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This chapter has discussed ways to recognize, review, and respond to contract risks. The chapter illustrates that in many cases, skills and resources that already exist need to be coordinated. While common tools and systematic processes can help, too much bureaucracy should be avoided. To succeed in managing contract risks and opportunities and benefit from this chapter, you should:

  • 1. Make sure your contracting processes and risks, along with response plans, have an owner and that you have a plan in place to support systematic risk and opportunity management. use your Contract Risk and opportunity Management Plan throughout the contract lifecycle and especially where you need to secure a successful handoff to a new team.
  • 2. Develop user-friendly processes and tools that help identify possible risks and ways to mitigate those risks when the contract is negotiated and throughout its performance. Share those tools with your contract partners and work together to develop and implement effective risk management.
  • 3. Be prepared to share risks rather than attempting to allocate all risks to the other party. risk allocation may mislead your organization into believing that its risk exposure has been minimized.
  • 4. Make sure that responsibility for managing each risk is clearly allocated to the party best able to manage it and that the party is aware of this responsibility. understand the difference between risk allocation and risk management. There is much more to true contract risk management than risk allocation and risk transfer.
  • 5. tackle the causes of risk, reduce their probability and impact, and focus on high-priority issues. remember that the strategies used for the recognition and management of risk are also suitable for the recognition and management of opportunities.
  • 6. Simplify where you can. Make your goal user-friendly contracts and contract risk management tools that help project and delivery teams implement contracts and manage the risks.
  • 7. Engage and empower your organization to make informed decisions. use visual tools to communicate contracts and risks effectively. Adopt a lean and visual (IKEA) approach to contract risk management.
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