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Value & Risk Management

The assignment has been designed to assess your understanding of (1) the nature

of value from the perspective of the project stakeholders, (2) the processes of VM

and RM and how they can be incorporated into the project life cycle and (3) the

outcomes that can be expected from applying VM and RM to a project scenario.


Your client is a development consortium who is redeveloping a brownfield site [Site

Details will be issued separately for Edinburgh, Dubai and Malaysia campus

students]. The site is located just outside of the city centre and is characterised by

quality office and leisure developments. With the economy showing signs of

recovery, there are a number of speculative office and high quality apartment

developments getting underway.

Your client is developing a hotel (estimated 125 beds) and leisure club complex on

the site and has budgeted £25M for capital works. Construction management is the

selected procurement path. The project is currently at Stage 1 of RIBA PoW 2013

edition, however there is concern that Stage 0 issues were not fully resolved and the

brief for the project is not sufficiently clear to allow the design to proceed. A VM

study has been commissioned to address this. The client has a vision that this will be

a high profile development that will capture the imagination of residents and visitors

to the city. It is intended this will be a catalyst for possible future development in the

area as the market grows.

Part 1 – Understanding Project Value and the application of VM and VE

The client has commissioned a Value and Risk Management study to help ensure

best use of their investment in the project and its timely delivery. You have been

engaged to provide the following VRM consultancy services to the project team

1. Based on the CABE definition1 of value drivers, Develop and prioritise value

drivers specific to this project. Suggest metrics for each of these value drivers

against which project success can be measured and identify the relevant

parties involved.

2. Design a detailed 3 day VM study agenda to be undertaken by the project

team. This needs to identify all the key stakeholders that will be required to

participate in the study. For each stage, explain both the study activities to be

undertaken and the expected outcome.

3. Prepare a one page (A4) function logic diagram that represents the functional

requirements and clearly identifies the overall project task.

4. The project has moved on and is now at RIBA PoW stage 3. The client has

just informed the project team that the construction budget needs to be cut

by 10%. Advise the client how this saving may be accommodated with

minimal impact on the project.

Part 2 Managing project risk

1. Design a structure for integrating formal RM into the project process in order

that a risk register can be set-up and maintained throughout the design and

construction phases. The Risk Management structure should identify key

stages when a risk study is required, identify expected participants and

explain the risk issues to be evaluated.

2. Identify those risks that should be recorded on the initial risk register for

monitoring. Prepare a short narrative report on the key risks to success of the

project at this stage and suggest the most appropriate ‘risk owner’ for each.

Approx 4500 words

Last Updated on February 10, 2019

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