ABSTRACT
Virtual gates are potential gates that can be introduced in the project life-cycle model as the project progresses. Effectively they break up the project into smaller and smaller units for management and control. The virtual gate approach involves frequent and vigilant monitoring of risks, using a technique like causal mapping which can track patterns of risk, coupled with excellent communication. A termination for convenience clause in a contract should be exercised as a last resort. Procurement strategies should reflect the type of complexity and include clauses allowing termination for convenience if switching values are reached. This is a less attractive option as any termination clause applied mid-way involves the awarding of costs to the service provider or contractor for work partly committed plus loss of potential profit. Eventually the contractor experienced a cash-flow crisis that further delayed construction and the further delays in construction caused an escalation of project costs which eventually forced the contractor into bankruptcy.
