Risk Management

Question 1

What is your understanding of contract risk?

Answer 1

It is the assesment of risk associated with a contract, this may include loss of opportunity, legal exposure if things go wrong, and potential business impact the contract will have on the involved parties.

Question 2

What is your understanding of project risk?

Answer 2

A project risk is an unknown or uncertain event which may occur during the lifecycle of a project, it could also be the risk associated with the project itself

Question 3

What are the key aspects of risk management?

Answer 3

They are identifying the risks, analysing them, prioritising them, planning a response, managing them through the project and then an analysis on completion

Question 4

What is your understanding of risk allowance?

Answer 4

It is the amount of risk that is agreed to be allowed, ie, time risk allowance is the amount of time allowed by the contractor in programming activities to allow for the risk of delay should problems arise.

Question 5

What is your understanding of how traditional procurement routes allocate design risk among project parties?

Answer 5

In a traditional procurement route separates design from construction, therefore the risk is predominately born by the client who will be appointing the designer

Question 6

What is your understanding of how design and build procurement routes allocates design risk among project parties?

Answer 6

With this route the contractor is responsible for the design of the finished project, therefore the risk associated with the design is allocated to them.

Question 7

What is your understanding of how PPP procurement routes allocate design risk among project parties?

Answer 7

Public Private Partnerships, the public body will usually stipulate the service it requires and the contractor is responsible for the delivery, with this it uslly shifts the risk with design onto the contractor with stage payments based on performance. The contractor may design the project to reduce ongoing maintenance costs to mitigate some of the ongoing risk

Question 8

What is your understanding of how traditional procurement routes allocate risk of cost overrun among project parties?

Answer 8

It depends on the procurement but typically it is done either through fixed price tendering to place the risk onto the contractor or it could be shared with an agreement of a gain share

Question 9

What is your understanding of how design and build procurement routes allocate risk of cost overrun among project parties?

Answer 9

This is not something that I have undertaken, but I do know it can be allocated by specifying a fixed price lump sum which allocates the risk to the contractor. Clients and contractors can mitigate against it by including contingency sums in their budgeting and agreements for variations and contract extensions or design changes

Question 10

What is your understanding of how traditional procurement routes allocate risk of time overrun among project parties?

Answer 10

Typically the risk is allocated to the contractor, with allowances, in the contract for unforseen events to mitigate some of the risk for the contractor and clauses for late delivery which protect the client

Question 11

What is your understanding of how design and build procurement routes allocate risk of time overrun among project parties?

Answer 11

This is not something that I have undertaken, but I do know it can be allocated by specifying a project timescale which allocates the risk to the contractor. Clients and contractors can mitigate against it by including contingency sums in their budgeting and agreements for variations and contract extensions or design changes

Question 12

What risk analysis methods are you aware of?

Answer 12

After identification, Probability and consequence analysis, brainstorming, bow tie analysis, probability impact scoring

SWIFT analysis

Question 13

What is quantitative risk analysis?

Answer 13

Quantitative risk analysis uses verifiable data to analyze the effects of risk in terms of cost overruns, scope creep, resource consumption, and schedule delays.

Question 14

What is qualitative risk analysis?

Answer 14

Qualitative risk analysis tends to be more subjective. It focuses on identifying risks to measure both the likelihood of a specific risk event occurring during the project life cycle and the impact it will have on the overall schedule should it hit.

Question 15

What is your understanding of sensitivity analysis in risk management?

Answer 15

It is an analysis of how changes in a specific area affect the outcome or variables, so how the risk can be managed, mitigated etc by making changes

Question 16

What is your understanding of expected monetary value risk analysis?

Answer 16

Expected monetary value (EMV) isa risk management technique to help quantify and compare risks in many aspects of the project. EMV is a quantitative risk analysis technique since it relies on specific numbers and quantities to perform the calculations, rather than high-level approximations like high, medium and low.

Question 17

What is your understanding of a risk register?

Answer 17

It is a log of identified risks, it’ll list the risk, the probability of it occuring, what will make it occur, what’ll happen and the impact it’ll have, how it can be managed or reduced, who is owning it and a timescale for review

Question 18

What is your understanding of a risk matrix during risk analysis?

Answer 18

It is a table, giving a way over defining the level of risk by considering the likihood against the impact

Question 19

What risk mitigation strategies are you aware of?

Answer 19

Accept, Avoid, Control, Transfer, Watch and Monitor

Question 20

What is your understanding of risk transfer?

