RICS Guidance - Risk Management Flashcards
What is a risk?
An uncertain event or circumstance that, if occurs, will affect the outcome of one of the project/programme.
Also: the likelihood of an event or failure occurring.
What is an issue?
Events that are happening now, or will almost certainly occur in the future.
What is an example of an issue?
Unmediated disputes, unresolved decision making, risks that have occurred.
What is the difference between a risk and an issue?
Issues are certain events, risks are uncertain events.
Risks can become issues if they occur.
How are risks managed pre contract?
Risk register
What are the 5 ways to deal with risks?
Risk avoidance.
Risk reduction.
Risk transfer to the contractor.
Risk sharing.
Risk retention by employer.
What is risk avoidance?
Where risks have serious consequence on the project outcome. Measures include reviewing the employees brief, alternative design solution or even project cancellation.
What is risk reduction?
Where the level of risk is unacceptable and actions are taken to reduce the chance of occurring of the impact should it occur.
For example, additional site investigation to improve information, using different materials to avoid long lead times or different construction methods.
What is risk transfer?
Risks that impact the building program can be transferred to another party who is able to control it more effectively.
What is risk sharing?
When a risk is not fully transferred to one party and some elements of the risk are retained by the employer.
What is risk retention by the employer?
Where the employer keeps a risk allowance identified in the cost plan reserved for a specific risk.
What are the five categories of risk?
Political and business risks
Benefit risks
Consequential risks
Project risks
Program risks
What are political and Business risks?
The occurrence of risk which has an adverse effect on the business.
What is a benefit risk?
Where a project fails to deliver the performance expected, which leads to an undermining of the long-term business case
What are consequential risks?
Risks that may occur as a result of other risks.
What are project risks?
The possibility that something may go wrong during the execution of a project that could affect the successful delivery of it.
Project risks are commonly considered in terms of time cost and quality.
What are the NRM1 risk categories?
Design development risks
Construction risks
Employer change risk
Employer other risks
What is a design development risk?
A risk allowance to be used during the design process to provide for the risks associated with design development; changing in estimating data
third-party risks
planning requirements
Legal agreements
environmental issues and pressure groups
Statutory requirements
procurement methodology
delays in tendering
What is a construction risk?
A risk allowance for you during the construction process to provide for the risks associated with site conditions.
Access restrictions
Existing buildings
Boundaries and existing occupants
Ground conditions
Existing services
Delays by statutory undertakers
What is an employer change risk?
A risk allowance for you during the design and construction process to provide for the risks of employer driven changes.
Changes in scope of works or brief.
Changes in quality.
Changes in timescales
What are employer other risks?
A risk allowance for employer risks.
Early handover,
Acceleration
Availability of funds
Liquidated damages
Unconventional tender action
Special contract arrangements
What are examples risk generators?
Natural
Economic
Government
Society
Client
Construction
Project
