Page 47 - Urban Construction Project Management

pter T
Cha
o
w
22 Chapter Two
22
3. Ensure that the CM/GC, architect, engineer, and owner have the opportunity to be
involved and communicate an appropriate agreement of the type of risk and con-
tingency plans to deal with that risk.
4. Identify project risks such as re-occurring risks, risks with small implications,
risks with manageable implications, risks with very large implications, risks with
catastrophic implications, and devise a risk management plan to deal with them.
5. Ensure control of risks by planning how risks are to be managed through the life
cycle of the project.
6. Allocate responsibility for managing each risk with the party best able to do so.
7. Establish and maintain a risk management plan by the CM/GC.
8. Establish procedures for actively managing and monitoring risks throughout the
project and during completion and occupancy.
9. Develop contingency plans to deal with the risks if they were to materialize.
10. Escalate the risk to upper management if it is of significant importance and poten-
tial adverse impact to the project.
11. Monitor risks throughout the project life cycle, as new risks may arise that have not
been previously identified or anticipated.
12. Update risk information throughout the life of the project.
13. Shift risks down to the subcontractors, suppliers, and vendors.
Exhibit 2-1 is a summary of the risk management process.

Exhibit 2-2 is a risk management flowchart.

RISK ASSESSMENT

One of the tasks to be performed during preconstruction services is risk assessment for
the project. Many people think about risk in terms of financial issues such as insurance
and bonding. Risks are not limited to finances, and can include any matter that
adversely affects the project such as design deficiencies, construction deficiencies,
material deficiencies, labor disputes, contract provisions (see Chapter 9), strikes, acts

EXHIBIT 2-1
The risk management process can be defined in the following manner:
Summary of the
risk management 1. Identify risks to the project.
process. 2. Complete the risk assessment form.
3. Investigate the risk to the project.
4. If the risk is determined to be large, escalate the risk to upper management.
5. Continuously monitor the risk.
6. Assign an appropriate risk management mitigating action, or contingency plan.
7. Implement the appropriate risk management action at the proper time.
8. Bring closure to the risk item.