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60 CHAPTER 7 Guide to the Design Phase 7.1 Introduction In summary, activities that occur during the design phase include: This chapter presents guidance for risk management in the design phase, defined in terms of its relevance to cost estimat- Right-of-way development and acquisition; ing and risk management. It then discusses each of the risk Final pavement and bridge design; and management steps in detail, including inputs, outputs, and Final trafficcontrolplans,utilitydrawings,hydraulicsstudies/ tools for the risk management process. Tips for tool applica- drainage design, and updating cost estimates. tion and how project complexity impacts risk management tools and practices also are discussed for each step. Risk management and cost management are two primary focuses during the design phase. Risk management concerns 7.1.1 Design Phase Overview the identification of new risks and monitoring and control of previously identified risks from the planning and program- The design phase focuses on designing projects to meet the ming phases. Cost management is concerned with the impact transportation needs defined in the planning phase. Design of changes due to additions or deletions to the project base- initiates project plan development and begins development line definition or changes resulting from design development, once the project is incorporated into the STIP. At this point, site conditions, or realization of risks that could not be the baseline cost estimate has been established for purposes avoided or mitigated. Change is likely to occur as the project of cost management. The goal of cost management through- is fully defined through the design effort. Changes may be out the design phase is to support the design of projects at or identified throughout the design process. Their potential cost below the baseline cost estimate established in the program- impact is determined through either project estimate updates ming phase. From the time a project enters the design phase or an assessment of the impact of an individual change that is to the beginning of construction letting can be as long as four significant in terms of its potential dollar magnitude. Both years for complex projects and as short as a few months for risk management and cost management are focused on ac- non-complex projects. This time duration between the start tively managing and retiring the contingency that was estab- of design and construction letting is a function of project lished with the baseline estimate. The key output of the de- complexity and project criticality. SHA policies and practices sign phase, in terms of cost estimating and cost management, also influence this time duration. is the engineer's estimate. Ideally, this engineer's estimate will Once a project is included in the STIP, the Design Phase be an amount equal to the baseline estimate. commences. Plan development focuses on detailed design and, if applicable, right-of-way plan development for prop- 7.1.2 Design Phase Risk erty acquisition if it is required. The designer makes use of Management Emphasis project programming information and data to prepare de- tailed right-of-way and construction plans. Right-of-way is Design phase risk management practices focus on moni- typically purchased later in the design phase; most necessary toring and controlling risks and their associated cost contin- outside agency permits are typically obtained during design. gency. However, all five steps in the risk management process The design phase sometimes overlaps with the program- must be actively addressed in this phase. Recalling from ming phase on small projects and/or in other special cases. Chapters 2 and 3, the baseline cost estimate is comprised of