Transforming decisions into action. Here’s how.
Money in hand, technology selected, and team members on-board – you are ready to build and commission your bioenergy system. You may have an internal project manager that will oversee contractor selection, or you may be turning over the construction to an EPC (engineer-procure-construct) firm.
At this point, hopefully you have done all you can to minimize risk – now it’s time to focus on minimizing risks from construction and commissioning. Having gone through a Feasibility Analysis and Validation process has given you confidence that the technologies and systems you’ve selected will perform to your expectation, providing the financial return you need. With all this planning, what can possibly go wrong?
Cavanaugh can provide you with confidence that the right decisions are being made.
Even if everything has gone perfectly to this point, there are construction risks that can have a real impact on the future operations and economics of your bioenergy system. Listed below are a few of the common construction risks that we have observed – some of which presented nearly irrecoverable consequences to bioenergy facilities and their owners:
Contract Risk – It all starts here. Which party is responsible to the Owner for the various components and costs that comprise the completed system you expect to receive. Cavanaugh can help you have better contracts, which puts money back in your pockets. More on Contract Risk
Bidding Risk – Do you want the lowest bid, the best quality, or the right balance of each? Whether you chose to solicit competitive bids for your project or went with a trusted EPC that you have known for years, much of your equipment and supplies will be acquired through a competitive bid process. More on Bidding Risk
Like-Kind Risk – “Our product does the same job as what your client wants, but ours is half the cost because we don’t have all the advertising overhead that other company does. There’s no difference…” Cavanaugh can provide you with confidence that the right decisions are being made. More on Like Kind Risk
Scope Creep – “That is not in our contract…” These words create anxiety as you hear them, and begin a frustrating debate with your contractors as to ‘who’ is to blame, and how much they will pay to fix the problem. Make no mistake, you, as the owner, will ultimately pay in some way. Scope creep is a risk an every construction project, and the risk can be lessened with good contract terms and a committed team. Regardless, even the best-written contracts cannot avoid this risk entirely, and during the course of construction, your team may uncover a need that is not in anyone’s scope, nor in your budget. More on Scope Creep
Force Mineur – Your contracts should have Force Majeure conditions that describe the roles and responsibilities of the contracting parties when unforeseen, uncontrollable conditions persist. Such conditions are often related to major weather events or other ‘Acts of God’ that typically are covered by the insurance products you carry. But what about those unforeseen, uncontrollable conditions that fall below the thresholds of force majeure, but cost you real money? More on Force Mineur
Post-Commissioning Flu – This risk refers to a ‘sickness’ that many systems seem to contract a few weeks after the EPC has packed up and left, the commissioning team has submitted their final report, or just after the 1-year warranty on workmanship expires. Unfortunately, for many systems, this is when the performance and outputs begin to drop off, resulting in your financial return either treading water or beginning to sink. More on Post-Commissioning Flu