Republic of the Philippines

Polytechnic University of the Philippines

Open University System
Sta. Mesa, Manila

CLASS ASSIGNMENT NO. 4

MSCM604 Construction Quality Risk Management

Dr. Manuel Muhi

ENGR. NATHANNIEL P. GONZALES

Master of Science in Construction Management

July 30, 2023

 Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila

Case Study 1

Using the concept of risk management, prepare a simple risk management plan of your current project or work.

You may present your quantitative assessment (using expected monetary value or decision tree risk analysis) and qualitative assessment

(you may use the risk matrix like probability-impact or probability consequence matrix). (Make some justifiable assumptions).

1. What are the Risk appetite of your company/project?

2. What are the risk mitigation plan that you will recommend?

3. What are the risk response plan and monitoring plan that you will implement to address the problem/s?
 Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila

Answer:

The risk appetites of the company are those events that are rated with a risk prioritization/factor (RF) of two (2) or less. This means that no

additional controls are necessary and monitoring is still required to ensure current control is maintained to prevent risk from manifesting.
 Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila
The following are some risk events of our company with the corresponding response plan and mitigation plan:
Process Risk Event
Infrastructure Asset Inappropriate maintenance
Maintenance activities applied to identified
defects on the national roads
and bridge leading to their
recurrences, resulting to:
a. Potential hazard to
pedestrian and
motorists
b. Slowdown of traffic
flow
c. Increased
maintenance cost
L S RF Response Plan Mitigation Plan
1. Provide assistance to the Maintenance 1. Train maintenance
Point Persons (MPP) in identifying the personnel and crews
appropriate maintenance activities on proper
corresponding to the identified road maintenance and
and bridge maintenance needs, and repair methodology.
provision of corresponding fund in the 2. Coordinate with the
2 3 6 AMWP. ESU to include in the
2. Monitor the performance of each procurement plan
3 3 9 Maintenance Point Person and the basic highway
evaluate the impact of the above maintenance
3 3 9 measures based on the condition of equipment and
their respective roads assigned. tools.
Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila
Failure to validate the nature
of work and urgency of the
proposed projects prioritized
under the Other Public
Buildings (OPB) and Flood
Control Structures (FCS)
Maintenance Program, leading
to modification or realignment
resulting to delayed project
implementation.
Frequent displacement of
road warning signage by
individual road users which
may lead to vehicular road
accidents.
2 2 4 1. Maintain regularly an updated 1. Establish a database
inventory of all OPB and FCS of all completed
2. Conduct annual validation of OPB and projects funded
FCS proposed for repair and under the OPB and
maintenance including previously FCS Maintenance
funded and completed projects. Program for use in
the succeeding
evaluation for
prioritization of
projects.
3 2 6 1. Conduct daily roving on road sections 1. Coordinate with the
where signage were placed for road local government
safety. units within the
2. Monitor regularly the maintenance of congressional
road signage. Observe a clear and district for an
visible view of road signage to prevent assistance to
and minimize future road accidents. monitor different
signage within their
jurisdiction.
 Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila
Process Risk Event
Inspectorate and Failure to recommend
Monitoring appropriate measures to
address identified
maintenance deficiencies/
improvement needs due to
non-completion of assessment
process leading to non-
improvement or decline in the
implementing offices' level of
compliance to maintenance
standards
Failure to provide on time a
complete consolidated
situational report to NDRRMC
and other NGA's for possible
response operations, due to
communication and reporting
issues resulting to delayed
dissemination of information
and incomplete data on
passable/unpassable roads.
L S RF Response Plan Mitigation Plan
1 1 1 1. Closely monitor the progress on the 1. Plan the schedule of
implementation of Development/ assessment on the
Action Plan to address identified compliance to policy
problem areas. guidelines on the
2. Evaluate the effectiveness of the maintenance of
instituted measures and their impact national roads and
to the DEOs level of compliance to bridges to ensure
maintenance standards as well as to completion of the
the maintenance service delivery activity and the
target level. collection of data
needed for the
performance
evaluation/analysis
and identification of
problem areas.
2 2 4 1. Improve the current Emergency 1. Automate the
Operation Center (EOC) specifically for reporting system
the purpose of Disaster Preparedness, utilizing web or
Response and Recovery, complete with mobile application in
all the required communication and coordination with
monitoring tools and equipment. the IMS.
2. Monitor the efficiency of the reporting
system upon completion of the web/
mobile application.
Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila
Failure to provide immediate
response to the National
Roads and Bridges situation
during Calamities/Disasters
due to unavailability of tools
and equipment resulting to
the disruption of the
continuous flow of traffic.
Non-conformance to the
Removal of Obstructions
within the Right-of-Way (D.O.
73 s.2014) due to refusal and
noncooperation of owners.
Maintenance technical
personnel might be harmed
by the Covid-19 virus during
inspection and monitoring of
daily maintenance activities
and may not be able to go to
work. This will hamper the
usual workflow in the office
and the services to the public.
1 3 3 1. Ask assistance from Local Government 1. Regularly, inspect
Units with an available appropriate the maintenance
tools and equipment to restore the tools and equipment
flow of the traffic. for possible defects
2. Rent necessary tools and equipment and damages and
for the restoration of the traffic flow. recommend for
maintenance repair,
if necessary
2 3 6 1. Monitor regularly the completion of the 1. Request for the
removal of the obstructions within the assistance of Local
Right-of-Way. Government Unit to
transact for the
cooperation of the
removal of
obstructions and the
issuance of notices.
1 2 2 1. Monitor the personnel from wearing 1. All employees must
proper protective wearables such as be fully vaccinated
face mask, and face shield. and follow the
2. Isolate personnel who were exposed prescribed Standard
to the covid-19 virus. Protocols for COVID-
19.
 Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila

