STUDY OF CONTRACTUAL RISKS ALLOCATION IN GENERAL CONDITION OF TRADITIONAL CONTRACTS

Regarding to the fact that the majority of construction projects are assigned under the traditional project delivery system by using General Conditions of contract for construction to the contractors, it is essential that specific attention be paid in the time of tender and contract documents provision and allocation of association risks with this contracts. Thus, the aim of this research is to identify the risks that are allocated between contract parties in General Conditions of contract for construction and also identify and assess the significant risks in highway projects and then addresses the proper allocation of them between owner and contractor. In Therefore we can provide an application framework for the proper risk allocation to express the responsibilities and risks of this type of contracting between parties under title of “Risk Allocation Matrix”. This research is done by a descriptive Survey method. Through the literature review, 36 risks are identified in highway projects that are assigned to the contractors by traditional project delivery system contract. Then risks questionnaire were designed and in order to determine risks probability, impact, rating and proper risk allocation between owner and contractor, the questionnaires were distributed among survey population. Based on the survey results, out of a total of 36 risk factors, 22 risks were allocated to the owner, 8 risks were allocated to the contractor and 6 risk factors were suggested to be shared between owner and contractor. Also with the comparison of the General Condition of Contract For Construction risks with survey results, it was identified that the General Condition of Contract For Construction need to be modified, that in this case " Risk Allocation Matrix" is suggested as a solution. Thus, in order to remove the problem of absence or lack of clear risk allocation in General Conditions of contract for construction and contract document of different projects such as highway projects, it is essential that a" Risk Allocation Matrix", according to the suggested table No 5, first in the tender document and then in contract document be prepared and extended. It is obvious that " Risk Allocation Matrix" for every project depends on its type, contract parties involved in projects and, project delivery system that we use and risk holders. It is evident that the "Risk Allocation Matrix" should be prepared according to suggested framework before the time of tender. The owner of project should identify the important risks of projects and add them to the suggested matrix. In addition, the owner should eliminate the risks which are included in the model but are not in project and allocate new risks to someone who has the most ability in management and control of risks. "Risk Allocation Matrix" should be prepared according to the preliminary framework in order that the contractors are able to bid in terms of it, and both parties can take the responsibility of risks in projects execution process.