Appendix D-Risk Charters - Risk Assessment and Allocation for Highway Construction Management - International - FHWA

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Risk Assessment and Allocation for Highway Construction Management

Appendix D-Risk Charters

Table 15: Caltrans Risk Management Plan Example Worksheet

Project Risk Management Plan (Example)

Priority (1)	Identification: Status (2)	Identification: ID #(3)	Identification: Date Identified/Project Phase (4)	Identification: Functional Assignment (5)	Identification: Threat/Opportunity Event (6)	Identification: SMART Column (7)	Identification: Risk Trigger (8)	Quantitative Analysis: Type (9)	Quantitative Analysis: Probability (10)	Quantitative Analysis: Impact (11)	Quantitative Analysis: Risk Matrix (12)	Quantitative Analysis: Probability (%) (13) (Optional	Quantitative Analysis: Impact ($ or days) (14) (Optional	Quantitative Analysis: Effect ($ or days) (15) (Optional	Response Strategy: Strategy (16)	Response Strategy: Response Actions including advantages and disadvantages (17)	Response Strategy: Affected WBS Tasks (18)	Monitoring and Control: Responsibility (Task Manager) (19)	Monitoring and Control: Status Interval or Milestone Check (20)	Monitoring and Control: Date, Status and Review Comments (21)
1	Active	3c	8/7/2002: PID	Environmental Analysis	Residents will want a higher soundwall than needed to mitigate noise	The height of the proposed soundwall is 2 meters. Residents who live next to the freeway have expressed a desire for a 5 meter high wall.	Risk is occurring if the Revised Noise Study indicates the additional wall height is warranted.	Schedule Cost	High	High		70%	100,000	70,000	Mitigation	Earmark $70,000 in the 6-page estimate for this risk. Add in an additional 250 hours in WBS 165 for an additional noise study to analyze 5 meter high wall at this location.	WBS 165 Perform Environmental Studies and Prepare Draft Environmental Document (DED)	Joe Envr. Manager	Two Months

Standard 5x5 Risk Matrix

	VL	L	M	H	VH
VH	Green	Yellow	Red	Red	Red
H	Green	Yellow	Red	Red	Red
M	Green	Green	Yellow	Red	Red
L	Green	Green	Yellow	Red	Red
VL	Green	Green	Green	Yellow	Red

2. Example of Risk Register Detail

Table 16: Example of Risk Register Detail (For Hypothetical Eight-Component Light Rail Project)

ID	Risk/Opportunity	Description of Issue	Affected Project Component	Correlation Among Dependent Components	Probability of Risk Occurring	Risk Cost Distribution	Expected Risk Cost¹	Risk Duration Distribution	Expected Value of Delay¹
Risk 1	Permitting and Interagency Agreements	Permits required from approval agencies could be delayed; intergovernmental agreements betweeen grantee and other agencies might not be concluded on schedule.	A. Design & Permitting D. Transit Construction	Positive between Cost and Schedule (i.e. Duration) of Both Components A & D	25% (0.25)	Triangular (see Fig 4-7 "C")	A. $2.2m D. $21.6m	Triangular (see Fig 4-7 "C")	A. 7 mos. D. 4 mos.
Risk 2	FFGA Approval	Grantee documentation of readiness to enter into full funding grant agreement negotiations with FTA might require further revisions, thereby delaying the anticipated FFGA approval date.	B. FFGA Approval		10%	No Significant Effect	No Significant Effect	Discrete (see Fig 4-6 "B") 1 mos.=50% 2 mos.=30% 4 mos.=20%	2 mos.
Risk 3	Station Design	Changes in stations features could occur late in final design and/or during early construction due to community concerns, requiring additional design effort and delaying start of certain construction activities.	C. Station Construction	Positive between Cost and Schedule (Delay=Higher Costs)	30%	Exponential (Fig. 4-7 "F")	$10.0m	Lognormal (Fig. 4-7 "E")	5 mos.
Risk 4	Right-of-Way Cost and Availability	Property costs are undertain and possibly higher than anticipated; the acquisition schedule, including obtaining of construction easements, could be extended.	D. Transit Construction	Positive between Cost and Schedule	50%	Lognormal (Fig. 4-7 "E")	$30.0m	Lognormal (Fig. 4-7 "E")	6 mos.
Risk 5	Utility Relocations	Locations of certain utilities are unknown and their relocation could be required.	D. Transit Construction		20%	Lognormal (Fig. 4-7 "E")	$5.0m	Uniform (Fig. 4-7 "A")	6 mos.
Risk 6	Changing Market Conditions	The construction market is changing, with bid prices on similar work components on other projects varying considerably. Procurement costs for major project components could be higher than estimated.	C. Station Construction D. Transit Construction E. Vehicle Design F. Systems Installation G. Vehicle Manufacture	Positive among Costs of Components C-G	100%	Normal (Figure 4-7 "D")	C. $4.7m D. $5.9m E. $0.7m F. $4.5m G. $4.5m	No Significant Effect	No Significant Effect
Risk 7	Light Rail Vehicles Price	With vehicles likely to be supplied by firms based outside the U.S., prices could fluctuate significantly in response to changing dollar exchange rates.	E. Vehicle Design G. Vehicle Manufacture	Positive between Cost and Schedule of Both Components E & G	10%	Lognormal (Fig. 4-7 "E")	E. $2.0m G. $20.0m	Lognormal (Fig. 4-7 "E")	E. 4 mos. G. 4 mos.
Risk 8	Systems Equipment Integration	Problems installing and testing of complex systems equipment and controls (signals, communications, traction power, fare collection, etc.) could add to costs and delay the revenue operations date.	H. Testing	Positive between Cost and Schedule	50%	Lognormal (Fig. 4-7 "E")	$5.0m	Lognormal (Fig. 4-7 "E")	6 mos.
Risk 9	Contractor Incentive Payment	Construction contract for primary general contractor includes an incentive payment of $10 million if work is completed ahead of grantee's base schedule.	H. Testing²		50%	Single Value	$10.0m	No Significant Effect	No Significant Effect
Risk 10	Grantee Administrative Costs	Should project construction be extended, grantee administrative costs, including costs for construction management and design support during construction, will increase proportionately.	H. Testing²	Directly Proportional to Delay if Project Duration Over 72 Months	100%	Multiplicative³	Months of Delay X $0.5m per Month	No Significant Effect	No Significant Effect

Footnotes

Calculated or simulated expected value for individual risk event; does not account for possible effects of correlations with other components/risks, escalation effects, etc.
Impacts assigned to that project component although the risk does not only apply to Testing component.
Estimated project duration is 80 months. Total Admin Cost Calculated as (80+Months Delay)80 X Base Administrative Cost

This page last modified on 12/10/07

United States Department of Transportation - Federal Highway Administration