Building a Residential House – Risk Management Plan

This project will design and construct a residential house for an independent customer. The customer has identified the needs and has purchased a suitable location in a residential area for the house.

Based on customer requirements a project scope has been prepared and presented to the customer for approval. A work breakdown structure (WBS) has been developed, resource requirements have been identified, costs have been estimated, and risks have been identified. At this stage of the project there are several uncertainties and so the risks tend to be higher.

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So far in the project lifecycle 20 risks have been identified and scored, several of which are medium risks. As detailed later in the document qualitative risk analysis has been used for this project which identifies risks based on their probability of occurrence and severity of impact on the project.

This document addresses five critical risks and details how these risks will be effectively managed. Critical risks are those risks that have the potential to bring the project to a halt or cause the project to be terminated due to associated costs.

This document, called the risk management plan is intended to be used on an ongoing basis for managing risks throughout the lifecycle of the project. The main objective of this document is to carefully identify all major impact causing risks and will be updated on a regular basis as the project progresses and more information is available.

Project Description

The project is to build a detached house with 4 bedrooms, 3 bathrooms, and an unfinished basement approximately 1800 square feet on a 4356 sq feet plot. The customer has already purchased the plot in a residential area and has secured it with a temporary fence around the perimeter. Based on customer requirements identified earlier, three tentative house plans have been developed and submitted to the customer. For the time being, landscaping is not part of the scope of work.

A work breakdown structure (WBS) has been developed and major activities and sub activities have been identified. As the project progresses and more information is available, the WBS will be further refined. WBS is the fundamental building block of the project and will be used for all future planning purposes.

WBS was used to identify risks associated with specific elements of the project and each element is assessed for risk (Dinsmore, 1993). Based on this, as mentioned above, so far 20 risks have been identified. These risks have been identified during the risk matrix and assessed for impact and probability of occurrence during risk assessment.

Based on information available at the time, suitable contingency plans have been prepared to contain the negative impact of all risks. Importance has been placed on high risk items especially those that have the potential to bring the project to a halt.

Procurement of raw materials is an important activity of building a residential house. Procurement also involves not only buying raw materials but also identifying qualified suppliers and developing criteria for selection of these suppliers. Historical information and current market research have been used to prepare procurement plans.

Several raw material suppliers have been identified and have been qualified based on the criteria specified in the procurement plan. These suppliers have been sent Requests for Quotations (RFQ). A high level risk has been identified in this category and is detailed below.

Based on the WBS, activity list, roles and responsibilities chart, and historical information resource requirements have been identified. Major parts of the project will be out sourced to contractors. Three contractors have been identified based on the experience and past performance. The intent is to have a single prime contractor who will be responsible for ensure safety regulations are consistently met. Contract documents are being prepared and will be submitted to the prime contractor.

A good quality residential house is designed and built to last for several years. The construction industry is a fairly advanced industry and has developed several best practices. To meet our quality standards as well and meet industry rules and regulations, we have prepared a quality assurance document.

This document servers as our guidelines during design and construction and includes industry standard quality standards, processes and metrics. The customer has been provided this document and will be used to ensure the house design and construction meets the approved guidelines. This document can also be used for third party audit purposes to help reduce risk.

Work Breakdown Structure (WBS)

WBS is the basis on which a project is built. For management purposes, the project is broken down into five major phases. They are:

Planning Phase
Design Phase
Tendering Phase
Construction phase
Monitoring

Each of these phases is further sub divided into smaller and interrelated tasks. Each of these tasks is further divided into unique, manageable time limited activities to which is assigned a cost and resource. During the brainstorming and interviewing sessions conducted, each of these tasks was assessed for risk. It was identified that most of the high risks occurs in the planning phase of the project which is mainly due to uncertainties.

WBS Critical Risk High Five

While developing the risk matrix along with subject matter experts and other involved in similar projects, several risks were identified and their impact on schedule, cost, quality and technical aspects of the project were identified. Risk assessment was conducted using qualitative risk analysis which identified the probability of them occurring along with the impact on the project. Table 1 gives the definition of probability in terms of its likelihood of occurrence.

Table 1: Probability definition

HighThis risk is more likely to occur>50%
MediumThe probability of this risk to occur is as likely as not to occur=50%
LowThis risk is less likely to occur.

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