Construction Project Risk Management

This assignment focuses on assessing various risks inherent in construction projects. It utilizes a risk matrix to analyze factors such as lack of contract understanding, faulty designs, worker safety, material delivery delays, coordination issues, and financial support availability. For each risk, students must evaluate its likelihood, consequence, existing controls, and assign a risk level and priority.

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1. Executive Summary
Risk mitigation is a key process for the construction project. In order to ensure proper
project completion for the WSI Blue Mountains TAFE project (19735 Project 4) is attained,
proper identification, analysis, evaluation and treatment of the risks will be important. This
document will therefore analyze the risks which can be experienced during the project execution
and provide the mechanism of mitigating the risks available (Jackson, 2010). Moreover, the level
of likelihood of the risks occurring is different from one risk to another. The order to action will
determine the seriousness which can be awarded during the mitigation process. Different risks
can occur at the same time and this will mean that the action taken will depend on the impact
which the risk has on the progress on the project execution. In addition, project uncertainties due
to the available risks are taken care of when the risk management plan is available. In this
project, the key risks which will be addressed include the risk during contract awarding. Some of
the key risks in this stage may include involvement of incompetent personnel during the
negotiation process. This means a wrong deal which may hinder the implementation stage is
achieved.
2. Introduction
Risks are likely to occur during the project implementation stage. The only action which
can be taken to ensure that the implementation stage continuous well is coming up with a perfect
plan to mitigate the available risks. From the contract negotiation to the handover, risks are ever
present. The risk plan therefore has to identify the risks available in the projects right from the
contracting period (In Ratay, 2012). This will ensure that successful completion of the project is
attained. Some of the key risks in the contractual documents include wrong contract sum
awarding to the project. This will mean that the contract sum will not be able to complete the

project and lead to stalling of the project. Involving proper personnel with experience will ensure
that the project negotiation details are well done and ensure that the time allocation and project
sum mare sufficient to complete the project. Another key risk which may be experienced is on
the technical part of the project. Many construction projects are able to stall due to lack of
workable technical details. The technical parts are important. The contract must be able to
analyze all the technical details and ensure they are well workable. This will ensure that the
progress on work is not hinders through evaluation of the technical details when found they
cannot be implemented on field. In addition, in order to ensure work progress is maintained,
proper logistics must be placed on board. The logistics ensures that all the requirements are
delivered to the team for them to ensure they complete the work on allocated team (Bissonette,
2016). In addition, the logistics ensures that all the project details are well clarified and issues are
addressed on time. The logistics ensures that the contract period is well kept and works are
completed on time for handover. Unclear plan on material deliver on site, payment of workers
and poor quality materials are some of the logistical issues which may be experienced during the
project execution. In addition, another area which has risks is the construction process. Lack of
proper planning is one of the key risks which are experienced in the construction process. The
WSI Blue Mountains TAFE project (19735 Project 4) is not different and likely to experience the
same risk. Therefore proper planning to solve such risk and mitigate them are needed. The
planning for mitigation of the risks needs to be done early enough to ensure proper project
completion. In addition, financial risks are key problems which affect construction projects
during project implementation. Proper contract agreements must be arrived at on matters of
payment. Securing financial assistance early enough is a key resolution which will ensure
progress of works is done well. Financial difficulties are key risks which are able to make project

stall and lead to their incompletion. Proper address of the financial risks will ensure that the
works continue well and completion timeline is met. In addition, addressing these risks will
ensure that the workers are well motivated since they are able to receive their financial
compensation on time. This paper will analyze all these risks and look at different ways which
can be implemented to mitigate them in relation to the WSI Blue Mountains TAFE project
(19735 Project 4) project.
3. Risk Assessment
All processes are able to carry some level of risk in them. This is the same in construction
project implementation. The major part for the projects is to identify the risks and be able to
come up with a mitigation plan (Pritchard, 2015). The risk assessment is able to help in the risk
identification in the different processes of the project implementation. This will be done in
relation to the WSI Blue Mountains TAFE project (19735 Project 4) project. This part will
identify the different risks which are likely to occur and assess their level of occurrence. The
risks are likely to affect the project output and therefore their output is important to ensure that
the work progress is not affected.
3.1 Identification
The contractual process is important for any project implementation. There are key risks
which are likely to affect the implementation or a project once the contractor is chosen. Proper
detail analysis is one of the processes which must be done by the contract. This includes the site
visitation to ensure that the working conditions in site are well laid off (In Fraser, In Simkins &
In Narvaez, 2015). Land issues and risks are key risk which has been able to hinder the start off
of projects at different site. This happens where the contractor is not aware of the working site
and has not done any background check on the site. Proper site visitation and site background

