Stork

Risk Management
Toolbox

Document no. ST00.000.2100

Revision 2.6, March 2019

ST00.000.2100 Classification: Stork General

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DISCLAIMER: This document contains trade secret and proprietary information that is confidential to, copyrighted by, or trademarked by the Stork
Group. As such it needs to be protected from indiscriminate or incidental disclosure. It is not to be shared or discussed with any party outside Stork
Group or its affiliates including outside consultants, partners, or customers. It is the responsibility of any individual making any duplicate copies of
this material to establish the appropriate controls to maintain this confidentiality. Any derivative works that incorporate any features of any part of
this presentation must have attached to them any proprietary symbols or statements that appear in the original work.

Approved by Date:

Reviewed by Date:

Prepared by Dirk-jan Voorn Date: 28 February 2019

Revision history

Rev Date

0.14 19 Jan 2018 Initial Issue

0.15 13 Feb 2018 Processed comments from Dirk-Jan Voorn, Robert de Vries, Mike Kujath,
Steve Berquist, Albert ter Maat and Alejandro Escalona

1.0 Feb 2018 Final version with comments incorporated

2.0 Mar 2018 Incorporated additional comments Dirk-Jan Voorn

2.5 Feb 2019 Updated Stork numbering and revision of statements Dirk-Jan Voorn

2.6 March 2019 New Template

Revision control

Major revisions of this document are to be approved by the approver of the document. These major
revisions are identified by using the next whole number for the revision number. Minor revisions are those
of a minor nature that include changes to references or minor wording and are approved by the author of
the document. Minor revisions are shown by using the next decimal number. In both cases a clear
description of the revision change is to be provided including section numbers where applicable.

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Contents
1 Purpose 4

2 Application 4

3 General Risk Management Process 5

3.1 Risk Management Culture 6

4 Risk Management Requirements Summary 8

5 Roles and Responsibilities 9

5.1 Stork Risk Organization 9
5.2 Key Functional Roles 10

6 Identifying Risk Projects 15

6.1 Exceptions to the Risk Assessment Requirements 16

7 Identifying risks and their impacts 16

7.1 Facilitation of a Risk review 16
7.2 BRMF Risk Assessment Process 17
7.3 Risk Management with the BRMF Website Tool 17
7.4 BRMF Tools 18
7.5 BRMF Approval Process 19
7.6 Checklist 19

8 Contingency Development 23

9 Waiver Request 24
9.1 Corporate Risk Project Waiver Request 24
9.2 Stork Group Waiver Request 24

10 Conducting Risk Reviews and Updates 25

10.1 Risk Reviews and Trigger Events 25
10.2 BRMF: Alignment Session Review 26
10.3 BRMF: Monthly Update 26
10.4 BRMF: Quarterly Risk Reviews 27
10.5 Checklist: Risk Reviews 27

11 Training and Certification 28

12 Teaming Arrangements 30

13 Additional Risk Reading Materials 30

Appendixes 33

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1 Purpose
All projects, contracts or activities Stork intends to engage in involve risks and have to be managed.
Managing risks means proactively controlling activities to minimize adverse effects, reduce leakage and
provide confidence in meeting the expectations of the as-sold model. The purpose of this document is to
provide guidance on the practice of risk management within Stork and describe the practice overview
requirements, activities and key terms related to the requirements, structure and tools.

This Stork Risk Management Toolbox has been developed to meet the Fluor BRMF requirements
established by the Fluor Corporate Risk Group and provides additional information related to Fluor and
Stork practices applicable for the work Stork is bidding and executing. Every project must be covered by
a risk assessment. The different service offerings within Stork stipulate the necessity for a central
document which describes the management of risks in a consistent manner following the Stork risk
requirements and promotes pursuit of new business opportunities with assurance of appropriate returns.

2 Application

This toolbox defines the structures, guidelines and procedures for members of the Stork risk community,
sales leads, proposal managers and operational managers to successfully assess, control and manage risks
for all types of work in Stork`s business including consultancy, fabrication, operation, maintenance,
construction, long-term contracts and construction activities.

Numerous mandatory requirements are highlighted in this toolbox, which are guided by the following
documents ranked by hierarchy:
 Fluor BRMF Practices (practice 000.000.2000)
 Stork Risk Management Policy:
o Risk Review Triggers (Stork standard ST00.000.2125);
o Risk Appetite Policy (Stork standard ST00.000.2110);
o Stork Management Toolbox (Stork standard ST00.000.2100).

As such this toolbox is applicable to all Stork entities either at corporate / group level, business line /
regional / product line level, local level or project/contract level.

Using the Risk Management Toolbox

For efficient application of the Risk management Toolbox please make reference to the Risk Review
Trigger Policy (Stork standard ST00.000.2120) and Risk Appetite Policy (Stork standard ST00.000.2110) 1 to
determine the level of risk management and the appropriate risk assessment process. From there on you
should be easily able to apply the Risk Management Toolbox as a document on how to assess, control and
manage risks during all stages of a project or contract.

Note: for the readers convenience, in the rest of this toolbox all contracts, engagements, services, work
orders or other kind of activity the Stork Group proposes and/or executes will be referred to as a
“project”.

1
All Stork Risk Management documents can be found on Stork SharePoint in the Group portal; section Risk

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3 General Risk Management Process

As a globally operating organization with a very diversified portfolio, the Stork Group is constantly
exposed to a wide range of risks and events that could significantly impact the achievement of financial
and non-financial objectives. The Stork Group is operating in a mature market with many competitors in
which risks are requested to be taken against relatively low rewards. Being aware of Stork`s position in
this market environment and of the impact risks have on the operational results and to act according to
this awareness are abilities expected from every sales lead, proposal manager and operational manager
working for Stork.

Generally, the more reward is sought the more likely it will be that more risk could be undertaken. This
is also applicable the other way around; lower rewards in profitability shall also have lower amounts of
risks associated with the project. When developing proposals and executing projects it is of the utmost
importance to have a risk-reward mind-set in the team which pursues and challenges the right balance
between risk and reward. Ideally the risk-reward ratio looks similar to the matrix depicted in Figure 1
below. The Stork Group prefers to accept and execute work in the dark green, low risk area. It also
dictates to avoid the red, high risk-low reward area. More situational are the other areas; they could be
acceptable provided that the business line, team or person that proposes or executes the project has the
capacity of identifying and managing the risks in line with the available guidelines and procedures.

Figure 1: Risk-reward ratio matrix

To prevent risks negatively impacting the margin and to avoid profit leakage, identifying and mitigating
risks is paramount to the profitability, competiveness and stability of Stork. Risk management enables
the Stork Group to take on opportunities including risk, mitigate the risk and enhance the probability of
capturing the reward.

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3.1 Risk Management Culture

Risk management is a proactive understanding and management of risks and opportunities that maximizes
the achievement of objectives, promotion of opportunities and assurance of appropriate returns. Risk
management involves assessing, managing and controlling the risks in a project. All Vice-Presidents,
Directors, Managers and staff have a common responsibility for identifying and reporting significant risks
to ensure appropriate evaluation, assessment and mitigation actions can be undertaken.

Business Risk Management Framework (BRMF) Process

Stork has integrated Fluor`s Business Risk Management Framework (BRMF) as the formalized and
systematic process for assessing, managing, and monitoring business risks (both project and non-project
related risks). BRMF helps ensure that the risk data, identified in the risk review process, is
systematically developed and historically maintained. This process is an integral part of Stork`s proposal
and project execution processes and the way the company manages business.

The BRMF process consists of the following six steps and is depicted in Figure 2 below:

1. Establish objectives and goals;

2. Perform risk assessment;
3. Select preferred risk management strategies;
4. Develop / execute risk management plan;
5. Monitor / report risk management performance;
6. Continuous performance improvement.

Figure 2: Business Risk Management Framework (BRMF) review process

The BRMF is a comprehensive risk management process consisting of a set of Fluor Corporate Risk Group
practices 000.000.2000 to 000.000.2040 and a great diversity of risk management tools e.g. the BRMF
Website and BRMF spreadsheet, to guide Stork`s efforts in managing business risk. Project risk
assessments must be updated once a month or more frequently if circumstances dictate.

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According to the Fluor principles, risk assessments are required on every project. Risk assessments are
guided by the Business Risk Management Framework (BRMF) process which enables a proactive
understanding and management of risks that maximizes:

 The achievement of objectives;

 Promotion of opportunities;
 Assurance of appropriate returns.

Both Stork and Fluor are known to have expertise in managing risks relating to a diversified range of
maintenance, operations and project developments. As a result, a customer or auditor may ask Stork to
facilitate a risk review of the customer’s venture or project risks. When Stork has suitably qualified
personnel available to facilitate such a review and when doing so does not conflict with Stork`s goal of
providing solutions to the customer, Stork may offer an external risk assessment as a service to a
customer. Stork Risk Officer approval is mandatory before making such an offer to a Stork customer.

