The National Academies Press

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Pages 86-103

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From page 86... ... 86 Risk management is the process of dealing with project uncertainties. An eective risk management process consists of a systematic identication and evaluation of project risks and the development of mitigating procedures for reducing or allocating adverse risk eects. Read the entire page →
From page 87... ... Relationship of Contract Time to Risk Management 87 e timing of risk assessment corresponds to the project development phases. At the planning phase, although project information such as project details and characteristics is limited, it is still benecial to start the risk management process. Read the entire page →
From page 88... ... 88 Systematic Approach for Determining Construction Contract Time: A Guidebook Figure 5-1. Schedule risk management process. Read the entire page →
From page 89... ... Relationship of Contract Time to Risk Management 89 5.1.1 Step 1 -- Risk Identication Schedule risk identication is the process of identifying risks that can adversely aect the project schedule. e overview provided in Figure 5-2 summarizes key aspects of this step. Read the entire page →
From page 90... ... 90 Systematic Approach for Determining Construction Contract Time: A Guidebook e concept of risk breakdown structure (RBS) can be used to list project risks in a hierarchical structure arranged by risk category and subcategory. Read the entire page →
From page 91... ... Relationship of Contract Time to Risk Management 91 5.1.2 Step 2 -- Select the Risk Analysis Method The tools used for the risk analysis may differ depending on the nature and the size of the project. Highway projects may be categorized into two classes: 1. Read the entire page →
From page 92... ... 92 Systematic Approach for Determining Construction Contract Time: A Guidebook Step 3a Qualitative Risk Analysis Required documents and information. Initial risk register. Read the entire page →
From page 93... ... Relationship of Contract Time to Risk Management 93 The qualitative approach to risk analysis is relatively quick, and the risk matrix provides a simple visual rating. In this way, working from the risk register, project participants can quickly develop an overall assessment of the risk level of the project. Read the entire page →
From page 94... ... 94 Systematic Approach for Determining Construction Contract Time: A Guidebook 5.1.4 Step 3b -- Quantitative Risk Analysis A quantitative risk analysis can help the project team gain a better understanding of the likelihood for achieving existing milestones and the effect of individual risk factors on the project schedule. Based on such information, a logical and defensible schedule contingency can be established. Read the entire page →
From page 95... ... Relationship of Contract Time to Risk Management 95 Step 3b Quantitative Risk Analysis Figure 5-6. Sample histogram and cumulative distribution function for a total schedule. Read the entire page →
From page 96... ... 96 Systematic Approach for Determining Construction Contract Time: A Guidebook 5.1.5 Step 4 -- Risk Mitigation and Monitoring The risk mitigation and monitoring process involves preparing a Risk Mitigation Plan (RMP) based on the risk analysis results and then implementing the plan. Read the entire page →
From page 97... ... Relationship of Contract Time to Risk Management 97 5.1.6 Step 5 -- Utilize the Output [of the Risk Analysis] in CTD As mentioned in Chapter 2, the contract completion time that results from a CTD approach is not necessarily the same as the completion time that results from the PDE. Read the entire page →
From page 98... ... larger smaller Schedule Risk Identification Initial Schedule Risk Register Schedule Network Simulation Risk Analysis Workshop Risk Analysis Workshop Project Size/ Complexity Completed Schedule Risk Register Completed Schedule Risk Register Risk Mitigation Workshop Risk Mitigation Plan CTD CTD = Completion of preliminary engineering = Completion of final design Revised Schedule Figure 5-8. Application of risk management output in CTD. Read the entire page →
From page 99... ... Relationship of Contract Time to Risk Management 99 Step 5 Utilize Output in CTD Required documents and information. Risk register or Risk Report. Read the entire page →
From page 100... ... 100 Systematic Approach for Determining Construction Contract Time: A Guidebook Preliminary design RFQ RFP Select Award Final Design Build DB contract time Planning Preliminary risk assessment Full-fledged probabilistic risk assessment CTD Figure 5-10. Timing of risk management for DB projects. Read the entire page →
From page 101... ... Relationship of Contract Time to Risk Management 101 methods. Because the design-builder is the single point of responsibility, project delays caused by ineffective communication among contract parties can be reduced to some extent; however, if a highway agency has not used DB in the past, it is likely that this delivery method can cause delays due to the novelty of the approach, lack of experienced agency personnel, and unfamiliarity with local contractors. Read the entire page →
From page 102... ... 102 Systematic Approach for Determining Construction Contract Time: A Guidebook Figure 5-11. Cumulative density function for total schedule with 50 percent condence level. Read the entire page →
From page 103... ... Relationship of Contract Time to Risk Management 103 It is suggested that identifying schedule risks should start with a listing of the typical risk factors from past similar projects. e identied risks should be documented in a preliminary risk register. Read the entire page →

From page 86...

... 86 Risk management is the process of dealing with project uncertainties. An eective risk management process consists of a systematic identication and evaluation of project risks and the development of mitigating procedures for reducing or allocating adverse risk eects.