Answer 20

It it the process of mitigrating a risk by transfering the strain of the risk onto another party. Like clients mitigating against material price rises by setting a fixed price contract

Question 21

What is your understanding of risk avoidance during risk management?

Answer 21

It is identifying a risk and then setting a strategy to avoid the risk from occuring. So you plan for it, then take steps to avoid it

Question 22

What is your understanding of risk reduction during risk management?

Answer 22

It is identifying the risk and then developing a plan to reduce the impact when it does occur, this could be bulk purchasing materials to reduce the impact of a price rise

Question 23

What is your understanding of risk acceptance during risk management?

Answer 23

When identifying the risks, you can choose to analyse them and accept. For example you could decide that prices may rise, but only by a little so you accept the reduced profit, or sickness outbreak hitting a project, you accept it will happen and set plans for when it does

Question 24

What is your understanding of fall-back option during risk management?

Answer 24

It is a back-up plan to the contingency plan, so you may set a contingency plan, if that then fails you have a further option. So in a rain affecting site where materials could be affected, you may order a dry store to keep them in, if that then fails your fall back could be to order more materials and submit an insurance claim

Question 25

Is the risk management process static, i.e. is it only done once? If not, why not?

Answer 25

No, for best practise in projects the risk resigister should be reviewed and updated periodically as new risks can occur or others can be crossed of after they have passed.

Question 26

There are 7-10 ways to identify risk, can you name a couple of them?

Answer 26

Brainstorming, checklists, review of other risk registers, review of past projects, doing the analysis alone, SWOT analysis

Question 27

What are the common causes of poor risk identification?

Answer 27

Risk ignorance, poor planning, poor logging, not seeking outside help and doing it alone, poor judgement

Question 28

What are the 4 stages to the risk management process?

Answer 28

Risk identification, risk analysis, Risk response plan, risk monitoring and control

Question 29

Name some of the ways in which you can identify risks.

Answer 29

Brainstorming, checklists, review of other risk registers, review of past projects, doing the analysis alone, SWOT analysis

Question 30

What is the layout of a risk register?

Answer 30

It’ll start off with something like the risk description, the impact decription, impact level, probability level, mitigation notes, owner and timescale for review

Question 31

How does change management and risk warning affect the risk register?

Answer 31

It needs updating to reflect any changes to the project as you move through the project lifestyle

Question 32

What is a risk workshop?

Answer 32

It is a gathering of involved parties to identify risks and then look at their mitigation etc

Question 33

What is a risk management plan?

Answer 33

It is a method for logging the risks and setting a strategy for how each one can be managed through the project lifecycle and how often this can be reviewed and who has ownership of it

Question 34

How can you mitigate risk?

Answer 34

It will depend on the risk and how you want to do it, but you can put the risk onto other parties, you can decide a stratgey for accepting or avoiding it, lessoning the severity

Question 35

What is probability and impact?

Answer 35

It is the likihood of the risk occuring and then the impact it will have on the project if it does occur

Question 36

What is Expected Monetary Value (EMV)?

Answer 36

Expected monetary value (EMV) analysis isa statistical concept that calculates the average outcome when the future includes scenarios that may or may not happen. An EMV analysis is usually mapped out using a decision tree to represent the different options or scenarios

Question 37

What is a Monte Carlo Simulation?

Answer 37

AMonte Carlo simulationis a model used to predict the probability of different outcomes when the intervention of random variables is present.

Question 38

Explain your understanding of Central Limit Theory (CLT) and Route Mean Square (RMS).

Answer 38

This is not something that I’m aware of and I would need to research this

Question 39

What is a quantified risk allowance?

Answer 39

The process produces a risk figure based on a percentage confidence that the figure will not be exceeded. It is common to report on an 80% confidence level.

Question 40

Tell me about the RICS Management of Risk (1st Edition) guidance note.

Answer 40

It’s a guidance note, effective from September 2015 and sets out key principles of risk management, response/mitigation strategies, risk identification techniques.

Question 41

Take me through about when you’ve contributed towards the identification of risks on a construction project.

Answer 41

Not on a construction project by I took part in a risk workshop when an internal service provider was expanding their area of operation. I met with a colleague, where we reviewed existing registers, looked at what might aapply and brainstormed our own ideas for potential risks, before logging it in a register and presenting it to our manager

Question 42

Take me through when you’ve helped identify who owns the risk in relation to the chosen procurement route on your project

Answer 42

In developing a risk register I looked at who was best placed to own the risk, in terms of their role and responsibilities

Would depend on the procurement route, with traditional procurement separating design and allocating that to the client/designer

Question 43

Take me through when you’ve contributed towards strategies to mitigate risk.

