Risk management plan

It is recommended that major purchases of standard goods and services and all purchases of complex goods and services have a documented risk management plan. A risk management plan is required where a procurement value exceeds $220,000 and/or the answer is NO to any of the above five questions.

• Whose Responsibility is it?
• It is the responsibility of all employees to assist in the identification and effective management of risks likely to affect the procurement dept.

Notwithstanding this, the Project Manager for a procurement project has overall responsibility for the effective and efficient management of the procurement including taking into account the risks at each stage of the procurement process.

Principles of Managing Risk
The key principles of managing risk in procurement are:

• Early and systematic identification, analysis and assessment of risks, including conflicts of interest and the development of plans for handling them;
• Allocation and acceptance of responsibility to the party best placed to manage risks; and
• Ensuring that the costs incurred in managing risks are commensurate with the importance of the purchase and the risks to the agency‘s operations.