Risk Management NK Flashcards
What is risk defined as?
An uncertain event that will have an effect on the outcome of the project, should it occur.
What are the different types of risk according NRM1?
Design Development
Construction
Employer Change
Employer Other
List examples of different risks within the NRM 1 category ?
Design Development - third party risk, delays in tendering, procurement method
Construction - ground conditions, access restrictions/limitation
Employer change - change in quality, time, scope of works
Employer other - early handover, acceleration, availability of funds
How do you manage risk?
Identify
Assess
Control/Monitor
Record
Review
Can you give me some examples of risk in a construction project?
External risks: Brexit, Covid
Financial risks: exchange rate, inflation
Client risks: lack of experience, likelihood of post-contract changes
Design risks: inappropriate consultant team, incomplete/poor design
Contractor selection: inadequate selection process.
Construction: weather, buildability, H&S, availability of resources, ground conditions
How do you identify a risk?
Work collaboratively with stakeholders to identify everything that could go wrong with a project.
Why is risk management important in construction?
- Projects are typically complex, all have time, cost and quality targets which must be met.
- 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.
- Risk is present in all projects and surveyors are routinely involved in making decisions which have a major impact on risk.
What would you do before spending risk?
Mitigate the risk by checking the following;
Reduce, transfer, avoid, risk,
What is risk allowance?
A sum included to cover unknown expenses or unmitigated risks during the project.
How do you carry out risk analysis and risk management?
Experienced clients may have 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 identity 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 probably of occurring and put in mitigation measures if they do occur.
What happens to risk allowances if the risk does not occur?
If it’s a central contingency pot, this should be reduced proportionally as the project progresses.
What is the difference between qualitative and quantitative risk management?
Quantitative quantifies risks numerically 1-5.
Qualitative categorises them in descriptive terms such as low to very high.
What is risk management?
A process for identifying, assessing 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.
All time, cost and quality targets must be met.
Tell me about the importance of risk registers?
Help to identify, analyse, monitor, manage and respond to potential hazards and risks.
What are the various risk response strategies?
Retain
Reduce
Transfer
Avoid
Share
What current challenges is Covid and/or Brexit bringing to Risk Management?
How do you allow for price increases?
Fluctuations in contracts
Who takes risk of covid?
Material delays
What is the difference between a hazard and a risk?
A hazard is the potentially detrimental event that could occur.
A risk is the probability and impact of that hazard occurring.
Can you expand on the Identify, Assess, Respond approach?
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.
Response actions aim to reduce the probability of the risk arising or to mitigate its impact should the risk arise.
What is an uncertain or unforeseen event?
A random event that defies prediction.
What is Risk Allocation?
Risks should be allocated to those who are best able to manage it, in a manner likely to optimise project performance.
Financial allocation of risk should be achieved through the contract documents.
