Risk assessment and allocation in the contract for public works used in Saudi Arabia construction industry

Abstract

This article aims to propose a new model to assess the Saudi public contract for risk sharing through the investigation of the perceptions and proposals of owners and contractors in Saudi Arabia on the statement of the clauses of the contract. The data collection tool used is a survey questionnaire comprising 70 items that refer to each clause of the Unified Contract for Public Works (UCPW) in Saudi Arabia. A sample size of 42 was determined using Kish’s formula (20 contractors and 22 owners) and a total number of 46 responses had been received. The results revealed that, in general, respondents did not believe that risk sharing exist in the Saudi UCPW. Moreover, 11 new areas of disagreement emerged from the proposals of the respondents. Using the Chi-square test, the data was tested for dependency on respondent’s type, and it was found that the number of risks allocated to each party is independent from the type of respondent.

Keywords

• risk assessment
• public contract
• saudi arabia
• construction contracts
• risk sharing