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6 1.4 Guidebook Use read Chapter 3 and 4 and the relevant Chapters 5, 6, and/or 7, and Appendix A according to their area of expertise. Those The Guidebook is designed to provide information to all leaders directly involved in estimating or cost-risk analysis levels of SHA personnel and their partners in a variety of ways. should read the same chapters and Appendix A. If the estima- Therefore, some portions of the Guidebook are written at a tor or manager has a specific area of expertise--such as the strategic level and others contain more advice on "how to" im- preparation of scoping estimates--then Chapter 7, "Guide to plement risk analysis tools and management practices. The the Design Phase," should be studied in detail, including the approach to implementing the Guidebook can be explained in relevant tools in Appendix A. the follow three levels of implementation. 1.5 Limitations of the Guidebook 1.4.1 Organizational Implementation The Guidebook is not a procedures manual. In order to Implementing risk analysis and management practices apply to multiple agencies across the country, the information across an organization will require a change in estimating pro- is provided as guidance rather than procedures. The subtle dif- cedures, but perhaps more importantly, it will require a cul- ferences relating to estimating and project development from tural change. The use of risk-based cost estimates will require agency to agency make it impossible to create a comprehensive a communication of cost estimates in ranges and a transparent "how to" procedures manual. The Guidebook does however, conveyance of uncertainties within agencies and external to the provide the necessary framework and information for an agency. Executive management will need to promote this agency to create its own procedures manuals to meet its unique change. Chapters 2, 3, and 4 of the Guidebook are written with needs and culture. The second limitation relates to the amount executive managers in mind. These chapters provide a basic structure and approach for developing agencywide policies and of statistical information and guidance that the Guidebook procedures for implementing risk analysis and management provides. Sophisticated risk analysis techniques (e.g., Monte practices. Additionally, Chapter 8 will provide assistance in Carlo analyses, influence diagrams, decision trees, etc.) require implementing changes and management performance from an a more in-depth knowledge of statistics than this Guidebook agency-wide perspective. can provide. The Guidebook, therefore, focuses on the appli- cation of these techniques rather than on their development. 1.4.2 Programmatic Implementation 1.6 Summary Program-level managers often lead and implement policy changes. If policy changes in risk analysis and management Highway design and construction projects can be extremely practices are necessary, then these managers should read Chap- complex. If uncertainty in project estimates and management ters 2, 3, 4, and the relevant Chapter 5, 6, and/or 7, depending is not properly analyzed and managed, costs will escalate. This on implementation issues. For example, planning directors can Guidebook was developed under NCHRP Project 8-60 "Guide- focus on Chapter 5, "Guide to the Planning Phase," while man- book on Risk Analysis Tools and Management Practices to agers of engineering and environmental programs should Control Transportation Project Costs." It contains tools and focus on Chapter 7, "Guide to the Design Phase." management practices in the area of risk analysis and manage- ment practices, particularly for the long-range transportation planning, priority programming, and preconstruction stages 1.4.3 Project Implementation of the project development process. The Guidebook struc- Project-level managers, engineers, and discipline leaders ture provides guidance for executive, program, project, and (e.g., the chiefs of sections such as design, right-of-way, discipline-level managers to implement risk analysis and man- and/or estimating) who are directly responsible for cost esti- agement practices in a strategic manner to create change in mation, risk analysis and risk management processes should SHA management procedures and cultures.