Risk Management

Question 1

Can you tell me an example of something ‘Employer Other Risk’ is designed to cover?

Answer 1

Covid.

Question 2

Can you run me through the Risk mitigation methods as outlined by RICS?

Answer 2

S - Sharing
T - Transfer
A - Avoidance
R - Reduction
R - Retention

Question 3

Can you give me an example of Risk Transfer, and an example of Risk Sharing?

Answer 3

Transfer = Design and Build contract transfer of design risk.

CDP = Sharing of design responsibility.

Question 4

What would you expect to see on a risk register?

Answer 4

• Reference
• Description
• Action / Owner
• Status
• RAG status
• Cost impact
• Probability

Question 5

What is the monte carlo simulation?

Answer 5

A computer based software used to generate potential outcomes.

It can identify risks that have the most impact on project outcome.

Question 6

How would you make an allowance for risk in a Stage 4 Cost Plan?

Answer 6

Priced risk register

If this information is not available, then % driven.

Question 7

You say you informed the CA of the commercial impact - how did you price risk?

Question 8

Can you tell me any other methods of pricing risk?

Answer 8

• Simple
• Probabilistic
• Percentage

Question 9

What is the simple method for pricing risk?

Answer 9

A likely cost multiplied by the probability of occurrence.

Question 10

What is the probabilistic method for pricing risk?

Answer 10

A more in-depth version of simple method. It assigns the probability of best, likely and worst case scenario’s to generate an expected value per assumption.

The total of three probabilities should be 1 or 100%.

Question 11

On what basis do you think risks should be allocated to each party at post contract stages - can you give me an example?

Answer 11

Risks should be allocated based on who would be best to mitigate the risk.

Question 12

What are the differences between the risk allowances in a D&B and Traditional procurement route?

Answer 12

The Contractor takes more risk on a D&B as they are in control of the Design as well as the Build, whereas Traditional the Contractor doesn’t take risk of the design.

Question 13

How would the risk in a D&B procurement compared to Traditional affect cost plans?

Answer 13

In a D&B you would have D&B risks and D&B fees.

Question 14

Who takes the time risk on a D&B?

Answer 14

Contractor

Question 15

On a traditional procurement who takes design risk?

Answer 15

Client.

Question 16

On a traditional procurement who takes build risk?

Answer 16

Contractor.

Question 17

On the PWI project, why are you producing the risk register rather than the PM?

Answer 17

I did not produce a risk register, the PM did.