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63R-11: Risk Treatment

63R-11: Risk Treatment
AACE International, August 23, 2012

Price: $0 (Member) / $100 (Non-Member)

This recommended practice (RP) of AACE International defines the expectations, requirements, and practices for risk treatment. This RP follows the steps identified in RP 62R-11, Risk Assessment Identification and Qualitative Analysis. In this process, an action owner is assigned who, working with the risk team, is responsible for devising and implementing risk response plans for those risks that were not deem acceptable in the qualitative analysis screening step. It expands on TCM Framework section Risk Treatment and leads into Risk Control.

In TCM, the risk management process is applied in the strategic asset management, as defined in RP 10S-90, Cost Engineering Terminology and project control processes. In the strategic arena, the project has not yet been selected, so the treatment focus tends to be on devising alternative asset or project solutions that mitigate the risks while meeting business objectives and requirements. In project control, the risk treatment focus is more on tactical refinements (per TCM - identify creative alternative solutions, leveraging value engineering for example, and, through a formal quantitative analysis process) of project scope, conditions, plans and deliverables as well as developing contingency plans. This RP is intended to be generic to either focus area or any project scope.

This RP is intended to provide guidelines, not a standard, for including risk management during the planning of a project or asset management that most practitioners would consider to be good practices that can be relied on, and would recommend for use. It will provide a foundation for risk control.

This RP will outline the processes and practices but is not a detailed “how-to”. In that respect it will most benefit those that are new to risk management or decision and risk management professionals who want to refresh their knowledge of recommended practices.

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