Answer 43

In developing the merger risk register we considered the possibility of being unable to deliver to the budget, we set a plan for meetings with the finance team, included budget discussion in the agenda for the contractor performance meetings and a target and process for post inspections to ensure we were acheiving value for money

Question 44

Take me through when you’ve analysed risks on a project or contract.

Answer 44

In my role at LCC when chairing the monthly contract review meetings I would include a review of the risk register in the agenda, we would go through ones that were sitting at open, have a discussion over it and agree if it can be left open or closed, if it needed a change in ownership or a change in approach etc

Question 45

Take me through when you’ve contributed data towards the quantification of risk

Answer 45

In a discssion of budget overspends I have brought information on current spend, forecasts and past years spend to allow this to happen

Question 46

Take me through when you’ve considered the effect of risk on programme

Answer 46

Not on a construction project by I took part in a risk workshop when an internal service provider was expanding their area of operation. I met with a colleague, where we reviewed existing registers, looked at what might aapply and brainstormed our own ideas for potential risks, before logging it in a register and presenting it to our manager

Question 47

Take me through when you’ve used the effect of risk to manage costs during a construction project.

Answer 47

I would manage costs on every project really

Question 48

Describe your role in the project group introducing a new schedule of rates.

Answer 48

So the rules in the rates were significantly different to the bespoke set that had been used at LCC for years, this presented a risk with the incorrect application, causing delays and overspend. So having used them before I advised on where the rules differed so we could put together a training plan to train all staff on how to use the new rates

Question 49

What advice did you provide regarding potential risks and their impact?

Answer 49

The potential risks were predominately the rules for measuring and quantities being applied properly which could lead to higher than necessary expenditure, giving us a risk of budget overspend. The impact could be significant but easily mitigated with effective training and support

Question 50

Describe your role in developing and delivering the training programme.

Answer 50

So the rules in the rates were significantly different to the bespoke set that had been used at LCC for years, this presented a risk with the incorrect application, causing delays and overspend. So having used them before I advised on where the rules differed so we could put together a training plan to train all staff on how to use the new rates. I also advised on the need for a condensed book of rates to reduce searching time

Question 51

Leeds Council sprinkler systems, how frequently are the sprinkler systems triggered?

Answer 51

They were still being rolled out at the time I left, with blocks for sheltered accomodation being prioritsed first, however even though only a relatively small percentage of blocks had been fitted we still saw them being triggered twice in a 3 month period. I also looked at data from fires in other tower blocks and knew that fires in blocks city wide occured at least once a month

Question 52

What issues are caused to tenants when sprinkler systems are triggered?

Answer 52

Usually flood damage, both to the subject property and the ones below, the primary issues are to their belongings and plaster damage to the ceilings

Question 53

How did you consider the probability of another event and the likelihood of issues for tenants?

Answer 53

I looked at past data for fires in tower blocks to look at the probability of similar events occuring in the future. We had seen in the few that had suffered that there was always damage caused by the water and that drying times could take a while at a time when they were already distressed so it was felt further action was needed

Question 54

Talk me through your mind mapping session to develop a risk register.

Answer 54

Not on a construction project by I took part in a risk workshop when an internal service provider was expanding their area of operation. I met with a colleague, where we reviewed existing registers, looked at what might aapply and brainstormed our own ideas for potential risks, before logging it in a register and presenting it to our manager

Question 55

What lessons were learned from past projects?

Answer 55

We looked at the risk registers and information, based on experience of bedding in new contractors. This gave us knoweldge of a drop in performance, issues with building relationships, understanding responsibilities etc

Question 56

Describe your role setting management strategies.

Answer 56

So as part of this session we developed a register, looking at the risks and ways in which we thought the risk could be managed, such as enforcing the post inspection process for financial management etc

Question 57

How did you decide your timescales for review?

Answer 57

We looked at the risk itself and the likihood of when it may occur or how often, also basing it on the impact to ensure high impact risks were reviewed more often

Question 58

How does the NEC contract deal with risk?

Answer 58

It is included in the contract as a contractual document and it requires the project manager to keep a risk register. The risks that are agreed are allocated to the contractor or client. If something happens then if it’s a client risk the client pays, if it’s a contractor risk, the contractor pays.

The Risk Register is a register of risks which are listed in the Contract Data and the risks which the Project Manager or the Contractor has notified as an early warning matter. It includes a description of the risk and a description of the actions which are to be taken to avoid or reduce the risk.