> the project owner is always, in the end, responsible for the success of a project
This is very relevant to large government construction projects in the public-private partnership model (aka Alternative Financing and Procurement). These go best when the project sponsor (the gov’t) thinks clearly about what risks the private partner is best places to manage and transfers those risks to them (e.g. managing lots of construction sub trades), while retaining the risks that they are best placed to manage.
It becomes very expensive when the sponsor just tries to throw all the risk over the fence. As the author says, this gets expensive - either through change order or sometimes even in the upfront cost. If you pitch a risk to someone who is badly placed to manage it or who cannot quantify it upfront, they will cover their risk with a big fee.
You can shuffle the risk, but you can’t make it go away.
This is very relevant to large government construction projects in the public-private partnership model (aka Alternative Financing and Procurement). These go best when the project sponsor (the gov’t) thinks clearly about what risks the private partner is best places to manage and transfers those risks to them (e.g. managing lots of construction sub trades), while retaining the risks that they are best placed to manage.
It becomes very expensive when the sponsor just tries to throw all the risk over the fence. As the author says, this gets expensive - either through change order or sometimes even in the upfront cost. If you pitch a risk to someone who is badly placed to manage it or who cannot quantify it upfront, they will cover their risk with a big fee.
You can shuffle the risk, but you can’t make it go away.