JS Risk Management

Question 1

How do you carry out risk analysis and risk management?

Answer 1

Undertake initial risk workshop
Formulate and input into a risk register
Ensure each risk has been responded to
Monitor and review the risk register throughout the course of the project

Question 2

What is risk defined as?

Answer 2

The likelihood of an event occuring and it’s consequence or impact

Question 3

What are the stages of risk management?

Answer 3

Identify
Assess
Respond
Control/Monitor
Review

Question 4

What are the NRM risk categories?

Answer 4

Employer Change Risk
Employer Other Risk
Design Development Risk
Construction Risk

Question 5

What happens to risk allowances if the risk does not occur?

Answer 5

If it’s a central contingency pot, this should be reduced proportionally as the project progresses.

Question 6

Can you give me some examples of risk in a construction project?

Answer 6

External risks: Brexit, Covid
Financial risks: exchange rate, inflation
Client risks: lack of experience, likelihood of post-contract changes
Design risks: inappropriate consultant team, incomplete/poor design
Contractor selection: inadequate selection process.
Construction: weather, buildability, H&S, availability of resources, ground conditions

Question 7

What is the difference between qualitative and quantitative risk management?

Answer 7

Quantitative quantifies risks numerically 1-5.
Qualitative categorises them in descriptive terms such as low to very high.

Question 8

What is risk management?

Answer 8

Process of identifying, assessing and responding to risk and setting a procedure to manage the risk

Question 9

Tell me about the importance of risk registers?

Answer 9

Help to identify, analyse, monitor, manage and respond to potential hazards and risks.

Question 10

What are the various risk response strategies?

Answer 10

Retain
Reduce
Transfer
Avoid
Share

Question 11

What current challenges is Covid and/or Brexit bringing to Risk Management?

Answer 11

How do you allow for price increases?
Fluctuations in contracts
Who takes risk of covid?
Material delays

Question 12

What is the difference between a hazard and a risk?

Answer 12

A hazard is the potentially detrimental event that could occur.
A risk is the probability and impact of that hazard occurring.

Question 13

Can you expand on the Identify, Assess, Respond approach?

Answer 13

Risk identification should be carried out as early as possible.
Assessment can be carried out to determine the probability and impact of each risk item and its effect on cost, time and performance of the project.
Response actions aim to reduce the probability of the risk arising or to mitigate its impact should the risk arise.

Question 14

What is an uncertain or unforeseen event?

Answer 14

A random event that defies prediction.

Question 15

What is Risk Allocation?

Answer 15

Risks should be allocated to those who are best able to manage it, in a manner likely to optimise project performance.
Financial allocation of risk should be achieved through the contract documents.

Question 16

Describe the format of the risk register?

Answer 16

A risk register format will typically include:-
A description of the risk.
The risk owner.
A probability of occurrence.
The impact of its occurrence (£/wks).
Risk factors (probability x impact).
Actions required.
Review date.
Status (open or closed).

Question 17

What role does the QS play in Risk Management?

Answer 17

Assist in setting & managing contingency funds appropriately.
Undertake risk analysis to ensure accuracy of funds available & manage their release when no longer required.

Question 18

Can risk be calculated?

Answer 18

Risk can be calculated to an extent, but it cannot be calculated exactly otherwise it would not be classified as a risk.
Risk involves the probability of something occurring & its potential impact in the event that it does occur.

Question 19

What is Expected Monetary Value (EMV)?

Answer 19

EMV is the probability of the risk occurring multiplied by its impact.
Can be used to establish the overall monetary value of risks
within the project.
The probability is usually expressed as a fraction or percentage while the impact is usually a positive or negative monetary value.

Question 20

What is monte carlo simulation?

Answer 20

Uses computer software to predict the risk.

Question 21

What is a risk register?

Answer 21

A document listing all the risks identified for the project, explaining the risk qualitatively and quantitatively.

Question 22

How do you create a risk register?

Answer 22

All members of the project team come together and brainstorm elements of project risk.
All risks will be collated by the PM.

Question 23

How do you use the risk register?

Answer 23

Continually monitor risk items and assign likelihood and impact scores to each risk. Will give it an overall risk score.

Question 24

What is risk allowance?

Answer 24

A sum included to cover unknown expenses or unmitigated risks during the project.

Question 25

L1 - What methods are there to assess the value of a risk?

Answer 25

Probability trees and monte carlo simulation.

Question 26

L1 - How do you decide if a risk has passed?

Answer 26

It would be discussed within a risk workshop between the project team. For example, if asbestos had been identified on the risk register it would be removed following investigation and confirmation that there was none present.

Question 27

L1 - Have you participated in a risk workshop?

Answer 27

No, I have not participated in a risk workshop. I have been involved in progress meetings where the contractor has highlighted certain risks.

Question 28

L1 - How do you identify a risk?

Answer 28

Work collaboratively with stakeholders to identify everything that could go wrong with a project.

Question 29

L1 - How do you mitigate a risk?

Answer 29

You put appropriate actions in place to reduce the likelihood of the risk occurring.

Question 30

L1 - How would you score or weight a risk?

Answer 30

You apply a percentage to the risk, this is dependent on the likelihood of it occurring.

Question 31

L1 - What are the NRM1 measurement rules for risk and risk allowance?

Answer 31

Under NRM1 a risk allowance is calculated by estimating the risk allowance for:
design development risks
construction risks
employer change risks
employer other risks
These are calculated by multiplying the base cost estimate by a % probability.

Question 32

L1 - What current challenges is Covid and/or Brexit bringing to Risk Management?

Answer 32

How do you allow for price increases?
Fluctuations in contracts
Who takes risk of covid?
Material delays

Question 33

L1 - What is a Monte Carlo simulation?

Answer 33

A computer based software used for predicting risk.

Question 34

L2 - St Wilfrid’s – when the ground problems identified how was the value of the PS determined?

Answer 34

I reviewed the time and cost implications of removing the ground obstructions and priced them appropriately.

Question 35

What contractual mechanisms protect the client or contractor?

Answer 35

Performance Bond/PCG
Variations
LD’s

Question 36

How do probability trees work?

Answer 36

Tree diagrams are a way of showing combinations of two or more events. Each branch is labelled at the end with its outcome and the probability is written alongside the line.

Question 37

How does the monte carlo method work?

Answer 37

A random-number generator is used to run enough simulations to produce different outcomes that mimic real-life results.

Question 38

Can you provide some examples that relate to the NRM1 risk categories?

Answer 38

Design development risk - use during the design process to provide for the risks associated with design development i.e. planning requirements, environmental issues, tender delays etc.
Construction risk - allowance for use during the construction process to provide for the risks associated with site conditions i.e. ground conditions, existing services etc.
Employer change risk - allowance for use during both the design process and the construction process to provide for the risks of employer driven changes i.e. changes to scope of works, change in quality etc.
Employer other risk - an allowance for other employer risks i.e. acceleration, funding issues etc.