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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Suggested Citation:"Chapter 1 - Value Management System Tool." National Academies of Sciences, Engineering, and Medicine. 2017. Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery. Washington, DC: The National Academies Press. doi: 10.17226/24851.
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Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

8 This section details the structure, content, and use of the Value Management System Tool. The following subsections are covered: • Overview and Structure • Stakeholder Analysis • Decision Analysis • Risk Analysis • Constructability Review • Value Engineering • Project Delivery Method Selection • Example Project • Customizable Worksheets • Implementation and Training Overview and Structure The Value Management System Tool was developed as part of NCHRP Project 19-11: “Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery.” The tool was developed in MS Excel 2016 and includes the following components: • Value Management System Tool (MS Excel workbook) • Example Application on a Transportation Project (MS Excel workbook) • A series of seven training videos providing instruction on the use of the tool (.mp4) The purpose of this tool is to assist project teams in enhancing the value of transportation projects as follows: • Improving internal and external team communications • Improving project-related decisions • Managing risk • Improving design quality • Enhancing innovation • Considering alternative delivery methods It includes several complementary techniques and processes that can be used independently, or collectively, depending on the needs of the users. The techniques and processes contained within this tool include the following: • Stakeholder Analysis • Decision Analysis • Risk Analysis C h a p t e r 1 Value Management System Tool

Value Management System tool 9 • Constructability Review • Value Engineering • Delivery Method Selection The example application and training videos focus on a transportation project called the Davis Road Bridge Replacement Project. Please note that the information presented related to this project is intended to be used for training purposes only and does not necessarily reflect actual events or conditions. The judgments, opinions, and data presented herein should be regarded as hypothetical. Control Panel This MS Excel workbook comprises approximately 150 individual worksheets. To assist users in navigating this tool, a Control Panel has been developed that allows users to select which activities they wish to use at any given time (see Figure 4). The default setting is that all activities are in the “OFF” position. To turn an activity on, simply select “ON” to reveal the related work- sheets. Selecting “OFF” will hide the associated worksheets. Note that data entered in hidden worksheets will not be lost, and can be revealed at any time using this control panel. Any number of activities can be turned on at any time. Please note that users should not attempt to modify the structure of the MS Excel workbook in any way. Doing so may cause the workbook to malfunction. Further, adding or deleting rows or columns is discouraged unless specifically called for in the tutorials. Project Dashboard Each activity includes a dashboard that provides summary information. The Project Dash- board includes summary information on project cost and schedule (see Figure 5). Included in this dashboard is the total estimated project cost, total estimated project duration, a pie chart showing Project Scope, Cost, and Schedule OFF Stakeholder Analysis OFF Decision Analysis OFF Risk Analysis OFF Constructability Review OFF Value Engineering OFF Delivery Method Selection OFF WARNING: Do not add or delete columns or rows to this workbook! NCHRP 19-11 Applying Risk Analysis, Value Engineering & Other Innovative Solutions for Project Delivery VALUE MANAGEMENT SYSTEM CONTROL PANEL Select "ON" to view or utilize each of the above Value Management Systems. This will open a series of color-coded tabs to navigate in any order, with the exception of the Decision Analysis series (which requires that you follow a certain sequence to properly compute formulas and analyses). You may turn all systems on or off simultaneously; simply scroll through the tabs Figure 4. Control Panel.

10 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery the breakdown of project costs, and a simple GANTT chart showing major project milestones and phases. This screen changes based on updates made to the Project Cost and Project Schedule tabs. Project Scope Information This Project Scope tab is used to capture basic information about the project. Note that the entry provided for “Project Name” will be replicated throughout the workbook for all activi- ties. If ever there is a need to change the project name, please do so here and any changes will be reflected throughout. The remainder of the information on this tab is used solely for reference purposes and does not appear elsewhere in the workbook. In addition, there are 10 extra “User Defined Fields” that can be used to capture agency- specific information. These may be deleted or modified without fear of altering the function of the rest of the workbook. 1,606 Days MAJOR COST ELEMENTS TOTAL KEY PROJECT MILESTONES START DATE Support Costs $2,500,000 Project Start 01-Aug-16 Roadway $16,850,000 65% Design 09-Sep-16 Structures $35,540,000 95% Design 26-Jun-17 Right of Way $4,029,000 100% Design 19-Feb-18 Utilities $120,000 PS&E Certification 27-Jun-18 Escalation $3,900,000 Utility Relocation 10-Apr-17 0 $0 Right of Way 14-Nov-16 0 $0 Permits 10-Apr-17 0 $0 Advertise & Award 13-Oct-18 0 $0 Construction 01-Dec-17 0 $0 Environmental Mitigation 02-May-19 0 $0 Project Finish 24-Dec-20 0 $0 0 $0 0 $0 0 $0 0 $0 0 $0 0 $0 0 $0 Davis Road Bridge Replacement TOTAL ESTIMATED PROJECT DURATIONTOTAL ESTIMATED PROJECT COST $62,939,000 Support Costs 4% Roadway 27% Structures 56% Right of Way 6% Utilities 0% Escalation 6% PROJECT COSTS Figure 5. Project Dashboard.

Value Management System tool 11 You will note that additional fields include Project Overview, Project Description, and Project Need and Purpose. It is a good idea to include this information and keep it updated because it will be beneficial to users performing other activities in this workbook. Project Cost The Project Cost tab is used to capture major categories of cost; it is not intended to serve as a detailed cost model (that information is included in the VE activity). A pie chart automatically displays this data and is replicated on the Project Dashboard. Project Schedule The Project Schedule tab provides a simple way to capture major project phases and mile- stones. Simply enter the various milestones and phases, start dates, and work days to complete if it is a phase. Note that formulas will automatically convert work days to calendar days. As this information is entered, the Project Schedule GANTT chart and Timelines will begin to populate the data graphically. Specific instructions on calibrating these two charts are provided to the right of the schedule data table. Note that a built-in formula automatically identifies the Min. and Max. Bounds for the GANTT chart. To calibrate the GANTT chart, left click on it to select it, and then right click on the horizontal axis values representing dates and select “Format Axis.” Under “Axis Options,” enter the numeric values displayed for the Minimum and Maximum Bounds. Doing so will adjust the dates to display all activities of the project. For the Project Timeline, you can adjust the vertical location of each milestone by entering a value between 1 and 4 on the “Timeline” column of the schedule data. The information in this tab is for reference purposes and is intended to support other activities within the workbook. Participant Information The Participant Info tab is used to maintain contact information for the various project par- ticipants. This information is for reference purposes and is also used on other tabs throughout the workbook to populate various drop-down lists. Stakeholder Analysis Stakeholder Analysis is a tool for clearly defining key stakeholders for a project, understanding where stakeholders stand, and developing cooperation and improved communication between the stakeholders and the project team. The following are the main objectives of stakeholder analysis: • Identify project stakeholders • Understand their interests and objectives • Analyze their relationship to the project • Identify and develop strategies to manage stakeholder communications and expectations • Define stakeholder roles and responsibilities relative to project activities and deliverables

12 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery Most stakeholder analysis is based on a simple grid configuration that considers tradeoffs between one of two sets of stakeholder attributes. These include the following: • Power versus Interest • Interest versus Attitude One needs to consider all three of these attributes to get the whole picture. These attributes are defined as follows: • Power—The ability of a stakeholder to influence a project. This could be through economic controls (e.g., project funding), political influence (e.g., decision-making authority), or both. • Interest—The degree of involvement by a stakeholder in a project. Some stakeholders are indifferent, some disinterested, while others may be actively engaged. • Attitude—A measure of the stakeholder’s support for or opposition to a project. Assessing and analyzing these attributes for each project stakeholder is necessary to develop effec- tive strategies for managing stakeholders and communicating effectively with them. The approach to stakeholder analysis included in the Value Management System Tool is designed to do this. Stakeholder Dashboard The Stakeholder Dashboard tab provides an at-a-glance summary of key stakeholders, their organizations, and a Stakeholder Map (see Figure 6). The Stakeholder Map graphically refer- ences all organizations as a bubble on a chart. The position of the bubble indicates the relative Figure 6. Stakeholder Analysis Dashboard.

Value Management System tool 13 degree of support (attitude) and how influential it is (power). The size of the bubble represents its stake in the project (interest). Stakeholder Information This Stakeholder Info tab provides a place to list all key project stakeholders. Aside from the typical contact information fields, there is a field to list the stakeholder’s interests and objectives. This is a good place to consider which factors are truly motivating stakeholder behavior. This information can be particularly valuable when new people join the project team and when new individuals representing existing stakeholder groups become involved in the project. Individual personalities can significantly impact the tone of communication and the willingness to com- municate and negotiate positions. Stakeholder Map Worksheet The Stakeholder Map Worksheet tab is used to evaluate the level of interest, support, and power of a stakeholder, which could be an individual, group, or organization. To construct the Stakeholder Map, follow these steps: 1. List the key stakeholders that you wish to map. 2. Rate the stakeholder’s level of support from 1 to 9. A “1” represents total opposition to the project; a “5” represents neutrality or indifference; while a “9” represents total support of the project. 3. Rate the stakeholder’s level of power from 1 to 9. A “1” represents weak influence; a “5” rep- resents moderate influence; while a “9” represents strong influence. 4. Rate the stakeholder’s level of interest on a 1 to 3 scale from low to high. In the example, we can see that there are two stakeholders that are both powerful, interested, and very supportive of the project: Monterey County and FORA. Conversely, there is one stake- holder that is moderately powerful and somewhat in opposition to the project: the Ag Land Trust. By evaluating each stakeholder on the map, strategies can be developed that will help the project team better manage outcomes (see Figure 7). Figure 7. Stakeholder Map legend.

