Abstract
This article deals with the problem of limiting the risk of taking up a construction contract for the execution of construction works. The authors have developed an advisory system that will support the analysis of threats on the basis of existing experiences for a specific activity without having to construct an individualized organizational model of an investment. In order to identify a relatively complete set of threats that occur in investment and construction processes in road construction investments, as well as to identify possible programs of their reduction, a model and a method of optimizing programs for reducing risks related to contracts was developed. Threats are considered to be possible events that take place during the preparation, implementation and settlement of any contract. The programs concern specific actions that can be taken in relation to specific threats. Every program contains a set of threats that will be limited as a result of its execution and also has a specific implementation cost. The aim of the proposed optimization is to determine, with regard to costs, a combination of risk reduction programs that is appropriate for the risk states that are accepted by a decision maker. The problem is solved using graph theory and a minimum cover determination algorithm with the use of the minimum alternative formula (mfa) of the Boolean function. A method of actively responding to identified threats during the implementation of a construction contract should take the form of an advisory system that will provide an answer as to what risks should be taken into account when undertaking a contract, as well as what actions can be taken to reduce these risks.
Highlights
Any deliberate activity is associated with a risk of its failure, which results from various types of threats that are not fully discovered in the course of preparing a targeted activity
The problem discussed in this paper is the method of determining the possibility of limiting the threats for a potential contractor for construction works, which should in turn lead to a reduction in the risk of implementing a construction contract
A construction contractor, when considering his decision to submit an offer for the performance of a contract, may take specific actions to reduce this risk by eliminating possible threats [9]
Summary
Any deliberate activity is associated with a risk of its failure, which results from various types of threats that are not fully discovered (identified) in the course of preparing a targeted activity. The problem discussed in this paper is the method of determining the possibility of limiting the threats for a potential contractor for construction works, which should in turn lead to a reduction in the risk of implementing a construction contract. A construction contractor, when considering his decision to submit an offer for the performance of a contract, may take specific actions to reduce this risk by eliminating possible threats [9]. These activities may involve conducting additional monitoring, supervision and control; securing a financial or time reserve for the execution of the contract; and transferring responsibility for disturbances to other contractors (e.g., the insurer), among other activities. Significant new elements when considering such a problem include the method of analyzing threats, assessing the risk of a contract and determining the possibilities of reducing risk
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