Risk management has always been an important part of running a project. The traditional practice of risk management includes having a lengthy contract, setting price and budget limits, and having the client manage, direct and control the vendor. In this practice it assumes that the risk comes from the vendor but we have found differently. In analyzing projects of different size and type, we have found that the main source of risk for a project lies with the client and his project manager.
The Best Value Approach’s new risk management model transfers the minimization of risk to a structure (PIPS/PIRMS)) and allows the experts/vendors to minimize the risk by creating transparency. It minimizes the activity of PMs, and allows them to be visionary and proactive instead of being reactive and continually putting out fires. This allows the client to do less work but get greater results than before!