14 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery Interpreting the Stakeholder Map requires us to consider power, interest, and attitude and then identify appropriate strategies to manage the various stakeholders. Stakeholders that fall within the “Champions” quadrant are likely to be the project’s biggest supporters. Depending on their degree of interest, they fall within the range of “Champion 3s” and “Champion 1s.” • Champion 3s are powerful and have a high interest and positive attitude. They are influen- tial, active proponents of the project. They need to be paid attention to, and the project team should seek to protect their interests. • Champion 1s are powerful and have a low interest and positive attitude. They are influential, passive proponents of the project. The project team needs to engage and appease them to awaken them. Stakeholders that fall within the “Supporters” quadrant are supportive yet lack significant influence over the project. Depending on their degree of interest, they fall within the range of “Supporter 3s” and “Supporter 1s.” • Supporter 3s have low power, high interest, and a positive attitude. They are relatively insig- nificant, active proponents of the project. They should be used as a confidante or sounding board to marshal support for the project. • Supporter 1s have low power, low interest, and a positive attitude. They are insignificant, pas- sive proponents of the project. They typically need to be kept informed and communicated with on a “transmit only” basis. Stakeholders that fall within the “Challengers” quadrant are likely to be the project’s biggest opponents. Depending on their degree of interest, they fall within the range of “Challenger 3s” and “Challenger 1s.” • Challenger 3s are powerful and have high interest, but they view the project with a negative attitude. They are influential, active opponents of the project. They need to be engaged to disengage. Understand their interests and seek to find common ground. • Challenger 1s are powerful and have low interest, but they view the project with a negative attitude. They are influential, passive opponents of the project. They need to be understood and managed so that potential opposition from them can be defused before it can negatively impact the project. Stakeholders that fall within the “Sleepers” quadrant are likely to be relatively weak or ineffec- tive opponents of the project. Depending on their degree of interest, they fall within the range of “Sleeper 3s” and “Sleeper 1s.” • Sleeper 3s are low-power, high-interest entities with a negative attitude toward the project. They are insignificant, active opponents. They need to be actively monitored and prevented from gaining greater influence. • Sleeper 1s are low-power, low-interest entities with a negative attitude toward the project. They are insignificant, passive opponents. They need to be understood and monitored because they could become more engaged and pose a challenge later. In the area below the Stakeholder Map, information supporting the interpretation of stake- holder positions is provided. Depending on the quadrant where each stakeholder bubble falls, a general strategic approach is recommended. Using the example above, Monterey County and FORA fall into the “Champions” category. The recommendation is that the project team protect the interests of these stakeholders. Because both are also very interested in the project (based on the relative size of the bubbles), it is further recommended that these stakeholders be closely paid attention to and that their interests be clearly understood and strongly supported. The Ag

Value Management System tool 15 Land Trust is identified as a potential project “Challenger.” It needs to be engaged and under- stood, and its issues need to be addressed to prevent a negative impact on the project. The purpose of this tool is to encourage project teams to actively consider stakeholder positions and think about strategies to better manage and communicate with stakeholders. It should be noted that the terminology used to describe stakeholder types are for descriptive purposes and are intended for internal project team use only. RACI Matrix The RACI Matrix tab provides another tool for project teams to use to consider the roles and responsibilities of stakeholders for various project phases, activities, or deliverables (see Figure 8). RACI is an acronym defined as follows: • Responsible—The person(s) or organization assigned to do the work to deliver the project. • Accountable—The person(s) or organization that makes the final decision and has ultimate ownership of the project. • Consulted—The person(s) or organization who must be consulted before a decision or action is taken. • Informed—The person(s) or organization that must be informed that a decision or action has been taken. Complete the RACI Matrix by first listing key project activities and deliverables. Note that if you completed the Stakeholder Map Worksheet on the previous tab, the stakeholders will already be listed. For each cell, there is a drop-down menu from which to select the appropriate role for each stakeholder relative to each activity. The purpose of this tab is to help project teams think about the roles of key stakeholders and ensure that their roles are clearly understood and considered throughout the project. This will help project teams better manage stakeholders and support whatever strategies have been selected. Decision Analysis Decision Analysis is defined as the theory, techniques, and applications used to address com- plex decisions within a structured framework. The decision approach selected for the purposes of this tool utilizes a form of multi-criteria decision analysis to evaluate multiple conflicting criteria in decision making known as the Analytic Hierarchy Process (AHP). AHP was developed in the 1970s by Dr. Thomas Saaty, a distinguished professor of the Whar- ton School of the University of Pennsylvania. AHP has been studied, refined, and applied for over 40 years and is widely regarded as one of the more effective approaches to complex group decision making. AHP structures decision problems as a hierarchy, as illustrated in this Figure 9. At the top is the decision objective. The next level consists of decision criteria. This is followed by any number of options or alternatives. The version of AHP articulated in the Value Man- agement System Tool organizes the criteria that trades off costs and benefits in considering total value. AHP is based on the premise that all measurements are relative. People are generally very good at comparing things relative to other things. AHP provides a framework to make relative comparisons using a rational decision structure based on scaled pairwise comparisons using

Responsible R Accountable A Consulted C Informed I FO RA TA M C Ca ltr an s M on te re y Co un ty Ag L an d Tr us t M er ril l F ar m s Pe da li Al pi ni Ac m e In c. PA&ED C C C R I I I A PS&E C C C R I I I A Development Funding Agreements R C C C I I I I SHOPP Funding Agreements I C R A I I I A Right of Way Certifications I I I R C C I R Advertise, Bid, Award I I C R I I I C The person(s) or organization who must be consulted with before a decision or action is taken. The person(s) or organization that must be informed that a decision or action has been taken. PROJECT STAKEHOLDERS Davis Road Bridge Replacement R A C I MATRIX Using the Codes described below, enter the role for each of the key project stakeholders for each of the deliverables/activities listed along the left as applicable. You may edit the list of deliverables/activities as needed. The person(s) or organization assigned to do the work to deliver the project. The person(s) or organization that makes the final decision and has ultimate ownership of the project. Position / Role Project Deliverable (or Activity) Figure 8. RACI matrix.

Value Management System tool 17 a fundamental scale that converts stakeholder preferences and priorities into ratio measures. Through this method, the performance, cost, time, and risks of alternatives can be articulated as ratios that can then be compared with one another. This decision model considers the following elements: performance, cost, time, and risk. Expressed mathematically, value equals performance over cost plus time. The risks related to performance, cost, and time must also be considered. The Decision Analysis tools presented herein can assist project teams with many important decisions such as the following: • Which design option offers the best overall solution? • Which contractor should be selected based on “best value”? • Will the VE alternative(s) offer better value compared with the baseline? • Which architect/engineer should we select based on qualifications? • Which project delivery method is the best fit for the project? To learn more about AHP, please visit these Wikipedia links: • https://en.wikipedia.org/wiki/Analytic_hierarchy_process • https://en.wikipedia.org/wiki/Analytic_hierarchy_process_%E2%80%93_leader_example Decision Analysis Dashboard The Decision Analysis Dashboard provides information on (a) the outcome of decision-making activities including the alternatives selected, (b) a chart depicting how the alternatives scored relative to the weighted performance attributes, and (c) a chart showing all alternative value indices, as well as how the alternatives compare with a baseline alternative in terms of value. As previously described, a value index is the relationship of an alternative’s performance to the cost and time to realize it. In the Davis Road example, a Decision Analysis was performed to evaluate the VE Alternatives that were developed using this tool. In the Selected Alternatives section on the left side, you see the Baseline Concept and the four VE alternatives that were evaluated. Reviewing the “Comparison of Alternative Performance” chart, we see that VE Alternatives 3 and 4 show a slight improve- ment in performance relative to the Baseline Concept. Finally, looking at the “Value of Selected Alternatives” chart, we see that VE Alternatives 1, 3, and 4 offer superior value compared with the Baseline Concept. VE Alternative 3 shows an 11% improvement in value over the Baseline Concept and is by far the strongest VE alternative (see Figure 10). Figure 9. AHP decision hierarchy.

18 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery It should be noted that any type of multi-criteria decision can be evaluated using the Decision Analysis tool in this workbook. In fact, non-financial and non-time-sensitive decisions can be made by ending the analysis at Tab 8, Performance of Alternatives. In the Davis Road example, VE Alternative 4 shows the highest level of performance based on the results of the “Comparison of Alternative Performance” tab (which does not consider cost or time). There are many variables that must be considered. These include the following: • Number of alternatives • Number of decision makers • Number of performance requirements • Number of performance attributes • Importance (or weight) of the performance attributes • Rating of the performance for each alternative Figure 10. Decision Analysis Dashboard.

Value Management System tool 19 • Cost of each alternative • Time of each alternative • Relative importance of cost and time Note: To perform the necessary calculations for these variables, the Decision Analysis tool is con- figured differently than other activities in this workbook. Visual Basic code has been written into the tool. It requires that the “Next Tab” button on each worksheet be activated upon completing a worksheet. Doing so will transfer the information on the current tab to various other places within the workbook. If this action is not performed, the data will not populate correctly and the analysis will be incorrect. Even worksheets that have no direct user input require clicking on the “Next Tab” button to ensure the proper transfer of data. It is strongly recommended that this workbook be viewed using a multimedia projector or large monitor so that all participants can see the information developed for the Decision Analysis. Identify Stakeholders The Identify Participants tab is where all decision makers that will be actively involved in par- ticipating in the Decision Analysis activities should be listed. Enter any relevant information. It is only necessary that first names be provided. Up to 10 decision makers may be entered. Click “Next Tab” when finished entering this information. Define Alternatives The Define Alternatives tab is where all alternatives to be considered are entered along with any cost and schedule information. Note that the first alternative entered is of special impor- tance. If the Decision Analysis involves comparing changes relative to a baseline, the baseline alternative should be entered in the first row (highlighted in yellow). If there is no baseline, then enter the alternatives in any order. Up to 20 alternatives may be evaluated. Once all information is entered, click on the “Next Tab” button to proceed. Pre-Screen Alternatives The Pre-Screen Alternatives tab provides a way for participants to check that alternatives meet essential performance requirements. Up to 12 performance requirements can be entered in Columns C and D. In the Davis Road example, there are two requirements. The first is that all alternatives must have four lanes. The second is that all alternatives must have 8-foot-wide shoulders. Each alternative is cross referenced with each requirement. Select “Yes” or “No” from the drop-down menu as appropriate. Once this has been completed for all alternatives, any that included a “No” response have violated a performance requirement and are therefore considered to be invalid alternatives. In the row at the bottom, select “Yes” or “No” from the drop-down menu for each alternative to indicate whether it should be considered for further evaluation (i.e., it is not automatic). Once all actions have been completed, click on the “Next Tab” button. Performance Ratings The Performance Rating tab is used to perform the following actions: • Define what performance attributes will be used • Define the related rating scales • Rate the performance of each alternative relative to the scales

