Risk Assessment and Allocation for Effective Project Delivery and - - PowerPoint PPT Presentation

June 27, 2012

Risk Assessment and Allocation for Effective Project Delivery and Management

• Dr. Khalid Bekka

HDR Decision Economics

Informing and Supporting the Decision Making Process

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Agenda

• Accounting for Uncertainty and the Use of Risk

Management

• HDR‘s Risk Management Process
• Impediments and Procurement Traps
• Risk Allocation and Project Delivery Method
• Case Studies:
• Texas DOT- North Tarrant Expressway
• Washington State DOT – SR 520 Bridge Program
• Utah DOT- Mountain View Corridor
• Alaska DOT – Northern Rail Extension
• NYC MTA – Signals Replacement Program
• Open Discussion

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My Background in Risk Management and P3

 Over 20 years of experience in infrastructure economic, financial, and risk assessment;  Led financial risk assessment for more than 30 toll road projects for USDOT and bond insurers, including development of Public Sector Comparator Framework for agencies in Arizona and Florida  Conducted risk analysis for over 200 infrastructure investment in the US and Canada, including bridges, highways, rail, ports, airports, tunnels, water treatment facilities, and convention centers  Prepared reports for US FTA, FHWA, FRA, FAA, DOJ, and DHS that have been submitted to congressional committees, GAO and OMB  Developed and Conducted Risk Management for Mega Programs including Ground Zero in New York City, and Katrina Rebuild Program in New Orleans.

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• Over 40% of all infrastructure projects,

and over 80% of major infrastructure, exceed their budget or schedule;*

• With the financial turmoil, funding

constraints, volatile commodity prices, and policy/regulation changes, conventional planning methods are no longer sufficient;

• Credible, transparent, and

comprehensive processes become critical for effective infrastructure planning; and

• Credibility means that decision-makers

must know the nature and magnitude

• f risks to determine their risk tolerance

so that they make effective decisions.

New Realities and the Need for Risk Assessment

• 45%
• 30%
• 15%

0% 15% 30% 45% 60% 75% $0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200 $220 $240 $260 $280 $300 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Hot rolled bars, plates, and structural shapes 12M Change * Flyvbjerg et al. (2005)

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An Integral Part of Project Management

Project Management Plan Project Communi- cations Project Schedule Cost Control Project Procurement Risk Management Project Staffing (HR) Project QA-QC Project Scope

HDR‘s Risk Management Process

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Integrating Risk Analysis, Value Engineering, and Risk Response Principles

• Investigate
• Functional analysis
• Speculate
• Evaluate
• Develop
• Improve

Performance

• Learn About Project
• Identify Risks
• Strategize
• Qualify and Quantify
• Develop Response
• Anticipate Risk

VE / Risk Response Cost Risk Assessment

Both use a consensus-based team approach

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HDR‘s Risk Management Process

* Project/Program Risk Assessment * Quantification of Cost and Schedule Risks

Step 2: Risk Response

Prioritization / Financial Planning Risk Allocation/ Project Delivery Method Alternatives

Step 3: Risk Analysis on Response Strategies Step 1: Baseline Risk Assessment

Development of Alternative Solutions and Risk Response Strategies Assessment of Threats and Opportunities Related to Response Strategies

Step 4: Tracking, Monitoring, and Control

Continuous Risk Tracking, Monitoring, and Reporting

Decision Support

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Comprehensive Identification of Risks

• Construction schedule risks;
• Third-Part Agreements;
• Environmental Risks;
• Utilities Risks;
• Drainage Risks;
• Traffic Management;
• Market Conditions Risks,
• Procurement Risks;
• Project Management Risks,
• Right of Way Risks;
• Performance Standards; and
• Financial Risks.

