Risk Management

Question 1

Can you tell me an example of something ‘Employer Other Risk’ is designed to cover?

Answer 1

Covid.

Question 2

Can you run me through the Risk mitigation methods as outlined by RICS?

Answer 2

S - Sharing
T - Transfer
A - Avoidance
R - Reduction
R - Retention

Question 3

Can you give me an example of Risk Transfer, and an example of Risk Sharing?

Answer 3

Transfer = Design and Build contract transfer of design risk.

CDP = Sharing of design responsibility.

Question 4

What would you expect to see on a risk register?

Answer 4

• Reference
• Description
• Action / Owner
• Status
• RAG status
• Cost impact
• Probability

Question 5

What is the monte carlo simulation?

Answer 5

A computer based software used to generate potential outcomes.

It can identify risks that have the most impact on project outcome.

Question 6

How would you make an allowance for risk in a Stage 4 Cost Plan?

Answer 6

Priced risk register

If this information is not available, then % driven.

Question 7

You say you informed the CA of the commercial impact - how did you price risk?

Question 8

Can you tell me any other methods of pricing risk?

Answer 8

• Simple
• Probabilistic
• Percentage

Question 9

What is the simple method for pricing risk?

Answer 9

A likely cost multiplied by the probability of occurrence.

Question 10

What is the probabilistic method for pricing risk?

Answer 10

A more in-depth version of simple method. It assigns the probability of best, likely and worst case scenario’s to generate an expected value per assumption.

The total of three probabilities should be 1 or 100%.

Question 11

On what basis do you think risks should be allocated to each party at post contract stages - can you give me an example?

Answer 11

Risks should be allocated based on who would be best to mitigate the risk.