First Principles of Risk

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AIA’s Guide to the First Principles of Risk was developed as a means to start the risk conversation – identify the principles that work for the agency and project developer and take time to create consensus on other areas.

For Association Members: Promoting the First Principles of Risk will help ensure transparent, fair, and successful P3 procurements.

For Private Sector Industry Participants: Understand the core purpose and transformative potential of the First Principles of Risk to navigate the P3 procurement period more strategically and successfully.

For Public Sector Officials: Incorporate the First Principles of Risk into your P3 procurement strategy to optimize outcomes and increase the efficiency of the procurement process, thereby reducing the risk of lengthy procurement processes.

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1.1 Common Defined Terms

	I agree	I disagree
Common Defined Terms	I agreeCommon Defined Terms I agree	I disagreeCommon Defined Terms I disagree

Common Defined Terms Comments:

2. Site Issues

	I agree	I disagree
2.1 Reliance on Information	I agree2.1 Reliance on Information I agree	I disagree2.1 Reliance on Information I disagree
2.2 Undisclosed Site Issues	I agree2.2 Undisclosed Site Issues I agree	I disagree2.2 Undisclosed Site Issues I disagree
2.3 Right of Way Acquisition	I agree2.3 Right of Way Acquisition I agree	I disagree2.3 Right of Way Acquisition I disagree
2.4 Hazardous Materials	I agree2.4 Hazardous Materials I agree	I disagree2.4 Hazardous Materials I disagree

Site Issues Comments:

3. Utilities, 3rd Party Coordination and Approvals

	I agree	I disagree
3.1 Utilities	I agree3.1 Utilities I agree	I disagree3.1 Utilities I disagree
3.2 Third Party	I agree3.2 Third Party I agree	I disagree3.2 Third Party I disagree
3.3 Government Approvals	I agree3.3 Government Approvals I agree	I disagree3.3 Government Approvals I disagree

Utilities, 3rd Party Coordination and Approvals Comments:

4. Changes and Modifications

	I agree	I disagree
4.1 Owner Led Changes	I agree4.1 Owner Led Changes I agree	I disagree4.1 Owner Led Changes I disagree
4.2 Developer Led Changes	I agree4.2 Developer Led Changes I agree	I disagree4.2 Developer Led Changes I disagree
4.3 Directive Letters	I agree4.3 Directive Letters I agree	I disagree4.3 Directive Letters I disagree

Changes and Modifications Comments:

5. Supervening Events

	I agree	I disagree
5.1 Compensation Events	I agree5.1 Compensation Events I agree	I disagree5.1 Compensation Events I disagree
5.2 Relief Events	I agree5.2 Relief Events I agree	I disagree5.2 Relief Events I disagree
5.3 Force Majeure Events	I agree5.3 Force Majeure Events I agree	I disagree5.3 Force Majeure Events I disagree
5.4 Change in Law	I agree5.4 Change in Law I agree	I disagree5.4 Change in Law I disagree
5.5 Process for Claims	I agree5.5 Process for Claims I agree	I disagree5.5 Process for Claims I disagree

Supervening Events Comments:

6. Operations and Maintenance

	I agree	I disagree
6.1 O&M Work	I agree6.1 O&M Work I agree	I disagree6.1 O&M Work I disagree
6.2 O&M Costs	I agree6.2 O&M Costs I agree	I disagree6.2 O&M Costs I disagree
6.3 Major or Life-cycle Maintenance	I agree6.3 Major or Life-cycle Maintenance I agree	I disagree6.3 Major or Life-cycle Maintenance I disagree

Operations and Maintenance Comments:

7. Handback Requirement

	I agree	I disagree
7.1 Handback Obligations	I agree7.1 Handback Obligations I agree	I disagree7.1 Handback Obligations I disagree

Handback Requirement Comments

8. Performance Requirements:

	I agree	I disagree
8.1 Key Performance Incentives	I agree8.1 Key Performance Incentives I agree	I disagree8.1 Key Performance Incentives I disagree

Performance requirements comments:

