of any
cost and time consequences of each risk referred to in the Risk Allocation
Schedule; and
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the amount (if any) for which the Supplier will be responsible which
is also included in the Supplier’s Target Cost or Contract Sum
(as the case may be) to deal with the occurrence of each individual
risk and the allocation of any costs in excess of this amount; and
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the period of time (if any) resulting from the occurrence of each
risk that the Supplier will accept as being its responsibility and
the allocation of responsibility for any time consequences in excess
of this period.
The Purchaser’s liability to contribute to the cost consequences
of, or grant any extension of time in respect of, any risk shown in the
Risk Allocation Schedule will only apply after the amount (if any) shown
in the Risk Allocation Schedule as having been included in the Supplier’s
Target Cost or Contract Sum has been spent in full. The Purchaser shall
not be required to consider any extension of time to the Date or Dates
for Completion in respect of any risk shown in the Risk Allocation Schedule
unless any time period shown in the Risk Allocation Schedule as being
the Supplier’s responsibility has expired. Subject to these conditions,
the cost and time consequences of the occurrence of any risk in excess
of the amount or time period that are the responsibility of the Supplier
will be apportioned in accordance with the allocation set out in the Risk
Allocation Schedule.
The Risk Allocation Schedule shall remain fixed throughout the period
of the Contract unless both parties agree otherwise and record the agreed
changes in writing.
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4.4
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Notification of the occurrence of risks identified in the Risk Allocation
Schedule
If a risk identified in the Risk Allocation Schedule occurs, whoever
of the Purchaser or Supplier first becomes aware of the occurrence of
the relevant risk will immediately notify the other and both will co-operate
to agree the best means of dealing with any adverse consequences of the
occurrence of the risk and to mitigate its effects, whether or not the
occurrence of the risk also constitutes a Relief Event.
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Relief events
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4.5
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Relief Events
The following are Relief Events:-
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any instruction issued by the Purchaser to change the Services or
the Project; or
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any act, omission or default of the Purchaser; or
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the occurrence of any risk referred to in the Risk Allocation Schedule
to the extent that the Risk Allocation Schedule does not apportion
responsibility for the consequences of the risk to the Supplier (provided
that the Supplier shall only be entitled to recover additional costs
if the cost consequences of the occurrence of the risk exceed the
amount (if any) shown in the Risk Allocation Schedule as having been
included in the Supplier’s Target Cost or Contract Sum and provided
that the Supplier shall only be entitled to seek an extension of time
to the Date or Dates for Completion if the time consequences of the
occurrence of the risk exceed the period (if any) shown in the Risk
Allocation Schedule as being the Supplier’s responsibility);
or
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the occurrence of any risk which is not referred to in the Risk
Allocation Schedule and which is not reasonably foreseeable and is
beyond the control of the Supplier (excluding any act, omission, default
or insolvency of the Supplier, any member of the Supply Chain or any
subcontractor of the Supplier) to the extent set out in the Purchase
Order;
that has, or is likely to have, any effect on the cost of performing
the Services and/or the Date or Dates for Completion.
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4.6
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Notification of Relief Events
If a Relief Event occurs, or is likely to occur, whichever of the Purchaser
or the Supplier becomes aware of it will immediately notify the other
of its occurrence or likely occurrence, and both will co-operate in agreeing
the best means of dealing with any adverse consequences resulting from
its occurrence and in mitigating their effect.
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4.7
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Involvement of the Project Team
Where either the Purchaser or the Supplier is a member of the Project
Team and considers that any Relief Event notified under clause 4.6 may
affect any other Project Participant, that party will:
so that the Project Team has an opportunity of considering the Relief
Event and its potential impact on other Project Participants. The Purchaser
and the Supplier will give serious consideration to any recommendation
of the Project Team in relation to the Relief Event.
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4.8
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Provision of a statement of the likely effect of a Relief Event
As soon as reasonably practicable, and in any event not later than 14
days after notification in accordance with clause 4.6 (or within any other
period that the parties may agree) the Supplier will provide a statement
setting out (in as much detail as is reasonably practicable) the effect
that the Supplier considers the Relief Event will have on the cost of
performing the Services and/or the Date or Dates for Completion.
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4.9
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Provision of further information
The Supplier will provide any additional information and/or explanation
reasonably requested by the Purchaser in support of any statement given
under clause 4.8.
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4.10
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Agreement of the effect of a Relief Event
The Purchaser and the Supplier will use reasonable endeavours to agree
the effect of any Relief Event referred to in the Supplier’s statement
under clause 4.8 and will co-operate to agree any action that reduces
or minimises any adverse effect of the Relief Event. If considered appropriate
by either the Purchaser or the Supplier, they will meet to discuss any
differences between them. Any failure to reach agreement will be resolved
in accordance with the Dispute Resolution Procedure.
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4.11
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Effects of Relief Event too uncertain
If the Purchaser decides that the effect of any Relief Event is too
uncertain to be forecast with reasonable accuracy, it will agree with
the Supplier the assumptions to be made to enable an estimate of the effect
of the Relief Event to be made. If these assumptions subsequently prove
to have been wrong, the Purchaser and the Supplier will agree the corrections
needed to be made to the original estimate. Any failure to reach agreement
will be resolved in accordance with the Dispute Resolution Procedure.
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4.12
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Purchaser's assessment of the effect of Relief Events in the absence
of notification
If the Supplier fails to notify the Purchaser in accordance with clause
4.6 or fails to provide a statement in accordance with clause 4.8, the
Purchaser may nevertheless carry out its own assessment of the effect
of any Relief Event and will notify the Supplier accordingly. The Purchaser
and the Supplier will use reasonable endeavours to agree the effect of
the relevant Relief Event and, if considered appropriate by either party,
will meet to discuss any differences between them. Any failure to reach
agreement will be resolved in accordance with the Dispute Resolution Procedure
and the provisions of clause 4.13 will apply in relation to the assessment
of the effect of the Relief Event.
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4.13
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Delay in notification of any Relief Event
In considering the effect of any Relief Event which the Purchaser was
not aware of, the parties will take into account any delay on the part
of the Supplier in notifying the occurrence of a Relief Event after the
date it became aware, or should reasonably have become aware, of the relevant
Relief Event and any additional effect of delay (in terms of additional
cost or greater disruption of the Services) will be ignored.
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4.14
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Where the Supplier is a subcontractor
Where the Supplier is a subcontractor, the Supplier acknowledges that,
to the extent that the effects of a Relief Event are determined under
the Purchaser’s Contract, that determination will be binding on the
Supplier, (unless, and to the extent that, the Relief Event is attributable
to the fault of the Purchaser, in which case the Purchaser will agree
the amount of any additional cost suffered by the Supplier and may either
grant an extension of time or require the Supplier to accelerate the Services
at the Purchaser’s expense). Any failure to reach agreement will
be resolved in accordance with the Dispute Resolution Procedure and the
provisions of clause 4.13 will apply in relation to the assessment of
the effect of the Relief Event.
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