checks are able to mitigate the risk of the contract being unable to kick off the work. Site search
is a key process which can be done to ensure that this type of risk does not happen. This has to
happen before the contract is signed to ensure work is not affected. The site managers, contractor
and the project owners are key stakeholders which can be involved in this process.
In addition, analysis of the contract details is important before contract signing for the
contractor. The contractor has to involve qualified personnel to check the documents. This
included proper preparation of the different document such as bill of quantities to ensure proper
pricing is done for the different elements. Improper pricing of element will lead to financial
risks. This will lead to the project being unable to be completed due to lack of financial support.
Brainstorming is a key process which will be involved in this process to identify the risks.
Involving professional will ensure that the risks are mitigated and their occurrence is reduced as
much as possible. The analysis of the risks in this process must be analyzed before contract
signing and work starts. This will ensure that the documents provided must be analyzed well by a
professional.
In addition, logistics processes are able to lead to key risks in the project implementation.
The payment issues are some of key logistical issues which may alter the implementation process
of a project. Lack of proper payment of workers may lead to strikes which may affect the
working plan and schedule. The project managers are able to play a key role in ensuring that the
payment issues are well enhanced (Smith, Merna, & Jobling, 2014). In addition, ensuring proper
payment plan will ensure the issues and risk of financial strikes are well solved. The plan on
when to pay the workers can be done at the beginning of the project. This will ensure that the
workers logistics are well solved and ensures that the workers issues are well solved. In addition,
the logistic issues have to make sure the different materials are delivered when required on site.

Lack of material deliver can result to stalling of the working schedule. The logistical issues
regarding materials may also involve the quality required. The logistic team has to make sure
that they consult well on what is needed and when it is required. This will minimize the material
logistic issues and the materials are well delivered.
Financial issues are highly likely to affect the working conditions in construction sites.
Lack of timely payment and delivery of financials high affect the working progress for many
projects. In this project, analysis of payment details and schedule must be delivered and ensure
that the finances are available all through the project span. In addition, proper planning details
must be done early enough to ensure that the contractor won’t depend on client to finance the
progress of works. In addition, construction risks are likely to affect work progress. This
involves key issues which include the safety factors during working (Hughes & Ferrett, 2016).
Wrong understanding of the technical details may lead to wrong construction which will likely to
affect the implementation. The set up of substandard structures which are not defined in the
technical details will increase the cost of implementation of the project. OSHA teams together
with the project management team play a key role in reducing and analysis the construction risks.
Brainstorming process to ensure that the construction process goes well for the WSI Blue
Mountains TAFE project will be effected. The teams will ensures that the construction issues
such as safety are well identified and mitigation mechanisms are enhanced.
3.2 Analysis and Evaluation
The contractual risks may affect the whole implementation cycle. Lack of enough
finances may lead to complete stalling of the project. The contract risks must be mitigated to
ensure that all parties are able to benefit and enhance the quality of work delivered. In addition,
the contract risks may affect the quality of work being done. Short implementation period and

budget may lead to the contractor delivering substandard work. In addition, longer time taken to
resolve the contract disputed may lead to extension of project timelines. This will mean delays
on start off of the project and therefore delay in completion time. The likelihood of the
contractual risks occurring depends on the analysis contract documents. Contractual risks
occurrence likelihood is usually low and their impact to the impact is high whenever they occur.
Technical risks are also costly affair for the construction projects. The availability of the
technical risks may likely affect the working progress. For instant, wrong understanding of the
technical drawings may affect the working schedule (Taylor, 2000). This will mean that the
project will take longer than it is scheduled. In addition, the cost of the project may escalate due
to the technical risks. For instance, wrong understanding of the may lead to wrong working
which will later lead to demolishing of the structure. The timeframe and costs of the projects will
escalate due to the technical risks. For the WSI Blue Mountains TAFE project, technical issue
will be able to affect the time and cost. This may lead to lack of completion of the project. The
technical risks have highly likelihood of occurring during the start of the project. Nevertheless,
with proper professionals, the likelihood is low and the seriousness is usually low with the proper
type of worker force.
The logistical risks may arise from different framework in WSI Blue Mountains TAFE
project. The materials quality can be able to affect the quality of output. This will even affect the
design lifetime of the project during use (Hassani, 2016). In addition, in another perspective, the
logistical issues can be experienced when the workers issues are not well addressed in time. This
will leads to issues of strikes which will affect the timeline schedule of the project. In addition,
the time taken to complete a project will define the cost factors for the project. The increased
timeline will mean that the cost of the WSI Blue Mountains TAFE project will increase. The