Fluor’s Business Risk Management Framework (BRMF) is a comprehensive and systematic management
process for assessing, managing and monitoring Fluor’s own potential risks and has been designed for
internal use only. In addition, the Stork Risk Group developed a set of additional standards to align the
Fluor BRMF process requirements to the Stork business environment. Being a global provider of
maintenance, modification and asset integrity services Stork does not operate in the same business
environment as Fluor does to successfully deliver integrated engineering, procurement, fabrication and
construction solutions to its clients globally.

The Stork standards include the following documents to further guide the Stork Group in its risk
management efforts:

 ST00.000.2110 Risk appetite policy; the purpose is to set strategic, economic and legal boundaries
to the Stork business initiatives in line with the Fluor and Stork business objectives. The risk
appetite defines how much and what type of risk Stork is generally prepared to accept to achieve its
financial and strategic objectives;
 ST00.000.2120 Risk review trigger policy; this policy defines the levels of risk management Stork
imposes on the projects and the appropriate risk management process in order to achieve its
business objectives;
 ST00.000.2120 Risk review trigger process; flowchart that acts as a guidance in defining the risk
level of the project and the appropriate risk management process;
 ST00.000.2140 Stork Risk Checklist; BRMF based risk checklist designed for the small transactional or
business-as-usual activities with a service value <$2.5 million;
 ST00.000.2160 Stork risk organization chart; organizational chart of the Stork risk organization
consisting of the Stork Risk Officer, Regional Risk Representatives and Risk Coordinators.

Over time there might be additional Stork standards and practices developed which are not listed above.
The most recent list of all required documents are maintained within the Fluor Risk Community and on
Stork Connect Community.

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4 Risk Management Requirements Summary

For convenience this section summarizes the various risk management requirements. Refer to the
sections in the rest of the toolbox on how to address the requirements.

Table 1: Risk Management Requirements Summary

Risk level Primary process / Application Involvement Risk Review Approval Reviews2
tool

Level 3 BRMF + website +  When a project meets  Stork Risk Officer  Fluor CRG  Quarterly
>$50 mln or Group review + risk level 3  Fluor CRG  Stork Risk Officer Corporate Risk
hazardous CRG review requirements  Regional Risk  Regional Risk reviews
materials Representative Representative  Monthly update
 Sales lead and/or proposal including review
manager and action item
 Project and/or operational status updates
manager  Trigger events
Level 2 BRMF + website +  When a project meets  Stork Risk Officer  Stork Risk Officer  Quarterly business
>$10 mln Group review risk level 2  Regional Risk  Regional Risk line risk reviews
requirements Representative Representative  Monthly update
 Sales lead and/or proposal including review
manager and action item
 Project and/or operational status updates
manager  Trigger events

Level 1 BRMF + website  When a project meets  Regional Risk  Regional Risk  Quarterly reviews
>$2.5 mln risk level 1 Representative Representative  Monthly update
requirements  Sales lead and/or proposal including review
manager and action item
 Project and/or operational status updates
manager  Trigger events
Level 0 BRMF + website  When a project meets  Regional and/or Risk  Stork Regional  Quarterly reviews
<$2.5 mln risk level 0 Representative and/or Risk  Monthly update
Potentially requirements and is  Sales lead and/or proposal Representative including review
High risk classified as potentially manager and action item
high risk with tab 1 of  Project and/or operational status updates
the Risk Checklist manager  Trigger events
Level 0 Risk Checklist or  When a project meets  Regional and/or Risk  If >$0.5 mln;  Monthly updates
<$2.5 mln no risk assessment risk level 0 Representative Regional Risk and reviews
Potentially requirements and is  Sales lead and/or proposal Representative  Trigger events
Low Risk classified as potentially manager  If <$0.5 mln; Risk
low risk with tab 1 of  Project and/or operational Representative
the Risk Checklist manager

Additional risk management requirements include:

 Trigger events that prompt a BRMF or Risk Checklist update include changes in contract, scope change,
client relationship change, change in law or geopolitical change. A list of trigger events is included in
section 10 Conducting risk reviews and trigger events;
 Corporate risk projects require numerous reviews and approvals which mandate significant
consideration when planning the proposal effort. See section 10 Conducting risk reviews and trigger
events for more details;
 Projects outside the risk appetite always require a BRMF guiding risk assessment with website support
and approval of the Group President prior to the submission of the bid. At the discretion of the Stork
Risk Officer, waivers to requirements can be requested to deviate from the process. See section 9
Waiver request for more details;
 Small projects that are not classified as a risk project may not require a separate risk assessment. See
section 6 Identifying risk projects for more details.

2The risk register, either BRMF or Risk Checklist, will be at least monthly reviewed and updated and more frequently when circumstances dictate
for example during Turnarounds or other types of projects with a high complexity and/or duration.

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5 Roles and Responsibilities

Risk Management is a team effort and consists of interactions between the sales leads, proposal
managers, operational and/or project managers and certified functional risk personnel. All of the
stakeholders have a role in the risk management process and must understand, implement and adhere to
the risk management process on the Stork business; from proposal to completion. This chapter defines
the roles and responsibilities within Fluor`s Corporate and Stork`s Business Risk organizations and
includes the following topics: Stork risk organization, key functional roles and risk responsibility during
proposal and execution process.

5.1 Stork Risk Organization

The Stork Risk Officer is nominated by the Stork Group President and approved by the Fluor Corporate
Risk office. Stork Regional Risk Representatives and Risk Representatives can be nominated by the
regional VP’s to the Stork Risk Officer and require approval from the Fluor CRG. Risk Coordinators can be
nominated by the Regional Risk Representatives and require approval from the Stork Risk Officer. The
risk roles and responsibilities within this manual are aligned with Practice 000.000.2000 a03, Business
Risk Management Framework (BRMF). For more information and the latest updates about the Stork risk
organization see policy ST00.000.2160 Stork risk organization chart.

The Stork Risk Officer is nominated by the Stork Group President and approved by the Fluor Corporate
Risk office. Stork Regional Risk Representatives and Risk Representatives can be nominated by the
regional VP’s to the Stork Risk Officer and require approval from the Fluor CRG. Risk Coordinators can be
nominated by the Regional Risk Representatives and require approval from the Stork Risk Officer. The
risk roles and responsibilities within this manual are aligned with Practice 000.000.2000 a03, Business
Risk Management Framework (BRMF). For more information and the latest updates about the Stork risk
organization see policy ST00.000.2160 Stork risk organization chart.

Figure 3 Stork Risk Organization

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5.2 Key Functional Roles

The following describes the key functional roles that make up the risk organization within Stork:

 Sales leads: responsible for conducting preliminary risk reviews and leading risk activities prior to
obtaining authorization to extend resources to pursue an opportunity;
 Proposal managers: responsible for developing and implementing a comprehensive and effective risk
review for prospects before proposal submission and updating the risk register until project award;
 Project / operational managers: accepting ownership of the risk assessment after hand-over moment
from sales to operations, responsible for updating the risk register at project award and identifying
new risks until project completion and project closeout;
 Fluor CRG (Corporate Risk Group): responsible for the Business Risk Management Framework (BRMF)
work process, Corporate Risk Practices, Risk Bulletins, etc. (i.e. Fluor’s Risk Framework), supports
pursuits, approves the risk register for Corporate Risk projects prior to proposal submissions, and
monitors execution of Corporate Risk Projects as defined in Practice 000.000.2000;
 The Stork Risk Officer: the Stork Risk Officer is globally responsible for all risk assessments with a
service value of >$10 million and is responsible for approval of the toolbox, risk management standards
and communicating its requirements to Stork regional Risk Representatives. Implements the Stork Risk
Management Toolbox in line with the Fluor’s Risk Framework and the BRMF work process in accordance
with Fluor Corporate and Stork requirements. Works closely with sales leads, proposal managers, and
Project / operational managers to facilitate the development of comprehensive and effective risk
reviews;
 Regional Risk Representative: the Regional Risk Representative is responsible for all risk assessments
with a service value of <$10 million for a specific region and/or business line and reports to the Stork
Risk Officer. The Regional Risk Representative will assist the proposal manager in interpreting risk
practices, plan risk review meetings and provide guidance on who to invite (including Subject Matter
Experts (SMEs)), implement the risk process, facilitate the risk review meeting with proposal teams
and make sure comprehensive and effective risk reviews are performed;
 Risk Representative: the Risk Representative has similar responsibilities as the Regional Risk
Representative except that Risk Representatives have local responsibility for risk assessments with a
service value of <$10 million instead of regional and/or business line responsibility. The Risk
Representative reports to the Regional Risk Representative;
 Risk Coordinators: will assist the Regional Risk Representatives, Risk Representatives and project
teams in the identification and management of project risks and opportunities and assist with the
facilitation and documentation of project risk assessments. Risk Coordinators report to Regional Risk
Representative;
 Functional Experts: support the risk management work process by providing input and advice in their
areas of expertise to proposal and project teams to make sure appropriate mitigation strategies are
developed; functional experts may also be responsible for implementing mitigation strategies as
required. Function experts could include: legal, government contract management, subcontract,
insurance, supply chain, security, health safety and environment and information technology.Risk
Process Responsibility during Proposal and Execution Phases

Sales, proposal, project and operational managers are accountable for making sure risks in the project
are properly identified and mitigated while complying with the Fluor and Stork risk management policies.
Support is provided by a risk organization consisting of the Regional Risk Representatives, Risk
Representatives and Risk Coordinators who are guided by the Stork Risk Officer. The following table
depicts the risk review requirements for Stork in relation to the risk policies, practices and standards
applicable for all work Stork executes.

