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51 CHAPTER 6 Guide to the Programming Phase 6.1 Introduction anticipated letting date. The first four years of the priority program is usually the STIP. The priority program is the out- This chapter presents guidance for risk management in the put from the programming phase of project development. programming phase. The programming phase is defined in Once projects are including in a priority program, the SHA terms of its relevance to cost estimating and risk manage- must manage project scope, cost, and time as development ment. Each of the risk management steps is discussed in de- continues during the design phase. The duration of time be- tail, including inputs, outputs, and tools used in the risk man- tween when a project is included in the priority program and agement process. Tips for tool application and how project finally goes to construction letting varies across SHAs. Some complexity impacts risk management tools and practices are SHAs program projects nine or 10 years before their expected also discussed for each step. construction letting date. Other SHAs only program a proj- ect when the project is ready to be included in the STIP. In the 6.1.1 Programming Phase Overview latter case, the STIP becomes the priority program. During the programming phase, a project baseline cost es- The programming phase focuses on converting the highest timate is prepared. This cost estimate becomes the basis for priority needs identified in the SHA's long-range plan into spe- managing project costs during the design phase. The risk cific projects. This decision point marks the beginning of the management process is tied to cost estimating through the risk project development process as individual projects are identi- identification, risk assessment and analysis, and risk mitiga- fied for definition, design, and construction letting. The time tion and planning when preparing the baseline cost estimate. period, from project definition in programming to letting the project for construction, is typically between five and 10 years. 6.1.2 Programming Phase Risk This time duration between programming and construction Management Emphasis letting is a function of project complexity and criticality. SHA policies and practices also influence this time duration. Risk management practices during the programming phase Programming often marks the beginning of a project spe- focus on comprehensive risk identification, detailed risk as- cific effort. Federal law requires that the transportation im- sessment and analysis, and risk mitigation and planning. The provement program (TIP) for a metropolitan area become key output of the programming phase in terms of cost esti- part of the state's transportation improvement program mating and cost management is the baseline cost estimate. (STIP). It is common for state SHAs and MPOs to work Recalling from Chapters 2 and 3, the baseline cost estimate is closely identifying the likely costs associated with candidate comprised of the base estimate and a contingency estimate. projects. As shown by shading in Figure 6.1, these three primary risk Programming is often referred to as the project "definition management steps serve as the basis for estimating the con- or scoping phase." The primary goal of programming is to tingency that must be included in the baseline cost estimate. create a baseline scope, cost, and schedule for the project. Once risks are comprehensively identified and assessed/ Once this baseline is approved, the project is included in an analyzed with regard to their potential impact and probability authorized priority program. The priority program includes of occurrence, a justifiable contingency can be estimated. A projects that are typically within 10 years or less from their detailed risk management plan will then be prepared and used