20 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery Included in this workbook are 11 pre-defined performance criteria that are commonly used on transportation projects. Further, there are another six “user defined” attributes. To select any of these, simply click on the cell that says “No” and select “Yes” from the drop-down menu to select the attribute and reveal the related information. This tool is designed to handle up to eight performance attributes; however, please make sure no more than eight have been selected before moving on to the next tab. In the Davis Road example, five performance attributes were selected to evaluate the VE alternatives. These include the following: • Local Operations • Environmental Impacts • Construction Impacts • Maintainability • Hydrological Impacts Let’s review the information for one of these attributes in detail. The definition for Local Operations is provided. Please note that the “default” information can be modified to tailor to the needs of the project and decision-making information. Performance ratings in this system range between 0 and 1, with 1 being ideal and 0 being unacceptable. Definitions for scalar values for 0.0, 0.2, 0.4, 0.6, 0.8 and 1.0 are included. These should be modified to meet the needs of the project and level of information available (see Figure 11). Next, you will see the alternatives being considered along with their numerical performance ratings and rationale justifying the ratings. It is important that the participants thoroughly dis- cuss performance for each alternative based on the definition and scales. The group’s consensus should be recorded in the “Rating Score” area. In the Davis Road example, performance of the VE alternatives can be compared with the performance of the Baseline Concept and relative adjustments can be made based on performance improvement or degradation. Once an attri- bute has been discussed and all alternatives rated, the process is repeated for each performance attribute. Any of the 11 pre-defined performance attributes may be edited or completely overwritten and any of the 6 user defined attributes may be used as needed. Once all activities are completed, click on the “Next Tab” button. Attribute Prioritization The Attribute Prioritization tab is used to determine the relative importance of the perfor- mance attributes compared with each other. The AHP pairwise comparison process is used to perform this activity. This sheet has been configured to make this simple and easy to follow by the participants. Depending on the number of attributes selected, this worksheet will already have populated the correct number of pairwise comparisons. Table 2 contains the breakdown. In the example, 5 attributes were selected, which means there are 10 comparisons that the group needs to make. The following steps should be followed for each comparison: 1. Discuss the importance of the attributes relative to meeting the decision goal. In the Davis Road example, we are first comparing Local Operations to Environmental Impacts. The facilitator reads the project’s need and purpose statement. The participants then discuss the merits of each attribute relative to the decision goal. 2. Select which attribute is more important and by how much. Based on the ensuing group discussion, participants state which attribute they feel is more important and why. The AHP fundamental scale is used to articulate the strength of preference. A value of “1” means that two attributes are equal. Values between 2 and 9 indicate increasing degrees of importance. In

Mainline Operations NO CLICK NEXT TAB! Local Operations YES Definition: Ideal Very Good Good Fair Poor Unacceptable 1.00 0.80 0.60 0.40 0.20 0.00 Local operations equivalent to LOS A during peak hour. Highest level of traffic operations. Significantly maintains or improves upon existing local access. Meets or exceeds all design standards. Local operations equivalent to LOS B during peak hour. High level of traffic operations. Maintains or improves existing local access. Meets all mandatory design standards. Meets all or most advisory design standards. Local operations equivalent to LOS C during peak hour. Good level of traffic operations. Maintains existing local access. Meets all or most design standards. Local operations equivalent to LOS E during peak hour. Poor level of traffic operations. Significantly impacts existing local access. May require multiple design exceptions. Local operations equivalent to LOS F during peak hour. Very poor level of traffic operations. Severely impacts existing local access. May require multiple design exceptions. Alternative Title Rating Score Baseline Concept 0.8 VE Alternative 1 0.8 VE Alternative 2 0.8 VE Alternative 3 0.8 VE Alternative 4 0.95 Rating Rationale The operations at the Davis Rd./Reservation Rd. intersection are good given the two-lane cross-section of Reservation Rd. west of Davis Rd. However, there are opportunities for further enhancing traffic operations at this intersection for the interim condition (e.g., before Reservation Rd. is widened to four lanes west of Davis Rd.). No significant change compared to Baseline Concept. An assessment of traffic operations and safety on the local roadway infrastructure, including on-ramps and frontage roads. Operational considerations include level of service relative to the 20-year traffic projections; geometric considerations such as design speed, sight distance, lane widths; bicycle and pedestrian operations and access. Davis Road Bridge Replacement No significant change compared to Baseline Concept. No significant change compared to Baseline Concept. Improved operations by changing turn movements into through movements between Davis Rd. and Reservation Rd. west of Davis Rd. The new configuration should improve the LOS significantly and provides an improved interim solution prior to the future widening of Reservation Rd. to four lanes. Improves horizontal sight distance. Next TabMain Menu ALTERNATIVE PERFORMANCE RATING Figure 11. Alternative performance rating.

22 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery this first comparison, if a participant believes the attributes are of equal importance, leave the rating blank; it will default the entry to 1. Use the drop-down menu to select the appropriate value of the dominant attribute (see Figure 12). 3. Discuss the group’s ratings. The facilitator should ask each participant which attribute is more important and by how much. In the Davis Road example, all the participants felt that Local Operations was more important than Environmental Impacts; however, the degree of importance varied significantly between them. Enrique felt that Local Operations was slightly more important than Environmental Impacts while Reinie felt that it was extremely more important. It is a good idea to have the two participants that had the highest and lowest ratings state the rationale for their positions. Oftentimes an individual will have information that was not known to the rest of the group. Once this information is shared, or a particularly compelling argument is made, the other participants may choose to adjust their scores. 4. Repeat this process for all the remaining comparisons. This process makes subjective judgments explicit and requires participants to provide the rationale for their preferences. Further, it leads to shared learning about the various elements of a decision and to better group decision making. Once all comparisons have been made, click on the “Next Tab” button to proceed. Decision Matrix The following three tabs display the results of the Decision Analysis to this point. The Decision Matrix tab shows the completed AHP Eigen matrices for each participant and a bar chart show- ing the overall preferences for the performance attributes. To learn more about the mathematics behind AHP pairwise comparisons, please visit the AHP Wikipedia links identified in the Deci- sion Analysis subsection. If we review Enrique’s preferences, we see that he felt that Local Operations was most impor- tant at 35% of the total, followed by Hydrological Impacts at 27%, and Maintainability at 21%. The facilitator should review everyone’s final scores to ensure that they make sense and are aligned with reality. If there is an issue, the previous tab can be revisited and individual judg- ments reviewed and adjusted as needed. Be sure to click the “Next Tab” button again if any changes are made. At the bottom of this tab is the Combined Group Score. Figure 13 shows the results of the AHP Eigen Matrix. Click on the “Next Tab” button to proceed. No. of Attributes No. of Comparisons 2 1 3 3 4 6 5 10 6 15 7 21 8 28 Table 2. Number of attributes versus number of comparisons.

WEIGHT 9 8 7 6 5 4 3 2 1 Step .1 Step .2 Step .3 Local Operations Environmental Impacts Local Operations Construction Impacts Local Operations Maintainability Enrique 2 2.00 Enrique 5 5.00 Enrique 3 3.00 Hank 6 6.00 Hank 6 6.00 Hank 2 2.00 Peter 4 4.00 Peter 9 9.00 Peter 9 9.00 Reinie 9 9.00 Reinie 4 4.00 Reinie 4 4.00 Step .4 Step .5 Step .6 Local Operations Hydrological Impacts Environmental Impacts Construction Impacts Environmental Impacts Maintainability Enrique 2 2.00 Enrique 5 5.00 Enrique 4 0.25 Hank 2 0.50 Hank 3 3.00 Hank 5 0.20 Peter 3 0.33 Peter 7 7.00 Peter 2 0.50 Reinie 2 2.00 Reinie 3 0.33 Reinie 2 2.00 Step .7 Step .8 Step .9 Environmental Impacts Hydrological Impacts Construction Impacts Maintainability Construction Impacts Hydrological Impacts Enrique 4 0.25 Enrique 6 0.17 Enrique 5 0.20 Hank 5 0.20 Hank 6 0.17 Hank 6 0.17 Peter 7 0.14 Peter 5 0.20 Peter 6 0.17 Reinie 3 0.33 Reinie 4 0.25 Reinie 2 0.50 Attribute Comparison Attribute Comparison Attribute Comparison DESCRIPTION Extremely more important Very strongly more important Strongly more important Moderately more important Equally important Which of the attributes is more important relative to meeting the decision goal? Using the scale to the right, select which attribute is more important to each participant, and by what degree. Enter the weight on the side of the more important attribute. If both attributes are equally important, either leave the entry blank or enter a 1 on each attribute. Make sure to perform the comparison until all steps containing attributes are complete, then CLICK NEXT TAB! Davis Road Bridge Replacement Weight Weight ParticipantWeight Participant Participant Attribute Comparison Attribute Comparison Attribute Comparison Participant Weight ParticipantWeight Participant Weight Participant Attribute Comparison Attribute Comparison Attribute Comparison Weight ParticipantWeight ParticipantWeight Next TabMain Menu ATTRIBUTE PRIORITIZATION Figure 12. Attribute prioritization.

24 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery Performance Priorities The Alternative Performance Scores tab summarizes the priorities (or weights) for each attri- bute, individual performance ratings, and adjusted performance scores. There are several other tables that are used to process data and configure the various charts summarized on the next tab, Performance of Alternatives. Click on the “Next Tab” button to proceed. Performance of Alternatives The Performance of Alternatives tab includes two charts. The first illustrates the group’s per- formance priorities. The second displays a breakdown of the total performance score for each alternative. Figure 14 shows the performance priorities. Figure 15 shows a comparison of the baseline with the four VE alternative performances. (All charts can be filtered to select active values using the chart options.) Click on the “Next Tab” button to proceed. Prioritize Cost Versus Time The Prioritize Cost versus Time tab allows participants to determine the relative impor- tance of cost and time in making the decision. The facilitator asks each participant to Enrique Hank Peter Reinie Priority Local Operations 0.35 0.30 0.34 0.45 0.36 Environmental Impacts 0.12 0.07 0.10 0.08 0.09 Construction Impacts 0.04 0.04 0.03 0.11 0.06 Maintainability 0.21 0.25 0.13 0.14 0.18 Hydrological Impacts 0.27 0.33 0.40 0.23 0.31 Figure 13. AHP Eigen Matrix. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Local Operations Environmental Impacts Construction Impacts Maintainability Hydrological Impacts Performance Priorities - All Participants Figure 14. Performance priorities chart.

