Risk management Flashcards
What is risk?
An uncertain event or circumstance that if it occurs will affect the outcome of a programme or project
What is an issue?
Issues are classified as events that are happening now or will almost certainly happen in the future
How is risk related to contingency?
Contingency is the total sum of identified risk where a cost has been assigned to each risk
What are the categories of Risk under NRM?
Design Development
Construction
Employer Change
Employer Other
What does Design Development include?
incomplete design or design coordination
Unclear or poorly defined project brief
What does Construction include?
ground obstruction
Inadequate site investigation / surveys
What does Employer Change include?
changes in quality, time or requirements
What does Employer Other include?
end user requirements
Contractual claims / acceleration / inflation or exchange rates
What are the stages of risk management?
Identify
Analyse
Respond
Monitor
What are the risk responses under NRM?
Risk Avoidance – where the consequences are serious and the risk unacceptable
Alternate design or cancellation
Risk Reduction – the level of risk is unacceptable, risk needs to be reduced
Redesign, further investigation required, alternative construction method
Risk Transfer – transferring the risk to someone better suited to control it
Insurance or transfer to contractor etc
Risk Sharing – not entirely transferred and employers maintains aspects
Risk Retention – Risk retained by the employer that are not controllable.
Remaining risk is the Residual Risk Exposure
How does risk vary within the RIBA stages?
Gradually decline as the design progresses
RIBA Stage 0 – risk may be a significant % of project cost
RIBA Stage 4 – risk should be assigned to specific items and mitigated where possible
What are some general risks in construction?
External – economic, legal, political
Financial – exchange rate, funding
Site Risks – restricted site, occupied site
Client risks – inexperienced client, multi-headed client, post-contract changes
Design Risks – inexperienced design team, poor brief, poor coordination, incomplete design
Contractor Selection – inadequate selection process
Construction – weather, buildability, H&S
What is the difference between quantitative and qualitative risk management?
Quantitative quantifies numerically – 1 to 5
Qualitative categorises in descriptive terms – low to high
How are risk registers used?
To Identify, Analyse, Respond and Monitor risks
How does procurement route affect risk?
Some routes transfer risk from the client to the contractor however this risk is reflected in the tender price
D&B vs Traditional
What is included in a risk register?
Description of the risk Owner Risk grouping Risk premium – estimated cost Probability of occurrence - % Impact on occurrence - £/weeks Risk factor – probability x impact Action required Review date Status – open / closed
What were some risks identified with Soho Place?
Ground conditions – LUL, TFL and Crossrail tunnels below ground
Single source items – Lixos stone glass, Tait demountable auditorium, currency
What were some risks identified with the Mock Up?
Free-issuing materials to contractor
Negotiation with the contractor reduced competitiveness
How does risk work in Traditional procurement?
Client owns the risk of time, cost and design
How does risk work in D&B procurement?
Depends on single or two stage
What is the Monte Carlo simulation?
A study of risk based on random sampling
Method of quantitative risk analysis – only as good as information on which it’s based
What are some risks associated with an Over-Site Development?
Movement monitoring – Client had a contract and consultant for this – novated across
Socotec Monitoring - £1.1m
Load bearing – LUL had a prescribed load bearing for the site
Construction methodology – soft toed piles used (E/O £1k per pile)
