BUSI 415 Week 6 Project: Risk Register and Risk Management Plan Example

Risk Management Plan and Risk Register: Fairmont Hills Community Recreation Center

Part 1: Risk Management Plan

Methodology

Risk management for the Fairmont Hills Community Recreation Center follows the risk processes of the PMBOK Guide (Project Management Institute, 2013): plan risk management, identify risks, perform qualitative and, for the largest risks, quantitative analysis, plan responses, and control risks. Risks are identified through a workshop with the project team and the general contractor at contract award, through the assumptions in the resource and communication plans, and through a checklist drawn from the city's two previous building projects. Dinsmore and Cabanis-Brewin (2014) recommend combining several identification techniques because each catches risks the others miss.

Roles and Responsibilities

The project manager owns this plan and the register. Each risk has a named risk owner who monitors its trigger and carries out the response. The construction manager leads identification of site and construction risks; the finance analyst maintains the contingency log. The steering committee approves use of the contingency reserve above $25,000 and reviews the top five risks monthly.

Budget and Timing

A contingency reserve of $420,000, about 6 percent of the budget, is held for identified risks, based on the expected monetary value analysis below. A management reserve of $200,000 is held by the sponsor for unknown risks. Risks are reviewed at every weekly coordination meeting for the top five and in full at each monthly steering committee meeting and each phase gate.

Research supports a firm review rule. Kutsch and Hall (2010) studied IT project managers and found that many deliberately ignored certain risks, excluding them from discussion because they were uncomfortable, politically awkward or considered not worth the cost of managing. A review rule that requires the team to discuss every risk above a set score, whether or not anyone wants to, protects the project from that kind of quiet avoidance.

Risk Categories

Risks are grouped in a simple risk breakdown structure: external (permits, weather, markets, utilities), site (soil, environmental conditions), contractor and procurement, design, organizational (city staffing, approvals), and operational readiness (systems, staffing for opening).

Probability and Impact Definitions

The risk score is probability times the higher of the cost or schedule impact rating. Scores of 12 or more are high and require a response plan and steering committee review; 6 to 11 are medium and require an owner and response; 5 or less are low and are watched.

Tracking and Reporting

The register is kept on the project site. The project manager reports the top five risks and any new high risks in the biweekly status report, and closes risks when their trigger dates pass or the work they affect is complete. Each entry records its status as open, triggered or closed, the date of its last review and the result of any response carried out, so that the register shows not only what was feared but what was done.

Part 2: Risk Register

Expected Monetary Value and Contingency

The opportunity O1, if realized, would add about $60,000 to the reserve; it is not counted until awarded.

Managing the Reserve

The contingency reserve is not a general cushion. Each draw must name the risk in the register that occurred, the response that consumed the money and the amount, and the finance analyst records it in the contingency log. Draws of $25,000 or less need only the project manager's signature; anything larger goes to the steering committee, matching the thresholds in the communication plan. When a risk is closed without occurring, such as the cold-weather risk once the structure is enclosed, its expected value is released from the reserve and reported to the sponsor, who decides whether to return it to the budget or hold it for later risks. Tracking draws this way shows at each phase gate whether the original analysis was realistic.

Response Plans for the Highest Risks

Two risks need more than a line in the register. Risk R1, unsuitable soil under the gymnasium, scores 12 and is the largest single cost exposure. The response has two parts. Before the contractor mobilizes, the construction manager will order two added soil borings at the gym footprint, at a cost of about $8,000, which narrows the uncertainty while design changes are still cheap. The bid documents will also ask for unit prices for over-excavation and replacement fill, so if poor soil is found, the extra work is paid at a price set in competition rather than negotiated after the fact. If the borings show poor soil across the footprint, the structural engineer will evaluate a deeper slab design, and the project manager will bring the cost to the steering committee before bids open.

Risk R5, bids above the estimate, is scored 10 because its cost impact would be severe even though it is less likely. The response is to structure the bid with two deductive alternates, the teaching kitchen fit-out and the outdoor court, so the city can award a contract within budget without rebidding, which would cost about two months. The procurement officer will also contact regional contractors before advertising to confirm interest, since fewer than three bidders is the trigger that this risk is becoming real.

Secondary risks are recorded as well. Removing the kitchen alternate would affect the program coordinator's opening plans, so the communication plan's user group meetings will review that possibility in advance, and residual risk after each response is noted in the register.

Biblical Integration

A proverb contrasts two travelers: the shrewd one spots danger ahead and shelters from it, while the careless one presses on and is hurt (English Standard Version Bible, 2001/2016, Proverbs 22:3). Spotting danger is the register's job, and sheltering from it, in practical terms, is the response plan. The verse also cuts against the deliberate ignorance Kutsch and Hall describe: a prudent team does not look away from a risk because it is unpleasant to discuss. That is why the plan requires every risk scored 12 or higher to be discussed with the steering committee, including risks that reflect on the city's own staffing.

Conclusion

The plan sets clear rules for identifying, scoring, responding to and reviewing risk on the recreation center, and the register applies them to the eleven risks known at contract award. The contingency reserve is tied to the analysis rather than to a rule of thumb, and the review schedule is designed to keep uncomfortable risks in view. Both documents will be updated at each phase gate.

References

Dinsmore, P. C., & Cabanis-Brewin, J. (Eds.). (2014). The AMA handbook of project management (4th ed.). AMACOM.

English Standard Version Bible. (2016). Crossway. (Original work published 2001)

Kutsch, E., & Hall, M. (2010). Deliberate ignorance in project risk management. International Journal of Project Management, 28(3), 245-255. https://doi.org/10.1016/j.ijproman.2009.05.003

Project Management Institute. (2013). A guide to the project management body of knowledge (PMBOK guide) (5th ed.). Project Management Institute.