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Table 2 Risk process responsibility during proposal and execution phase

QUALIFY DEVELOP PROPOSE CLOSE EXECUTION CLOSE-OUT

PHASE PHASE PHASE PHASE
General activities Check risk Re-visit risk Project Baseline Term-Sheet Establish Only after
appetite appetite position completed filled in and Baseline warrantee
position hand-over to expiration
Operations
BRMF activities - Start Update + secure Update Update Final update
approvals
Roles

Sales lead /Proposal R R A A I -

manager
Operational manager I I I R A A
Project manager - - I I R R

Regional Risk I S, I S, C S S S
Representative
Risk Representative S, I S S S S S
Checklists activities Start tab 1 / Start tab 2 - Update tab 2 Final update
- Finish tab 1 (only if potentially tab 2
low risk)

Roles
Sales lead /Proposal R R A A I -
manager
Operational manager R R A A A A
Project manager - - I I R R

Regional Risk I S, I S, C S S S
Representative
Risk Representative S, I S S,C* S S S

Legend
R= Responsible C* = Consult only if service value <$0.5 million
S= Support -= Not applicable / Not required
A= Accountable
C= Consult
I= Inform

A step-by step explanation is provided below of the general roles and responsibilities and when either
using the BRMF or Risk Checklist process during each stage of the proposal and execution process.

Qualify Phase

 General:
o The sales lead and/or proposal manager will check client T&C`s and previous experience with
the Stork risk appetite position. This is done to align and educate the clients in relation to the
potential risk-reward profile of the work. Please see Stork standard ST00.000.2110 for the risk
appetite policy;
o When applicable the sales lead and/or proposal manager will request a waiver via the Stork Risk
Officer if deviating from the risk appetite.

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 BRMF:
o The sales lead and/or proposal manager will investigate potential teaming activities and align
appropriate support and process requirements (see sales toolbox);
o When applicable a teaming risk assessment will be conducted and discussed with the Stork Risk
Group;
o The sales lead and/or proposal manager will conduct a preliminary meeting with Fluor Corporate
Risk Group, if appropriate.

 Checklist:
o IMPORTANT: the role that triggers the use of the Risk Checklist, either the sales lead, proposal
manager or operational manager, is responsible for the Risk Checklist process during the proposal
process;
o The sales lead, proposal manager or operational manager will check if the required information
is available to fill in tab 1 of the Risk Checklist.

Develop Phase

 General:
o The sales lead and/or proposal manager will review the received tender documents (RFP / RFQ
package, ITB, scope documents, contract documents, etc.) and assess the potential risk level in
accordance to the BRMF trigger standard;
o The sales lead and/or proposal manager will revisit risk appetite position with client T&C`s /
previous experience.

 BRMF:
o The sales lead and/or proposal manager together with the designated Risk Representative will
schedule the required risk review meetings and submit the required documentation with
“homework” questions to the participants;
o The Risk Representative will assist the sales lead and/or proposal manager with the preparation
of the risk review meetings;
o The sales lead and/or proposal manager will develop a comprehensive and effective risk review
that addresses all risks and potential opportunities;
o After the initial risk review meeting the Risk Representative will prepare first draft of risk
assessment which could be used for the bid/no-bid decision.

 Checklist:
o The sales lead, proposal manager or operational manager will fill in tab 1 of the Risk Checklist
and assess if the risk profile of the project is either potentially High or Low risk;
o The sales lead, proposal manager or operational manager must sign tab 1 of the checklist before
sending to the Regional Risk Representative or coordinator for approval;
o The sales lead, proposal manager or operational manager is responsible for securing approvals by
sending tab 1 to either the Regional Risk Representative if the service value is >$500.000 or Risk
Representative if the service value is <$500.000. Signatures may be obtained via facsimile or
email confirmation;
o The sales lead, proposal manager or operational manager is responsible for initiating the BRMF
process if outcome of tab 1 is potentially high risk or approval for potentially low risk is declined
by Regional Risk Representative or Risk Representative.

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Propose Phase

 General:
o The sales lead and/or proposal manager will make sure a detailed development of the Project
Baseline and documentation is completed, including project risk review.

 BRMF:
o The Risk Representative will assist the sales lead with the follow-up and update of the risk review
meetings and finalize the BRMF appendices;
o The sales lead and/or proposal manager and operational team will review, amend, adjust and
approve BRMF appendices;
o After the final approval by the SOT team the Risk Representative will distribute the BRMF
documentation to the Regional Risk Representative for approval (<$10 million) (See risk policy
ST00.000.2120 Risk Review Triggers for the required process). For PRC’s with a value >$10 million
a Stork Group risk review (Fluor BL) and potentially Fluor Corporate Risk reviews are required.

 Checklist:
o The sales lead, proposal manager or operational manager is responsible for assembling the
appropriate personnel to review tab 2 of the Risk Checklist in order to assess the applicable risk
areas, selecting the severity and likelihood of occurrence and the appropriate mitigations
strategy;
o The sales lead, proposal manager or operational manager is responsible, after completion of tab
2, to save the complete document on the proposal / tender site and send it to the Regional Risk
Representative or Risk Representative by email.

Close Phase

 General:
o Contract signed, Term sheet is filled in and deviation are explained, handover moment to
operations.

 BRMF:
o The sales lead and/or proposal manager will make sure the risk register is updated after contract
negations and PRIOR to the signing of the contract.
o The sales lead and/or proposal manager secure approvals as necessary before the contract is
signed;
o The sales lead and/or proposal manager will make sure the risk register is updated after the
contract is signed;
o IMPORTANT: The sales lead and/or proposal manager is responsible to handover ownership to
the proposal team to the execution or project team by holding an alignment session with key
members of the project team, including the Regional or Risk Representative. Please see chapter
10.2 BRMF: Alignment sessions review for more information.

 Checklist:
o The sales lead, proposal manager or operational manager hands-over the Risk Checklist to the
operations team and discusses the key risks on the list and its mitigation strategies as developed
during the proposal stage.

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Execution

 General:
o A handover session of the Baseline documentation will be planned by the sales lead and/or
proposal manager with the execution team;
o The project or operational manager will communicate risks and opportunities with project team
members and make sure timely and proper implementation of risk mitigation strategies and
opportunity strategies.

 BRMF:
o The project or operational manager is responsible for continuing with the BRMF process by
updating risks and mitigations strategies and identify any new risk and opportunities per practice
000.000.2000;
o The project or operational manager will make sure the risk register is monthly reviewed and
updated by the execution team or more frequently when circumstance dictate for example for
Turnarounds or other types of project with a high complexity and/or duration;
o The project or operational manager will make sure that quarterly risk reviews with members of
the Stork Risk Group are conducted or more frequently if trigger events occur.

 Checklist:
o The project or operational manager is responsible for assembling appropriate personnel and
monthly review and update tab 2 of the Risk Checklist. Each item in the checklist shall be
reviewed and the team should assess whether the risk scenario, severity and likelihood of
occurrence and the selected mitigation strategies are still applicable.

Close-out / warrantee period

 General:
o Contract or project close-out cannot be achieved until completion of the scope of work,
expiration of any and all warranties, settlement of final indirect rates, claims and costs often
many years after project completion.

 BRMF:
o The project or operational manager is responsible to update the risk register with the assistance
of the Regional Risk Representative or Risk Representative, for any significant events after
project completion but pending final audits and settlement of final indirect rates, claims and
costs;
o The project or operational manager is responsible to conduct a final risk review upon settlement
of final contract costs and achievement of contract financial close-out;
o The project or operational manager is responsible to close-out the risk register in the BRMF
website with the assistance of the Regional Risk Representative.

 Checklist:
o The project or operational manager is responsible to monitor and update tab 2 of the Risk
Checklist due to any significant events after project completion but pending final audits
and settlement of final indirect rates, claims and costs.

