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82 Cards in this Set

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This is a response to a risk event, generally made when the probability of the event and/or impact are small. It is used when mitigation, transference, or avoidance are not selected.
This is one response to a risk event. The risk is avoided by planning a different technique to remove the risk from the project.
A general creativity technique that can be used to identify risks using a group of team members or subject matter experts. A tool of the risk identification process.
contingency reserve
The amount of money or time needed above the estimate to reduce the risk of overruns of project objectives to a level acceptable to the organization.
decision tree analysis
The decision tree is a diagram that describes a decision under consideration and implications of choosing one or another of the available options. It incorporates probabilities or risks and the costs or rewards of each logical path of events and future decisions.
Delphi Technique
A method to query experts anonymously on foreseeable risks within the project, phase, or component of the project. The results of the survey are analyzed and organized and then circulated to the experts. There can be several rounds of anonymous discussions with the Delphi technique The goal is to gain consensus on project risks, and the anonymous nature of the process ensures that no on expert’s advice overtly influences the opinion of another participant.
Expected monetary value in risk analysis. Probability x dollar value impact equals the expected monetary value. Total equals contingency reserve.
influence diagram
An influence diagram charts out a decision problem. It identifies all of the elements, variables, decisions, and objectives and how each factor may influence another.
Interviewing subject matter experts and project stakeholders is an approach to identify risks on the current project based on the interviewees’ experience.
Risk mitigation seeks to reduce the probability and/or impact of a risk to below an acceptable threshold.
qualitative risk analysis
An examination and prioritization of the risks based on their probability of occurring and the impact on the project if they do occur. Qualitative risk analysis guides the risk reaction process.
quantitative risk analysis
Measuring the probability and consequences of risks and estimating their implications for project objectives. This process uses techniques simulation and decision tree analysis.
residual risk
A risk that remains after risk responses have been implemented.
An uncertain event or condition that, if it occurs, has a positive or negative on a project’s objectives.
risk categories
A source of potential risk reflecting technical, quality, and performance risks; project management risks, organization risks, or external source risks. Changes to industry standards during the project are part of technical risks.
risk database
A repository that provides for collection, maintenance, and analysis of data gathered and used in the risk management processes. A lessons learned program uses a risk database. This is an output of risk monitoring and control process.
risk management plan
Documents how the risk processes will be carried out during the project. This is the output of risk management planning.
risk owners
The individuals or groups responsible for a risk response.
scales of probability and impact
Each risk is assessed according to its likelihood and its impact. There are two approaches to ranking risks: Cardinal scales identify the probability and impact by a numerical value, ranging from .01 as very low to 1.0 as certain. Ordinal scales identify and rank the risks descriptively as very high to very unlikely.
secondary risks
A risk that arises as a direct result of implementing a risk response.
sensitivity analysis
This examines each project risk on its own merit to assess the impact on the project. All other risks in the project are set at a baseline value.
A simulation uses a project model that translates the uncertainties specified at a detailed level into their potential impact on objectives that are expressed at the level of the total project (Monte Carlo technique).
system or process flowcharts
These show the relation between components and how the overall process works. They are useful for identifying risks between system components.
Risk transference is seeking to shift the impact of a risk to a third party together with ownership of the response.
Triggers, sometimes called risk symptoms or warning signs, are indications that a risk has occurred or is about to occur. Triggers may be discovered in the risk identification process and watched in the risk monitoring and control process.
utility function
A person’s willingness to accept risk.
Workarounds are unplanned responses to risks that were not identified or were accepted.
Risk diagramming techniques
Ishikawa, flow charts, and influence diagrams.
Risk responses
Avoidance, mitigation, transference, and acceptance.
A document from the seller to the buyer. Used when price is the determining factor in the decision-making process.
Bidder conferences
A meeting with prospective sellers to ensure all sellers have a clear understanding of the product or service to be procured. Bidder conferences allow sellers to query the buyer on the details of the product to help ensure that the proposal the seller creates is adequate and appropriate for the proposed agreement. Also called a contractor or vendor conference.
Centralized contracting
All contracts for all projects need to be approved through a central contracting unit within the performing organization.
A contract is a mutually binding agreement that obligates the seller to provide the specified product and obligates the buyer to pay for it. Three types: fixed-price (lump-sum), cost-reimbursable, or time and materials. Contracts are backed through the court system. A contract must contain an offer, have been accepted, provide for a consideration (payment), and be for a legal purpose
Contract administration
Managing the relationship with the seller.
Contract change control system
Defines the procedures for how contracts may be changed. Includes the paperwork, tracking, conditions, dispute resolution procedures, and the procedures for getting the changes approved within the performing organization.
Contract closeout
Completion and settlement of the contract, including resolution of any open items.
Contract file
A complete indexed set of records of the procurement process incorporated into the administrative closure process. These records include financial information as well as information on the performance and acceptance of the procured work.
Cost-reimbursable contracts
This category of contract involves payment (reimbursement) to the contractor for its actual costs. Costs are usually classified as direct costs or indirect costs (often calculated as a percentage. There are three types of cost-reimbursable contracts: cost plus fixed fee, cost plus percentage of costs, and Cost plus incentive fee
Decentralized contracting
Assigns a contract administrator or contract officer to the project rather than going through a centralized contract system.