likelihood of the risk to occur depends with the handling of the logistical issues by the logistic
team. Careless handling of the issue will increase the likelihood of the issue to occur. When they
occur, the impact and seriousness is usually high and has great impact on project progress.
In addition, financial issues are able to affect the timeline for project implementation. The
financial risks are able to affect the work quality and lead to reduced benefits of project. If not
handled early, the financial risks have highly likelihood of occurring. Overall, the financial risks
have a medium likelihood of occurring in WSI Blue Mountains TAFE project.
Seriousness
Likelihood
Low Medium High Extreme
Low N D C A
Medium D C B A
High C B A A
4. Risk Mitigation
The mitigation plan will highly depend on the seriousness and likelihood of the risk
occurring in the WSI Blue Mountains TAFE project. The classification of the mitigation plans
will depend on the category which the specific risks are able to fall (Lock, 2016). The urgency
on solution and mitigation plan will depend on the time of risk occurrence and the way it is able
to affect the progress of works in the project. As identified, the risks classified in category A
have the greatest negative impact on the projects and are highly likely to occur on the projects.
The impacts are able to reduce on the projects from category A, B, C, D and N.
The financial risks are likely to occur and will able to be classified under category A. the
impact of these risks are able to affect the progress of the works in this projects and therefore
will be given high priority incase of their occurrence. Proper financial plans will be laid and
checked on after very month. This plan will be able to identify any occurrence risks of these
plans. The project management team will have a crucial role in assessing the likelihood of the

risks occurring during the analysis period. The analysis will mean that the budget of the project
is control and kept at the assigned amount.
Another category of risks will be classified on class B. these risks will have a high impact
on the project and high likelihood of happening. Nevertheless, their impact will not be able to
match the impact on the risks in class A. some of the key risks which can be categorized in this
class in WSI Blue Mountains TAFE project include the wrong materials delivery, design faults
risks and construction risks. In order to mitigate the risks, proper personnel will be involved in
the different stages of the construction in this project. This will ensures that each process is
carried out according to the set plan. The engineers and logistics team will be able to carry out
most of mitigation plans in the risks in this category. These risks will be able to create crisis on
the budget since they will be able to escalate the budget when they occur.
Another class of risks in this project will be on class C. this will involve risks which have
medium likelihood of occurring and medium impact on the project. In order to resolve these
risks, time can be taken to analyze and they can be mitigate with time. Logistic issues involving
workers welfare are some of the risks which are able to fall on this category. In addition, safety
risks in this project will be classified under this category. Proper analysis of the risks occurrence
will be taken and their point of occurrence be mitigated. The involved people will be drawn from
the specific field where the risk is able to occur. For instance, in case of the security issues, the
OSHA and workers welfare team will be involved to mitigate the risk. Analysis of the risk
occurring will be carried out in monthly basis to ensure any loopholes of the risks occurring are
mitigated.
Lastly class D and N will be other categories of risks which will be found on this project.
These classes involve risks which have low likelihood of occurring and also attribute to low level

of impact on the project. Construction risks such as lack of understanding of the technical
materials will be classified on this category.
5. Risk Monitoring
Monitoring the risks will be a vital tool which will be used in WSI Blue Mountains TAFE
project. The monitoring will be time which will be taken for the team to review the mitigation
plan and level at which the different processes are at risk of occurring (Bissonette, 2016). The
risk monitoring will highly borrow from the risk occurrence and likelihood process. In addition,
for the different risks, the report to the project manager and steering committees will be delivered
different. Under the risk monitoring, the schedule will be able to indicate the frequency on which
the report will be delivered. In addition, the steering committee will be able to check only the
risk monitoring report on class A and B. the project manager will be able to review all the report
according to the monitoring schedule.
Risk type Involved
personnel.
Monitoring
schedule
Delivering report
to steering
committee
A Project manager
and client
Weekly Weekly
B Contractor and
project manager
Weekly Monthly
C Contractors Monthly Monthly
D OSHA team Monthly Monthly
N Contractor,
workers
Daily Weekly
6. Roles and Responsibilities
In WSI Blue Mountains TAFE project, there are different team members who have key
roles in ensuring that the risks are well identified and mitigated. The members will have different
responsibilities to ensure that risk identification and analysis process goes well (Pritchard, 2016).
Lastly, the team will ensure that the perfect mitigation measures are put in place to ensure that
the project is completed on time as it is scheduled. The following three team members will have

