Risk management systematically identifies, analyzes, and mitigates uncertainties that could affect project success, safety, environmental performance, or business objectives. Process includes risk identification through brainstorming and structured analysis, risk assessment evaluating likelihood and consequence, risk prioritization focusing attention on highest impacts, mitigation strategy development, implementation of risk controls, and monitoring throughout project execution.

For fabrication and construction projects, risks include technical uncertainties (unproven processes, material availability), schedule risks (long-lead equipment, resource constraints), cost risks (commodity volatility, productivity assumptions), quality risks (procedure qualification, inspection resources), safety risks (hazardous operations), and external risks (weather, regulatory changes). Risk analysis methods range from qualitative assessment to quantitative techniques including Monte Carlo simulation. Effective risk management prevents problems or reduces their impact, allocating contingency resources appropriately and improving decision-making under uncertainty.