Risk Management Flashcards
What is risk management?
- A process for identifying and responding to risks associated with the delivery of an objective such as a construction project.
What is a Risk Event?
- An event that can be predicted to at least some degree, generally based on historical data or experience.
What is an uncertain or unforeseen event?
- A random event that cannot be predicted.
Why is risk management needed in construction?
- 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 eliminate risk, but techniques can be used to reduce the impact of events that may cause failure to reach the desired targets.
What are the stages of Risk Management?
- Identification.
- Analysis.
- Response.
- Monitor and control.
Can you give me some examples of risk in a
construction project?
- External risks for example include economic uncertainty, legislation changes and changes in government policy.
- Site risks such as restricted access, planning difficulties and environmental issues can also be considered as further examples.
- Construction and delivery risks may include adverse weather, H&S and availability of resources.
What are the benefits of risk management?
- Increased confidence in achieving project objectives and success.
- Reduced likelihood of cost and time overruns.
- The team understands and recognises the use and build up of contingencies.
Describe the format of the risk register?
1) Description of the risk.
2) Owner.
3) Probability of occurrence.
4) Cost impact of its occurrence.
5) Actions required.
6) Review date.
What role does the QS play in Risk Management?
Contingency funds - Assist in setting & managing appropriately.
Risk analysis - Undertake risk analysis to ensure accuracy of funds available.
Estimates - Assist in the decision making process by providing estimates with a degree of certainty.
Can risk be calculated?
- Risk can be calculated to an extent with suitable provision being made for the risk.
- however it cannot be calculated exactly otherwise it would not be classified as a risk.
What is Monte Carlo analysis?
- Monte Carlo Analysis is a risk management technique used to conduct a quantitative analysis of risks.
- Monte Carlo gives you a range of possible outcomes and probabilities to allow you to consider the likelihood of different scenarios.
What is risk?
Risk is the probability of an outcome having a negative effect on people, systems, or assets.
What is a conflict of interest?
When an individual’s personal or professional interests could compromise his or her judgment, decisions, or actions leading to a lack of impartiality.
What types of conflict of interest are there?
- Party conflict
- Own interest conflict
- Confidential information conflict
What types of risk response are there?
STARR
- Sharing
- Transfer
- Avoidance
- Reduction
- Retention
What is risk reduction?
Where the level of risk is unacceptable and measures need to be taken to reduce it.
o Redesign and improved VE
o More detailed design or further site investigation.
o Different materials or engineering services.
o Different methods of construction – avoid risky techniques.
o Changing project execution plan – packaging works differently.
o Changing contract strategy – allocating risks differently.
What types of risk should be accounted for in a cost plan?
Design Development Risk:
Construction Risk:
Employer Change Risk
Employer Other Risk:
What are some examples of employer other risk?
Other employer related changes, such as postponement, acceleration, availability of funding, early handovers etc.
What is EMV?
Expected Monetary Value (EMV) is a statistical technique in risk management that is used to quantify the risks.
How do you manage risk on a project?
- Ensure that a risk register is prepared as early as possible, informed by all members of the design team.
- Each risk has a likelihood and impact score rated from 1-5, which helps to calculate the risk score.
- Potential costs are apportioned to each risk.
- Risk register is a live document so regularly updated when new information occurs or once a survey has been carried out.
