Time Risk Allowance

Requirement In Clause 31.2

Time Risk Allowance

Is a requirement in clause 31.2 for the Contractor to show provisions for time risk allowance on each programme submitted for acceptance.

• It conversely becomes a reason for the Project Manager not to accept a programme if it is not shown.

• Time risk allowance is the duration allowed for each activity that has been assessed by the Contractor as a period of time risk necessary to ensure that the activity will be completed by the date required considering the risks the Contractor is taking.

• It may be that the period of risk allowed for is zero, but this needs to be demonstrated as such.

Example Time risk allowance build up during programme development at tender stage,

• Activity:100m pipe installation

• Assessed Duration = 16 days (shifts)

• Resource=1 gang (3 men) at 7m/shift/gang = 14.3 shifts (output estimate for the operation)

• Shifts have been rounded up to 16 shifts (1.7 shifts time risk allowance) low for a small period of risk. The time risk allowance is only there to demonstrate to the Project Manager that you have assessed risks associated with each activity and that the Contractor is more likely to achieve the overall programme. A programme showing little or no time risk allowance, particularly on the critical path items, is unlikely to turn out as planned.

The element of time risk allowance is NOT available to mitigate the affects of a compensation event

– So if the pipework installation is delayed by one day and it is on the critical path, the planned Completion will be delayed

– the Completion Date changes by one day and the delay is not absorbed by the Contractor.

Program Evaluation and Review Technique (PERT)

– PERT was originally developed for and used on the Polaris missile systems in 1958

– Like the Critical Path Method (CPM), PERT uses logic diagrams to analyse performance times and focuses on the event.