example
Procurement Risk Register
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Name of tender: [name]
Risk
Impact
What would stop our procurement
objectives being met?
What would be the result of this risk?
Example: Suppliers do not
understand the business need.
Proposals fail to address the
requirements, no proposals meet the
need.
How risky is this if left uncontrolled?
Likelihood
Possible
Consequence
High
Risk rating
(uncontrolled)
Does Procurement Plan mitigate risk?
What is in place to reduce the risk?
Make sure the description of goods/services
is comprehensive. Double-check the final
draft with the business owner. Set
appropriate weightings.
What level of risk remains if mitigated?
Likelihood
Rare
Consequence
Low
Risk rating
(controlled)
Do we need additional controls?
What else could we do to reduce this
risk?
Test the description of goods/services
with someone not involved in the
drafting. Provide supplier briefings
before issuing tender.
RISK RATING = use colour + letter
G
green
yellow
amber
red
How to define your risks
Once you have identified specific risks, use the steps below to identify the likelihood, consequence and risk rating.
STEP 1 - choose one of the following to define the likelihood of the risk happening
Likelihood
level of risk
your assessment
Almost certain
Likely
Possible
Unlikely
Rare
Is expected to occur in most circumstances
Would probably occur in most circumstances
Could occur at some time
Is not expected to occur
May occur only in exceptional circumstances
STEP 2 - choose one of the following to define the consequence if the risk happens
Consequence
level of risk
your assessment
Extreme
High
Moderate
Low
Negligible
Significant impact on the achievement of goals/objectives
High impact on the achievement of goals/objectives
Moderate impact on the achievement of goals/objectives
Impacts on a limited aspect of the activity
The consequences are dealt with by routine operations
STEP 3 - use these two ratings to determine the overall risk rating (green/yellow/amber/red)
Plot the likelihood and consequence ratings on the matrix to identify the colour of the risk rating.
For example: a risk with a 'possible' likelihood and 'moderate' consequence would be rated as AMBER (where the two intersect on the matrix).
Likelihood
Consequence
Risk rating
rare
rare
unlikely
unlikely
rare
rare
unlikely
possible
possible
likely
rare
unlikely
possible
possible
likely
likely
almost certain
almost certain
unlikely
possible
likely
likely
almost certain
almost certain
almost certain
negligible
low
negligible
low
moderate
high
moderate
negligible
low
negligible
extreme
high
moderate
high
low
moderate
negligible
low
extreme
extreme
high
extreme
moderate
high
extreme
green
green
green
yellow
yellow
yellow
yellow
yellow
yellow
yellow
amber
amber
amber
amber
amber
amber
amber
amber
red
red
red
red
red
red
red
Examples of potential risks*
Identifying the need
Understatement of the need
Overstatement of the need
Insufficient funding
Impractical target dates
Probity failure
Misinterpretation of user needs
Political environment
Likely media interest
Developing the specification
Narrow definition or commercial specification (e.g. brand name)
Definition of inappropriate product or service
Biased specification
Inadequate specification or statement of work (for services)
Detrimental environmental impacts
Selecting the procurement method
Failure to identify potential sources
Selecting inappropriate method
Supplier collusion
Strength of New Zealand and international market
Contract documents
Terms and conditions unacceptable to service providers
Providing inadequate information method
Seeking, clarifying and closing offers
Failure to address service provider enquiries adequately
Actual or perceived favouritism in providing information
Actual or perceived breach of confidentiality
Insufficient number of responses
No response from known quality service providers
Evaluating offers
Failure to follow effective evaluation procedures
Breaches of security
Offers fail to meet needs
Failure to identify a clear winner. Decision made on subjective grounds
Selecting the preferred service provider
Selecting an inappropriate service provider
Selecting inappropriate product
Seeking, clarifying and closing offers
Not matching the expectations of buyer and service provider
Deadlock on details of agreement
Failure to secure mandatory conditions
Unfair or onerous requirements on the service provider in the contract conditions
Failure to reflect the terms offered and agreed in the contract
Inadvertently creating a contract without the delegates prior approval. Inappropriate product
Contract management
Variations in price and foreign exchange
Unwillingness of the service provider to accept the contract
Unwillingness of the service provider to accept the contract
Inadequately administering the contract
Commencement of work by the service provider before contract is exchanged or letter of acceptance issued
Unauthorised increase in scope of work
Loss of intellectual property
Failure to meet liabilities of third parties (e.g. royalties or third party property insurance)
Loss of or damage to goods in transit
Fraud
Key personnel not available
Supplier goes out of business
Disposal
Collusive bidding at auction
Inadequate tender management
Evaluating the procurement process
Failure to evaluate procurement and management processes
Failure to identify and address problem management
[* Source: NSW Government Procurement Guidelines]
