Risk Assessment and Allocation for Highway Construction Management

Risk Management Matrix - High Probability, High Impact

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Figure 21. Chart of Innovative Contracting Approaches and the methods of risk allocation that can be used by each:

• Project Delivery Approaches:
  • Indefinite quantity/indefinite delivery construction manager at risk
  • Design-build
  • Design-build-warranty
  • Design-build-operate-maintain (DBOM)
  • Design-build-operate-maintain-finance (DBOM-F)
  • Performance-based total asset management contracts
• Procurement Approaches
  • Bid-averaging method (BAM)
  • Alternative bids/designs
  • Request for proposals
  • Cost plus time (A + B)
  • Multiparameter bidding (A + B + Q)
  • Best-value
• Contract Payment Approaches
  • Disincentive or penalty contracts
  • Incentive contracts
  • Incentive/disincentive contracts
  • Lane rental contracts
  • Active management payment mechanism
  • No-excuse bonus contracts
  • Lump-sum contracts

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