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6 Identifying Risk Projects

Projects within Stork are classified into different risk projects which are categorized from high risk (Level
3) to low risk (Level 0). Classifying risk projects is important to assure compliance with the Fluor CRG
policy 000.000.2020, Stork`s requirements for risk governance and management and the application of
the appropriate risk assessment process to reduce the risk of margin erosion and enhance the profitability
while maintaining efficient.

The basis for determining the risk level of activities is Stork Policy ST00.000.2120. It establishes a set of
risk criteria to determine the level of risk analysis that shall be performed, the degree to which the Stork
and Fluor risk community participate in the review and approval process for bid decisions and bid
submittals and the appropriate risk assessment process.

All projects need to be categorized as either level 3, level 2, level 1 or level 0 risk project in order to
determine the requirements for management review and approvals prior to submission of the bid. The
categorization of the risk projects is triggered by the service value of the contract and/or the potential
exposure to hazardous materials. The risk triggers, risk project levels and risk assessment processes are
depicted in table 3 below:

Table 3 Risk triggers, risk projects levels and requirements

Risk triggers Risk project level Risk assessment process

Hazardous materials exposure

Fluor Corporate (highest), Level 3 BRMF process (mandatory)
regardless of service value

>$50 mln service value Fluor Corporate (highest), Level 3 BRMF process (mandatory)

Stork Group / Fluor Business Line

>$10 mln service value BRMF process (mandatory)
(moderate to high), Level 2

Stork regional /Stork Business Line

>$2.5 mln service value BRMF process (mandatory)
(medium to low), Level 1

Low risk / transactional work, Level 0

<$2.5 mln service value
 If potentially High risk BRMF process

 If potentially Low risk Risk Checklist

The checklist tool is mandatory for all offers that are categorized as level 0, low risk / transactional work
risk projects and assures compliance to the Stork risk appetite and trigger policy. Tab 1 of the Risk
Checklist assists in the determination whether the project is potentially risky by assessing the risk profile
of the project and categorize in potentially low risk or potentially high risk. This quantification of risk
projects is not easy and as such that the determination depends on a multitude of factors. Low value
projects contracts may seem to be low risk, however a $10,000 project may be more risky then a $2
million project; it all depends on the scope and contract.

Because this is a subjective activity the final advice for potentially high or low risk in tab 1 of the Risk
Checklist depends on the judgement of the Regional Risk Representative and/or Risk Representative in
combination with the responsible sales lead, proposal manager and/or operational manager. Tab 1 of the
Risk Checklist shall be completed before the ORC is submitted for approval.

Sales leads and/or proposal managers shall engage the appropriate Stork Regional Risk Representative at
their earliest convenience in the proposal phase to help assess whether a project will be qualified as a
risk project. To assist in the process of identifying risk projects and their associated documentation and
approval requirements, the Stork Group has developed a flowchart (ST00.000.2120 Risk review trigger
process), which incorporates both Fluor Corporate and Stork Group risk criteria.

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6.1 Exceptions to the Risk Assessment Requirements

All projects Stork executes require to be covered by a risk assessment, however in certain cases the risk
assessment is covered in a more general process such as an umbrella risk assessments (please see Fluor
Risk Bulletin #6). The following cases describe the exceptions that do not require a separate risk
assessment:

 Projects under $100,000 service value that are within the risk appetite and sold under Stork`s T&C`s;
 Projects under $2.5 million service value that are within the risk appetite and having a scope of work
which is fully covered by an existing and applicable framework agreement or contract (e.g. offering
civil works under a maintenance contract would not apply) and covered by an umbrella risk assessment
do not require an additional risk assessment;
 Projects under $2.5 million service value that are within the risk appetite and part of a specific
product line (e.g. fabrication, staffing and consultancy activities) which is covered by an umbrella risk
assessment and meeting the predefined conditions of the umbrella risk assessment do not require
an additional risk assessment;

Important note: the Regional or Risk Representative has to be notified when offering scope of work with
a service value of >$100.000 under an umbrella risk assessment

7 Identifying risks and their impacts

The previous chapter explained the concept of a risk project, how to identify risk projects and the
subsequent risk assessment processes. This chapter explains how to identify risks and their impact by
applying either the BRMF process for L3, L2, L1 and L0 potentially high risk projects or the Risk Checklist
process for potentially low risk L0 risk projects and transactional or business-as-usual activities.

Risk assessments are initiated during the proposal stage by the receipt of either a RFP, a RFQ, a ITB or a
sales letter for which Stork is requested to offer a bid. Additionally, mergers and acquisition activities,
new strategic direction, purchase of software tools and other events that create risks and/or
opportunities may also initiate a risk assessment. The initiation of the risk assessment process is
illustrated in Figure 4 below:

Mitigation
Initial risk
Pre Risk Review strategies &
Start event identification & Risk reviews
Work event
analysis
contingency

Figure 4 Initiating the risk assessment process

Risk assessments are owned by the sales lead and require support of certified Regional or Risk
Representatives. Fundamental in the risk management process using the BRMF is the facilitation of the
process and consistency in the use of tools and templates.

7.1 Facilitation of a Risk review

After initiation of the risk assessment process the sales lead with assistance from the Regional or Risk
Representative selects functional SME`s to participate in the review process and form a project risk
review team for the rest of the risk assessment process. Risk reviews are facilitated via several methods.
Common examples include:

 Online meetings;
 Brainstorm sessions;
 Conducting roundtable review sessions.

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The next step is to identify the risks and their impacts by applying either the BRMF process or Risk
Checklist process. Note that the application of one of these processes is determined based on the risk
level the project is classified in (see previous chapter). Applying the correct process is important to
reduce the risk of margin erosion and enhance the profitability while maintaining efficiency.

The sales lead and/or proposal manager and Regional or Risk Representative utilize their knowledge of
earlier risk reviews with similar risks and mitigation strategies. Pre-risk review work consists of:

 Importing historical risk registers from the BRMF Website into the new project risk register file.
Providing the project risk team a template to work from;
 Prior to the first meeting, the functional SME`s review the RFP documents, including the template
risk register.

7.2 BRMF Risk Assessment Process

The BRMF assessment process is led by the sales lead and/or proposal manager and is supported by the
Regional or Risk Representative. The risk process is as follows:

 First the participants for the risk sessions are nominated and pre-work is submitted to the participants
(note that these may include but are not limited to legal, HR, HSE, operations, project management,
engineering, construction, procurement, sales, project controls, etc.);
 A 1st risk brainstorming sessions is organized by the sales lead / proposal manager and will take 1-2
hrs);
 After the 1st session all action holders will develop one or multiple risk mitigation strategies per risk
action as homework;
 A 2nd follow-up meeting is scheduled to asses all the action inputs. All items are discussed in a review
session with the same team. It will also include the setting of the exposure and event contingency.
After the meeting the Regional Risk Representative will review and finalize all which will be submitted
to the team for final review;
 The risk contingency of the risk session will be the direct input for the risk & contingency in the
Proposal Review Card (PRC) and the financial proposal;
 During the proposal process the risk document could be reviewed multiple times with face-2-face risk
update sessions.

7.3 Risk Management with the BRMF Website Tool

The use of the BRMF input spreadsheet and website tool process is mandated for all business
development efforts and projects classified as L3, L2 and L1 risk projects or L0 potentially high risk
projects. Practice 000.000.2000, Business Risk Management Framework Process, provides a detailed step-
by-step description of how to identify risks and assess their impacts.

During the proposal phase the sales lead is responsible for effectively implementing the projects risk
management program via the BRMF process. In this process the risk list, in is practice 000.000.2000, is an
indispensable list that acts as a ‘thought stimulator’ and promotes a common / standard risk language.

Depending on the type of risk project different approvals are required during the proposal phase prior to
submitting the proposal. During the execution phase the project and/or operational manager is
responsible for effectively updating and maintaining the project`s risk assessment program. BRMF risk
assessments must be updated on a quarterly basis or more frequently when circumstances dictate. These
requirements for BRMF approvals and reviews are summarized in table 4 below:

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Table 4 BRMF required approvals and reviews

Risk project level Required approvals Required reviews
 Fluor CRG  Quarterly corporate risk
 Stork Risk Officer reviews
 Regional Risk Representative  Monthly update including
Fluor Corporate (highest), Level 3
review and action item status
updates
 Trigger events
 Stork Risk Officer  Quarterly business line risk
 Regional Risk Representative reviews
Stork Group / Fluor Business Line  Monthly update including
(moderate to high), Level 2 review and action item status
updates
 Trigger events
 Regional Risk Representative  Quarterly reviews
 Monthly update including
Stork regional /Stork Business
review and action item status
Line (medium to low), Level 1
updates
 Trigger events
 Regional or Risk  Quarterly reviews
Representative  Monthly update including
Low risk / transactional work,
review and action item status
Level 0
updates
 Trigger events

To assist in completing the BRMF process the Stork Group has developed a step-by-step BRMF Process
Completion chart which is illustrated in Figure 5.

