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TechnipFMC Case Study On Risk Management


Task: The current assignment on TechnipFMC case study will discuss the various business processes of a multi-national contraction company – “Technip FMC”, based in London, UK.


1. Introduction
The current assignment on TechnipFMC case study will be based on the various business processes of a global construction company. The discussion will be starting from the 'Project Delivery' method to the 'Risk Management' plans. The 'Project Delivery', 'Financial Contract', and 'Procurement' explanations will present importance levels and scores to understand their requirement at the organization.

1. Background of the TechnipFMC case study
The current assignment on TechnipFMC case study will discuss the following areas from a multi-national contraction company – “Technip FMC”, based in London, UK. As its global identity, the company offers services to the ‘Asia Pacific’, ‘Africa’, ‘America’, ‘Europe’, and ‘Middle-east’ countries(Chinn, 2020). They provide jobs to over 44,000 employees in different positions and earn a revenue of US$13 billion. They are currently planning for constructing the largest unit of "Hydrogen Generation" in India(Chinn, 2020). They are now focusing on conduct business in 'offshore', 'onshore', 'subsea', and 'surface'. So, it is obvious for them to face difficulties in generating efficient 'Project Delivery' methods, managing 'human' resources or workers, and tax and market-related competitions. The current assignment on TechnipFMC case study will shed light on these factors and provide the best recommendations.

2. Recommended ‘Project Delivery’ Method




Score (from 1-5, where 5 is the best)



Engaging with a single entity to provide designs or, construction services.

Understand the technical and resource capacity according to the requirement

Escalating cost and schedule with measuring potential risks

Works separately with another entity



As a multi-national company explored in the TechnipFMC case study, Technip FMC; needs to adopt Design-Bid-Build; method to develop and improve their works. Design-Bid-Build; helps in encouraging the construction companies to improve their existing architecture, engineering and construction processes (Arshad, et al., 2019). However, it requires more legal stability and development to prevent contractual risks.


Hired as an entity to provide design, construction and performance under a single contract

It can be performed by their resources or can be subcontracted with other entity

Medium to High


The "Design-Build" is a well-adopted 'Project Delivery' method across the USA because of its competitive 'superior cost' and timely delivery sense. Almost 75% of the "D-B" project has finished before their deadline (Chen, et al., 2016). It can help the company mentioned in the TechnipFMC case study to increase its revenue by providing work before the actual time and schedule. However, 'cost-overrun' is still uncertain.

CM at Risk; or CMAR;

Under the CM at-risk; method noted herein TechnipFMC case study, the construction manager needs to deliver the performance under the Guaranteed Maximum Price; contract

The construction manager can be an individual entity hired by a project owner at their planning or pre-planning stage to work on the schedule, cost, cash flow, engineering and methods.



The implementation of the "CM at-risk" delivery method enables the construction company to make the project owner agreeing on the "guaranteed maximum price" when the project is at 80% completion (Kim, et al., 2020). It helps in mitigating delays and the last moment changes efficiently. It is stated in the TechnipFMCcase study that it also helps the project owner to reduce their 'construction' cost.

3. Recommended ‘Financial Contract’ Type

Types of Contract



Score (from 1-5, where 5 is the best)


Lump sum; Contract

Agreeing on a lump sum price for a particular project before the starting of the project

The contract will be based on the agreement in executing and completing the discussed project within the schedule and decided lump sum money



The "Lump sum" contract can be a risk to the construction company if not completing the delivery within time. However, as noted in the TechnipFMC case study interested and conscious project managers are comfortable with this contract (Sancho Calderón, 2017). However, during the actual project process, the 'target-cost' can act as a burden in generating quality performance. So, it is the responsibility of the organization to appoint a credible team and managers to handle a project under this contract.

Guaranteed Maximum Price; Contract

The company needs to efficiently calculate the maximum project price to not face any financial loss

Enhances the company to plan independently, but it requires to make the plan under its initial offered cost



The application of the "Guaranteed Maximum Price" contract is beneficial in strengthening the project mechanisms and focusing on specific areas. It is different from the 'target costing' factor, where "GMP" can generate creative works and measures the project operations(Bugrov & Bugrova, 2019). The analysis of this contract needs to be done carefully to achieve its maximum outcome.

Cost-plus Fixed Fee; Contract

The prices will be finalized after understanding the requirement and capacity of the project to generate the profit

It can be changed according to the performance generation



It is the most beneficial method while conducting 'outsource' construction works. The implementation of the "Cost-plus Fixed Fee" contract is related to the 'procurement', 'engineering', and 'construction' processes (Mahmoudi, et al., 2020). The additional fees can be received as a profit for the organization. It is a sustainable and low-risk process.

4. What is the recommended ‘Procurement’ method developed in the TechnipFMC case study?




Score (from 1-5, where 5 is the best)



Competitive; procurement process related to competitive proposals, bidding, direct purchases, maintenance, professional and non-professional service generation, and material and supply processes

The bidding process allows the best value at the best price



The different 'procurement' methods are responsible for making complex decisions in a construction project. A client can appoint an entity through the Competitive; procurement or bidding process(El-Sawalhi & El Agha, 2017). It is an important process as it defines the companys procurement method and ability to work on certain situations. It is transparent and generates result according to the market demand and prevent favoritism among the construction industry.


An individual entity offers price according to their capacity and performance standard to the project owner

There is no competition between the constructors and the organization select for their ability and good portfolio in a negotiated pricewith an agreement from both party



The Negotiated bidding method enables a construction company to serve a long-term relationship with the project owners company. The negotiated procurement process is relatively common and highly successful among the private sector with individual clients (Kim, et al., 2019). It is easier to engage with big projects without engaging in any competition.