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Risk-Adjusted Cost Estimates

BID PRICE 02/07 ($219 M)

Baseline Non-Escalated Baseline Escalated

$150.3 $172.8

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% $135 $155 $175 $195 $215 $235 $255 $275 $295 $315

Total Project Cost ($Millions) Probability of Not Exceeding

$170.9 $186.9 $192.3 $195.9 $199.6 $202.7 $209.3 $206.2 $212.0 $214.9 $217.5 $220.5 $223.3 $226.1 $228.9 $232.7 $236.9 $242.0 $247.7 $255.1 $281.5

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Risk-Adjusted Schedule Projection

Feb-2018 Jan-2019 Mar-2020

Baseline End Date Jun- 2018

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2017 2018 2019 2020 2021 2022 2023 2024

Probability of Not Exceeding

Project Timeline

Project Completion Date

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Risks Prioritization

$0,2 $0,3 $0,3 $0,3 $0,6 $0,9 $0,6 $0,2 $0,9 $1,2 $3,2 $0,2 $0,2 $0,3 $0,3 $0,3 $0,6 $0,9 $0,9 $1,8 $3,2 $0,0 $0,5 $1,0 $1,5 $2,0 $2,5 $3,0 $3,5 Co7b: Interference from other projects (28) Rw4: Objections to Right of Way appraisal (1) Tr1b: False work placement and removal (28) Tr2b: Conflicting lane closures (28) Rw7: Delays in ROW acquisition (1) Rw1b: ROW unable to certify before advertising (1) Ma2b: Other construction projects in region limit supply of labor (28) Rw12: Other Delays in ROW Acquisition (1) Co6: Discovery of unknown utilities during construction (28) Rw17: Utility relocation may not happen in time (22) Expected Increase in Cost Millones

Top Cost Impacts on Cost - Event Costs and Schedule Delay Costs

Schedule Cost (Delay & Escalation) Event Cost

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Risk Response Categories

• Avoidance is a change to the project scope to

eliminate the impact of a risk.

• Transference of a risk to another party who is more

capable at handling the risk (such as the contractor

• r insurance company).
• Mitigation is seeking to lessen the impact of a specific

risk items, which may involve the consumption of additional time and/or money.

• Acceptance is recognition by the project team of a

specific risk and decision to not take action to deal with the risk.

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Risk Analysis on Response Strategies

Mitigation Value

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Adequate and Continuous Reporting

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Financial Planning Support

• The framework integrates risk-

adjusted cost estimation with cash flow modeling

• The process allows for the

assessment of various project prioritization on cash flow and risk exposure

• Risk-Based budgeting

thresholds determined on project by project basis, which depends on project size and level of risk

• The projections can then be

shown for the program as a whole or for individual or a set

• f projects

Impediments and Procurement Traps

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Address/Resolve Regulatory Impediments

• Interoperability
• Conversion of Existing Roads/

Highways

• Violation Processing
• Eminent Domain/Condemnation
• Negotiation after Selection

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Selection Process is Critical

• Specify Minimum Submission Requirements

– Financial and Technical Qualifications – Financial Component – Demonstrate Technical Feasibility

• Specify Evaluation Process
• Balance Need for Confidentiality and Public

Disclosure

• Process for Ensuring Price Reasonableness in

Negotiated Transaction if price is not ―locked in‖ at selection

• Ensure Involvement of Local Stakeholders

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Procurement “Traps”

• Pre-quality Teams
• Low Bid versus Best Value Evaluations
• Design-Bid versus Design-Build and Design-

Build-Operate-Maintain

• Warranties, Maintenance, Long-Term

Operational Arrangement

• How Much Design should DOT Provide?
• Land Acquisition: Advance, Donated,

Shared with Private Partners

• Utility Relocation

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Competition is Critical

• Alternate Technical Concepts
• Innovative Design
• Compensation for Ideas
• Present Value Proposal Cost
• One-on-One Meetings to Discuss Details

Prior to Proposals

• Realistic Time — Value of Money
• Confidentiality

Risk Pricing and Allocation

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Establishing Risk Allocation Policy

Objective

• Allocate individual risk

factors to the party best suited to manage them

• Develop contract

language to effectively manage risks through allocation Benefit

• Understand which

parties will manage each risk

• Improved understanding
• f potential change
• rders
• Minimize cost premiums

for risks from contractors for risk factors best handled by owner

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Risk Allocation Methodology

• Identify risks associated with project in baseline risk

assessment

• Identify mitigation strategies during risk response

step

• Assist in determining the ―ownership‖ of risks based
• n characteristics of the risk

Goal: Optimal Risk Transfer that Maximizes Value for Money

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Criteria For Risk Allocation

Individual Risks should be allocated to:

• The party best able to manage

it: The party that is most capable to predict and prevent the risk.

