Risk Management Plan For Water Treatment Plant Project

Methodology

Methodology

Nowadays environment has become highly competitive. The probability of any kind of occurrence of risk directly affects the achievement objectives of a project (Harvey, 2008). A risk in its simple terms is the adverse and the negative impact exerted on the returns and profits of a company, which is being caused because of the uncertainty. The types, as well as the degree of the risks, mainly depends on the varied factors or parameters that can be associated with the size of the project, complexity of operations, volume of transactions and much more (Berg, 2010). Management of risk in a water treatment plant is an integral part of the sustainable practices of management for the purpose of mitigating the potentials for the physical, social and financial losses that arise because of the possible risks by performing and participating in the activities. An effective and efficient management of risks in a ware treatment plant system requires a systematic approach for the purpose of controlling the ranges and the impacts of the losses. So, it is very important to have an effective practice of analyzing and determining the risks at early stages wherein planning and monitoring is followed. The process of risk management in the water treatment plant project comprises of following steps ( Laurie Williams, 2014):

• Identification of the risk: The team members of the water treatment plant will be required to uncover, identify and illustrate the risk that might impact the project. There are varied techniques which the companies can utilize for determining the risks.
• Analyzing the Risk involved: After determining the risk involved, the team members of the water treatment plant will be identifying the likelihood and the consequences of the risk involved. Through this, the manager of the water treatment plant can easily develop an understanding the nature of the risk and the potentials that affect the goals and objectives of the project.  
• Evaluation of the risk: Manger of the water treatment plant can evaluate the risk by analyzing the magnitude of the risk that is the combination of the likelihood and consequences of the risk. The team members of the water treatment plant will be developing an understanding regarding the nature of the risk and the potential of affecting the goals and objectives of the project.

For the purpose of evaluation of the risk, the team members will be making a decision regarding whether the risk is acceptable or whether it is a serious concern for warranting the treatment.

• Treatment of the risk: This step is also considered as the risk response planning. During this particular step, the team members of the water treatment plant will be assessing the highest ranked risk and will be developing a plan for testing and modifying the risk for achieving the acceptable risk levels. Risk mitigation strategies will be developed.
• Monitoring and review of the risk: This is the step in which the team members of the water treatment plant will be taking the project risk register and will be using it for monitoring, tracking and reviewing the risk factors.

The project of Sea water treatment is not a project that can be considered as a risk-proof project and thus, there are varied people, holding the responsibilities for the varied determined risks (ISO, 2015)

• Manager of the project: Project Manager of the water treatment plant will be responsible for determining the financial risks and the risk associated with time management.
• Contractor of the Project: Contractor of the water treatment plant project will be responsible for the site-related risks that will be including the materials and the workmanships.  
• Designer of the team:  The team will be responsible for the determination of the flaws in the designing of project.

The above-mentioned examples are some of the risks that reveal some of the possible risks associated with the water treatment plant project. The manager of the project will be the main in charge and responsible person for the other risks at higher levels. Some of the examples of risk associated with the project are (Adelaide, 2012):

• Adverse effects of the climatic conditions.
• Natural calamities.
• Theft of raw material.

The process of budgeting will be involving below steps:

• What are the short and long term financial constraints in water treatment plant?
• Including all the inputs, like the, annualized costs of the services and how the manger expects it to change in time.
• Are there are many kind of differences in the costs of the services across the varied regions of the district.

Such sum mainly amounts to 5 percent, to the cost of the total project (IRM, 2002).

The risk register is to be utilized by the team members of the water treatment plant here, as medium for reporting any kind of risk that can occur or has occurred throughout the time period of the project at regular intervals (Haring, 2015)

• Technical risk factors: This category comprises of risk that is associated with quality of the material such as the performance of project, aesthetics, and ergonomics. The project of water treatment plant can get affected by the quality of the raw material that is being utilized in the project.
• External risk factors: This category comprises of risk that is not directly associated with the conditions of the weather. The weather conditions can affect the process of the water treatment plant. Unwanted rains can affect the working or can even slow down the process.
• Organizational Risks: This category comprises of risk that is associated with approvals in project management, funding drops, reports and others. There is possibility that the government officials can create issues in respect of water treatment. Even the sources of funds can deviate their ways for not supporting the project.
• Project management risks: This category comprises of risk that is associated with management of project, estimations, planning and operations. The water treatment plant is a big huge project and as we know that there are some factors that are not in control of management, so such factors can affect the estimation of the project. Because of wrong projection, estimations can be affected.  (The State of Queensland (Queensland Treasury), 2011)

Types and Degrees of Risks

The tolerance level of the risk will be mainly dependent on the impacts, on the deliverables of the project and it will be depending on the allowed percentage of 5 percent of the total cost of the project for the contingencies in respect of the risk. The organization of water treatment plant is mainly under financial pressure and therefore they have high risk tolerance level, as the water treatment plant project is already losing and consequences of failure does not make any difference to it.

The team members of the water treatment plant need to utilize risk register as the medium of reporting for keeping the records of the risks and also, for the purpose of monitoring and managing the risks.

The tracking process of the risk will be mainly used for unveiling the activities performed by the manager of the project at the end stage of the project, wherein the risk that occurred will be mainly analyzed and any kind of enhancement required for the mitigation plan will be implemented.

Risk tracking process of the water treatment plant will comprise of:

• Communication of the risk to the shareholders of the water treatment project.
• Monitoring of the mitigation plan.
• Review of the status of water treatment.
• Illustration of the dynamics of risk management.
• Risk reporting matrix will be framed.