7.4 BRMF Tools

The BRMF process provides a range of tools to assist in identifying risks and their impacts (see chapter 13
for the complete list of available risk tools):
 Accumulator - a web-enabled database program developed and copyrighted by Fluor Corporation
that contains risk and mitigation strategies identified on past Stork and Fluor risk projects. Outputs
from this application can be used as a thought stimulator on new projects;
 Mitigator – a web based program developed and copyrighted by Fluor Corporation to identify,
document and classify project risks. It is the primary tool for managing risks and their associated
mitigation strategies and action plans, and provides the mechanism for rolling up project risks to the
corporate level;
 BRMF Website Import Spreadsheet - is an online spreadsheet providing a consistent and structured
approach to document the assessed risks, strategies, costs, action plans and event contingencies;
 External Risk Assessment Spreadsheet - is the same document as above but then offline.

Note: when a risk is identified, it is important to determine who will be carrying that risk: Stork, a
partner or the client. Identifying non-Stork risks is fine, but should not be included in Stork`s internal
BRMF.

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7.5 BRMF Approval Process

For L1, L2 or L3 Stork risk projects >$2.5 million an approval of the formal BRMF risk appendices is
required BEFORE the PRC is submitted to the Stork risk committee for approval. At the end of the
bidding the risk register (BRMF) will be reviewed and updated to accommodate and assess potential
changes during the contract negotiations;

 At handover, the sales lead / proposal manager will transfer the risk register to the project or
operational manager;
 Projects over $10 million value are considered as Stork Business Line (BL) risk projects and therefore
require Stork Risk Officer approval of the BRMF risk register appendices after it has been reviewed
within the sales and proposals team, regional management and with the regional VP approval. Final
approval of the BRMF risk register is required at the end of the proposal process PRIOR to the
submission of the PRC to the Group Tender Board (GTB) and prior to the submission of a binding or
non-binding offer to the client. Corporate risk reviews >$50 million in value follow the same process,
and require Stork Risk Officer approval prior to the review with the Corporate Risk Group of Fluor
(CRG). CRG approval is required PRIOR to the submission of the PRC. The BL or CRG risk review will
be schedule by the sales lead / proposal manager;
 The standard required documentation to support the risk review / risk register (according to
000.000.2020) is shown in Table 5 below. Be aware that some documents might not be applicable
and could be omitted with Stork Risk Officer approval.

Table 5: BL and Corporate risk review required documentation supporting the review

Documentation Responsible

1. Introduction presentation Sales

2. Approved ORC document Sales
3. PRC Proposal manager
4. Client´s proposed Contract Legal
5. Legal Summary (Liquid Damages & Performance
Legal
Guarantees Summary)
6. Red lines to the contract by legal Legal
7. Scope of Work Proposal manager
8. Contract Schedule (Include Critical path) Proposal manager
9. BRMF (Appendices: H, G, LM, C and AB) Regional or Risk Representative
10. Project Execution strategy (PES) Proposal manager
11. Basic of Estimate (BoE) Estimator / Proposal manager
12. Commercial execution strategy (CES) Sales
13. Pricing Model Estimator / Proposal manager

7.6 Checklist

For potentially low risk projects and transactional or business-as-usual activities (L0) the Stork Group
developed the Risk Checklist. The objective of the Risk Checklist is to identify whether the project is
potentially risky by assessing the risk profile of the project and based on this assessment determine the
subsequent risk assessment process. The Risk Checklist process is divided into two steps:

 Tab 1: completing tab 1 will identify whether the project is potentially risky by assessing the risk
profile and whether a BRMF is required, if it is possible to proceed to tab 2 or if no further risk
assessment is required;
 Tab 2: completing tab 2 will identify the risks and their impacts by check boxing the applicable risk
scenario`s and mitigation strategies for how the risks will be managed during execution.

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In cases when the Risk Checklist is permitted instead of a BRMF, it is important to note that the bid shall
not have a separate event contingency but rather all contingency must be incorporated in the cost build
up and/or gross margin of the work based on professional judgment. For more information please see
Chapter 8 Contingency development.

Tab 1 Risk Checklist

Completing tab 1 is mandatory before proceeding to tab 2 and consists of assessing the risk profile of the
project based on six different dimensions: 1. Service & Margin, 2. Risk appetite, 3. Contract type, 4.
Contract history, 5. Liquidated Damages and Penalties, 6. Scope of work, 7. Procurement and 8.
Subcontracting.

In order to complete tab 1, approvals need to be required from the operational managers, sales lead and
from either the Regional Risk Representative (If >$0.5 million) or Risk Representative (If <$0.5 million).
The Regional or Risk Representative decides, based on the outcome of tab 1 and his knowledge of risk
management and the business, whether the project is low or high risk and what the additional risk
assessment requirements are. The approval of tab 1 by the Regional or Risk Representative needs to be
confirmed by the sales lead in CRM using the intended checkbox. Tab 1 needs to be completed before the
ORC is submitted for approval and saved and uploaded on the proposal / tender site and sent to the
Regional or Risk Representative by email.

Tab 2 Risk Checklist

After approval of tab 1, tab 2 needs to completed before the PRC is commercially reviewed. After
completion, tab 2 is integrated into the Project Execution Plan (PEP) from where the risks are managed
during execution. The status of risks and mitigations in the completed Risk Checklist must be updated
monthly or for ongoing projects with a duration of >6 months quarterly and immediately when trigger
events occur.

Because the information on tab 1 might change prior to proposal submittal and tab 2 during execution
the checklist is a living document requiring updates as information changes.

To assist in completing the Risk Checklist process the Stork Group has developed the Risk Checklist
Completion chart which is illustrated in Figure 6 and added in the workbook instruction tab.

Note: The Corporate version of tab 2 is default for all business lines within the Stork Group. However, the
opportunity is provided to adjust tab 2 and make it business line specific. In order to deviate from the
Corporate version an approval needs to be requested from the Stork Risk Officer.

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BRMF Completion Chart

Figure 5 BRMF completion chart

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Risk Checklist Completion Chart

Figure 6 Risk Checklist Completion Chart

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8 Contingency Development

There are three different types of contingency defined within Stork:

 Escalation;
 Cost estimate contingency;
 Risk event contingency.

Risk event contingency covers risks that are associated with execution of the project and/or specific
events that may occur during the life of the project. Event contingency is developed and based on the
results of the BRMF risk review process and the Monte Carlo analyses. Risk event contingency should not
be confused with Estimate contingency, the monetary value allocated to the project budget to cover
potential variations and inaccuracies in the project estimate. As such, event contingency is allowed only
for specific risks, which are not already included in the Cost Estimate Contingency such as ranges of wage
rates, productivity, material cost, etc. Event contingency information is captured in Mitigator Reports -
Exhibit C - Monte Carlo Simulation of Event Contingency and Exhibit S - Risk Event Contingency History.
Please see Risk Bulletin #13 for an example of these reports. Also see Practice 000.000.2030, “Risk Event
Contingency Management”.

Regardless the type of project reimbursement, adherence to the BRMF process shall be applied. Risk
event contingency development using the BRMF website (Mitigator software tool) should be applied in the
following cases:

 For all projects with a specified scope and an estimated value above $2.5 million;
 For all framework contracts with an estimated value above $2.5 million;
 For PO’s within a framework contract with a specified scope with an estimated value above $2.5
million, being a turn-around or construction project or if the type of work is not included in the
framework agreement already. So if we have a service and maintenance PO for the whole year of
services part of the framework agreement with an estimated value >$2.5 million, no separate BRMF
required;
 As the use of BRMF website tool and Mitigator software is not always practical for smaller contracts,
projects, services and production jobs.

Note: for determining risk event contingency only work-related risks are included and no general business
risks like decrease of oil prices or generic economic circumstances with as possible consequence less
volume in the contract or contract termination.

Below $2.5 million, the risk trigger policy (ST00.000.2120) describes the risk assessment process. Projects
identified as low risk and or not requiring BRMF based on the policy will not have a separate risk event
contingency. The bid shall have all contingency incorporated in the cost build-up and/or gross margin of
the work based on professional judgement.

Note1: for projects not requiring BRMF; the offline risk tool Palisade@Risk is available to provide an
indicative amount of event contingency to review and challenge the professional judgement. This tool is
not to be used as risk event contingency tool to substitute the BRMF Mitigator tool.
Note2: for projects not requiring BRMF; event contingency can be set equal to 0 based on the fact it is
included in GM or cost.

Although the goal is to mitigate all risks to zero, this is rarely possible. For projects which require a BRMF
based risk assessment using the website the project team must establish a risk event contingency fund.
Practice 000.000.2030, Risk Event Contingency Management, provides detailed guidance on how to
establish risk event contingency.

