Risk Management

Question 1

What do you understand by risk management?

Answer 1

Risk management is a proactive exercise designed to enable the identification, analysis and effective ongoing management response to risks.

Question 2

What is a risk in the context of a construction project?

Answer 2

An uncertain event or set of circumstances that, should it occur, will have an effect on the project’s objectives. Examples may be given, such as statutory consents, design change, etc.

Question 3

What is the purpose of a contingency on a project?

Answer 3

The contingency sum is usually incorporated to allow for unforeseen items and/or project specific risks. Risk assessment can be used to provide an objective assessment of the contingency requirement, rather than relying on percentages which do not relate to project circumstance.

Question 4

What is ‘Consequential Risk’?

Answer 4

A risk that may occur as a result of another risk occurring

Question 5

What is an ‘Issue’?

Answer 5

Events that are happening now or will almost certainly happen in the future

Question 6

What is ‘Risk Appetite’?

Answer 6

The willingness of a person or an organisation to accept risk

Question 7

What is a risk register?

Answer 7

To note down, score and mitigate the risks that could arise on a project.
The purpose is to continuously monitor risks throughout the project period to minimize or mitigate the consequences

Question 8

What are the NRM risk categories?

Answer 8

Design development risks
Construction risks
Employer change risk
Employer other risks (e.g. early handover, postponement, availability of funds etc.)

Question 9

Explain a typical risk management process? (5 main steps)

Answer 9

Identification – workshops, checklists, interviews, design review etc.

Analysis (qualitative and quantitative)

Management (risk response and management actions)

Review(s)
o Risk probability and impacts (monthly)
o Implementation of risk responses (monthly)

o Update risk register (quarterly)
o Risk management maturity (quarterly)

Reporting

Question 10

What risk response and mitigation strategies are available?

Answer 10

Risk avoidance (where the impact is unacceptable)
Risk reduction (where the level of risk is unacceptable)
Risk transfer (pass responsibility to another party better able to control the risk)
Risk sharing (where the risk is not entirely transferred and the employer retains some element of risk)
Risk retention (employer retains risks that are not necessarily controllable – reduces as the project progresses)

Question 11

Explain quantitative risk analysis (QRA)?

Answer 11

Calculation of cost or time effects of risk.