Direct costs
Costs incurred directly by the project. Examples include equipment needed to complete the project work, salaries of the project team, and other expenses tied directly to the project’s existence.
Evaluation criteria
Used to rate and score proposals from sellers. In some instances, such as a bid or quote, the evaluation criterion is focused just on the price the seller offers. In other instances, such as a proposal, the evaluation criteria can be multiple values: experience, references, certifications, and more.
Firm Fixed-Price Contract (FFP)
A type of contract where the buyer pays the seller a set amount (as defined by the contract), regardless of the seller’s costs.
Fixed-price contracts
This category of contract involves a fixed total price for a well-defined product. May also include incentives for meeting project objectives such as schedules.
Fixed-Price-Incentive-Fee Contract (FPIF)
A type of contract where the buyer pays the seller a set amount (as defined by the contract), and the seller can earn an additional amount if it meets defined performance criteria.
Force majeure
A powerful and unexpected event, such as a hurricane or other disaster.
Indirect costs
Costs allocated to the project by the performing organization as a cost of doing business such as salaries for corporate executives). Examples include utilities, office space, and other overhead costs.
Invitation for Bid (IFB)
Generally, this term is equivalent to request for proposal. However, in some application areas, it may have a narrower or more specific meaning.
Letter of Intent
Expresses the intent of the buyer to procure products or services from the seller. Not the equivalent to a contract.
Life Cycle Costing
The concept of including acquisition, operating, and disposal costs when evaluating various alternatives.
Make-or-buy analysis
Used in determining what part of the project scope to make and what part to purchase.
The process of a buyer soliciting, selecting, and paying for products or services from a seller.
Procurement audits
The successes and failures within the procurement process are reviewed from procurement planning through contract administration. The intent of the audit is to learn from what worked and what did not work during the procurement processes.
Procurement Management Plan
This subsidiary project plan documents the decisions made in the procurement planning processes. It specifies how the remaining procurement activities will be managed.
A document from the seller to the buyer, responding to a Request for Proposal or other procurement documents.
Qualified seller list
The performing organization may have lists of qualified sellers, preferred sellers, or approved sellers. The qualified sellers list generally has contact information, history of past experience with the seller, and other pertinent information.
Quote (or quotatation)
A document from the seller to the buyer; used when price is the determining factor in the decision-making process.
Request for Proposal (RFP)
A type of bid document used to solicit proposals from prospective sellers of products or services. In some application areas, it may have a narrower or more specific meaning.
Request for Quotation (RFQ)
Generally, this term is equivalent to RFP. In some application areas, it may have a narrower or more specific meaning.
Should cost estimates
Am estimate of the cost of a product or service used to provide an assessment of the reasonableness of a prospective contractor’s proposed cost.
Single source
A specific seller that the performing organization prefers to contract with.
Sole source
The only qualified seller that exists in the marketplace.
Obtaining quotations, bids, offers, or proposals as appropriate.
Source selection
Choosing from among potential sellers.
Statement of Work (SOW)
A narrative description of products or services to be supplied under contract.
Time and materials contracts
Time and materials contracts are a hybrid type of contractual arrangement that contain aspects of both cost-reimbursable and fixed-price type of arrangements. Full value is not defined at the time of the award, but can include pricing info such as hourly cost of a senior engineer. T&M contracts should have a not-to-exceed clause (NTE) to contain costs.
There are very few sellers and the actions of one seller will have a direct affect on the other seller’s prices and the overall market condition.
The contractual relationship between the buyer and the seller is often considered confidential and secret.
Acceptance sampling
A statistical process if evaluating a portion of a lot for the purpose of accepting or rejecting the entire lot.
Single sampling
This is the acceptance or rejection of a lot based upon one sampling run.
Double sampling
A small sample size is tested. If the results are not conclusive, then a second sample is tested.
Producer’s risk
This is called the a (alpha) risk or type I error. This is the risk to the producer that a good lot will be rejected.
Consumer’s risk
This is called the B (beta) risk or type II error. This is the consumer’s risk of accepting a bad lot.
Cost of quality
Prevention costs, appraisal costs, internal failure costs, and external failure costs (customer).
Juran Trilogy
Quality Improvement, Quality Planning, and Quality Control. Customer’s view is fitness for use. Developed 10 Steps to Quality Improvement.
Philip Crosby
14 Steps to Quality Improvement, Four Absolutes of Quality (including zero defects)
The sum of the measurements divided by the number of measurements.
The value having as many observations above it as there are below it. If an even number of observations is collected, then the median is the mean of the two observations in the middle.
The most frequently occurring observation in the data set under consideration.
Hurwicz criterion
In risk management, often referred to as the maximax criterion. The decision-maker is always optimistic and attempts to maximize profits in a go-for-broke strategy.
Wald criterion
In risk management, often referred to as the maximin criterion. The decision-maker is concerned with how much he can afford to lose. Used by small companies.
Savage criterion
In risk management, often referred to as the minimax criterion. Minimize the maximum regret.
Laplace criterion
An attempt to transform decision-making under uncertainty into decision-making under risk.