Figure 1: Risk Tracking System (ISO, 2015)

Procurement management plan of the water treatment plant mainly illustrates how the team in charge the project will be acquiring the goods and services from outside market. Information in this plan can be utilized as an input while completing the acquisition plan for the contract (Knezevic, 2014)

The manager of the project possesses the responsibility for coordinating with the members of the team of project, who will be determining the materials that are to be procured for the project management. The procurement listing is sent to the office of the project management for the purpose of review and approval (PM Study, 2012).

The manager of the project of water treatment will be over sighting and managing all the activities of procurement. The manger works with the team for identifying the items that are to be procured for the successful completion of project.

The items and services of the water treatment plant project will be solicited under the contract of firm- fixed price. The team members of the water treatment plant works with the contracts and the department of the purchasing for illustrating the types and services. The main parties associated with the project management will be mainly the vendor party and the purchasing department party. Both the parties will be working under the aegis of the manager of the project (PMI, 2012).

Roles and Responsibilities

The management plan of procurement of water treatment project comprises of many kinds of constraints that are associated with (PPOA, 2009 ):

• Unrealistic scheduling and expectations of vendors for cost.
• Manufacturing capacities of the vendors.
• Conflicts occurring the current contracts and the relationships of vendor.
• Configuration management for the upgrading  (Schapper, Malta, & Gilbert, 2006).

The procurement activities and the contract award needs to support the approved scope statement of developing a water treatment plant and procurement of the transmission pipe. The treatment plant will be reducing the spread of water diseases and will be enhancing the economic productivity. As the scope of work is clear and not likely to change, the fixed price contract will be offering predictable cost (Pan American Health Organization, 2016). The contracts are utilized on projects for work that is smaller in the scope and has uncertainty.  As the contractor will include contingency in the prices of contracts for covering the risk, the contract will offer low total cost to project.

After the approval of the issuance of the request for the proposal for availing the quotations, the cost will be determined by the process of procurement (Government Procurement Solutions, 2011).  For determining cost market price of the commercial items will be determined from the market for the suppliers. These costs will include the raw material for water treatment plant, labor and catalog price. The negotiated price will be compared with the market price for cost determination of the water treatment plant.

The contract of procurement will be awarded to the procurer after analyzing the below-mentioned criteria:

• Timely Delivery: At first, the delivery timings of the vendor will be assessed so that it can be analyzed whether the vendor will be able to deliver the products and services on time.
• Expected Delivery date: the vendor will be asked to share their expected date of deliveries so that the best timely date can be chosen.
• Cost: The cost of the supplies will be determined so as to analyze the effective cost saving in procurement process.
• Quality: Quality of the raw material to be procured will be assessed.
• Portfolio of Procurer: The portfolio of the procurer will be assessed.

 Below is the list of the standard documents that are to be utilized in the procurement process

• Requisition order of the site that needs to comply with the mentioned requirements.
• Quotations of the contracts and tender.
• Details of the fixed contracts.
• Evaluation form of procurement(Watt, 2011).

The risk that is associated with the project is required to be registered in the risk register as this process will be using the register for the purpose of the mitigation plan. Nevertheless, the risks that need special attention in respect of the procurement, the manager of the project carries the responsibility for bringing the issue forward, in the meetings.

The formats of the reporting in respect of the procurement management plan will be as below:

• Log of the procurement
• Book of Delivery
• Materials on the site log

The suppliers that will become part of the project management will be evaluated before the start of the project, during project management and after the phase of procurement. For this purpose, procurement manager will require below mentioned documents:

• Procurement log
• Delivery book
• Procurement orders
• Procurement Forms

References

Laurie Williams. (2014). Risk Management. Retrieved from csc: https://agile.csc.ncsu.edu/SEMaterials/RiskManagement.pdf

Adelaide. (2012). Risk Management . University of Adelaide.

Berg, H.-P. (2010). Risk Management: Procedures, Methods And Experiences .  RT&A .

Government Procurement Solutions. (2011). Procurement – driving better value. Crown.

Haring. (2015). Introduction to Risk Analysis and Risk. Springer.

Harvey, J. (2008). Introduction to managing risk . CIMA.

IRM. (2002). A Risk Management Standard. IRM.

ISO. (2015). Risk management. ISO.

Knezevic, B. (2014). PROCUREMENT MANAGEMENT. Retrieved from efzg: https://web.efzg.hr/dok/trg/bknezevic/pm2014/01_Procurement%20management.pdf

Pan American Health Organization. (2016). A Practical Guide For Procurement Planning And Management Of Strategic Public Health Supplies. All Type Assessoria Editorial LTDA.

PM Study. (2012). Project Procurement Management. PM Study. Retrieved from pmstudy.

PMI. (2012). Project Procurement Management. PMI.

PPOA. (2009 ). Manual for Procurement and Management of Projects. Republic Of Kenya.

Schapper, P. R., Malta, J. N., & Gilbert, D. L. (2006). An analytical framework for the management and reform of public procurement. Journal of public procurement, 6(1/3), 1-26.

The State of Queensland (Queensland Treasury). (2011). A Guide to Risk Management. Retrieved from The State of Queensland (Queensland Treasury): https://www.treasury.qld.gov.au/publications-resources/risk-management-guide/guide-to-risk-management.pdf

Watt, A. (2011). Procurement Management. Retrieved from Opentextbc: https://opentextbc.ca/projectmanagement/chapter/chapter-13-procurement-management-project-management/

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