Value Management System tool 25 distribute 100 points between cost and time with more points awarded to the element that is more important. In the Davis Road example, Enrique feels that Cost is significantly more important than Time at this stage of the project and indicates his distribution is 70:30. In contrast, Reinie feels that both cost and time are of equal importance and distributes the points 50:50 (see Figure 16). This tab averages that value for the group at the bottom. If only cost or time is being con- sidered, simply assign 100% to either value. If neither time or nor cost is being considered, the Decision Analysis is complete and the outcome is indicated on the previous tab. Click on the “Next Tab” button to proceed. Normalize Cost and Time The Normalize Cost and Time tab automatically converts the cost and time values of the selected alternatives into normalized ratio values that can be adjusted based on the priorities for cost and time and then added together. For the Davis Road example, the sum of the costs for all alternatives is $287,585,938. To derive the base cost score for each alternative, divide the alternative cost by the total sum to arrive at the normalized value. For the baseline concept, this is 0.205. In other words, the cost of the baseline concept represents 20.5% of the total cost for all alternatives. This base cost score is then multi- plied by the priority (or weight) developed for cost on the previous tab, which was 0.65 (or 65%). The adjusted cost score for the Baseline Concept is 0.133. The same process is used to develop the time scores for each alternative. The total weighted cost and time score for each alternative is shown in the table at the bottom of the tab (see Figure 17). This data is used to calculate the final value indices on the next tab. Click on the “Next Tab” button to proceed. 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00 Baseline Concept VE Alternative 1 VE Alternative 2 VE Alternative 3 VE Alternative 4 Local Operations Environmental Impacts Construction Impacts Maintainability Hydrological Impacts Figure 15. Comparison of the baseline and four VE alternative performances. 70% 80% 60% 50% 30% 20% 40% 50% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Enrique Hank Peter Reinie Cost Time Figure 16. Group prioritization of cost versus time.

26 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery Value Matrix The Value Matrix synthesizes the performance, cost, and time scores for each alternative to derive a value index. The data for each alternative is summarized and depicted in a chart at the bottom of the tab. The chart shows the total value index for each alternative, as well as the change in value of all alternatives relative to the first alternative (in this case, the Baseline Concept). Risk Analysis Per the fifth edition of Project Management Institute’s (PMI’s) A Guide to the Project Manage- ment Body of Knowledge®, project risk is defined as “an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objective such as scope, schedule, cost, or quality.” Risk Management, therefore, involves the management of the various uncer- tainties that face all projects. Project Risk Management includes the following steps: • Risk Planning • Risk Identification • Risk Analysis • Risk Response Planning • Risk Monitoring and Control The RA tools included in the workbook touch on these steps and are designed to help project teams think critically about what risks could happen, their potential impacts, and how the risks will be proactively managed. There are many risk tools in existence today. This workbook attempts to strike a balance between usability and sophistication. Included in this workbook are a risk breakdown structure and risk scales that are customizable; a risk register that considers performance risk in addition to cost and schedule risk; risk tornado charts to graphically summarize project risk data; and a 3.94 4.04 3.94 4.37 4.11 0.0% 2.5% 0.1% 11.0% 4.4% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 3.7 3.8 3.9 4.0 Ba sel ine Co nc ep t VE Al ter na tiv e 1 VE Al ter na tiv e 2 VE Al ter na tiv e 3 VE Al ter na tiv e 4 4.1 4.2 4.3 4.4 4.5 Ch an ge in V al ue R el ati ve to F irs t A lte rn ati ve Va lu e In de x Alternatives Figure 17. Comparison of the values of selected alternatives.

Value Management System tool 27 risk response toolset that will help leverage group creativity in identifying and articulating risk response strategies. Risk Analysis Dashboard The Risk Analysis Dashboard provides information regarding the outcome of related RA activities (see Figure 18). At the top left, the total number of risks are indicated and organized by status. To the right of this, information on the pre-response and post-response risk values is indi- cated. Note that the total value of cost risks represents a simple, cumulative sum of all expected values and does not discriminate based on exclusivity or conditionality. The highest single schedule risk is also identified and does not consider other schedule risks because schedule risks oftentimes run in parallel. This information is for summary purposes only; it is highly recom- mended that reviewers of the risk information peruse the details on the following tabs in this section of the workbook. A tornado chart included at the bottom lists the top 25 project risks from highest to lowest. Note that threats are represented as colored bars to the right of the axis, while opportunities extend to the left of the chart axis. This chart displays the aggregate values for the performance, cost, and schedule impacts of all risks. Total Risks 6 Total Value of Cost Risks: Active Risks 6 Highest Schedule Risk: Dormant Risks 0 Total Value of Cost Risks: Retired Risks 0 Highest Schedule Risk: PRE-RESPONSE RISK VALUES POST-RESPONSE RISK VALUES $6,668,101 $5,252,150 Davis Road Bridge Replacement RISK ANALYSIS DASHBOARD 5 Months 3 Months -0.2 -0.1 0 0.1 0.2 0.3 0.4 0.5 4 - Frontage Rd. Funding 5 - Bikeway Classification 3 - Construction Staging Plan 1 - Differing Soil Conditions 6 - In-Water Work Windows 2 - Nesting Birds Relative Severity Total Risk Ranking - Risk Priority Pre-Mitigated Post-Mitigated Figure 18. Risk Analysis Dashboard.

28 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery Risk Breakdown Structure This tab is designed to allow users to select applicable risk categories that are relevant to their project. Numerous pre-defined categories are included as well as several “user defined” input fields. Simply select “YES” for each category to include it on the Risk Register. Risk Scales The Risk Scales tab allows users to establish cost and schedule impacts for different levels of probability and impact (see Figure 19). Begin populating this tab by entering the project cost and duration (in months) to be considered in the risk model. Note that the project cost should only include construction and right-of-way costs, not support costs. The model is pre-populated with suggested values for very low, low, medium, high, and very high values based on industry best practices. These values may be modified by the user if desired. If they are changed, it is recommended that this be performed by the organization’s risk expert to ensure that the adjusted values align with standard preferences. Adjustments can be made to the probability ranges (which establish the distribution for each probability level); the priority of cost, time, and performance risks in plotting the total risk rankings (for example, if perfor- mance risk is not used, cost and schedule could each be made 50%); and the cost and schedule risk index percentages. In the example, you can see what the risk ranges are for a medium cost impact. A risk at this probability level has a cost impact ranging from $2,839,000 to $4,258,500, with a most likely impact of $3,548,750. This risk model also allows users to consider performance risk. Performance risks represent risks that could affect the long-term quality or performance of the project as it relates to its functions. For example, a project could have a risk related to rebar corrosion that could reduce the expected lifespan of a structure and increase maintenance costs that would not otherwise impact the project’s construction cost or schedule. Performance risk is handled in a qualitative manner and organizations using it may want to better define its meaning for the various levels of performance impact. Risk Register The Risk Register tab is designed to handle up to 125 individual project risks, organized into four distinct sections (see Figure 20). These include the following: • Basic risk information • Qualitative risk assessment • Semi-quantitative risk assessment • Risk Management Plan overview From left to right, the risk information section includes the following: • Risk Number • Risk Category • Threat/Opportunity—A threat is a risk that will have a negative impact, and an opportunity is one that will have a positive impact • Risk Status—A risk may be active, dormant, or retired • Risk Event Name • Risk Description—The SMART format is recommended, which describes the risk as specific, measurable, attributable, relevant, and time bound

Project Cost: Total Duration: Probability Cost Impact Schedule Impact Value L ML H Value L ML H Value L ML H Very Low 0% 10% 20% Very Low -$ 709,750$ 1,419,500$ Very Low 0.0 0.6 1.3 Low 20% 30% 40% Low 1,419,500$ 2,129,250$ 2,839,000$ Low 1.3 1.9 2.5 Medium 40% 50% 60% Medium 2,839,000$ 3,548,750$ 4,258,500$ Medium 2.5 3.1 3.8 High 60% 70% 80% High 4,258,500$ 4,968,250$ 5,678,000$ High 3.8 5.6 7.5 Very High 80% 90% 99% Very High 5,678,000$ 7,097,500$ 8,517,000$ Very High 7.5 10.0 12.5 Risk Type Priority Cost Impact Schedule Impact Performance 33% Very Low 0 2.50% Very Low 0 2.50% Cost 33% Low 2.50% 5% Low 2.50% 5% Schedule 33% Medium 5% 7.50% Medium 5% 7.50% High 7.50% 10% High 7.50% 15% Very High 10% 15% Very High 15% 25% Index (Percent %) Index (Percent %) 56,780,000$ 50.0 Index (Percent %) Index (Dollars $) Index (Months) Figure 19. Risk Scales.

30 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery • Object of Risk—This should succinctly articulate the thing or event about which the team is concerned. For example, a risk that is concerned about geotechnical issues might state “Soil Conditions.” • Risk Trigger—A statement of what condition or event would cause the risk to happen or be symptomatic that the risk had occurred • Type of Risk—Whether the risk will affect performance, cost, or time in any combination The qualitative risk assessment section of this sheet is divided into Pre-Response and Post- Response areas (see Figure 21). The Pre-Response portion should be populated first and includes the following: • Probability—The team should select the likelihood that the risk occurs using the values ascribed to the five risk levels in the Risk Scales tab. For example, a risk with a medium prob- ability has a 50% chance of occurring. • Performance Impact—Select the appropriate level of performance impact (if applicable). The severity level populates automatically based on the probability and impact values selected. • Cost Impact—Select the appropriate level of cost impact (if applicable). The severity level populates automatically based on the probability and impact values selected. Davis Road Bridge Replacement RISK REGISTER Risk # Risk Category Threat / Opportunity Risk Status Risk Event Name S.M.A.R.T. Risk Description (Specific, Measurable, Attributable, Relevant, and Time Bound) Object of Risk Risk Trigger (Symptoms) Type of Risk (Performance, Cost, Schedule) 1 Structures and Foundations Threat Active Differing Soil Conditions Only limited geotechnical investigations have been performed to date. There is a potential for encountering differing ground conditions which would require changes to the foundation design. Soil Conditions Poor soils encountered during future geotechnical survey and/or construction. Performance, Cost, Schedule 2 Environmental Threat Active Nesting Birds There is a high probability that the presence of sensitive nesting birds could cause delays to construction if encountered. Birds Birds encountered during construction. Performance, Cost, Schedule 3 Government Agencies & Stakeholders Threat Active Construction Staging Plan It is possible that there will be public opposition to the temporary closure of Davis Rd. between Reservation Rd. and Foster Rd., thereby requiring Davis Rd. to be kept open. Public Opposition Public opposition to the proposed Traffic Management Plan. Cost, Schedule 4 Government Agencies & Stakeholders Opportunity Active Frontage Rd. Funding There is a potential that funding for the development of the frontage road could be paid for by SIWFT. Funding Review of easement disputes between Monterey County and SIWFT are resolved in the County's favor. Cost 5 Government Agencies & Stakeholders Threat Active Bikeway Classification There is a risk that the roadway cross-section could increase due to change in the bikeway classification. Bikeway Classification TAMC Review requires classficiation change. Performance, Cost, Schedule 6 Environmental Threat Active In-Water Work Windows There is a chance that the current in-water work windows could be further reduced by the State Fish and Game Dept. Work Windows State Fish and Game Dept. reclassifies presence of certain sensitive fish species. Cost, Schedule Risk Information Figure 20. Risk Register.

