It is in the best interest of the Owner to allocate all risk to other parties. Is this true?

Allocating all risk to other parties may seem advantageous at first glance, but in practice, it can lead to complications and consequences that do not serve the owner’s best interests.

The ideal approach to risk allocation is achieving a balance that allows each party involved in a project to take on risks that they are best equipped to manage. By trying to pass all risks onto contractors or subcontractors, the owner may inadvertently create an environment of mistrust, constrain the contractor's ability to perform effectively, and lead to higher costs as contractors adjust their bids to account for the additional risk they must cover.

Furthermore, a complete transfer of risk can lead to a lack of accountability on the part of the owner, potentially resulting in unresolved issues or disputes arising from areas that may require the owner's input or decision-making. Each party needs to have a clear understanding of their respective responsibilities and risks to facilitate collaboration and ensure the project's overall success.

Thus, while it might be tempting for the owner to seek to transfer all risk, the reality is that a more nuanced approach to risk management usually yields better outcomes. Recognizing the capacity of different parties to manage risk is fundamental to a successful partnership in construction projects.