Risk Classification Model for Design and Build Projects

The purpose of this paper is to investigate if the various risk sources in Design and Build projects can be classified into three risk groups of cost, time and quality using the discriminant analysis technique. Literature search was undertaken to review issues of risk sources, classification of the identified risks into a risk structure, management of risks and effects of risks all on Design and Build projects as well as concepts of discriminant analysis as a statistical technique. This literature review was undertaken through the use of internet, published papers, journal articles and other published reports on risks in Design and Build projects. A research questionnaire was further designed to collect research information. This research study is a survey research that utilized cross-sectional design to capture the primary data. The data for the survey was collected in Nigeria. In all forty (40) questionnaires were sent to various respondents that included Architects, Engineers, Quantity Surveyors and Builders who had used Design and Build procurement method for their recently completed projects. Responses from these retrieved questionnaires that measured the impact of risks on Design and Build were analyzed using the discriminant analysis technique through the use of SPSS software package to build two discriminant models for classifying risks into cost, time and quality risk groups. Results of the study indicate that time overrun and poor quality are the two factors that discriminate between cost, time and quality related risk groups. These two discriminant functions explain the variation between the risk groups. All the discriminating variables of cost overrun, time overrun and poor quality demonstrate some relationships with the two discriminant functions. The two discriminant models built can classify risks in Design and Build projects into risk groups of cost, time and quality. These classifications models have 72% success rate of classification of risks in Design and Build projects. These models are strongly recommended for use of clients, Design and Build contractors and Risk Managers for the management, control and mitigation of future risks in new Design and Build projects. These models will offer appreciable improvements in risk management and mitigations which can enhance better management of future Design and Build projects. This study also recommends that clients and contractors using Design and Build approach should watch out for emerging issues of cost overrun and poor quality in their projects as these can dictate classification of newly encountered risks.Keywords: Risk classification, model, Design and Build project