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OCR for page 72
72 The WSDOT initiated a risk office when its Cost Estimate Validation Process (CEVP) commenced. This office has been Monitor and Identify active in drafting policy, supporting risk assessment work- Control shops, and developing risk related tools among other focus areas. The office has four full-time personnel that support the Risk risk management process. An alternate approach was used by Management Caltrans. While Caltrans did not establish a specific office to Allocate Process Assess/ initiate the risk management process, they did have personnel Analyze that worked on developing a risk management process. This process is captured in a handbook designed to support project Mitigate management and includes some tools used to implement risk and Plan management at the District level. Caltrans also has developed a dedicated course for risk management. This course is in- Figure 8.2. Risk management cluded as one of several training courses under the Caltrans process framework (varies by project development phase project management curriculum. and complexity). Agency implementation of the risk management process will require organizational change to support this new process. Each agency will have to determine an organizational approach to risk management that fits within the agency culture and re- development phase such as for the programming phase as sources available. Commitment to such a structured approach indicated in Table 8.2. Current use should consider not only is vital to successful implementation. if the particular step is being used, but also the level of under- standing of the step and how it is being applied in practice. Comments then can be gathered on issues to consider for fu- 8.3 Step Two Implementation of ture implementation of the step. Since many agencies include Methods: Programmatic Change contingencies in their cost estimates, it is important to capture The second implementation step involves change at the definitions of contingency and how risk is related to the con- program level with the institution of the risk management tingency value that is incorporated into each estimate. process steps as shown in Figure 8.2. Chapter 3 and Chapters 5 through 7 described the implementation of the five risk man- 8.3.2 Determine Policies and Procedures agement steps that support implementing the Risk Strategy. At the program level, current practice is first examined. Next, Once an understanding of the use of the risk management policies and procedures regarding risk management should be steps is achieved, the agency should begin to formulate poli- developed. Finally, the development of training and education cies related to risk management and, in particular, contin- materials is prepared to support implementation. gency. These policies should address the relationship between risk and contingency and specific issues such as how is con- tingency determined, who owns the contingency, and when 8.3.1 Assess Current Practice should contingency be retired, all in relation to risk manage- The first task for implementation of the risk management ment process steps. process is an assessment of the current state of practice within A general policy statement related to evaluating risk and the agency. This assessment should be conducted by project contingency was developed by the Minnesota Department of Table 8.2. Example assessment of risk management steps in the programming phase. Comments on Future Step Currently in Use Implementation Identify Assess and Analyze Mitigate and Plan Allocate Monitor and Control