Value Management System tool 31 • Schedule Impact—Select the appropriate level of schedule impact (if applicable). The severity level populates automatically based on the probability and impact values selected. • Total Severity—This number represents the total combined values for performance, cost, and risk. The Post-Response section should only be populated after the team has identified the risk response strategies that will be implemented to manage the risks. The team should follow the same procedure described above, but adjust the probabilities and impacts based on the antici- pated benefits afforded by the response strategies. The Semi-Quantitative Risk Assessment section is automatically populated based on the information identified in the Qualitative Risk Assessment. A Semi-Quantitative Risk Assess- ment is performed in conjunction with the Qualitative Assessment, thereby simplifying the process while still providing the team with quantitative values. The expected values indicate the most likely cost and schedule impacts based on the qualitative assessment. Like the Qualitative Risk Assessment section, the Semi-Quantitative section is divided into Pre-Response and Post- Response areas. The last section of the Risk Register is used to summarize the team’s Risk Management Plan (see Figure 22). It includes the following information: • Risk Response Strategy—Strategies to manage threats are limited to mitigate, avoid, transfer, and accept, while opportunities are limited to exploit, share, and enhance. • Risk Response Focus—Risks can be managed either internally, externally, or both. • Primary Action Plan—This section outlines what actions are to be taken to manage the risk. If the Risk Response Strategies tabs in this workbook were used, then the information developed within these should be transferred here. • Fallback Action Plan—This section details what fallback actions should be taken if the pri- mary plan does not work. • Action Plan Worksheet Reference—If a detailed action plan was developed, reference the appropriate worksheet number here. • Risk Owner—Identify who is responsible for managing the risk. • Risk Review (Date/Frequency)—Identify how often the risk should be reviewed and the date of the next review or action. Im pa ct Se ve ri ty Im pa ct Se ve ri ty Im pa ct Se ve ri ty Im pa ct Se ve ri ty Im pa ct Se ve ri ty Im pa ct Se ve ri ty High Very Low 0.16 Low 0.32 Low 0.32 0.267 Medium Very Low 0.12 Very Low 0.12 Very Low 0.12 0.120 Very High Very Low 0.2 Very Low 0.2 High 0.8 0.400 Very Low Very Low 0.04 Very Low 0.04 Very Low 0.04 0.040 Qualitative Risk Assessment Pr ob ab ili ty Performance Cost Schedule To ta l S ev er it y Pr ob ab ili ty Performance Cost Schedule To ta l S ev er it y Un-Managed State (Pre-Response) Managed State (Post-Response) Figure 21. Qualitative risk assessment.

32 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery Risk Ranking Charts The information entered into the Risk Register is used to develop four unique risk tornado charts. These include a Total Risk Ranking Chart (which also appears in the dashboard) and individual charts for performance, cost, and schedule. The charts are intended to help project teams communicate risk to decision makers and project stakeholders. Response Strategies—Brainstorming This tab is designed to help project teams leverage VE techniques to develop more robust risk response strategies. The tool transfers information from the Risk Register for the first 50 risks. In the Function section of this worksheet, the team can then brainstorm different risk response strategies by selecting from the verb column and then brainstorming ways to perform the function. In the example, the team is brainstorming various ways to respond to poor soil conditions (see Figure 23). They begin with the verb “accept,” and consider ways to accept the soil conditions. One idea to accomplish this is to maintain the expected value identified for this risk as a reserve amount to pay for the risk if it occurs. Next, they brainstorm ways to mitigate soil conditions. One approach might be to perform additional borings at the bent locations to minimize uncertainty related to subsurface conditions. The brainstorming continues until the team has several strategies to choose from. Next, they perform a quick evaluation of the ideas to determine whether they want to pursue it or not. If desired, specific risk response strategies can be elaborated on within the Risk Register or in the detailed Risk Response Action Plan worksheets. Risk Response Action Plans Twenty individual tabs are included to allow the team to articulate detailed Risk Response Strategies for key risks. The information is similar to what appears in the Risk Register, but more room is provided to expand on strategies and related actions. Risk Response Strategy Risk Response Focus Primary Action Plan Fallback Action Plan See Detailed Action Plan Worksheet #? Risk Owner Risk Review Date/Frequency Mitigate Internal Additional borings should be factored into the geotechnical survey at an additional cost of $50,000. This will reduce the chances of encountering poor soils during construction and thereby reduce the cost and schedule impacts somewhat. Prepare alternative foundation design to utilize if poor soils are encountered to avoid design schedule delays. 1 Monterey County Completion of Geotechnical Survey on 3/1/2017 Mitigate Internal Prepare a separate, advance package to clear and grub the construction area prior to nesting season to minimize the chance of birds nesting in the construction zone. Monterey County 1/5/2017 Accept External The public is currently aware that single stage construction and related road closures are likely. Considering that Davis Rd. is often closed in the winter during seasonal flooding, and that there are other crossings over the Salinas River, this risk should just be accepted. Monterey County 6/1/2017 Risk Management Plan Overview Risk Monitor & Control Figure 22. Risk Management Plan.

Verb Noun Accept Soil Conditions Maintain the EV contingency and incorporate into budget and schedule Mitigate Soil Conditions Perform additional borings at bent locations Avoid Soil Conditions Clear span the floodway to avoid potential poor soils Transfer Soil Conditions Shift project delivery method to Design-Build and have contractor bear the risk Soil Conditions Mitigate Birds Create separate, advance contract for clearing and grubbing Avoid Birds Change NTP date to coincide with pre- nesting season Accept Birds Take the risk that construction is delayed a season Birds Birds Mitigate Public Opposition Develop presentation to frame increasing construction schedule duration vs. temporary closures Mitigate Public Opposition Develop alternative staging plan to respond to the potential need for 2-stage construction Public Opposition Public Opposition Public Opposition 3 Construction StagingPlan Th re at It is possible that there will be public opposition to the temporary closure of Davis Rd. between Reservation Rd. and Foster Rd., thereby requiring Davis Rd. to be kept open. Public Opposition Low $1,064,625 3.00 High $1,490,475 1.31 2 Nesting Birds Th re at There is a high probability that the presence of sensitive nesting birds could cause delays to construction if encountered. Birds 1 Differing SoilConditions Th re at Only limited geotechnical investigations have been performed to date. There is a potential for encountering differing ground conditions which would require changes to the foundation design. Soil Conditions Very High $635,226 5.03 RISK RESPONSE STRATEGIES Team Brainstorming EV Cost EV Schedule Function Ideas Ra tin g Assigned toRiskID Risk Name Risk Type Description Object of Risk Probability Figure 23. Risk response brainstorming and evaluation.

34 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery Constructability Review CR is a formalized process whereby a project is evaluated to identify issues, errors, and omis- sions related to the construction of a project. A common definition of CR, one developed by Washington State Department of Transportation (WSDOT), reads as follows: Constructability is the property of a project in which errors and omissions on the contract plans and special provisions have been minimized and allow the contractor to construct a high-quality project that is biddable, buildable, and maintainable. Many organizations consider CR to be a process performed late in design. While CR should be performed prior to construction, it should also be considered during the earlier stages of project development. CR is both a quality and a risk management process. This activity has been designed to help project teams systematically consider applicable constructability issues at various stages of project development. It uses research performed by the University of Kentucky and from several state DOTs to identify common construc- tability issues. Constructability Review Dashboard The Constructability Review Dashboard provides information on the total number of CR issues; a breakdown of how many issues are (a) unaddressed, (b) in-progress, and (c) resolved; and the number of CR issues that are also risks. A simple pie chart is included to graphically represent the status of CR issues. Constructability Review Checklist This tab is designed to allow users to systematically review a transportation project from many different perspectives. A list of questions has been developed and organized by technical area. The technical areas include the following: • Environmental • Design • Right of Way • Geotechnical and Materials • Surveys • Traffic Management • Schedule • Plans, Specifications, and Estimates (PS&E) • Construction • Utilities • Biddability These questions are designed to stimulate critical thinking and prompt project teams to ensure that they have been adequately answered. If they have not, this will trigger the creation of a CR Issue. Figure 24 shows the CR checklist. It includes the following areas: • Constructability question • Required/Relevant?—The questions included on this checklist should first be screened by the team for relevance. For example, questions related to bridges are not relevant for non-bridge projects. Select “Yes” or “No” to include the question as appropriate. • Suggested Timing for Review—Each question includes yellow shading to indicate when the questions should be reviewed relative to the stage of project development. Some questions