• The least risk-bearing cost

partner: The risk bearer must be the party that can promptly deal with the risk via existing system and resources

• The party with the most

efficient and effective mechanism: The risk bearer must be the party that can deal with the risk with most economical and effective method

Design ROW Geotechnical

Environmental

Utilities Schedule Construction RISK ALLOCATION ITEM Owner Contractor

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Assigning the Risk Bearer

Key Risk Risk Register Handling Ability Controlling Ability Influence Ability Risk Liability Owner Agent

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Procurement Cost

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Procurement Cost

Risk Allocation Productivity Costs Transactional Costs Risk –Bearing Costs Incentives and Allowances Contractual Organization, Institutional Guaranties Risk Premium for Supporting Risks

Transferring too many risks or not transferring the right risks leads to higher procurement costs.

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Handling Cost ($) Risk Exposure Costs ($) Liability Cost($) Transactional Cost ($ and Time)

Costs under Financing Options

• Risk Expected Value
• Number of Bidders/ Competitive

Premium

• Risk-Bearing Risk
• Insurance and Bonding

Cost Avoidance/Benefits

Comprehensive Assessment for Optimum Strategy

Public Net Present Value ($) Discounting (%) Total Cost Avoidance/ Benefits and Risks ($) Total Costs ($) Private Net Present Value ($) NPV Optimal Risk Transfer Level

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Risk Allocation – Design & Site Risks

Type of Risk Risk

Grantor Concessionaire Shared Detailed Design approvals and consents Working (Construction) Drawings Delay in final approval of detailed design Feasibility Approvals and consents with State responsibility Changes in design and construction standards during the Construction Period    Land acquisition within right-of-way Obtaining consent to use additional land (permanent additional right-of-way) that is Identified prior to commercial close Environmental Water/air/soil pollution – unknown pre-existing Land acquisition within right-of-way Obtaining consent to use additional land Identified after commercial close Obtaining Ministerial or owner consent to use additional land (temporary use of land for construction purposes) Procuring fill sites and other offsite land required Access risks Site Security Cultural/archaeological/ heritage Geotechnical and ground/soil conditions Past mine workings Undisclosed Latent defects (Existing infrastructure)

Allocation Design Risks

 

Site Risks

 

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Risk Allocation – Construction Risks

Type of Risk Risk

Grantor Concessionaire Shared Quality assurance and quality control Achieving Construction Standards and Specifications Fit for purpose manuals, approvals and statutory certificates Cost overrun and delay not caused by a relief or compensation event Delays due to Concessionaire changes Injunctions against construction: due to Concessionaire failure Workplace Health and Safety Construction security (bonding by subcontractors) Sub-contractor insolvency Latent defects (disclosed defects with existing infrastructure) Water/air/soil pollution – known pre-existing or arising from work Defective materials Delays caused by agencies other than State (e.g. utilities) Delays caused by State Delays due to State‘s changes Labour disputes Labour and material availability Project management / integration / delay Time and costs to satisfy commissioning Damage to works, however caused except as excluded Damage/injury to third parties Damage/loss to utilities identified by Grantor Damage/loss to utilities not identified by State Adequacy of insurance Patent infringement Cost associated with works for Railways, Canals etc. Patent infringement Cost associated with works for Railways, Canals etc. Injunctions against construction: due to alignment 

Allocation Construction Risks

  

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Risk Allocation –Performance Risks

Type of Risk Risk

Grantor Concessionaire Shared Labour and material availability Future interchanges or additional lanes Damage to works, however caused, except as excluded Overloaded Vehicles Obtaining and maintaining licenses to comply with regulatory requirements Interface with sub-contractors Change in scope of service specifications by public sector Off road incidents Meeting handback standards Workplace Health and Safety Labour disputes Vandalism Water/air/soil pollution Third party claims and accidents Expansion for traffic accommodation at ramps and interchanges due to traffic growth, or signalization Development Around Project Site Requiring Further Over Bridges or Under Passes or other Demographic Changes Traffic accidents Damage caused by unauthorised tyres e.g. spikes Damage/injury to third parties Increased legal load limits Traffic Management

