Risk Management

Question 1

What type of provisional sum did you include for? – was it defined/undefined

Answer 1

The sum for the stair pressurisation works was a budget costs, if the design had not been completed by tender stage it would likely have been included as a defined provisional sum.

Question 2

What is the difference between a defined and undefined provisional sum?

Answer 2

A defined provisional sum has prelims and time associated to it within the programme. An undefined provisional sum has no time or prelims associated

Question 3

How did you manage the risk of the rate?

Would agreeing a provisional rate have been more suitable?

Answer 3

As much information was requested as possible, and enquiries with the specialist contractor and their provisional design were interrogated. Costs were assigned to the individual items as supply only costs with installation, labour, delivery, BWIC as additions based on the anticipated works.

Question 4

Whose sub-contractor? Who took risk on the design?

Answer 4

The specialist was employed directly by the client to complete the design works, this was included as a defined part of the £250,000 budget (15%), and the subsequent installation and supply was an estimate

Question 5

How do you carry out analysis and risk management?

Answer 5

• If the project is being undertaken within a wider programme of similar projects, experienced clients mayhave access to risk registers from previous schemes that can be used as a starting point.
• A risk management workshop can also be organised with all members of the design team coming together to identify project specific risk items.
• The risk register can be updated during the meeting and will form the basis of risk management for the project.
• These risks will be continually monitored as the project progresses.
• Identified risks can either be removed or we can aim to reduce their probability of occurring and put in mitigation measured if they do occur.

Question 6

What is risk defined as?

Answer 6

• An uncertain event that will have an effect on the achievement of the project objectives should it occur.
• Risks are measured in terms of thier likelihood (probability) and consequence (Impact).

Question 7

What is Risk Management?

Answer 7

A process for identifying, asessing and responding to risks associated with the delivery of an objective such as a construction project.
Risk Management establishes a set of procedures by which risks are managed.
- It comprises an intuitive approach where project teams look to manage risk in a more proactive manner.

Question 8

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

Answer 8

• Identification takes place after the project and its objectives have been well defined.
• a risk cannot be effectively manged before it has been identified
• 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 (a qualitative approach can also be undertaken to describe the risk and effect on project performance.
• Response actions aim to reduce the probability of the risk arising or to mitigate its impact should the risk arise.

Question 9

What is a risk event?

Answer 9

An event that can be predictied to at least some degree generally based on historical data or experience and making a decision according to the probablility of a particular event occuring

Question 10

What is an uncertain or unforeseen event?

Answer 10

A random event that defies prediction.

Question 11

Why is risk management needed in construction?

Answer 11

• Projects are typically complex, all have time, cost and quality targets which must be met.
• Risk is present in all projects and surveyors are routinely involved in making decisions which have a major impact on risk.
• Risk management cannot elimnate risk, but techniques can be used to reduce the impact of events that may cause failure to reach the desired targets.

Question 12

What are the stages of risk management?

Answer 12

• Identification
• analysis
• response
• monitor and control

Question 13

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

Answer 13

• External risks: Economic uncertainty, legislation changes, policy changes.
• Financial risks: exchange rate changes, cost of borrowing.
• Sire risks: restricted access, planning difficulties, environmental issues,
• Client risks: lack of experience, multi headed client, post contract changes.
• Design risks: inappropriate consultant team, poor team ethos, incomplete design or incomplete coordination.
• adverse weather

Question 14

What is risk allocation?