Value Management System tool 35 should be reviewed more than once. Indicate whether the question has been adequately addressed by indicating “Pass” or “Fail.” A “Fail” should result in the creation of a corre- sponding CR Comment. • Last Checked By—Indicate who last checked on the question. • Notes—Indicate any reviewer notes or reference the appropriate CR Comment tab. Organizations may want to edit, delete, or add to these questions. This checklist can be edited freely without fear of damaging the functioning of the workbook. Constructability Review Summary List This worksheet summarizes information from the individual CR Comment tabs. It automati- cally populates the CR Comment No., Issue Category, Severity, Status and whether it should be treated as a risk. The Response Actions should record what is being done followed by the last date checked and person responsible for managing the issue. <35% 65% 95% Is an environmental reevaluation required or needed? YES Have environmental construction windows been identified? YES F. Johnson See CR Comment #1 Are design noise levels affected by minor design changes? NO Have all environmental permit requirements been determined and requests issued? YES Do soundwall designs conform to environmental requirements? NO Are any mitigation monitoring programs established and feasible? YES Do plans and specifications include noise mitigation measures during construction? YES Are all required mitigation measures in the environmental document addressed? YES Are all environmental permit requirements satisfied and permit receipt progressing on schedule? YES Are Environmental Sensitive Areas (ESA) included on design plans? YES Is there a temporary erosion and sedimentation control plan? YES Davis Road Bridge Replacement STANDARD CONSTRUCTABILITY CHECKLIST This checklist includes standard CR issues and requirements. It is not intended to be all-inclusive and/or exhaustive. The yellow shading in the various CR questions indicates recommended reviews for specific design development milestones. 1. First, determine if each CR question is relevant/required for your project. For example, if your project does not include soundwalls, soundwall-related CR questions would not be required or relevant. If they are included, then this question would be relevant and the project would have to conform. 2. At each design development milestone (e.g., 35%, 65%, 95%), a CR review may be performed. If the CR question can be responded to positively, then enter a "1" to indicate that the project has passed this CR question. If it is unclear, or does not address the question, then enter a "0" to indicate the project has not passed this question. 3. Record the name of the individual that performed the last CR check for this item to track reviews. 4. In the "Notes" column, record any issues and refer to specific CR Comment sheets as required. Suggested Timing for Review 0 = Fail 1 = Pass Required/ Relevant? Constructability Review Category Last Checked By Notes, or Reference CR Comment Sheet # Environmental Figure 24. CR checklist.

36 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery Constructability Review Comments There are 50 individual tabs included to capture specific CR comments (see Figure 25). Fields are included to capture all the information relevant to CR issues. The information is self- explanatory. Use the comments section to capture any additional miscellaneous information. Value Engineering VE is defined by SAVE International® as “A systematic process that uses multi-discipline teams to improve project value through the analysis of functions by providing the required performance at the lowest total cost.” The VE body of knowledge, known as the Value Methodology, comprises numerous tools and techniques organized around a phased process called the VE Job Plan. The VE Job Plan includes the following phases or steps: • Pre-Study or Preparation • Information • Function Analysis • Speculation or Creativity • Evaluation • Development • Presentation • Post-Study or Implementation 1 Environmental Yes Open High Fred Johnson (555) 555-5555 fjohnson@dot.com 10/15/2016 Comments: Issue No.: The current in-water work windows may be reduced based on the suspected presence of a threatened species of minnow. Need to coordinate this issue with State Fish and Game Dept. Until it is resolved, this CR issue should be treated as a project risk. EIR/EIS Davis Road Bridge Replacement CONSTRUCTABILITY REVIEW COMMENT Project Document: Date: Reviewer Email: Reviewer Phone: Reviewer Name: Severity: Status: Risk? Issue Category: Figure 25. CR comment.

Value Management System tool 37 It is recommended that project teams engaging in VE activities do so under the guidance of a qualified facilitator. The Value Management System Tool assumes users have a working knowl- edge of VE. For more information on VE, visit the following websites: • SAVE International® at: http://www.value-eng.org/ • Miles Value Foundation at: http://valuefoundation.org/ • AASHTO Technical Committee on VE at: http://design.transportation.org/Pages/Value Engineering.aspx • FHWA Value Engineering Program: https://www.fhwa.dot.gov/ve/ Value Engineering Dashboard The VE Dashboard provides information on the status of VE activities relative to the number of VE alternatives; creative ideas generated; and total potential initial cost, life-cycle, and sched- ule savings. Project Issues This tab is used to capture project issues and any site visit observations made by the project team. The intent is to focus on key project drivers, constraints, and issues. Cost Model This worksheet allows users to create a simple Pareto cost model (see Figure 26). Begin by entering major cost items and their associated costs within the table. Next, sort the costs from highest to lowest using the cost column. Finally, uncheck the “blanks” box to display only popu- lated rows. The information is displayed on the Pareto Chart tab. PARETO COST CHART 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Bridge Structural Section Right-of-W ay Earthwork Contingency Traffic Items Roadway M obilization Roadway Additions M inor Items Landscaping Type “D” Dike Drainage Specialty Items Perm. Erosion Control $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 Pr oj ec t El em en t Co st Th ou sa nd s Project Elements Figure 26. Pareto cost model.

38 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery Function Analysis The concept of “function” is one that is fundamental to VE. A function is composed of two words: a verb and a noun. This two-word abridgment states what something does rather than what it is. For example, the function of a coffee cup might be stated as “contain liquid” (see Fig- ure 27). The focus of function analysis is to identify the various functions of a project’s elements, allocate project resources amongst the functions, and select those functions that have the best opportunity for value improvement. The Function Analysis worksheet provides the simplest technique of function analysis called Random Function Identification. Users begin by listing a project element and then randomly identifying related functions. Once a sufficient number of functions have been identified (usu- ally 1 to 3 functions), enter the next project element and repeat the process. After populating the table with functions, determine the function type using the drop-down menus. Finally, determine whether to include a function in the Cost-Function Matrix. Be sure to select “Yes” or “No” for all functions to ensure the functions populate properly in the Cost-Function Matrix. Select a function only once for inclusion even if it is shared by more than one project element. Function Library On this sheet, numerous transportation project elements have been listed along with associ- ated functions and notes discussing the rationale (see Figure 28). This information helps teams thoroughly discuss project functions; it is not intended to serve as a definitive resource. Teams may use different verb+noun pairs based on the context of their project and their own internal discussions. Cost-Function Matrix The Cost-Function Matrix provides users a tool for allocating project costs among func- tions. The items selected “Yes” for inclusion on the Random Function Identification will be pre-populated along with the project elements and associated costs from the Cost Model. To begin the analysis, it is recommended that the Random Function Identification table be consulted and that each element’s associated functions be highlighted first to assist the team with this exercise. In the example provided, all functions were highlighted in yellow for each project element (i.e., they are not colored automatically) (see Figure 29). The team should then discuss the functions relative to cost and begin making estimates on their total contribution to the cost of the project element. For example, in evaluating the func- tion costs related to the bridge, the team begins by considering which functions are most sig- nificantly driving cost. It is determined that the function “Separate Grades” is the key driver. + NOUN LIQUID VERB CONTAIN Figure 27. Illustration of defining functions.

Value Management System tool 39 Functions Notes Project Need (Higher- Order) Improve Mobility Transportation projects that are focused on improving the efficiency and/or safety of transporting vehicles, bicycles, and pedestrians Improve Livability Transportation projects that are focused on addressing livability impacts (such as noise, visual, etc.) Improve Environment Transportation projects that are focused on addressing environmental impacts (such as water quality, biological impacts, etc.) Improve Sustainability Transportation projects that are focused on improving the longevity and maintainability of the transportation system Project Purpose (Basic) or Design Objectives Improve Operations Transportation project elements designed to improve traffic operations Improve Safety Transportation project elements designed to improve safety for vehicles / bicycles / pedestrians / maintenance Reduce Impacts Transportation project elements designed to eliminate or reduce collateral impacts Improve Maintainability Transportation project elements designed to improve long-term maintainability of the transportation system Improve Reliability Transportation project elements designed to improve the long-term reliability of the transportation system (such as seismic resiliency) Connect Regions Transportation project elements designed to improve the connectivity of the transportation system (such as new routes or bypasses) HOV Lane (New) Incentivize Behavior HOV lanes are designed to encourage ride sharing Convey Traffic Increase Level of Service (LOS) = Volume/Capacity Increase Capacity New capacity added Create Capacity The manner in which the capacity is increased HOV Lane (Existing) Incentivize Behavior Benefit of adding an HOV Lane Convey Traffic Increase Level of Service (LOS) = Volume/Capacity Improve Capacity Increased capacity through widening: vehicles/hour Increase Width The manner in which existing HOV lanes may be improved Reduce Width The manner in which existing lanes may be degraded (i.e., in order to add an extra lane within an existing cross-section) HOV Lane Buffer (New/Existing) Separate Traffic Width of buffer Delineate Traffic Striping Pavement Structural Section Support Load The vehicle loading the pavement is rated for Improve Surface Relates to ride quality Striping Delineate Traffic Lane striping Identify Boundary Shoulder striping/fog lines Multi-Purpose Lane (New) Increase Capacity New capacity added: vehicles/hour Create Capacity The manner in which the capacity is increased Drainage Facilities Convey Runoff Gutters and storm drainage pipes convey runoff Collect Runoff Curbs, gutters, and catch basins collect runoff Store Runoff Detention basins, ditches, and bioswales store runoff Treat Runoff Bioswales and settling basins treat runoff, usually through infiltration Multi-Purpose Lane (Existing) Improve Capacity Increased capacity through widening: vehicles/hour Increase Width The manner in which existing lanes may be improved Reduce Width The manner in which existing lanes may be degraded (i.e., in order to add an extra lane within an existing cross-section) Shoulder (New/Existing) Permit Recovery Shoulders are part of the clear zone and allow space for errant vehicles to recover Create Refuge Shoulders can be used as a vehicle pull-out Maintain Traffic Shoulders of sufficient width so all traffic operations can be maintained Bypass Obstructions Shoulders can be designed to allow for the diversion of traffic Increase Width The manner in which existing shoulders may be improved Reduce Width The manner in which existing shoulders may be degraded (i.e., in order to add an extra lane within an existing cross-section) LIST OF COMMON FUNCTIONS FOR TRANSPORTATION PROJECTS Transportation Project Elements Figure 28. Sample of transportation functions (see MS Excel spreadsheet for full list).