Allocation Performance Risks

      

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Risk Allocation – Other Risks

Workmen‘s liens Disputes between designer/contractor/professional team Weather Force Majeure during operations Natural disaster, terrorism, war   Intensive or extended event leading to termination Uninsurable risks (throughout the concession) Political Force Majeure 

Revenue Risks

  Incorrect estimates and cost overruns Increased maintenance due to traffic volume Equipment used becomes prematurely obsolescent Actual operating and maintenance costs higher than anticipated  

External Risks

Changes in standards  Base interest rates to Financial Close Interest spread risk to Financial Close Costs of finance on change of requirements Currency fluctuations    Inflation on Construction Costs Inflation on Operation, Maintenance, Rehabilitation Refinancing (if no 2 stage financing)  

Political Risks

Public sector budgeting cycles, changes in law and taxation  

Default Risks

Termination    Change in Ownership of Concessionaire Conflict of Interest Among Shareholders of Concessionaire

Force Majeure Risks O&M Risks Strategic Risks Other Market Risks

     

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Case Study 1: TXDOT Determining Risk Allocation

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NTE Project Overview

• The North Tarrant Express (NTE)

Project runs along IH-820, north

• f Dallas, TX
• The existing highway includes

two general purpose (GP) lanes each direction.

• Through the Base Build and 9

build options, the proposed improvements include three GP lanes in each direction with two managed lanes in each direction

• The NTE is being constructed as

part of a concession project.

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Risk Allocation Approach

• TXDOT used risk management

to identify project risks and allocate between contractor and DOT

• Evaluated various risk

allocation approaches to understand differences in costs and risk between parties

• Analysis recommended that

TXDOT manages environmental and right-of-way risks and concessionaire to manage design, construction and utility risks

TXDOT North Tarrant Expressway

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Base Costs w/ Contingencies: $457 Escalated Base Costs w/ Contingencies: $502

$462 $494 $526 $537 $597 $654 $544 $604 $662 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% $400 $500 $600 $700 $800 $900 Likelihood of Not Exceeding Cost Millions

Escalated Base Costs With Budget Uncertainty (Using Base Schedule) Plus Developer Risk

Risk Allocation Scenarios

• Evaluated two risk allocation

scenarios:

– Design-Build Contract (DB) – Comprehensive Development Agreement (CDA)

• Differences in Risk Allocation:

– DB: developer assumed risks of litigation, schedule delays, design changes – CDA: developer assumed risks to utilities, right of way, unplanned work – Allocation of other risks did not change between scenarios, with Owner retaining environmental and stakeholder risks and developer owning many of the risks to construction

• DB allocation put more risk on

TXDOT

TXDOT North Tarrant Expressway

Base Costs w/ Contingencies: $457 Escalated Base Costs w/ Contingencies: $502

$463 $494 $527 $526 $584 $641 $544 $604 $662 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% $400 $450 $500 $550 $600 $650 $700 $750 $800 Likelihood of Not Exceeding Cost Millions

Escalated Base Costs With Budget Uncertainty (Using Base Schedule) Plus Developer Risk

DB Allocation CDA Allocation

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Case Study 2: SR 520 Bridge Replacement and HOV Program

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SR 520 Bridge Replacement and HOV Program

• The 12.8-mile program area begins at I-5 in Seattle

and extends to SR 202 in Redmond

• The SR 520 Bridge Replacement and HOV

Program will enhance safety by replacing the aging floating bridge and keep the region moving with vital transit and roadway improvements throughout the corridor

• Consists of multiple projects, including:

– Bridge Replacement and HOV Project – Floating Bridge and Landings Project – Eastside Transit and HOV Project – Pontoon Construction Project

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Risk Tracking and Allocation Methodology

• 1. Conduct individual risk assessments on project-by-

project basis

• 2. Establish Risk Management Plan
• 3. Establish Risk Management Program
• 4. Track risks within risk tracking tool
• 5. Evaluate risk allocation scenarios through risk

assessment modeling

• 6. Roll up project risk information to program level
• 7. Provide real time project information for decision

makers, including forecasted budgets, forecasted schedule, key areas of risk, and contingency requirements

