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85 Anderson, S.D., and Russell, J.S. (2001). Report No. 451: Guidelines facilitates communication between estimators and designers for Warranty, Multi-Parameter and Best-Value Contracting. TRB, concerning these impacting items. By maintaining a running National Research Council, Washington, DC. list, these items will not disappear from consideration and Federal Highway Administration's National Highway Institute http:// www.nhi.fhwa.dot.gov/ then later cause problems. National Cooperative Highway Research Program, Project 10-49 Web- site http://www4.trb.org/trb/crp.nsf/All+Projects/NCHRP+10-49 What does it do? National Cooperative Highway Research Program, Project 10-61 Web- site http://www4.trb.org/trb/crp.nsf/All+Projects/NCHRP+10-61 At the earliest stages of project development, an agency de- Scott, S., Molenaar, K.R., Gransberg, D.D., and Smith, N. (2006). Report velops a list of impacting items, based primarily on engineer- No. 561: Best-Value Procurement Methods for Highway Construction Contracts. Transportation Research Board of the National Academies, ing judgment or historical records of problems. The red flag- Washington, DC. ging of these items may not involve any formal qualitative or Utah State University, Technology Transfer (T2) Center, Innovative quantitative risk analysis of the factors, but it keeps the team Contracting Website http://www.ic.usu.edu mindful of their existence. The list reminds the team to de- vote attention to risk issues as the design progresses so that I2.1 Red Flag Items they can be removed from contingency and placed in the base estimate or reduce the overall project cost as appropriate. A red flag item list is perhaps the simplest risk identification and risk management tool. It is created at the earliest stages of project development and maintained as a checklist during When to use it? project development. The list helps estimators to better under- The red flag item list should be compiled during the earli- stand the required contingency for a project and helps man- est stages of project development. The list should then be up- agers control scope growth more effectively throughout the dated at each major milestone or as new items are identified. project development process. Not all projects will require a The list will be most useful if it is maintained and updated comprehensive and quantitative risk management process. A throughout the project development process. red flag item list can be used in a streamlined qualitative risk management process. How to use it? What is it? Red flag item lists should be developed by different mem- A red flag item list is a technique used to identify risks and bers of the team in collaboration. The list should be shared by focus attention on critical items with respect to critical cost Designers and Estimators. and schedule impacts to the estimate. Issues and items that can potentially impact project cost or schedule in a significant way Example are identified in a list or red flagged, and the list is kept current as the project progresses through development. Figure I2.1-1 provides an example from the Ohio DOT:301.6 Red Flags Why use it? Tips By listing items that potentially can impact a project's cost or schedule, and by keeping the list current, the project team The list of red flag items should be developed in an interdis- has a better perspective for setting proper contingencies and ciplinary team environment. This activity works well during controlling cost escalation. Occasionally, items that are con- the Scoping Process. Consider brainstorming sessions with sidered a risk are mentioned during the Planning phase of representatives from multiple discipline areas. In addition to project development but soon forgotten. The red flag item list Scoping Documents or lists of standard items, individuals Red flags, including environmental and engineering issues, are locations of concern within the study area. Red flags do not necessarily identify locations that must be avoided, but rather, identify locations that will entail additional study, coordination, design, right-of-way, or construction cost. Locations that must be avoided are referred to as "fatal flaws." The Project Manager should ensure consultation with the appropriate specialists to determine the level of concern for each red flag item. Both environmental and design red flags are identified on the red flag summary. Figure I2.1-1. Ohio DOT Red Flag example.