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Halcrow Group Applies Palisade's @RISK to Manage Potential Threats and Opportunities
Leading infrastructure engineering company Halcrow Group Ltd has adopted Palisade's flagship risk analysis software, @RISK, for UK Environment Agency projects. Halcrow uses @RISK in the risk quantitative stage of its projects to set risk budgets at the start of each phase of the project commission. From an initial understanding of project budget, Halcrow uses @Risk to assess and quantify potential threats and opportunities that could affect project objectives and alter the base price.
Tim Wells, project manager at Halcrow, comments: "Halcrow's line of business makes robust risk analysis an essential part of project management, and the Environment Agency's core principles reinforce this way of working. Palisade and @RISK provide us with a flexible product that is easy to use, as a result of which we are able to understand the significance of risks on projects. In addition they ensure that the Environment Agency is accountable to the UK public by putting its funds to the most effective use to manage the risk of flooding and erosion."
@RISK is a Monte Carlo simulation add-in for Microsoft Excel that has become popular due to its analytical power, ease of use and understandable results. The product has broad applications in business, government and education.
For many years Halcrow has undertaken contracts that form an integral part of the Environment Agency's Flood Defence programme, with work including:
* improving hard flood defences in urban environments
* re-instating rivers to flow in their original form (a river's meandering path and resulting flood plain acts as a natural guard against excess water)
* managed realignment of coastal regions (re-flooding areas where original flood defences are no longer sustainable in order to relieve pressure on the overall system)
* construction of groynes (structures running perpendicular to a beach) to recharge beaches (more sand on the beach offers more protection against flooding)
Risk management is embedded within the core principles of the Environment Agency. It facilitates the effective delivery of projects by helping to identify and understand the sources of uncertainty to achieving a project's objectives. Careful management of financial risks can also assist in delivering more flood risk management schemes to protect vulnerable communities.
All suppliers to the Environment Agency must therefore adhere to a proactive level of risk management. Their selection and procurement is carried out under Environment Agency Frameworks1 by the National Capital Programme Management Service (NCPMS), which is responsible for the nation's capital flood defence programme.
To further encourage effective use of budget through risk management, the Environment Agency administers an incentivised contract scheme that is increasingly standard in the construction industry. If suppliers meet the agreed terms of the contract they receive a pre-agreed share of the project budget. If however they do not perform as well as expected, their revenue is reduced.
1-the National Engineering & Environmental Consultancy Agreement No. 2 (NEECA2) and the National Contractors Framework (NCF). 07.02.2007, Halcrow Group
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