Schedule Risk Management - Construction Project Scheduling and Control - page 386

documenting the decisions that are made. The task of documenting the decisions that
are made should include preparing a risk mitigation plan for those unresolved risks
and then acting on that plan. The risk mitigation plan might include just monitoring
unresolved risks to ensure that they don't become a driver of productivity or delay.
The risk mitigation plan might include adding time contingencies to the activities,
representing a specific risk on a certain scope of work, like the craft activities men-
tioned earlier. This risk mitigation plan should include identification of the progress
stages that are necessary to investigate new risks in case it is determined unnecessary
to do so at each schedule update.
Contractors will often add a cost contingency to cover such risks as the likelihood
that they will be unable to complete the project by the contractual completion date.
This could include making a judgment about the difference between the contractual
completion date and the scheduled completion date, and adding the costs of pay-
ing liquidated damages for that difference or accelerating the schedule. Such a risk
might encourage the contractor to withdraw from bidding or contracting on a project
because of the risk in order to pursue lower-risk projects.
After the risk mitigation plan and resolved risks have been incorporated into the
schedule, the risk assessment of the baseline schedule is complete, documentation of
the process has been recorded, and the final product is a risk-adjusted schedule. This
product is the result of a good plan, with decisions made at every step along the way
based on appropriate assumptions and accurate assessment of the risks to the project.
This product is not a black-box risk management approach, where the schedule is
dumped into proprietary software for risk adjustments, based on unknown assump-
tions and decisions. A good risk management process should be documented and be
able to be duplicated by a reviewer.
6. Monitoring and Updating the Risk Management Plan
With the first schedule update, the next step comes into play: monitoring and updating
the risk management plan during updates. This step also includes evaluating exist-
ing unresolved risks with each update, as well as starting the identification cycle for
new risks again. This new cycle comprises the same steps that were performed for
the baseline schedule. New risks are identified qualitatively and then are quantita-
tively analyzed, prioritized, and responded to or resolved. New risks that cannot be
resolved need to be added to the risk mitigation plan in order to determine a plan of
action and incorporate them into the schedule. This cycle continues until the com-
pletion of the project or the determination that all risks have been actualized or have
disappeared.
Some scheduling software programs include ways to monitor and control risk,
and offer the ability to perform some level of analysis. An example is Primavera Project
Management, which has a directory button that displays risks and allows some level of
monitoring of those risks. This type of schedule software package with standardized
components can help with the last step in a risk management plan: monitoring and
control risks during the schedule update cycle.