Project Risk Management (Unit 30|31)

An APC Candidates Guide.

Unit 30|31 – Project Risk Management emphasizes a structured approach to identifying, analyzing, and mitigating events that could negatively impact a project’s objectives.

Here’s a summary of the key aspects of Unit 30|31:

General Overview:

Project risk management is a systematic process that includes analyzing project objectives, establishing a risk analysis framework, identifying potential risks, quantifying these risks for prioritization, developing and implementing risk management strategies, and continuously monitoring and reviewing risk situations.

Key Elements (Performance Criteria):

Risk Management Approach: This involves identifying project objectives, developing a risk management study structure, identifying and recording various types of risks (inherent, contingent, and schedule), conducting quantitative cost risk assessments (QCRA) to calculate risk exposure and determine appropriate contingency measures, and managing risk exposure and contingencies.

Software and Tools: Understanding the basic use of various industry software tools.

Selection of a Facilitator for the QCRA: Identifying suitable individuals to facilitate the QCRA.

Identifying Project Characteristics and Life Cycle Stage: Matching the life cycle stage to the level of detail required in the QCRA, choosing the approach (qualitative or quantitative), considering insurance implications, and identifying the type of contract.

Preparation for the QCRA: Ensuring clarity of the scope of work, developing the risk register, identifying participants, and preparing a workshop agenda.

Running the QCRA Workshop: Identifying assumptions, recording exclusions, capturing risks in typical distributions, utilizing independent experts to counter optimism bias, and calculating the exposure profile.

Validating the Risk Data: Classifying data, considering correlations and dependencies between risks, understanding estimating uncertainty (EU), reviewing provisional sums, and comparing current versus target risk assessments.

Modeling the Risks: Using Monte Carlo Simulation to analyze and produce an assessment of overall project cost risk exposure, presented in terms of a distribution.

Reporting the QCRA Outputs: This includes an Executive Summary, methodology, assumptions, a risk register, results from cost modeling (including the S-curve and confidence levels), comparisons against benchmarks, and follow-up actions.

Recording and Managing the Outputs: Considering correlated projects and risks in a contingency model for program and portfolio contingency values.

Additional Range Indicators:

These highlight the need for:

• Developing appropriate structures for a project risk management study.

• Strategies for accessing data related to regulations, legal requirements, research, and data gathering.

• Using suitable techniques for identifying project risks.

• Analyzing relevant data.

• Employing appropriate risk analysis and evaluation techniques.

• Establishing project contingency (P50 & P90).

• Using effective techniques for controlling and minimizing project risks.

• Understanding the financial, insurance, and tax practices within the industry.

In essence, Unit 30|31 details the competencies required for an infrastructure quantity surveyor to effectively manage project risks through a structured process of identification, analysis, quantification, and response, ultimately aiming to minimize adverse impacts on project objectives.

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Disclaimer: This information is for general knowledge purposes only and should not be considered legal advice. It is essential to consult with a qualified legal professional for any legal matters or concerns.