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Risk Tracking Tool Facilitates Risk Allocation

• Used by WSDOT as a tool to

proactively manage risk in the delivery of this megaproject

• Integration into project team

meetings creates a culture of risk management

• Visual displays of risk impact

versus risk likelihood demonstrate the risks relative impact to budget and schedule

• Aggregates and reports risk

information for individual Projects and for entire Programs

• The tool allows for the capture

and storage of risk data including risk allocation between

• wner and contractor

WSDOT SR 520 Program

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Case Study 3: UDOT Mountain View Corridor

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Mountain View Corridor

• Located in Salt Lake County, Utah
• Initial construction builds two lanes in

each direction with signalized intersections where MVC crosses local roads

• In the future, as improvements are made

in subsequent construction phases, MVC intersections will be reconfigured as grade-separated interchanges

• At the ultimate build-out, MVC will be a

freeway similar to I-15, extending 35 miles north and south from 1-80 in Salt Lake County to Lehi in Utah County

• Delivered using CMGC delivery method

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Mountain View Corridor Risk Allocation Approach

• Bid Items: Risks best managed by the contractor are allocated as the contractor's

responsibility:

– Included 'yield' in the sense of converting tons of gravel/soil into an area coverage for building the road. – Once the owner and contractor agreed on a yield ratio, it determined total volumes / tons required and then it was up to the contractor to manage

• Price Escalation: risks to price growth uncertainty is shared:

– Clauses in the contract for fuel and asphalt kept the owner from paying a premium on the price. – The contractor would pay the owner if the prices dropped a certain level. The owner paid out when prices exceeded a certain level.

• Provisional Sums: the owner retained risks for identifiable and quantifiable

materials that could be managed as provisional sums.

– These 'sums' are similar to an allowance. – ‗Sums‘ are paid out of the contract amount and thus handled differently than a change order - because they were a known risk.

• Program Contingency: remaining risks are handled through program contingency

– Change order requests that come through are handled from this contingency pool. – This is held in the owner‘s control.

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Risk Allocation for Mountain View Corridor

• Process results in an

efficient risk allocation and an optimal risk transfer that maximizes value for money.

• The analysis resulted in

a mechanism to track risks and manage contingencies.

• The savings led to an

extension of 5 additional miles of roadway

$0 $1 $2 $3 $4 $5 $6 $7 $8 $9 $10 $0 $10 $20 $30 $40 $50 $60 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14

Monthly Contingency Released ($M) Total Contingency ($M) Project Timeline

C1 Released Prov Sums C1 Released Contract Funds C2 Released Prov Sums C2 Released Contract Funds Total Contingency Total Prov Sums Contingency Total Contract Contingency

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Case Study 4: Alaska Railroad Northern Rail Extension

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Northern Rail Extension Overview

• The Alaska Railroad

Corporation (ARRC) is constructing a crossing

• ver the Tanana River in

Salcha

• Include the construction of

3,300 ft bridge across Tanana River and related access roads

• Construct 10,700 ft levee

and protection system for upstream flood protection

• Delivered using CMGC

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Northern Rail Extension Risk Allocation Approach

• Risk management facilitated

discussions between owner and contractor on risk pricing

• Utilized Independent Cost

Estimator (ICE) along with Owner and Contractor estimators to understand how risks are priced

• Specified risk allocation and

contingent items within Guaranteed Maximum Price (GMP) to determine best allocation of risk

$164.9 $170.1 Base Cost: 156.4M

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% $120.0 $140.0 $160.0 $180.0 $200.0 $220.0 $240.0 $260.0

NRE1 30% Design NRE1 60% Design NRE1 60% Interim-Design NRE1 90% Design NRE1A 90% Design - Adjusted NRE1A - GMP-1 Design (Base Scenario) NRE1A - GMP-1 Design (Final) NRE1A - GMP-1 Design (Final)

