What are some risk mitigation strategies?
- Risk avoidance
- Risk reduction
- Risk transfer
- Risk sharing
- Risk retention
What is Risk avoidance
-Risk avoidance occurs where risks have such serious consequences on the project outcome
that they are totally unacceptable.
-Risk avoidance measures might include a review of
the employer’s brief and a reappraisal of the project, perhaps leading to an alternative
development mix, alternative design solution or cancellation of the project.
-The planning risk for one of the terraces was so high that we completly removed from the application as not to impact the other terraces
What is risk reduction?
-Where the level of risk is unacceptable and actions are taken to reduce either
the chance of the risk occurring or the impact of the risk should it occur.
-Typical actions to
reduce the risk can include: further site investigation to improve information, using different materials/suppliers to avoid long lead times or using different construction methods.
What is risk transfer?
-Example of 1 James Street Exisitng structure
-Risks that may impact the building programme are
transferred to another party able to control it more effectively, usually involving a premium
to be paid. If the risk materialises, the impacts are carried by the other party.
What is risk sharing?
This is when a risk is not wholly transferred
to one party and some elements of the risk are retained by the employer. In accordance with
NRM, the approach for dealing with risks that are apportioned between the client and the
employer will normally be dealt with using provisional quantities, with the pricing risk being
delegated by the contractor and the quantification risk being allocated to the employer
What is risk retention?
In the event where risks are to be retained by the employer,
the appropriate risk allowance identified in the cost plan will be reserved and managed by
the employer.
What are some risk quantification techniques?
- Monte Carlo
- Probability trees
- Fault tree analysis
- Sensitivity analysis
What is a risk breakdown stucture?
The RBS helps the project team identify potential risk generators in different catagories these are called the seven risk environments some of these are:
-Economic
-Client
-Constuction
What are some risk indentification techniques?
-brainstorming
-checklists
-historical information
-leasons learnt
-list of assumptions and constraints
-team workshops
How does the risk rating on the risk register shows the risk severity
-The qualitative severity rating is reached by
multiplying the likelihood of occurrence by the qualitative impact.
-It is possible to use a skewed scoring system to rate the impacts higher than likelihood
What is qualitative risk analysis?
The purpose of qualitative analysis is to prioritise the risks in terms of importance, without
quantifying (costing) them. This should be carried out during the first phases of the riskmanagement process.
What is a risk management strategy and what does it include?
-Client Risk appitite
-Who is responsible for risk management
-How risks are idnentified, analysed, managed and reviewed
-Frequency of risk review meetings
Why do Risks need to be identified early?
-Costs of
making change will increase as the project progresses
-The more advanced the design, the
more complex it is to incorporate changes
- The longer people have been working
on a particular project, the more attached they become to existing plans
What is an example of where you have used Risk sharing on a project?
We were not fully aware of the condition of the facade until we had the scaffold errected so a Provisional Sum was included to cover potential repairs
Please give me an example of risk reduction?
On 1 James Street where the risk the of works being stopped due to
disruption to tenants was an unacceptable level of risk, this was
mitigated with a risk reduction strategy which involved a
communications consultant being appointed to maintain tenant
communication and mitigate the risk.
Please can you give me an example of risk transfer?
On 1 JS we the existing stucture risk transfered to the contractor after a validation period. This meant after a certain date any aditional works had to be covered by the contractor and would not entitle them to a extention of time or a loss and expense
Examples of risk retention?
Usually external events that cant be controlled.
-Extream weather events
-Or changing market conditions
How do you create a risk alowance?
Quantitive risk allowance:
The simple method of assesment
-Likely cost assigned to all risks on register along with the probabillity of occourance.
-Cost is multiplied by the probabbility to give an expected value.
-This is totalled for an overall risk allowance
Central limit theorem
-A calcualtion to give 90% confidence of the risk allowance that should be given
Monte Carlo Technique
-Probability for each risk is inputed along with the minimum cost inpact, most likely cost inpact and a maximum cist inpact.
-Provdes most likely cost outcomes
-identification of the risks that have the most impact on the project outcome.
