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39 department of transportation are 1) the degree to which risks 3.6 Summary are identified in early estimates; and 2) the degree to which contingency resolution is tracked. This chapter provides an overview of the risk management While the use of performance measures is critical to long- process with particular reference to contingency planning term process improvement and risk management program and the risk management steps. The chapter provides a foun- success, risk management should not be viewed purely as a dation and vocabulary that is used throughout the remainder measure of estimate accuracy. Comparisons of estimate accu- of this Guidebook. Definitions for risk management terms racy between a stochastically based range estimate from plan- are provided. A series of figures describe the need for contin- ning and a deterministically based estimate at the end of design gency and the contingency resolution process. Each of the is not advisable due to the disparate nature of the information risk management steps is discussed in detail, including risk available in the estimates. Performance measures that deal with identification, risk assessment, risk analysis, risk mitigation the number of magnitude of risks that have been mitigated and planning, risk allocation, and risk monitoring and con- during the project development process are likely a better trol. The chapter concludes with a brief discussion of policies indicator of program success. and performance measures relating to risk management.