Case Study 2

If you are the project manager of the company, using the figure below, how can you relate the opportunity of the

company’s investment from a possible loss of the invested resources (manpower, materials, equipment, etc.) to a

substantial gain. Discuss the important relationship between risk and uncertainty and what are the possible actions you

will do in pursuit of an opportunity.

 Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila

Answer:

A project manager should properly study the organization’s risk appetite and the acceptable deviation from the organization's risk appetite (risk

tolerance). Thru this, a project manager can effectively assess whether the invested resources could provide substantial gain or a loss of

resources. From the given figure, a project manager can analyze that invested resources should not exceed the risk appetite point B because

increasing the resources will just result to the same considerable gain and increasing hazard exposure of risks may result to an increasing loss of

resources.

Risk is the situation under which the decision outcomes and their probabilities of occurrences are known to the decision-maker, and uncertainty is

the situation under which such information is not available to the decision-maker. Risk and uncertainty are related in that both preclude knowledge

of future states and both may be described by probabilities. It is important, however, to distinguish whether a lack of predictability arises from

insufficient knowledge (uncertainty) or from a well-understood probabilistic process (risk). Risk can be described by the likelihood and severity

of a negative event and thus, can be prevented through appropriate mitigation plans. Uncertainties are events that cannot be predicted and thus,

only be controlled and minimized by appropriate response plans.

 Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila

Opportunity is also an uncertain event that could have a positive effect leading to benefits or rewards. It is a positive event that could be determined

by the benefit and occurrence of this event happening. In the pursuit of an opportunity, a project manager should determine the likelihood of the

event happening and also the range of benefits to consider in order to determine what opportunity should be prioritized for an action plan in order

for it to grow more which promotes welfare for the project.

 Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila

Case Study 3

a. Explain the important points of qualitative risk analysis and what are the risk characteristics that are evaluated during

a qualitative risk analysis?

b. What is the contingency reserve of the project if the following risk information will be considered:

Identified Risk Probability Consequence

Delayed Delivery of Materials 0.16 -125,000.00
Lack of Manpower 0.57 36,800.00
Materials Quality 0.89 -89,000.00
Inflation 0.92 157,000.00
Trained Personnel 0.67 -123,000.00
Permits 0.25 101,000.00
Fabrication 0.35 -100,000.00
 Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila

Answer:

a. Qualitative risk analysis tends to be more subjective. It focuses on identifying risks to measure both the likelihood of a specific risk event

occurring during the project life cycle and the impact it will have on the overall schedule should it hit. It prioritizes risks according to probability

and impact, identifies the main areas of risk exposure and improves the understanding of project risks. Organizations can improve the project’s

performance by focusing on high-priority risks. Perform Qualitative Risk Analysis also assesses other factors as well such as the time frame

for response and the organization’s risk tolerance associated with the project constraints of cost, schedule, scope, and quality. Such assessments

reflect the attitude of the project team and other stakeholders to risk.

Risk Likelihood or Probability - the possibility of a potential risk occurring, interpreted using qualitative values such as low, medium, or

high. This is in comparison with quantitative assessments, which use data and numbers.

Risk Severity or Impact - the extent of the damage to the institution, its people, and its goals and objectives resulting from a risk event

occurring. It is the expected harm or adverse effect that may occur due to exposure to the Risk. In other words, it measures how bad things

could get if a particular Risk materializes.

 Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila
Risk Tolerance - the degree, volume or amount of risk that an organization can withstand. It indicates how sensitive organizations,

stakeholders, and people are towards risks.

Risk Appetite - the level of uncertainty an organization or stakeholder is willing to take on with the anticipation of reward at the end. The risk

appetite of an organization indicates how much it is willing to take risks to grow itself.

Risk Categories - made up of risk causes that fall into common groups. These groups can include risks such as technical risks, internal risks,

external risks, group risks, organizational risks, and or, environmental risks.

b.

Identified Risk Probability Consequence Expected Monetary

Value
Delayed Delivery of Materials 0.16 -125,000.00 -20,000.00
Lack of Manpower 0.57 36,800.00 20,976.00
Materials Quality 0.89 -89,000.00 -79,210.00
Inflation 0.92 157,000.00 144,440.00
Trained Personnel 0.67 -123,000.00 -82,410.00
Permits 0.25 101,000.00 25,250.00
Fabrication 0.35 -100,000.00 -35,000.00
Total -25,954.00
 Republic of the Philippines
Polytechnic University of the Philippines
Open University System
Sta. Mesa, Manila

In the scenario, a cost of 25,954.00 needs to be added in the budget to cover all identified risks. This is because not all possible risks are guaranteed;

some may happen and some may not. All risks will add their EMV to the pool. The risks that do occur will use money from the pool, but the risks

that do not occur will help cover the cost of those that did