PCC Risk Assessment & Mitigation 5

Question 1

An owner directs the contractor to include a 10% cost contingency in the bid for potential geotechnical surprises. This is an example of which risk response strategy?

Accepted Answer

Accept — active

Answer

Active acceptance involves deliberately planning for a risk by allocating contingency reserves rather than changing the plan to avoid it.

Question 2

Which tool is used to trace a risk back to its fundamental cause to prevent recurrence?

Accepted Answer

Root Cause Analysis

Answer

Root Cause Analysis (RCA) identifies the underlying cause of a risk event so that corrective actions address the source, not just the symptom.

Question 3

In earned value management, a Cost Variance (CV) of negative $150,000 most directly indicates:

Accepted Answer

The project is over budget by $150,000 at the current performance point

Answer

CV = EV − AC; a negative CV means the project has spent more than the earned value of the work completed, indicating cost overrun.

Question 4

A project team performs a risk reassessment at the end of each phase. This practice is aligned with which principle?

Accepted Answer

Continuous risk monitoring and iterative risk management

Answer

Risk management is an iterative process; risks must be re-evaluated as the project evolves, new information emerges, and conditions change.

Question 5

Which contract type places the greatest financial risk on the owner (client) for cost growth?

Accepted Answer

Cost Plus Fixed Fee (CPFF)

Answer

Under Cost Plus Fixed Fee contracts, the owner reimburses all allowable costs, absorbing cost growth risk while the contractor earns a fixed fee.

(PCC) Project Controls Certification Practice Test

(PCC) Project Controls Certification Practice Test

PCC Risk Assessment & Mitigation 5