Best Value;

Focuses more on the performance generation and expertise quality rather than choosing by the cost

The value-based construction work can be compared with the cost and beneficial aspects before engaging an entity



Acquiring an efficient project result is related to both value and cost. However, due to the 'cost-bidding' process, receiving 'value-based' work is rare. It is a perfect opportunity in producing 'value-based' work within an agreed budget to get noticed by other big organizations. The best value procurement method enables the project owner to select an entity by judging their management capability and their risk-management techniques in any situation (Perrenoud, et al., 2017). The project owner will not engage with a construction company who is not clear about their capacity and risk mitigation plans.

5. ‘Risk Management’ Plan




Risk Register;


For the present TechnipFMC case study, it is important to identify and register the potential risks to prevent any uncertain situation during the construction works. The 'risk register' is mostly related to the potential issue that can delay the project processes other than the 'regulatory compliance'. The main risk related to the 'construction industry' is delayed schedule, 'cost overrun', and performance deterioration that involves the project owner, contractor, and 'subcontractor'(Abd El-Karim, et al., 2017). The engagement of experienced managers and workers can help the organization to identify any potential risks at an earlier stage. The international projects need more concentration and a thorough background check to avoid any resource and cost-related risks in the beginning.

Risk Quadrant Analysis;


Financial Risks are related to the default payment transaction, 'cost overrun', uncompetitive bidding, inefficient account management, and uncertain 'economic recession'. The company needs to maintain its financial planning and accounting process regularly to mitigate further risks related to these issues.   

Strategic Risks can affect the company by facing negative publicity, political conflicts, new market threat, and pricing and supply competition. As outlined in the TechnipFMC case study, being a multi-national company, these issues can be mitigated by planning for branding and competency nature enhancement.  

Operational Risks during the designing and planning process can be resolved by maintaining the resources, equipment, IT infrastructure, logistic process, inefficient negotiation nature, and internal safety assurance.

Hazard Risks occurred from uncertain events, such as accidents at the construction sites, poor weather conditions, injuries, bad working environment, and other relevant difficulties. The management should plan and ensure the prevention of these causes by adopting an efficient maintenance process.  

Risk Mitigation;


After identifying the potential risks, it is important to implement risk mitigation planning to reduce the disruptions. The appropriate project visibility and flexibility can resolve the negative impacts related to the project resources and coordination (Zailani, et al., 2016). The 'optimization' of the 'supplier' development and proper project planning for reducing 'cost overrun' and delay issues.

6. Conclusion
The current assignment on TechnipFMC case study has analyzed the recommended 'project delivery', 'financial contract', and 'procurement' methods for the multi-national construction company, “Technip FMC”. It will help them in understanding the weight and description of each method and contract process that can help in improving their performance and revenue. The recommendation on the 'risk management' planning developed in the TechnipFMC case study will help them in identifying and mitigating potential risks during or before the project processes.

7. Bibliography
Abd El-Karim, M. S. B. A., Mosa El Nawawy, O. A. & Abdel-Alim, A. M., 2017. Identification and assessment of risk factors affecting construction projects. TechnipFMC case studyHBRC journal, 13(2), pp. 202-216.

Arshad, M. F., Thaheem, M. J., Nasir, A. R. & Malik, M. S. A., 2019. Contractual risks of building information modeling: Toward a standardized legal framework for design-bid-build projects. Journal of Construction Engineering and Management, 145(4), p. 04019010.

Bugrov, O. & Bugrova, O., 2019. An algorithm of selecting the pricing model for a construction contract. Chen, Q. et al., 2016. Time and cost performance of design–build projects. Journal of Construction Engineering and Management, 142(2), p. 04015074.

Chinn, S., 2020. Top 18 Biggest Construction Companies in the World and What Makes them Great.TechnipFMC case study[Online] Available at: [Accessed 23rd July 2020].

El-Sawalhi, N. I. & El Agha, O., 2017. Multi-attribute utility theory for selecting an appropriate procurement method in the construction projects. Multi-Attribute Utility Theory for Selecting an Appropriate Procurement Method in the Construction Projects, 22(1).

Kim, G.-S., Jin, Z.-X. & Hyun, C.-T., 2020. GMP Calculation Process in CM at Risk for Public Construction Project. s.l., The Korean Institute of Building Construction, pp. 48-49.

Kim, S.-W., Lee, K.-W. & Yu, J.-H., 2019. Preliminary Analysis of the Bid Success Ratio according to the Characteristics of Overseas Construction Projects. Korean Journal of Construction Engineering and Management, 20(3), pp. 122-133.

Mahmoudi, A. et al., 2020. A novel model for risk management of outsourced construction projects using decision-making methods: a case study. Grey Systems: Theory and Application.

Perrenoud, A., Lines, B. C., Savicky, J. & Sullivan, K. T., 2017. Using best-value procurement to measure the impact of initial risk-management capability on qualitative construction performance. Journal of Management in Engineering, 33(5), p. 04017019.

Sancho Calderón, D., 2017. Selection of contract type in construction contracts: Lump-Sum, Target-cost and Cost-plus contracts. s.l.:s.n.

Zailani, S. et al., 2016. The moderating effect of project risk mitigation strategies on the relationship between delay factors and construction project performance. TechnipFMC case studyJournal of Science and Technology Policy Management.


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