FUNCTION - Active Verb The Cost Model populates the project cost information on this sheet. Please be sure to fill this out to use the Cost-Function Matrix properly. Once the matrix has been populated by cost data and functions, distribute the costs amongst the relevant functions for each project element. Select the functions you want to include on the Function Analysis tab. Se pa ra te Gr ad es M ai nt ai n Co nv ey an ce Co nv ey Tr af fic Co nv ey Bi cy cle s Bu ffe r T ra ffi c Tr an sfe r L oa d Re sis t F or ce s Ac co m m od at e De br is En ha nc e Ae st he tic s Percent of Resource Allocation PROJECT ELEMENT ELEMENT COST TOTAL 11,267,008 3 ,909,400 10 ,250,873 574,279 2 ,048,988 4 ,620,200 4 ,620,200 1 ,421,600 710,800 100% Bridge 35,540,000$ 35,540,000$ 25% 11% 12% 1% 3% 13% 13% 4% 2% 100% Structural Section 6,944,630$ 6,944,630$ 67% 11% 100% Right-of-Way 4,391,405$ 4,391,405$ 100% Earthwork 2,977,510$ 2,977,510$ 80% 100% Contingency 2,021,898$ 2,021,898$ 100% Traffic Items 1,478,000$ 1,478,000$ 100% Roadway Mobilization 673,970$ 673,970$ 67% 11% 11% 100% Roadway Additions 673,966$ 673,966$ 67% 11% 11% 100% Minor Items 641,872$ 641,872$ 67% 11% 11% 100% Landscaping 500,000$ 500,000$ 100% Type "D" Dike 441,300$ 441,300$ 100% Drainage 250,000$ 250,000$ 100% Specialty Items 146,000$ 146,000$ 100% Perm. Erosion Control 100,000$ 100,000$ RESOURCE TOTALS 56,780,551$ 56,780,551$ 11,267,008 3 ,909,400 10 ,250,873 574,279 2 ,048,988 4 ,620,200 4 ,620,200 1 ,421,600 710,800 FUNCTION - PERCENTAGE: 100% 19.84% 6.89% 18.05% 1.01% 3.61% 8.14% 8.14% 2.50% 1.25% Separate Grades 20.0% Maintain Conveyance 6.9% Convey Traffic 18.2% Convey Bicycles 1.0% Buffer Traffic 3.6% Transfer Load 8.2% Resist Forces 8.2% Accommodate Debris 2.5% Enhance Aesthetics 1.3% Accommodate Footprint 7.8% Accommodate Risk 3.6% Capture Runoff 0.4% Convey Runoff 1.6% Mitigate Impacts 1.1% Control Traffic 2.0% Create Refuge 6.9% Stage Construction 6.9% Distribution of Project Cost by Function Figure 29. Cost-Function Matrix and Chart.

Value Management System tool 41 The team looks at the cost estimate and attributes the foundations, abutments, and piers to this function, which amounts to roughly 25% of the total cost. Next, the team splits another 25% of the cost between the functions: “Transfer Load” and “Resist Forces.” It assigns another 12% to “Convey Traffic” for roadway costs and 11% to “Maintain Conveyance” for the additional structural height needed to accommodate floods and associated freeboard. At this point, over 70% of the costs of the bridge have been assigned to four functions. The team makes relative estimates for the remaining functions to complete this cost item. The point of this exercise is not to develop precise estimates, but rather to drive discussions related to which functions most contribute to costs. The worksheet totals up all function-related costs, and a pie chart is produced on the following tab, Cost-Function Chart (see Figure 29). Looking at the chart, there are seven functions con- tributing to over 80% of the total project cost. From a cost standpoint, the team should focus on these for the Creative Phase of the VE Job Plan. Fast Diagram A tab has been provided for teams to create a FAST Diagram, if this technique is pursued. Providing a tutorial on FAST Diagramming is beyond the scope of this tool; however, an example has been provided to demonstrate function logic for the Davis Road Bridge Replace- ment Project. Function Prioritization This tab is designed to help users determine which functions to focus on during the Creative Phase. Functions that were part of the Cost-Function Matrix appear on this sheet along with their associated costs. The team can review the functions relative to their criticality to schedule, performance, and risk, if desired, and then select whether to include the function for creativity focus by selecting “Yes” for those functions. Idea Evaluation This tab is designed to allow teams to brainstorm ideas by function. Nearly 200 ideas can be captured on this table. Once the team has completed team creativity, the ideas can be evaluated by adding key performance attributes and considering how each idea impacts project perfor- mance, cost, time, and risk (see Figure 30). Select the plus sign (+) for ideas that improve a factor, “0” for no change, or a minus sign (-) for a degradation. Record the advantages and disadvan- tages of each idea relative to the team’s analysis. Finally, rate each idea on a simple 1 to 7 scale. Typically, ideas rated 5 or higher should be considered for development. Assign team members to the top-rated ideas for further development. Value Engineering Alternative Development The VE Alt. Summary tab summarizes the information from the individual VE Alternative tabs. Up to 20 VE alternatives can be developed. Each individual VE Alternative tab is organized to include standard information including a summary of the benefits; description of baseline and alternative concepts; advantages and disadvantages of implementing the alternative; a dis- cussion and justification of the alternative; a summary of the performance, schedule, and risk impacts; assumptions and calculations; a location to attach sketches and figures; an initial cost estimate; and a life-cycle cost estimate. Note that the areas shaded in yellow on the worksheet indicate cells in which it is safe to enter information.

+ = Improved 0 = No Change – = Degraded Maintain Conveyance 1 Enlarge channel to increase conveyance under the bridge; dredge the river 0 0 – – Will likely require supplemental EIR/EIS and additional permits. Increase risk of obtaining permits and public outcry. Might require O&M funds to maintain channel. + + – 3 Maintain Conveyance 2 Construct box culverts under roadway in lieu of bridge structure 0 0 – – Greater impacts to floodway and habitat. This alternative would require improvements to the channel that would make it not feasible. + + – 2 Maintain Conveyance 3 Develop a letter of map revision to submit to FEMA to modify the floodplain 0 0 0 0 0 0 0 4 Maintain Conveyance 4 Have farmers remove their unpermitted fills to open up the floodplain again 0 0 + – Requires political action that will be difficult to enforce and likely result in litigation. + + – 3 Tr affi c O pe ra tio n M ai nt ai na bi lit y O pe ra tio na l R el ia bi lit y En vi ro nm en ta l I m pa ct s Davis Road Bridge Replacement IDEA EVALUATION Assigned To Function Idea No. Idea Performance Attributes Legend Co st Sc he du le Select Participant from Drop-Down ListRi sk Ra tin g This action will have to be considered with any alternative (including the baseline design) that modifies the floodway. Improves hydraulic flow and would allow bridge to be shortened in length. 7 = Major Value Improvement 6 = Moderate Value Improvement 5 = Minor Value Improvement 4 = Possible Value Improvement 3 = Design Consideration (No cost data developed) 2 = Moderate Value Degradation 1 = Major Value Degradation Advantages Disadvantages Less bridge and more, less expensive earth work. Improves hydraulic flow. Reduces cost and time Figure 30. Idea Evaluation Matrix.

Value Management System tool 43 Project Delivery Method Selection This section covers the sixth activity included in the Value Management System Tool: Project Delivery Method Selection. The decision tools included for this activity are a synthesis of the quantita- tive AHP tools presented for the Decision Analysis activity, in conjunction with a qualitative delivery method selection framework developed by the Colorado Department of Transportation (CDOT). This toolset considers the following project delivery methods: • Design-Bid-Build (DBB)—The traditional delivery method whereby an agency advertises construction documents that contractors submit bids on with the lowest bidder being awarded the contract. • Design-Build (DB)—A project delivery method in which the agency procures both design and construction services in the same contract from a single, legal entity referred to as the design- builder. The method typically uses Request for Qualifications (RFQs)/Request for Proposals (RFPs) procedures rather than the DBB Invitation for Bids procedures. The design-builder controls the details of the design and is responsible for the cost of any errors or omissions encountered in construction. • Construction Manager/General Contractor (CMGC)—A project delivery method in which the agency contracts separately with a designer and a construction manager. The agency can per- form the design or contract with an engineering firm to provide the design. The agency selects a construction manager to perform construction management services and construction work. The significant characteristic of this delivery method is a contract between an agency and a con- struction manager who will be at risk for the final cost and time of construction. Construction industry/Contractor input into the design development and constructability of complex and innovative projects are the major reasons an agency would select the CMGC method. CDOT identified eight discrete evaluation criteria in its process. These are replicated within this tool and include the following: Five Primary Criteria 1. Project Complexity and Innovation 2. Project Delivery Schedule 3. Project Cost Considerations 4. Level of Design 5. Risk Assessment Three Secondary Criteria 6. Staff Experience/Availability (Agency) 7. Level of Oversight and Control 8. Competition and Contractor Experience Participant evaluation of the three project delivery methods will apply these criteria using the AHP methodology previously outlined in the Decision Analysis activity. CDOT recommends the following approach be used to evaluate project delivery methods: Stage 1 • List Project Attributes • Review Project Goals • Identify Project Constraints • Discuss Project Risks Stage 2 • Assess Primary Evaluation Factors • Perform Risk Assessment for all Methods

44 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery Stage 3 • Assess Secondary Evaluation Factors The following tabs in this section are intended to assist project teams in performing Stages 2 and 3 of the evaluation. Project Delivery Method Selection Dashboard The Project Delivery Method Selection Dashboard provides information on scoring the three project delivery methods (see Figure 31). This includes final rankings and a detailed breakdown of the weighted scores for the eight rating criteria. Select Participants This tab is used to capture the basic information on the participants that will be performing the evaluation. Up to 10 participants may be listed. Rate Performance This worksheet is similar to the one included in the Decision Analysis activity. The eight criteria are included from the CDOT method, including key considerations. The participants should discuss the anticipated level of performance for each delivery method relative to the evaluation criteria while referring to the considerations provided. Use the 0 to 1 scoring scale provided for each criterion (see Figure 32). Repeat the process for each of the evaluation criteria. Design-Bid-Build CMGC Design-Build 8.9 4.0 3.9 Davis Road Bridge Replacement PROJECT DELIVERY METHOD SELECTION DASHBOARD Final Ranking (Score out of 10) 0 1 2 3 4 5 6 7 8 9 10 Design-Bid-Build Construction Manager / General Contractor Design-Build Rating of Project Delivery Methods Project Complexity & Innovation Project Delivery Schedule Project Cost Considerations Level of Design Level of Risk Staff Experience / Availability Level of Oversight and Control Competition & Contractor Experience Figure 31. Project Delivery Method Selection Dashboard.

