Risks in construction Flashcards
How is risk defined?
“An uncertain event or circumstance that, if it occurs, will affect the outcome of a programme/project” (RICS).
A measure of the likelihood that harm from particular hazard will occur together with the severity of the harm (Health & Safety).
What can risk impact?
Can have significant impacts on:
Time
Cost
Performance (quality) characteristics of construction project.
Identification, analysis and management / mitigation are also very important.
What is project risk?
An unexpected event that might affect the people; processes, technology, resources etc.
What are the most common risks?
1) Cost (e.g project cost overrun)
2) Programme (e.g delays and extensions)
3) Client (e.g clients change)
4) Project team change
5) Funding (e.g funding restrictions, law/policy change)
6) Site/project (e.g listed building, ground condition)
Careful risk management / mitigation is needed throughout pre/post contract stages of a construction project.
What happens when a risk becomes real?
It becomes an issue it will have to be dealt with and its impacts are to be mitigated.
RICS state “Issues should be managed in similar terms as risks, with response plans, accountability and agreed action dates”
When are risk registers made?
Early in the pre-construction stage
What is a risk managers role?
1) Review the risks, liaising with the employer and the design team.
2) Update the risk register.
3) Prioritise the risks (most consequential to least consequential and unlikely)
This continues throughout the project, there are also team brainstorming meetings to identify new risks.
What are some example of RICS categories of risk?
1) Political and Business risks
2) Project risks
3) Consequential risks
4) Construction risks (RICS NRM 1)
5) Programme risks
How are construction risks quantified and analysed?
1) Probability trees
2) Central limit theorem
3) Monte Carlo simulation modelling (computer based technique to model outcomes)
4) Fault tree analysis (the causes contributed to a designated negative outcome)
Explain risk avoidance?
When a risk seems to be very high consequence and likely, the risk may be decided by the employer to be avoided. The employer would rather adapt the project, rather than face the consequences such an undesirable risk occurring and becoming an actual issue.
Explain risk reduction?
Measures are instigated if the impact of the risks seems to be higher. Bringing it to the lower level of impact.
Explain risk transfer?
Contractor / subcontractor (should be appropriate and fair)
Explain risk retention by the employer?
The employer to take ownership of the risk, e.g within a cost plan for the project, the risk allowance within the cost plan will be reserved and managed by the employer. Insuring the works.
Why would you ignore the risk?
Where they are of low consequence and low likelihood.