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Risk Event Contingency should not be confused with Estimate Contingency. Risk Event Contingency is
defined as potential occurrence of certain events that could impact the cost and schedule of the project.
Estimate Contingency is based on an assessment of variations in predicting various cost elements. Care
should be taken when assessing Risk Event Contingency that they do not include Estimate Contingency.
For example, if nearby plants have turnarounds scheduled that could impact the project labor
productivity, this is a valid Risk Event Contingency. On the other hand, if field labor productivity is lower
than anticipated, then the lower productivity should be included in the next cost estimate update or cost
forecast as Estimate Contingency.

9 Waiver Request
All prospects and projects are required to complete and maintain a risk assessment. Part of the risk
assessment work process is determining if a project is to be designated as a Corporate Risk project (i) or
outside the Stork Risk appetite (ii). For either or both a waiver may be requested.

9.1 Corporate Risk Project Waiver Request

Actions for submitting a Corporate Risk Project Waiver Request are:

 The regional Risk Representative will fill out the Corporate Risk Project Waiver Request form
(000.000.F2020 Corporate Risk Project Waiver Request Form) and route for Business Line approval
signatures;
 Once all approvals and signatures are obtained, attach the applicable required attachments to the
waiver form. These may include the PRC form, Contract summary, Risk Assessment, or As-Sold Pricing
Model depending on the phase of the proposal/project. If a required attachment is unavailable,
include a comment in the Rationale for Waiver field stating why and when it will be available;
 Approval of the Stork Risk Officer and Stork Group President must be obtained;
 Waivers for Corporate Risk Projects require upload in the BRMF website. Open the Risk Assessment in
the BRMF Website and go to the Risk Criteria tab. Select the Request Waiver button.

Figure 7 Excerpt from BRMF website for Corporate Risk Project Waiver request

Select the Request Waiver button to submit the form. The Reviewer will receive an email with the waiver
request.

9.2 Stork Group Waiver Request

A project outside the risk appetite should request a Project Waiver with the Stork Corporate Risk Group
and approval from the Stork Group President.

If the Stork Business Line believes the project should not be designated as a Corporate Risk Project, the
proposal or operational and/or project manager, with approval from the Stork Risk Officer, may request
a Fluor Corporate Risk Project Risk Waiver from the Corporate Risk Group (CRG). There may also be
instances where a Business Line requests a Blanket Waiver to designate multiple projects that fall under
the same set of risk characteristics as non-Corporate Risk projects.
Stork waivers have to be stored with the Regional Risk Representative for auditing purpose. The stork
Risk Group will also hold an folder with the waivers, their conditions and their approvals.

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Practice 000.000.2020 provides additional details on how to identify risk projects and the waiver
requirements including a standardized waiver form to be filled out and submitted to the Corporate Risk
Group. The form can be found on Stork SharePoint and in the Fluor Risk Community in the Files section or
using the link in the Helpful Links section of the BRMF Website Homepage.

10 Conducting Risk Reviews and Updates

Managing risks is much more than merely assembling a BRMF or Risk Checklist. This chapter defines the
mandatory risk reviews after assembling the BRMF or Risk Checklist and highlights possible trigger events
that provide the necessity to immediately update the applicable BRMF or Risk Checklist without waiting
for the normal cycle of review and updates.

10.1 Risk Reviews and Trigger Events

Risk reviews within Stork range from compiling risks and mitigation strategies used on earlier projects to
more complex analysis involving a series of facilitated meetings and reviews.

Prior to the final BRMF review during the proposal effort, multiple risk management sessions are needed
to accomplish the following:

 Define commercial terms and RFP response requirements;

 Define/finalize mitigation strategy development from commercial terms and RFP response;
 Update for estimate review and for execution plan review;
 Update final BRMF review including risk event contingency.
Additional risk reviews are required once events occur. Trigger events are events that could potentially
impact the results and/or profitability of the project during execution. When a trigger event occurs,
project management or operational management should inform the Regional or Risk Representative about
the event. The BRMF or Risk Checklist must be updated immediately to reflect any potential impact.

The following list highlights risks or situations that should cause concern during the project life cycle. If
any of the following arise as result of a contract change, scope change, client relationship change,
change in law or geopolitical change the BRMF or Risk Checklist, both tab 1 and tab 2, should be updated
immediately without waiting for the normal cycle of review and updates.

 Change to other types of contract e.g. change from reimbursable to lump sum;
 Change in the agreed terms and/or conditions of the contract;
 Deviating from risk appetite;
 Deviating from previously classified Risk project e.g. change from L0 to L1 risk level;
 Force majeure;
 Excessive media exposure;
 Labor strikes;
 Client’s ability to pay invoices becomes suspect;
 Change in labor posture;
 Delayed payment terms or past due payments;
 Facility performance guarantees may be involved;
 Damages or penalties may be payable;
 Questionable ability to meet schedule;
 Labor disputes;
 Unsuitable/unavailable labor;
 Restricted material sourcing impacting our cost or schedule change in project management;
 Specifications with vague or variable technical descriptions;
 Weather or other significant schedule delays;

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 New strategic direction of client;

 Potential loss or low margins;
 Ability of key supplier or partner to perform becomes suspect;
 Merger or acquisition of client;
 Change in client champion for alliance or strategic performance contract;
 Catastrophic and other external events;
 Change in compensation terms;
 Any major work release or scope expansion on a contract (e.g., Master Services Agreement);
 Invoice payments more than 45 days past due twice in the same 12-month period.

Schedule Risks Analysis (SRA)

While most risks have in impact on costs, there are risks which primarily affect schedule performance.
The use of Fluor practice 000.320.0400, Schedule Risk Analysis (SRA) defines the process by which
schedule risk analysis can be carried out, the information required and the approach undertaken. The use
of the SRA is promoted on all risk projects with liquidated damages associated with the schedule. In the
absence of a schedule risk analysis the inclusion of a minimum of 5% schedule float is required. Fluor Risk
Bulletin #4: Schedule issues addresses all kind of schedule issues and the use of the SRA.

10.2 BRMF: Alignment Session Review

Upon contract award, during the close-phase of the proposal process, an alignment session is conducted
to handover ownership to the project or execution team with the as-sold risk review. The risk review is
initiated by the sales team and/or proposal team and held with key members of the project team,
including the Regional or Risk Representative.

These sessions are of high importance to make ensure follow up of risk reviews during execution but
moreover to understand the risks before execution has started and know how to implement mitigations
strategies and actions might these risks occur during execution.

10.3 BRMF: Monthly Update

Identifying and managing risks is an ongoing effort that continues for the life of the project. To assure
that risks are being properly managed, the project or execution team should review their action plans
monthly and take appropriate corrective action when necessary. Project or operational management with
support of the Regional Risk Representative will schedule these update sessions and should include:

 Discussion of client relationship, claims, receivables, deviations, changes in execution strategy;

 Status of all planned risk mitigations which are incomplete;
 Identification of risks that have passed;
 New risks;
 New or revised mitigation strategies;
 Updates to remaining risk estimates of probability and consequence estimates (i.e. pessimistic, most
likely and optimistic estimates).

The monthly project report e.g. PRM, PSR, PMCC, DOO report etc. could include slides for reporting on
the status of BRMF implementation and risk action plans. The Stork Risk Officer conducts monthly risk
teleconferences with the Regional Risk Representatives and indicated project managers or operational
managers in each regions to review risk status.

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10.4 BRMF: Quarterly Risk Reviews

Projects designated as Fluor Corporate (level 3) or Stork Group (level 2) risk projects require quarterly
review of the BRMF revisions and hence have to be submitted to the Stork Risk Officer and/or Fluor CRG.
Project or operational management with support of the Regional Risk Representative need to schedule
these reviews:

 Executive risk reviews for Fluor Corporate (level 3) risk projects require involvement of the Group
President or his/her designee, Fluor CRG, Stork Risk Officer, Regional VP, regional
operations, Regional risk representative and Legal is required;
 Business Line Risk reviews Stork Group (level 2) risk projects require involvement of the Group
President or his/her designee, Regional VP or his/her designee, Stork Risk Officer regional
operations, Regional risk representative and Legal is required.

Which projects will be reviewed in these meetings is determined based on the risk level. Requirements
and participation to each review is communicated separately.

Required actions quarterly risk reviews

The following actions are required for each of the Regional or Risk Representative to check, support and
execute:

 Invite the appropriate participants, which include the VP of the region, the regional operation
managers / responsible projects manager, Regional or Risk Representatives and legal representative
are required to attend and participate;
 Have the teams prepare the presentations as included (CR and BL risk presentation decks);
 Request the teams to update the risk assessment, mitigations and action plans following the BRMF
practice;
 Have the Regional Risk Representatives update the risk assessments in the BRMF website and
distribute the appropriate appendices, Exhibits H, G, D, LM, C, AB and S;
 Have a preparation meeting with the regional operation managers / responsible projects manager
for each of the projects;
 Send out the presentation and exhibits as one single PDF at least 48 hours prior to the meeting to
regional participants of the meeting and Stork Risk Officer the latter will send out the presentation
to the CRG if applicable.

