RISK MANAGEMENT IN PROJECT DELIVERY (CONSTRUCTION) Jeremy Stone Director – Heritage and Culture Greenwood Projects Ltd

Greenwood Projects Ltd Context & Definition Risk Management Identification Review and Analysis Ranking Determining the mitigation Implementation of strategy Monitoring, control and adjustment Summary Questions

GREENWOOD PROJECTS LTD A Project Management and Quantity Surveyor practice. Have been working in the Heritage Sector for over 25 years. Approximately 70% of annual workload within Heritage & Culture Sector.

GREENWOOD PROJECTS LTD Hadlow Tower St Georges Chapel, Woolwich SLT Old Fire Station Wymondham Abbey The Walronds, Cullompton Fort Nelson

Context & Definition RISK (Verb): Incur the chance of unfortunate consequences by engaging in (an action): PROJECT DELIVERY: a new construction, expansion, renovation, or replacement project for an existing facility or facilities. RISK MANAGEMENT: The identification, analysis, assessment, control, and avoidance, minimization, or elimination of unacceptable risks. However, Acknowledge that risk can often lead to opportunity!

Risk Management Risk Identification Review & Analysis Ranking Mitigation Strategy Implementation Monitor, Control & Adapt Risk Management

Risk Identification Construction Risks generally grouped into: Funding / Cashflowing Financial / Commercial Procurement Compliance Planning & Statutory Consents Professional Team Performance Design Development Client scope creep Existing site / fabric conditions Below the ground Specialist items installations / Lead In Contractor Performance Stakeholder Management Multiple supplier co-ordination Post Practical Completion Impact All can effect Programme (time) and Budget (cost) ! Risk Identification Identification

Risk Review, Analysis & Ranking How could the risk impact : - Programme - Resources - People - Current Capabilities - Finance - Legal - Reputation - Quality of Build / Exhibition - Relationships with Users - Operational Processes - Management / Trustees - Stakeholder Management - Funders Requirements - Technology / Future Proofing - Business Planning - Asset Management Risk Ranking Review & Analysis Analysis Probability x Impact (score out of 5) Risk Ranking Red – High / Unacceptable Amber – Close Monitoring Green – Low / acceptable

Mitigation Acceptance: Do Nothing ! A common option when the cost of other risk mitigation options such as avoidance or limitation may outweigh the cost of the risk itself. Avoidance: Putting in place an action that avoids any exposure to the risk whatsoever. Risk avoidance is usually the most expensive of all options. Limitation: Usually the most common risk management strategy employed on projects. This strategy limits exposure by taking some action. It is a strategy employing a bit of risk acceptance along with a bit of risk avoidance. Transfer: Transferring the risk to whom is deemed best able to deal with it and thus limiting or avoiding it. Within capital projects this is most commonly handing a risk to the contractor and supply chain. However, Risk Transfer does not mean total avoidance regardless of whom has ownership !

Strategy Implementation Risk Strategy Implementation Capture all Risks and Mitigation into a holistic plan. Ensure everybody is clear of who owns a specific risk. Ensure that any deferred risk assessment or mitigation decision is captured on the project timeline. Clearly brief other internal / stakeholders that may be effected over the duration of the project such as the Business Planner, Activities Officer, funder etc.

Monitor, Control & Adapt Risk Monitor, Control & Adapt Prepare a comprehensive risk register as a monitoring tool. Review the each risk post mitigation. Is there anything that is still unacceptable ? Build in regular risk register review at Project Progress & Contractor Monthly meetings. Identify those risks that have a large exposure to cost increase and allocate specific sums of project contingency against each risk. Does the cumulative total of all specific contingency costs exceed the overall project contingency ?

Summary Be inclusive when identifying risks ! The more people involved the greater opportunity to highlight risk potential. Look to include the professional team and contractors / supply chain. All risk items will have an impact on programme, project budget and/or quality of the capital works. Make sure these are all updated accordingly. Be clear with project members as to who owns / manages a specific risk. Risk Transfer is not Risk Avoidance ! Understand the ramifications of risk mitigation action during the capital works on post build functions such as Business Planning , Activities, operations etc. Promote a culture of constant risk monitoring and control through the adoption of a risk register. Always allocate specific budgets to key risks from the overall project contingency. Be open and transparent with funders and reporting on identified risks and how they are being managed.

Questions ?