Risk allocation in public construction projects: the case of Jordan

Proper risk identification, assessment, and allocation can reduce cost and time delay. This study identifies, assesses and allocates risks in public construction projects in Jordan with the goal of reducing the overall costly claims and disputes. Based on extensive literature review, the study identifies 62 risk factors that are grouped under 14 categories. The respondents were asked to estimate the probability, impact and proper allocation of these risk factors. Based on 208 valid responses, the results indicate that the top ranked risk factors are delays in client's payments, poorly tailored contract forms, competition, delay in approval of permits, default by subcontractors, unclear specifications, material prices fluctuations, different construction standards, change in design, and poor design. The respondents of the study recommend 4 risk factors to be shouldered by owners, five risk factors to be shouldered by contractors, and 42 risk factors to be shared by the contracting parties. The results of the study also help practitioners to allocate risks to the stakeholder who is more capable to assesses, controls and manages these risks. The generated risk priority can be used to prioritize the risks for response planning.