the highest responsibility in the risk management plan. The teams will be able to identify the
risks, access them and their impacts to the project and lastly come up with the plan which they
will execute to mitigate the risks.
6.1 Steering Committee
The steering committee will have the highest responsibility of monitoring the projects
progress. In addition, they will be involved in the monitoring of the key risks which are likely to
have the greatest impact on the project. This team will be involved in the analysis of the risks in
category A and B. for all the risks, the steering committee will be involved in the risks
identification and analysis process. They will then handover the monitoring of the other risks to
other teams and collaborate with the project managers to monitor the mitigation of risks in class
A and B. The committee will be able to receive the report on these risks on weekly and monthly
basis respectively. They will analyze the reports and therefore come up with any suggestions to
enhance the mitigation plans. Any updated on risk register during implementation process will be
forwarded to the steering committee through the project manager.
6.2 Project Manager
The project manager will be a vital member in WSI Blue Mountains TAFE project. The
project manager will come up with the guide of preparing the risks management plan. He will be
involved in all the risk identification, assessment and mitigation plans for this project. The
manager will be vital in monitoring the management plan for the risks and able to identify the
challenges involved (Lock, 2016). Through this the project manager will be able to come up with
new ways of mitigation and emerging risks or better ways of mitigating the available risks. In
addition, the project manger will be able to provide the key reports to the steering committee on
the risk management plan for the risks in class A and B. The project manager will be able to

provide any changes which the project team has done on the field to enhance the implementation
of the risk management.
6.3 Project Team
The project team will have the greatest responsibility of assisting the project manager in
risk identification, analysis and mitigation. In addition, the team will be able to suggest any new
methods which can be applied to mitigate the risks and therefore be updated on the registry.
Throughout the WSI Blue Mountains TAFE project, the project team will be able to mitigate and
implement the risk management plan. They will be able to report any risk which had not been
captured to the project manager.

7. Appendix A: < WSI Blue Mountains TAFE project (19735 Project 4) > Risk Register (as
at 21/01/2018)
Rating of risks
L Low E Extreme
M Medium N Not assessed
H High
Grade combination effect of seriousness and likelihood
Seriousness
Likelihood
Low Medium High Extreme
Low N D C A
Medium D C B A
High C B A A
Recommended action for grade risks
Grade Mitigation action to be taken
A Immediate action to reduce likelihood and seriousness once risk identified and
implemented immediately. Action be taken prior to implementation stage
B Immediate action to reduce likelihood and seriousness once risk identified and
implemented immediately. Action be taken during implementation stage
C Immediate action to reduce likelihood and seriousness once risk identified and
implemented immediately.
D Monitored as work progresses and action be taken if risk grows with time
N Monitored as work progresses and action be taken if risk grows with time
Risk
id
Description
of risk
Impact to the
project
L
2
S3 G
4
Cha
nge
Review
date
Mitigation
action
Responsible
personnel
Cost
($)
Mitigatio
n
timeline
1 Lack of
proper
understanding
of contract
details
Delay on
project
commencemen
t
Stalling of
project
progress
seeking
clarification
H H A N/A 01/01/2
018
Involving
professional
to prepare
contract
documents
Steering
committee
Project
manager
N/A 1 week
2 Faulty
technical
details
Wrong project
execution
Increased cost
of
implementatio
H M B New 03/01/2
018
Involve
professional
to review the
technical
details
Project
manager
Project
technical team
1500 3 weeks

n
Delay in
project
completion
3 Unworkable
technical
details
Leading to
 Lack
of
unders
tandin
g by
projec
t team
Delays of
project
execution
when seeking
clarity
Increase cost
of
implementatio
n and expense
of the project
M M B N/A 02/03/2
018
Use
engineers to
review the
technical
details
Project
manager
Project
engineers
2300 1 week
4 Lack of
release of
financial
support
Delay in work
kick-off or
progress
Affects quality
of work due to
straining
budgets
H M A N/A 10/01/2
018
Avail
financial plan
for proper
support
Properly
quantify the
financial
support
needed
Sponsor
Project
manager
N/A 1 month
5 Delay in
material
delivery on
site
Delays
working
schedule
Increase cost
of project
L H C N/A 15/01/2
018
Provide
schedule on
what material
is needed and
what time
they are
needed.
Logistics
team
Project
manager
N/A 1 week
6 Unsuitable
construction
program
Delays in
construction
program
Increased costs
on the project
H L B New 21/01/2
018
Proper
organization
of work plan
Project
manager
Project team
200 1 week
Risk register
Date of risk review
Function
compiled by………………………………..date……………

Reviewed by……………………………….date……………
Re
f
Risk Likeliho
od
Conseque
nce
Existing
control
Likeliho
od rating
Conseque
nce rating
Ris
k
lev
el
Risk
priorit
y
Lack of
understandin
g of contract
details
L L Use
professiona
ls to
prepare
contract
1 2 C Low
Faulty
technical
designs
M M Use
qualified
engineers
2 2 B Mediu
m
Safety risk
for workers
during
implementat
ion
H H Proper
safety
measures
use
1 2 A High
Delays in
materials
delivery on
site
H H Ensure
proper
logistics are
in place
2 3 B Mediu
m
Lack of
coordination
between
different
groups
H H Brainstormi
ng to solve
relation
issues
2 3 B Mediu
m
Lack of
timely
delivery of
financial
support
L H Prepare
proper
financial
financing
plan
2 1 A High

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