Risk Management Design Constru

The essential risk assessment guide for civil engineering, design, and construction Risk management allows construction professionals to identify the risks inherent in all projects, and to provide the tools for evaluating the probabilities and impacts to minimize the risk potential. This book introduces risk as a central pillar of project management and shows how a project manager can be prepared for dealing with uncertainty. Written by experts in the field, Risk Management for Design and Construction uses clear, straightforward terminology to demystify the concepts of project uncertainty and risk. Highlights include:

• Integrated cost and schedule risk analysis
• An introduction to a ready-to-use system of analyzing a project's risks and tools to proactively manage risks
• A methodology that was developed and used by the Washington State Department of Transportation
• Case studies and examples on the proper application of principles
• Information about combining value analysis with risk analysis

> ? JOHN MILTON, PHD, PE
Director of Enterprise Risk Management, Washington State Department of Transportation

PREFACE xi ACKNOWLEDGMENTS xix
CHAPTER 1: WHY AND WHAT IS RISK MANAGEMENT? 1
Introduction 1
What Is an Estimate? 3
What Is Uncertainty? 4
What Is Risk? 4
What Is Risk Management? 4
Why Risk Management? 5
The Limitations of Risk Management 6
Objective of This Book 8
CHAPTER 2: PROJECT COST AND SCHEDULE ESTIMATES 11
Introduction 11
Cost Estimating Methodology 14
Cost Estimating Process 14
Cost Estimating Data 18
Cost Estimating and Project Development Level 18
Estimate Documentation 24
Basis of Estimate 24
Conclusion 25
CHAPTER 3: THE RISK-BASED ESTIMATE 27
RBE-The Process 27
Risk-Based Estimate-How It Works 42
Base Cost and Schedule 43
Risks as Events 63
The Micro-Project 87
Eastside Corridor Program 90
RBE and Estimate Accuracy 100
Conclusions 105
CHAPTER 4: RISK ELICITATION 109
Importance of Elicitation for Project Risk Management 109
Elicitation and Biases 111
Risk and Base Variability 121
Risk Conditionality 124
Summary 146
CHAPTER 5: RISK MANAGEMENT 149
Introduction 149
Risk Response Planning 153
Value Engineering and Risk Management 157
Risk Monitoring and Control 164
Summary 168
CHAPTER 6: RISK-BASED ESTIMATE SELF-MODELING SPREADSHEET 169
Overview 169
Model Accuracy 172
RBES-Cost and Schedule Data Input and Output 174
Risk Conditionality and RBES 183
Model Outputs 198
Risk Management 200
Critical Issues 207
Tutorials/Case Studies 208
Summary 229
CHAPTER 7: RISK-BASED ESTIMATE WORKSHOP 231
Introduction 231
Preworkshop Activities 234
Conditioning Workshop Par ticipants 236
Workshop Objectives 237
Risk Identification Process 237
Postworkshop Activities 244
Everyone Has Duties 245
Helpful Hints 249
Sample Questions to Ask 249
INDEX 253