The Case of Unidentified Risk

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The Case of the Unidentified Risks

This project takes place in South Australia. In September 2000, ACME Fabricators advised its staff that their new factory and offices out in semi rural Angle Vale would be ready for completion by the end of April 2002. ACME was responsible company and liked to keep their premises clean and tidy and their staff happy. The new premises at the Angle Vale were developed on a 4.5 hectare site, previously used for grain crops. Consequently, ACME decided that significant landscaping would be required to enhance the amenity of the otherwise bare land.

The senior executive group pictured some land contouring with an attractive green lawn, and trees and shrubs to soften the impact of otherwise stark commercial buildings. Accordingly, they notionally allocated $232,000 for the project, and developed a tender document that called for the work to be completed by the time they moved to the new premises. They then invited proposals for landscaping and quote for the work.

A company called Arbor Industries submitted an artist’s sketch for the ACME evaluation team to picture what landscaping would look like. Arbor was selected with a bid of $175000, substantially lower than any other submission. Arbor then prepared a detailed landscaping plan based on existing drawings of the site provided in the tender. Arbor met with the ACME senior executives to agree project start date, access and security of the plant and equipment, and a fixed price contract. A contract was duly signed.

The project was scoped and planned by Arbor, with specific milestones for site works, irrigation, turf laying, and tree and shrub planting. Arbor had undertaken many similar jobs on city sites in the past and based on the knowledge and skills of the project team, they did not think that a formal project management plan would be needed. All they wanted was agreement on the scope of the project and the key deliverable dates. From experience, they wanted to deal...
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