Risk Management Flashcards
What is a ‘Risk’?
An uncertain event that, if it occurs, will affect the outcome of a project
Risk can refer to both positive and negative uncertainties
What is ‘Consequential Risk’?
A risk that may occur as a result of another risk occurring
What is ‘Risk Appetite’?
The willingness of a person or an organisation to accept risk
What is a risk register?
The willingness of a person or an organisation to accept risk
The purpose is to continuously monitor risks throughout the project period to minimize or mitigate the consequences
What are the NRM1 risk categories?
Design development risks
Construction risks
Employer change risk
Employer other risks (e.g. early handover, postponement, availability of funds etc.)
What is risk management?
Client’s risk appetite
Who is responsible for risk management
How risks will be identified, analysed, managed and reviewed
Frequency of risk review meetings
Software tools and techniques that will be used
Reporting forms and structures
Explain a typical risk management process? (5 main steps)
Identify
Analyse
Monitor
What risk response and mitigation strategies are available an example for each?
Risk avoidance - UXO
Risk reduction - contamination (S.I works)
Risk transfer - D&B
Risk sharing (where the risk is not entirely transferred and the employer retains some element of risk)
Risk retention (employer retains risks that are not necessarily controllable – Stats
Explain quantitative risk analysis (QRA)?
Calculation of cost or time effects of risk.
What is ‘expected monetary value?’
Multiplying the likelihood of the risk occurring by the size of the outcome (as monetised)
What are probability trees?
Technique for determining the overall risk associated with a series of related risks. Used to calculate ‘expected monetary value’ in more complex situations.
What is fault tree analysis?
Involves working back from a negative outcome to identify cause(s)
What is event tree analysis?
Find possible outcomes from an initial event - opposite of fault tree analysis
What is percentage addition?
Risk allowance is based on a percentage of the cost – should only be used for initial order cost estimates.
What is the probabilistic method?
More in-depth version of the simple method (sometimes called 3-point estimating) – best, likely and worst cases for each risk are prepared
What are the different type of risk?
Site (Ground conditions, asbestos, contamination) Design Construction Programme Client Stats Tender S106
What is design development risk allowance and an example?
Planning requirements, legal agreements, covenants, environmental issues, stats, procurement process and tender delays
What is construction risk allowance and an example you’ve dealt with?
An allowance during the construction process for the risks associated with construction
Contamination
Obstructions
UXO
What is Employer change allowance?
Allowance for both design and construction phases for changes made by the client
Instructions
Hoarding
What is employer other risk allowance?
An allowance for other risks
Early handover, postponement, acceleration, availability of funds, LDs
Where LDs may not be the actual loss for client
How can a client minimize his design risk?
D&B contract
Contractors Design Portion
Novation
What does a risk register look like?
Description, priority, probability, value, owner, mitigation strategy
How do you identify risks?
A risk workshop where all parties can have an input
How to calculate a risk?
To provide an informed risk budget I would gather as much information as possible (workshop- Delphi)
Benchmarking
How to calculate the likelihood of a risk occuring?
Workshops, Monte Carlo, Central Limit Thereom
Who owns a risk?
Can be dependent on:
risk itself
procurement route
How are risks captured?
Risk register
Approaches to identifying risks?
Lists, brainstorming, delphi technique
What is risk allocation
To allocate to the party who can manage risk best
Benefits of Risk Management?
Increased confidence in achieving project objectives
Reduces surprises and cost/time overruns
Enable greater decision making
Encourages communication and collab
How to price risk at NRM1?
In line with the four NRM1 categories
What are the techniques of valuing risks?
Expected monetary value Probabilistic method Central Limit Thereom Monte Carllo Route Means Square
Why are risks tracked?
Within progress meetings to potentially alleviate risks and to value risks throughout
Why is a QS so important to Risk Management?
Monitoring of the clients budget and costs
Why are risk registers important?
To track risks throughout the project life
How does the monitor of risks assist cost control?
Continuously management of risks assists in managing the clients budgets and cashflow
How is there risk protection in contracts?
Procurment / Contract type Bonds / PCG Retention Materials on/off site LD's Defects Liability Period
What is Monte Carlo?
A Monte Carlo simulation that analyses risk and gives several out comes based on data input into the simulation
What is the difference between quantitative and qualitative risk?
Quantitative = severity x likelihood Quantitative = the technique of quantifying the cost of a risk occuring
How can you transfer a risk?
Procurement
Contract
Type of risk (at a cost)
Who determines the probability of a risk?
This can be expressed by all parties to arrive at the likelihood of a risk occuring
What is residual risk?
Risk retained by Employer
How would you advice an allowance for the risk of JK?
Is the risk true? Percentage of probability may be affected Site survey Removal of JK Report Future monitoring
What others factors are effected by risks?
Time / Programme
Quality
Planning
How do you provide allowances in your risk register?
Probability x likely cost
Can you give me some examples of risks you have assessed?
Japanese Knotweed - £25k
Acoustic Screen - £200k
Contamination - £150k
Can you tell me the general risk categories?
Political and business Beneficial Consequential Project Programme
