Overview

The U.S. construction industry employs close to 9 million full and part time employees, and contributes nearly US $1.5 trillion to the U.S. economy making it the largest single production sector. Moreover, construction works represent approximately 5% of the nation’s Gross Domestic Product Thus, the construction industry is regarded not only as a backbone of the nation’s economy but also as an integral indicator of its efficiency and effectiveness. The construction industry is characterized by the close integration of many different trades in construction projects. In fact, this integration has intensified in the past decades with the transformation from simple, straightforward small projects to complex, sophisticated large-scale projects. A single construction project would require interaction between dissimilar, yet contractually integrated parties, including inter alia, owners, designers, contractors, sub-contractors, suppliers, manufacturers, and others. As a result, construction is described as a collaborative teamwork process where parties with different interests, functions, and objectives, share a common goal, which is the successful completion of a project. The above described interdependencies and diverging interests in the construction process make construction projects described as complex adaptive systems. That said, risks and uncertainties are an integral part of the construction process. Construction risks can be categorized in a number of ways based on the source of risk, impact of risk, or by project phase. Examples of construction interrelated risks can, for example, include: design, site, execution, economic, financial, political, environmental, human, and force majeure risks.