1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 1 2 3 4 5 1 2 3 RiskAssessment Changes over Different Design Stages Base (30%) - high degree of uncertainty in design, quantities and prices. Base = $180.8M. Change #1 (60%): Realize design efficiencies from alternative analysis: upland levee alignment, modification of revetment size and amount of stone; 165 ft, 4 girder simple span TRB configuration. Base = $168.0M. Change #2 (60% - interim): Include additional construction execution risks from CMGC register. Base = $168.0M. Change #3 (90%): New estimate includes: firm pricing for PMs and subs; effects of levee -TRB sequencing ; addtional $6.9m in contingent items; higher escalation from potentialdelays with CLOMR. Base = 186.8M. Change #4 (90% - Adjusted): Re-scoped project to NRE1A that reduced quantities of materials and project components to bring base cost down to $157.8M. Additional opportunities to reduce pricing on steel and

• riprap. Base = 157.8M

Change #5 (GMP-1 ): Re-priced and scheduled project to account for changes in contracting and delays. Additional risk of delay is included. Higher cost outlook

• n escalation is anticipated. Base = 146.6M.

Change #6 (GMP-1 ): Based on GMP with re-analyzed and allocated risks. Includes additional contractor risks 6

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Case Study 5: MTA NYC Transit: Queens Boulevard Line Interlocking Modernization

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MTA NYC Transit: Queens Boulevard Line Interlocking Modernization

• Initially evaluated

projects as two individual contracts

• Considered risk

mitigation strategy of combining into single contract

• Evaluated both options

through risk assessment to understand impacts

• n overall cost

Contract Description Initial (Separate) Mitigated (Packaged) S-32769 Designing And Furnishing Signal Equipment For 71St- Continental Avenue And Union Turnpike Interlockings Queens Line, IND, Borough Of Queens $99.5 $327.7 S-32754 Installation Of Signal Equipments For 71St- Continental Avenue And Union Turnpike Interlockings Queens Line, IND, Borough Of Queens $257.3 Total $356.9 $327.7

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Risk Analysis Results of Standalone Contracts

• Project Cost at 80th

Percentile:

– S-32769: $106.0 M – S-32754: $282.3 M – Total: $386.2 M

• Key Risks:

– Delays in Award – Contractor coordination – Delays in Design, Manufacturing, Testing & Delivery of Equipment – Additional TA Labor services costs (GOs and work trains)

$102.4 M, 50% $106.0 M, 80% Total Project Cost Base Estimate - Initial:$99.6 M 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% $89.7 $92.2 $94.6 $97.0 $99.5 $101.9 $104.3 $106.8 $109.2 $111.6 $114.0 Probability of NOT Exceeding Probability of Occurrence Cost ($M) S-32769 - Total Project Cost Density Function - Initial S-32769 - Total Project Cost - Initial Total Project Cost Base Estimate - Initial $272.3 M, 50% $282.3 M, 80% Total Project Cost Base Estimate - Initial:$257.3 M 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% $235.0 $242.3 $249.6 $256.9 $264.2 $271.5 $278.8 $286.2 $293.5 $300.8 $308.1 Probability of NOT Exceeding Probability of Occurrence Cost ($M) S-32754 - Total Project Cost Density Function - Initial S-32754 - Total Project Cost - Initial Total Project Cost Base Estimate - Initial

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Risk Analysis Results of Combined Contract

• Reduction in total

project cost at 80th percentile:

– $386.2 M to $356.9 M – Savings of $29.3 M

• Combining contracts

resulted in base cost reductions as well as reduction in coordination and other risks

$374.8 M, 50% $386.2 M, 80% $346.9 M, 50% $356.9 M, 80% Total Project Cost Base Estimate - Initial:$356.9 M Total Project Cost Base Estimate - Mitigated, $327.7 M 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% $308.3 $319.1 $329.9 $340.7 $351.5 $362.3 $373.1 $383.9 $394.7 $405.5 $416.3 Probability of NOT Exceeding Probability of Occurrence Cost ($M) S-32769C -Total Project Cost Density Function - Initial S-32769C -Total Project Cost Density Function - Mitigated S-32769C -Total Project Cost - Initial S-32769C -Total Project Cost - Mitigated Total Project Cost Base Estimate - Initial Total Project Cost Base Estimate - Mitigated

June 27, 2012

Risk Assessment and Allocation for Effective Project Delivery and Management Open Discussion

Informing and Supporting the Decision Making Process