9. Financing Risks and refinancing

	I agree	I disagree
9.1 Financing RIsk	I agree9.1 Financing RIsk I agree	I disagree9.1 Financing RIsk I disagree
9.2 Interest Rate Risk	I agree9.2 Interest Rate Risk I agree	I disagree9.2 Interest Rate Risk I disagree
9.3 Refinancings	I agree9.3 Refinancings I agree	I disagree9.3 Refinancings I disagree

Financing Risks and Refinancing Comments:

10. Equity Requirements (copy)

	I agree	I disagree
10.1 Change in Ownership	I agree10.1 Change in Ownership I agree	I disagree10.1 Change in Ownership I disagree
10.2 Revenue Sharing	I agree10.2 Revenue Sharing I agree	I disagree10.2 Revenue Sharing I disagree

Equity Requirements Comments:

11. Insurance and Indemnity

	I agree	I disagree
11.1.1 Insurance	I agree11.1.1 Insurance I agree	I disagree11.1.1 Insurance I disagree
11.1.2 Benchmarking Insurance Costs	I agree11.1.2 Benchmarking Insurance Costs I agree	I disagree11.1.2 Benchmarking Insurance Costs I disagree
11.2 Uninsurable Risks or Unavailable Term	I agree11.2 Uninsurable Risks or Unavailable Term I agree	I disagree11.2 Uninsurable Risks or Unavailable Term I disagree
11.3 Indemnity	I agree11.3 Indemnity I agree	I disagree11.3 Indemnity I disagree

Insurance and Indemnity Comments:

12. Defaults and Termination

	I agree	I disagree
12.1 Developer Defaults	I agree12.1 Developer Defaults I agree	I disagree12.1 Developer Defaults I disagree
12.2 Remedial Plan	I agree12.2 Remedial Plan I agree	I disagree12.2 Remedial Plan I disagree
12.3 Termination by Owner for Developer Default	I agree12.3 Termination by Owner for Developer Default I agree	I disagree12.3 Termination by Owner for Developer Default I disagree
12.4 Compensation on Termination for Developer Default	I agree12.4 Compensation on Termination for Developer Default I agree	I disagree12.4 Compensation on Termination for Developer Default I disagree
12.5 Owner Defaults	I agree12.5 Owner Defaults I agree	I disagree12.5 Owner Defaults I disagree
12.6 Compensation on Termination for Owner Default	I agree12.6 Compensation on Termination for Owner Default I agree	I disagree12.6 Compensation on Termination for Owner Default I disagree
12.7 Termination by Owner for Convenience	I agree12.7 Termination by Owner for Convenience I agree	I disagree12.7 Termination by Owner for Convenience I disagree
12.8 Termination by Either Developer or Owner in No-Fault Circumstances	I agree12.8 Termination by Either Developer or Owner in No-Fault Circumstances I agree	I disagree12.8 Termination by Either Developer or Owner in No-Fault Circumstances I disagree

Defaults and Termination Comments:

13. Key Personnel and Subcontracting

	I agree	I disagree
13.1 Key Personnel	I agree13.1 Key Personnel I agree	I disagree13.1 Key Personnel I disagree
13.2 Subcontracting	I agree13.2 Subcontracting I agree	I disagree13.2 Subcontracting I disagree

Key Personnel and Subcontracting Comments:

14. Miscellaneous

	I agree	I disagree
14.1 Performance Security Requirements	I agree14.1 Performance Security Requirements I agree	I disagree14.1 Performance Security Requirements I disagree
14.2 Price Adjustments for Commodities	I agree14.2 Price Adjustments for Commodities I agree	I disagree14.2 Price Adjustments for Commodities I disagree

Miscellaneous Comments:

Contact:

Lisa Buglione, Executive Director
For more information or to set a meeting to discuss AIAI's First Principles of Risk.

lbuglione@aiai-infra.org

516-277-2950 (office)

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Contact:

Lisa Buglione, Executive Director For more information or to set a meeting to discuss AIAI's First Principles of Risk.

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Lisa Buglione, Executive Director
For more information or to set a meeting to discuss AIAI's First Principles of Risk.