T077 Risk Management Rics Apc

Front 1

What is risk defined as?

Back 1

An uncertain event should it occur will have an effect on the achievement of the project objectives measured in terms of likelihood (probability) and consequence (impact)

Front 2

How do you carry out risk analysis and risk management?

Back 2

Produce a risk register.
All members of the design team come together and brainstorm as many elements of project risk as possible.
These risks will be continually monitored throughout project progress.
Identified risks can be used to flag, prepare for and reduce the possibilities of their occurrence.

Front 3

What is a risk register?

Back 3

A schedule and record of risks rated by probability and impact giving a predicted consequence score; mitigation activities and risk owners are also assigned

Also note NRM1 section 13

Front 4

How do you use the risk register?

Back 4

Continually monitor risk items identified in initial risk register and make it a working document to identify project risks for the remainder of the project.

Assign levels of likelihood to each risk identified in an attempt to iron out the possibility.

Front 5

What is Monte Carlo simulation?

Back 5

A study on risks based on random sampling.

Front 6

What is risk management?

Back 6

A process for identifying, assessing and responding to risks associated with delivery of an objective such as a construction project.

Establishes a set of procedures by which risks are managed.
Formulates an intuitive approach to risk which project teams often undertake to manage risk in a more proactive manner.

Front 7

Can you expand on the Identify, Assess, Respond?

Back 7

IDENTIFICATION: Takes place after the project and its objectives have been well defined. A risk cannot be effectively managed before it has been identified! Should be done as early as possible.
ANALYSE: Assessment of an individual and combined effect of identified risks on the successful delivery of the objective. Analysis = likelihood (probability) and consequence (impact) Qualitative: Describes risk and effect on project performance, Quantitative: Sensitivity and probability analysis: mathematical probability and numerical consequence (time, cost and performance).
RESPONSE: Actions to reduce the probability of the risk arising or the significance of its detrimental impact should it arise.

Front 8

What is a risk register?

Back 8

A document listing all the risks identified for the project, explaining the nature of each risk qualitatively and quantitatively.

Front 9

What is a “Risk Event”?

Back 9

An event that can be predicted to at least some degree, generally based on historical data or experience and making a decision according to the probability of a particular event occurring.

Front 10

What is an uncertain/ unforeseen event?

Back 10

A random event that defies prediction.

Front 11

Why is risk management needed in construction?

Back 11

Projects are typically complex, all have time, cost and quality targets which must be met.
Risk is present in all projects and surveyors are routinely involved in making decisions which have a major impact on risk.
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.

Front 12

What is the purpose of risk management?

Back 12

Risk events can be managed, uncertain events cannot. Fundamental rule of risk is to reduce uncertainties to a minimum.
Events have a likelihood of occurring (probability) and a consequence (impact)
Impossible to manage uncertainties, usual way to manage them is to include programme float and/ or contingency.

If you manage the risks, by default you have managed the project.

Front 13

What are the stages of Risk Management?

Back 13

IDENTIFY
ANALYSE / ASSESS
RESPOND
MONITOR AND CONTROL

Front 14

What approaches can you use to identify risks?

Back 14

Assumption analysis: previous experience categorised, lists, brainstorming, Delphi techniques (Design team, client, contractor individually identify risks prob/ impact in questionnaires, info collected and reported against)

NRM1 section 13

Front 15

Can you give me some examples of risk in a construction project?

Back 15

NOTE: Major risks should be considered during the design and procurement stage:
External risks: economic, legal, political
Financial risks: exchange rate, funding
Site risks: Restricted, occupied site, planning difficulties, access, environmental
Client risks: lack of experience, multi-headed client, likelihood of post contract changes.
Design risks: inappropriate consultant team, poor brief, incomplete design, co-ordination.
Selection of appropriate contractor: inadequate selection process
Construction and delivery risks: weather, constructability, H&S, availability of resources.

Front 16

What is a risk management strategy?

Back 16

Avoid: action needs to be taken to ensure risk does not occur. E.g. remove or alternative solution considered- different design, method
Reduce: If such a risk does occur the impact will be reduced as much as possible. Alternative solutions: need to ensure adequate man power and budget are dedicated to mitigating the risk.
Transfer: transfer the risk through sub-letting or insurance
Share: Usually achieved through the construction contract: exceptionally adverse weather EOT but not direct loss and/ or expense.
Retain: Noting and keeping the risk and controlling it. Must ensure dedicated man power and budget are dedicated to monitor and control it.

Front 17

What is Risk Allocation?

Back 17

Risks should be allocated to those best able to manage it, in a manner likely to optimise project performance. Financial allocation of risk should be done through the contract documents.

Front 18

How do you report/ monitor risks?

Back 18

Using a risk register: Risks are logged, tracked through the life of the project.
Item: Threats/ Opportunities likelihood/ impact. Placed in a category e.g. client control, share.
Needs regularly updating.

Front 19

What are the benefits of risk management?

Back 19

Increased confidence in achieving project objectives and success
Surprises reduced cost/ time overruns
Team understands and recognises the use and composition of contingencies
Enable decision making to be made on an assessment of known variables available
Risk management workshops can facilitate team development and encourage communication.