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42 4.3 Appendix A Table 4.1 summarizes these tools with the risk step and phase in which they apply. The description of project com- Appendix A describes all the tools referenced for each step plexity is addressed within each chapter. in Chapters 5, 6, and 7. The common informational structure Note that the tools are numbered to correspond with for describing each tool is the following: NCHRP Report 574: Guidance for Cost Estimation and Man- agement for Highway Projects During Planning, Programming, What is the tool? and Preconstruction. Why is the tool used? What does the tool do or create? When should the tool be used? 4.4 Summary How should the tool be used? This Guidebook applies a common framework in Chap- What are examples or applications of the tool? ters 5, 6, and 7 to describe how the risk management steps What tips will lead to successful use of the tool? change throughout the project development phases and how Where can the user find more information to support de- they are impacted by project complexity. It provides a map to velopment of a specific tool? applying the tools presented in the Appendix A. Table 4.1. Risk tool summary. Risk Management Phases Step Tool Description Mitigate & Monitor & Planning Assess & Allocate Analyze Identify Scoping Control Design Plan D1 Delivery and Procurement Method D1.1 Contract The manner in which work is subdivided into individual contracts. Contract Packaging packaging affects contract prices and must be accounted for when estimating project cost. D1.2 Delivery The project delivery method involves the organization of the project team Decision Support members, the procurement method, and the contract payment terms. The selection of a project delivery system can affect both risk allocation and project costs. I2 Identification of Risk I2.1 Red Flag Items A technique to identify risks and focus attention on critical items with respect to cost and schedule impacts. Risks of greatest concern are "red flagged" for monitoring throughout the project. I2.2 Not Used I2.3 Risk Checklists The use of a historical list of project risks from experience or specific past projects that is used to aid in the risk identification process. I2.4 Assumption The process of reviewing all assumptions for uncertainty that could generate Analysis risks. I2.5 Expert Speaking with experts in order to generate risks and/or assess risk Interviews probability/impact. I2.6 Crawford Slip A group risk identification technique. Useful in generating a large number of Method risks in a short amount of time. I2.7 SWOT Strengths, Weaknesses, Opportunities, & Threats. A risk identification Analysis technique used to help generate risks and place them into categories. R1 Recognition of Project Complexity R1.1 Recognition The tool used to assign a project complexity level. This is based on of Complexity predetermined criteria, and assigned based on project characteristics (new or reconstruction, urban or rural, etc.). (continued on next page)

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43 Table 4.1. (Continued). Risk Management Phases Step Tool Description Mitigate & Monitor & Planning Assess & Allocate Analyze Scoping Identify Control Design Plan R3 Risk Analysis R3.1 Risk Project-specific document that comprehensively describes the philosophy and Management Plan approach to risk management. R3.2 Contingency The process of estimating contingency based on a percent of the project. The Percentage percentage is typically based on policy, similar projects, or estimator judgment. R3.3 Contingency The process of estimating contingency on the basis of identified risks and the Identified probability of their occurrence. R3.4 Estimate A technique for generating range estimates by estimating an optimistic, most- Ranges Three likely, and pessimistic estimate. Point Estimates R3.5 Estimate A risk analysis modeling method that uses repeated trials computing Ranges Monte probabilistic outcomes of various risk events or uncertainties. The technique is Carlo Analysis used for both cost and schedule. R3.6 Risk Workshops that are conducted to identify and quantify the uncertainty involved Workshops in projects. Risk mitigation and planning are also often addressed. R3.7 Risk Priority Using qualitative or quantitative analysis methods to rank risks. This often Ranking results in a dynamic "Top Ten" list to track risks with the highest potential impact at any given project development phase. R3.8 Probability x Qualitative analysis tool to provide a ranking of risks based on probability and Impact Matrix impact. It is a powerful visual tool to convey risk ranking. (P x I) R3.9 Risk Analysis tool to compare all risks to each other to determine prioritization and Comparison Table importance. R3.10 Risk Map A tool that places all risks graphically on a probability and impact (P x I) matrix to show relative probability and impact of different costs. Can also show how mitigation changes the probability and impact of each risk. R3.11 Risk A formal coding of risks that can supplement the risk register and explore the Breakdown relationships of different risks to each other. It can be helpful for an agency Structure when organizing similar risks across multiple projects. R3.12 Risk Register A risk management tool that lists risks in a given project and provides summary information that can include the risk description, probability, impact, ranking, ownership, and other important information. R3.13 Risk A data management system that tracks risks and risk related information Management throughout the project development process. Information System R3.14 Self A spreadsheet tool developed to model risk and uncertainty given basic project Modeling parameters. Based on Monte Carlo simulation. Allows for more customization Worksheet than commercial software.