10.5 Checklist: Risk Reviews

The following risk reviews are required for the Risk Checklist:

1. Alignment session review. Upon contract award, during the close-phase of the proposal process, an
alignment session is conducted to provide the execution team with the as-sold risk review. The risk
review is initiated by the proposal team. The execution team will add the Risk Checklist to the Project
Execution Plan (PEP) for risk management during execution;
2. Execution reviews. During execution the status of the risks and mitigations must be reviewed monthly
or more frequent when deemed necessary for needed updates. During these reviews each item in the
checklist shall be reviewed and the team should assess whether the risk scenario, severity and
likelihood of occurrence and the selected mitigation strategies are still applicable. It is the
responsibility of the project or operational manager to assemble appropriate personnel for reviewing
tab 2.

Note: risk reviews are not applicable for tab 1 as this document is finalized after approval of the Regional
or Risk Representative during the proposal phase.

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11 Training and Certification

Potential Risk Coordinators, Risk Representatives or Regional Risk Representatives must have experience
in accordance to the Practice 000.000.2000a03 BRMF Roles and Responsibilities requirements and follow a
set of mandatory training requirements. After successful completion of the trainings the Stork Risk
Officer nominates Regional and Risk Representatives to the Fluor Corporate Risk Group (CRG) for
approval or the Regional Risk Representative nominates Risk Coordinators to the Stork Risk Officer for
approval. Upon approval, the CRG provides the new risk person the appropriate access to the software
and other tools.

New Regional Risk Representatives, Risk Representatives or Risk Coordinators must join the Fluor Risk
Knowledge Online Community and complete the required corporate risk training courses to participate in
the risk review process. See table 6 for training requirements. Sales leads and proposal managers are
responsible for understanding the risk management process. The risk management training courses are
available to Stork personnel. At a minimum, sales leads and proposal managers are encouraged to
complete the training courses listed in table 6.

Table 6 Risk Management training courses

Role Required Training

Risk Coordinator BRMF Orientation (PE005)
Fluor Risk Management Process (PE006)
BRMF Website Training (PE157)

Regional or Risk Representative As required for Coordinators, plus

Aligning Profit with Risk (PE200)
BRMF Facilitation Training (PE153)

Sales Lead / Proposal Manager Fluor Risk Management Process (PE006)

Aligning Profit with Risk (PE200)

 PE005 – Business Risk Management Framework (BRMF) Orientation

o Online Course via KOL;

o A presentation to serve as an introductory tutorial that explains the purpose and the benefits of
using BRMF and why Fluor has a risk management process.

 PE006 – Risk Management Process

o Online Course via Fluor University or Stork Risk Officer;

o The Fluor Risk Management Process course consists of three lessons that will explain what risk
is, how we manage, and the tools we use. Each section includes a quiz. A score of 85 is
required to pass.

 PE153 Effective BRMF Facilitation

o Instructor-led Course and Video Distance Learning;

o This course provides participants with instruction on how to effectively facilitate Risk
Assessments (BRMFs). The course discusses techniques, different approaches, and a step by
step methodology to maximize results in a timely and efficient manner. The purpose of this
course is to provide authorized Stork Regional Risk Representatives and Risk Coordinators with
instruction on how a Risk Assessment should be facilitated in order to achieve effective results
in an organized and timely manner.

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 PE154 – Monte Carlo Simulation & Contingency

o Instructor-led Course and Video Distance Learning;

o Focuses on the fundamentals of how the Monte Carlo Simulation works and how it is used in the
development of Risk Event, Estimate, and Schedule Contingencies. The instructor also discusses
how each contingency is developed and reported throughout the project life cycle.

 PE155 – Assessing and Managing Risk

o Instructor-led Course and Video Distance learning;

o Focuses on the BRMF process, the various tools available to assess risk, and expectations of
Fluor employees.

 PE157 – BRMF WebsiteSM Training

o Instructor-led Course and Video Distance Learning;

o The BRMF Website Guideline is used as the course study material. A case study is used to define
risks, enter these risks into the BRMF website and apply the principles of risk management
(prioritization, mitigation strategies and actions, etc.) thereby enabling reports to be
generated for use on projects.

 PE158 - BRMF Website Training for Functional Groups

o Instructor-led Course and Video Distance Learning;

o An overview of the BRMF website for Functional Group users. This course focuses on how to
access records within the website, query data, and generate reports.

 PE200 - Aligning Profit with Risk

o Instructor-led Course (2 days);

o Identifies concepts and provides tools and techniques to bid and execute projects. Fluor’s
profitability is increasingly dependent on the successful bidding and execution of risk projects.

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12 Teaming Arrangements

Whenever the decision is made to team with another company, the sales lead will make sure the
requirements within Fluor practice 000.100.1500, Teaming Arrangement Practice and Checklist,
000.100.1501, Teaming Project Setup Checklist, and 000.340.F0062, Integrated Alignment Framework
Checklist, are followed. These practices provide the sales lead with the corporate guidelines, work
process and checklists necessary for the creation of Teaming Arrangement (TA) relationship. In addition,
Fluor CRI #25, Teaming Arrangements, should be reviewed for information and requirements contained in
that document.

In addition to the guidance documents above, the sales lead, with assistance from the Regional Risk
Representative, must conduct a risk assessment of each teaming partner. The teaming partner
assessment should include consideration of the teaming partner’s ability to perform their portion of the
work, their financial health, ability to provide staffing and resources etc. The teaming partner risk
assessment should be conducted before entering into an MOU with the teaming partner. This teaming
partner assessment is in addition to the project risk assessment.

When the proposal team determines a Teaming Arrangement is appropriate, The sales lead, in
coordination with the Regional Risk Representative conducts a Business Risk Management Framework
(BRMF) risk review addressing the risks associated with the various parties making up the proposed team.
Such a review is internal to Fluor. The sales lead conducts a BRMF risk review (required on all
opportunities) addressing the risks associated with the project itself. This second review may be
conducted in conjunction with all team members.

Note: it is important to align and inform the Stork corporate group sales coordinator about the teaming
arrangement and conducting the BRMF.

13 Additional Risk Reading Materials

Fluor Practices:

 Practice 000.0510.0300 Opportunities that may Involve Exposure to Asbestos

 Practice 000.000.2000a03: BRMF Roles and Responsibilities
 Practice 000.000.2040: Facilitating and Participating in External Risk Reviews
 Practice 000.100.1500: Teaming Arrangement Practice and Checklist

Stork Standards

 ST00.000.2100: Stork management toolbox

 ST00.000.2110: Stork risk appetite policy
 ST00.000.2120: BRMF trigger policy
 ST00.000.2125: Risk review trigger process
 ST00.000.2140: Stork Risk Checklist policy
 ST00.000.2150: Umbrella Risk Assessment
 ST00.000.2160: Stork risk organization chart
 ST00.000.2170: Risk representative process

Offline Risk tool: Palisade @risk

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Fluor Risk Practices:

 000.000.2000, Business Risk Management Framework (BRMF): A formalized and systematic process
for assessing, managing and monitoring Fluor's business risks (both project and non-project related
risks). This process is an integral part of the Fluor work process and the way we manage our
business. Attachment 02, Internal Risk List, includes definitions, examples and/or explanations for
each Business Risk; Attachment 03, Roles and Responsibilities, includes all members of the risk
management team;
 000.000.2010, Policy for Sharing the BRMF Process, Procedures and Software: The Business Risk
Management Framework (BRMF) and its enabling software are a comprehensive risk management
process developed by Fluor. This process was developed at considerable expense to Fluor and has
been copyrighted to protect its investment. Fluor wishes to utilize the BRMF primarily to manage its
own risk and preserve its competitive edge with regard to competitors and owners. This practice
focuses on protecting this intellectual property;
 000.000.2020, Identifying Corporate Risk Projects: This practice clarifies the different risk review
levels in general and to specifically communicate the criteria for projects that require Corporate
Risk Group (CRG) review and approval;
 000.000.2030, Risk Event Contingency Management: The purpose of this practice is to provide
guidelines when using the Monte Carlo simulation module contained within the BRMF Website
application in the calculation of a risk event contingency for a project;
 000.000.2040, Policy for Facilitating and Participating in External Risk Reviews: Fluor is known to
have expertise in managing risks relating to large-scale operations and project developments. As a
result, a Client may ask that Fluor facilitate a risk assessment of the Client’s venture or project
risks. When Fluor has suitably qualified personnel available to facilitate such an assessment and
when doing so does not conflict with Fluor’s goal to provide engineering, procurement and
construction solutions to the Client, Fluor may offer an External Risk Assessment as a service to a
Client. Fluor’s BRMF (i.e., the BRMF work process, Risk Bulletins, Risk Lists, etc.) is intended for
assessing, managing and monitoring Fluor’s own potential risks and has been designed for internal
use only. Only certain aspects of Fluor’s BRMF work process may be used for an External Risk
Assessment and is discussed in detail in this practice. Attachment 01, Fluor Business Risk List for
External Risk Assessments, includes definitions, examples and/or explanations for each Business Risk
for use one external risk reviews.