Figure 32. Project Delivery Method Performance rating and considerations. Project Complexity & Innovation Ideal Very Good Good Fair Poor Unacceptable 1.00 0.80 0.60 0.40 0.20 0.00 The delivery method is an optimal match relative to the degree of complexity and need for innovative and/or unique project solutions. The delivery method is adequate relative to the degree of complexity and need for innovative and/or unique project solutions. The delivery method is a poor match for the project relative to its complexity and need for innovation. Delivery Method Rating Score Design-Bid-Build 1 Construction Manager/General Contractor 0.2 Design-Build 0.2 DELIVERY METHOD PERFORMANCE RATING An assessment of the delivery method's applicability for generating new designs or processes to resolve complex technical issues. Considerations Rating Rationale • Agency's control of design of complex projects • Agency and consultant expertise can select innovation independently of contractor abilities • Opportunities for value engineering studies during design, more time for design solutions • Aids in consistency and maintainability • Full control in selection of design expertise • Complex design can be resolved and competitively bid • Innovations can add cost or time and restrain contractor’s benefits • No contractor input to optimize costs • Limited flexibility for integrated design and construction solutions (limited to constructability) • Difficult to assess construction time and cost due to innovation • Highly innovative process through 3-party collaboration • Allows for agency control of a designer/contractor process for developing innovative solutions • Allows for an independent selection of the best qualified designer and best qualified contractor • VE inherent in process and enhanced constructability • Risk of innovation can be better defined and minimized and allocated • Can take to market for bidding as contingency • Can develop means and methods to the strengths of a single contractor partner throughout preconstruction • Process depends on designer/CM relationship • No contractual relationship between designer/CM • Innovations can add or reduce cost or time • Management of scope additions • Designer and contractor collaborate to optimize means and methods and enhance innovation • Opportunity for innovation through competitiveness of ATC process • Can use best-value procurement to select design-builder with best qualifications • Constructability and VE inherent in process • Early team integration • Requires desired solutions to complex designs to be well defined through technical requirements • Qualitative designs can be difficult to define if not done early in design (example: aesthetics) • Time or cost constraints on designer • Quality assurance for innovative processes can be difficult to define in RFP • Ability to obtain intellectual property through the use of stipends The current project is very simple in concept; uses standard methods and a single stage of construction. Design-bid-build would be the best fit based on the level of project complexity. Due to the simplicity of the project, there is little input a CMGC contractor could provide the project to further simplify it. The simplicity of the project would not afford DB contractors with many opportunities to further simplify the project beyond what the project team has come up with.

46 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery Prioritize Attributes The participants should next prioritize the importance of the eight evaluation criteria. Fol- low the procedures outlined in the Decision Analysis activity. Completing this worksheet will complete the analysis. The remaining tabs in this section show the results. Decision Matrix, Performance Priorities, and Ranking of Decision Methods The final three tabs provide a breakdown of the calculations and results based on the previous team ratings and prioritizations. The Decision Matrix shows the aggregate priorities, or weights, for each of the eight evaluation criteria. The Performance Priorities tab displays the priorities and aggregate ratings for each delivery method. The final tab graphically displays the priorities of the evaluation criteria and the total ratings of the project delivery methods. In the Davis Road example, the Design-Bid-Build method is clearly the most suitable approach for this project based on an assessment of the eight evaluation criteria. Example Project The example project used in this document is summarized in this section for reference purposes. Background The Monterey County Public Works Department is proposing to replace the existing two- lane, low-level Davis Road Bridge (Bridge No. 44C-0068) over the Salinas River with a longer bridge that meets current AASHTO requirements. The existing Davis Road Bridge is located approximately 2 mi south of the City of Salinas in Monterey County. The County is also proposing to widen Davis Road from two lanes to four lanes for approximately 2.1 mi between Blanco Road to the north and Reservation Road to the south. The following alternatives are being considered. One of the alternatives includes a design variation. Preferred Alternative: The Preferred Alternative would replace the existing bridge over the Salinas River with a four-lane, 74′-10″ wide, cast-in-place (CIP) box girder bridge that would include two 12-ft lanes in each direction, an 8-ft painted median, and an 8-ft shoulder on each side that is striped for a Class II bicycle lane. This alternative would widen Davis Road from two lanes to four lanes between Reservation Road and Blanco Road, which is approximately 11,164 ft (2.1 mi). Project Description The Preferred Alternative served as the baseline for the VA Study. Design Variation was the Preferred Alternative considered during the VA Study and included in the VA Alternatives. The No Build and Alternative 2 did not meet the project need and purpose; therefore, they were not included as part of the VA Study. Key project features of the Preferred Alternative include the following: • A 1,700-ft-long Caltrans CIP/PS multi-celled box girder bridge supported on reinforced con- crete bents with an integral bent cap and three 4-ft-diameter flared columns on cast-in-steel- shell (CISS) piles. • The 14-span bridge includes two 80-ft end spans and a 650-ft vertical curve.

Value Management System tool 47 • Widening Davis Road to a four-lane road with an 8-ft median and 8-ft shoulders on both sides of the road, striped as Class II bike lanes. • An all-weather road to accommodate traffic demand through 2040 with improved opera- tional reliability during seasonal flooding with V-ditches and dikes. • Maintaining access control in a multi-modal corridor with agricultural vehicles. • A frontage road at SWITF driveway to Foster Road. • Minimizing right-of-way impacts to farming operations and the environment. • Fewer utility relocations and avoidance of high power transmission lines. Project Need and Purpose The primary purpose of the proposed project is to provide an arterial roadway crossing over the Salinas River that (1) meets current bridge and roadway structural and geometric design standards, (2) provides an all-weather bridge crossing that can accommodate seasonal high flows of the Salinas River, (3) accommodates projected travel demand for the 2040 planning horizon at an acceptable level of service (LOS), and (4) improves traffic safety. Davis Road is reliably passable only from the months of May through December because floodwaters inundate the existing bridge over the Salinas River during the winter and spring months. In addition, the County has identified Davis Road as a critical link in a countywide transportation system that is needed to handle future increases in traffic between the cities of Salinas and Monterey as a result of regional population and employment growth. The exist- ing capacity of Davis Road is insufficient to accommodate the projected high traffic demands through the 2040 planning horizon. Furthermore, the structural and geometric design of the roadway must be updated to improve safety. The accident rate along the Davis Road corridor is greater than the statewide average. Project Drawings Selected sheets from the project drawings and reports are included on the following pages as Figures 33 through 38. Customizable Worksheets The Value Management System Tool has many worksheets that are customizable. Public transportation agencies are encouraged to tailor these worksheets to better align with their inter- nal syntax, standards, and procedures. • Project Information – Project Scope b All User Defined Fields may be edited – Participant Information b Columns may be added to capture additional fields • Stakeholder Analysis – Stakeholder Information b Columns may be added to capture additional fields • Decision Analysis – Performance Ratings b All User Defined Fields may be edited b All attribute definitions may be edited b All rating scale definitions may be edited

48 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery Figure 33. Davis Road Bridge Replacement Project vicinity map.

Value Management System tool 49 Figure 34. Davis Road Bridge Replacement Project location map.

Figure 35. Davis Road Bridge Replacement general bridge plan.

Value Management System tool 51 Figure 36. Davis Road Bridge Replacement: Preferred Alternative (baseline) roadway cross-section. Figure 37. Davis Road Bridge Replacement: Preferred Alternative—Design Variation. • Risk Analysis – Risk Breakdown Structure b All User Defined Fields may be edited – Risk Scales b The “most likely” probability values in cells D9:D13 may be edited b The risk priority values in cells C18:C20 may be edited b The index percentage values in cells H18:I22 may be edited b The index percentage values in cells M18:N22 may be edited b The performance descriptions in cells R9:R13 may be edited

52 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery Figure 38. Davis Road Bridge Replacement Project lane configurations.

Value Management System tool 53 – Risk Action Plans b These worksheets may be edited freely to best support the requirements of the organization • Constructability Review – CR Checklist b The various CR categories and questions can be edited freely, added to, or deleted to best support the requirements of the organization – CR Comments b Rows from “D” down may be edited, added, or deleted to best support the requirements of the organization • Value Engineering – Project Issues b This tab may be freely edited. Additional categories and data may be added to best support the requirements of the organization – Function Library b This worksheet may be edited freely to best support the requirements of the organization – FAST Diagram b This worksheet may be edited freely to best support the requirements of the organization – VE Alternatives b There is some latitude to edit the VE Alternative forms. Care should be given to how these individual worksheets interact with the VE. Alt. Summary tab. Changes to the Initial Cost Estimates and Life-Cycle Cost Estimates should be made with caution. • Project Delivery Method Selection – Rate Performance b The considerations (identified by CDOT) can be edited as necessary to best support the requirements and experience of the organization Implementation and Training It is recommended that public transportation agencies interested in using the Value Manage- ment System Tool consider the following steps: 1. Identify an individual within the organization who has a broad understanding of its project delivery procedures and, ideally, some experience with the techniques presented within the tool. 2. This individual should be tasked with reading NCHRP Research Report 850, watching the training videos, and learning how to apply the tool to representative projects within the organization. 3. Based on the experience of the user, adjustments should be made to the tool to better cus- tomize syntax, decision criteria, definitions, and so forth, to align with those within the organization. 4. Consideration should be given to how the tool should be used and at what points within the project delivery process it should be applied. 5. Basic instructional documents should be drafted by the organization to provide guidance on how and when to use the tool. 6. Once the tool has been customized, the organization should select appropriate individuals within the organization to receive internal training on the use and application of the tool such that it integrates with current project delivery processes. The current videos and NCHRP Research Report 850 can be leveraged for this purpose.

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TRB's National Cooperative Highway Research Program (NCHRP) Research Report 850: Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery examines the state of the art in managing project development and delivery through application of Value Engineering (VE). VE is a systematic process that combines creative and analytical techniques to achieve a common understanding of project requirements. At the project level, the goal of VE is to achieve balance between project needs and resources.

A set of seven training videos, an Excel-based Value Management System Tool, and a sample project application of that tool accompany the report.

Disclaimer - This software is offered as is, without warranty or promise of support of any kind either expressed or implied. Under no circumstance will the National Academy of Sciences, Engineering, and Medicine or the Transportation Research Board (collectively "TRB") be liable for any loss or damage caused by the installation or operation of this product. TRB makes no representation or warranty of any kind, expressed or implied, in fact or in law, including without limitation, the warranty of merchantability or the warranty of fitness for a particular purpose, and shall not in any case be liable for any consequential or special damages.

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