Risk Bulletins (for use as needed):

 Risk Bulletin # 1, Project Cash Flow Management: Explains the efforts in earning a positive cost
of cash contribution; gives a good outline of the strategy steps necessary to succeed in proposal
and contract negotiations;
 Risk Bulletin # 2, Fixed Price Design Build Projects – Minimizing TIC Through Control of Design
Development: Provides an approach to successfully control facility costs on fixed price design
build projects where Fluor has engaged an Architectural Engineering firm to furnish the
construction documents;
 Risk Bulletin # 3, A Comparison of Lump Sum (LS) and Guaranteed Max Price (GMP) Contracts:
Highlights the main differences regarding profitability between these two types of contracts;
 Risk Bulletin # 4, Schedule Issues: Provides clarifications and guidelines with respect to
schedule issues, particularly in relation to risk projects;
 Risk Bulletin # 5, Warranty/Guarantee: Describes warranty and guarantee issues and risk
mitigations information pertaining to warranty issues;

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 Risk Bulletin # 6, Guidelines for the Preparation of Program & Alliance Risk Assessment Plans
(BRMF): Assists Project/Program Teams in the preparation of BRMFs associated with umbrella
programs and long-term relationships covered by a Master Agreement. This Risk Bulletin also
applies to Task Orders executed under a MATOC, MACC, BOA, etc. for the U.S. Government, or
similar programs for other governmental agencies;
 Risk Bulletin # 7, Effective BRMF Facilitation: Helps facilitator prepare and conduct a successful
BRMF session;
 Risk Bulletin # 8, BRMF Dashboard Report: Assists Risk Executives, Regional Representatives and
Coordinators in the process of preparing a BRMF Dashboard Report that contains the current
status of projects and proposals. (Includes an example);
 Risk Bulletin # 9, Contractor and Professional Licensing Requirements (US & Canada): Enables
Regional Risk Representatives to check the status of Contractor Licensing requirements prior to
or during the Bid/No Bid timeframe;
 Risk Bulletins #10 and #11: Archived;
 Risk Bulletin # 12, BRMF Quality Checklist: Provides a BRMF Quality Checklist template to
conduct an audit of a project's risk review and mitigation efforts;
 Risk Bulletin # 13, Sample BRMF Website Reports: helps people better understand which
standard reports are available in BRMF Website and what the expected level of detail should be
on the reports;
 Risk Bulletin # 14, Documenting Risks, Mitigation Strategies and Action Steps: Provides
guidelines and clarification on how risks, mitigation strategies, and mitigation strategy action
steps are to be written in order for the pursuit and execution teams to fully understand the risk
and the steps needed to reduce the risk.

Fluor Business Risk Lists – Includes definitions, examples and/or explanations for each Business Risk.
There is also an external list for use on external risk reviews.

Note: A hard copy of this document may not be current. All employees are responsible for referencing
the current version in the Online Stork Connect Community or the Stork Risk Group, prior to performing a
new significant task.

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Appendixes
A. Glossary
B. Acronyms

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Appendix A - Glossary

Accumulator A web-enabled database program developed and copyrighted by Fluor Corporation

that contains risk and mitigation strategies identified on past Fluor and Stork Risk
Projects. Outputs from this application can be used as a thought stimulator on
new projects;
and reward

BRMF Business Risk Management Framework, a formalized and systematic process for
identifying, assessing, managing, and monitoring business risks on any given
project. BRMF helps ensure that the risk data, identified in the risk review process,
is systematically developed and historically maintained;

BRMF website Fluor’s proprietary Risk Management software containing a MitigatorSM and an
Accumulator ModuleSM. The BRMF Website, the BRMF Website Import
Spreadsheet, and the BRMF Website & Import Spreadsheet Guidelines are available
to designated Regional Risk Representatives;

Business Group Stork Corporate, the entire Stork group within the Fluor organization;

Business Line A Stork division or region represented in the Stork management team;

Contract A contract is a mutually binding legal relationship obligating the seller to furnish
the suppliers or services (including construction) and the buyer to pay for them;

Mitigator A web based database program developed and copyrighted by Fluor Corporation
to identify, document and classify project risks. It is the primary tool for managing
risks and their associated mitigation strategies and action plans, and provides the
mechanism for rolling up project risks to the corporate level;

ORC Opportunity Review Card, develop stage. ORC is to be created by sales before
starting to work-out a RFQ and should help the sales lead to structure commercial
arguments and our approach. This card serves as input to senior management in
deciding on starting a proposal process;

Policy A set of ideas or a plan of what to do in particular situations that has been agreed
officially by the Stork Group and/or Fluor organization;

Project Any undertaking or activity with a defined beginning and end and is intended to
be comprehensive of all undertakings at Stork;

PRC Proposal Review Card, propose stage. PRC is to be created by sales before
completion of a RFQ and should help the proposal team to structure and balance
commercial and internal aspects in our proposal. This card serves as input to senior
management in deciding to issue a proposal to the customer;

QRC The Qualify Review Card serves to understand customer needs, importance to
Stork and awareness of competitors. It helps to make a decision whether Stork
should invest time and money in pursuing this opportunity;

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Risk appetite How much and what type of risk Stork is generally prepared to accept to achieve
its financial and strategic objectives;

Risk capacity The maximum amount of risk an entity is able to attain within its available
financial resources;

Risk Checklist BRMF based Risk Checklist developed for the small transactional or business-as-
usual activities with a service value <$2.500.000 consisting of two tabs.
Completing tab 1 will identify whether the project is potentially risky by assessing
the risk profile and whether a BRMF is required or if it is possible to proceed to
tab 2. Completing tab 2 will identify the risks and their impacts by check boxing
the applicable risk scenario`s and mitigation strategies from where the risks will
be managed during execution;

Risk Event
Contingency Monetary value allocated to the project budget to cover the internal Stork costs
associated with a potential risk event or combination of risk events;

Risk level A project is categorized into a risk level when it meets the criteria for either the
Fluor Corporate, Stork Group, Stork Business Line or Stork Regional level. These
criteria are related to both the project size and to the level of risk on the project.
If a project is classified into a specific risk level, then this has consequences for
the type of risk assessment process, the level of documentation and the review
and approval process;

Risk profile Current risk profile is the amount or type of risk the entity is currently exposed
to. Forward risk profile is forward looking view of how Stork ‘s risk profile may
change under both expected and stressed economic conditions;

Risk register A series of reports generated from the BRMF Website Mitigator module
documenting the results of a risk review. Risk registers generally consist of the
following BRMF reports: Exhibit H – BRMF Summary, Exhibit AB – Risk and Mitigation
Strategies, Exhibit C – Risk Event Contingency, Exhibit L – Opportunity Register;

Risk tolerance The maximum amount or type of risk Stork is prepared to tolerate above the
appetite;

Risk-reward behaviour Acting according to the risk-reward mind-set;

Risk-reward mind-set The awareness to mindfully pursue and challenge the right balance between; risk
and reward

Risk-reward ratio The ratio between the amount of risk and expected in reward;

Schedule Float Time added to schedule activity durations due to uncertainties and
unforeseeable elements of time impact within the scope of the project under
Stork’s control

Service Value Total contract value of revenue including contractual extensions;

Stork Business line A Stork division or region represented in the Stork management team;

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Stork Group Stork Corporate, the entire Stork Business Group within the Fluor organization;

Stork Regional Separate countries, offices and/or entities within a Stork Business Line;

Term Sheet Prior to contract signing a Term Sheet is created by sales in the CRM system. This
Term Sheet presents the negotiated contract terms in comparison to the latest
approved PRC;

Waiver An agreement that you do not have to obey to (a part of) a specific policy.

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Appendix B - Acronyms

BL Business Line

BRMF Business Risk Management Framework

CRG Corporate Risk Group

ORC Opportunity Review Card

PEP Project Execution Plan

PRC Proposal Review Card

QRC Qualify Review Card

RFI Request For Information

RFP Request For Proposal

RFQ Request For Quotation

SME Subject Matter Expert

TA Teaming Arrangement

TAR Turnaround

TS Term Sheet

VP Vice-President

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