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The Second S T R A T E G I C H I G H W A Y R E S E A R C H P R O G R A M TRANSPORTATION RESEARCH BOARD WASHINGTON, D.C. 2015 www.TRB.org REPORT S2-R09-RW-1 Developing the âGuide for the Process of Managing Risk on Rapid Renewal Projectsâ William RobeRds and TRavis mcGRaTh Golder Associates Inc. with KeiTh molenaaR University of Colorado at Boulder michael loulaKis Capital Project Strategies, LLC Ted FeRRaGuT TDC Partners, Ltd.
Subject Areas Construction Highways
The Second Strategic Highway Research Program Americaâs highway system is critical to meeting the mobility and economic needs of local communities, regions, and the nation. Developments in research and technologyâsuch as advanced materials, communications technology, new data collection tech- nologies, and human factors scienceâoffer a new opportunity to improve the safety and reliability of this important national resource. Breakthrough resolution of significant transportation problems, however, requires concentrated resources over a short time frame. Reflecting this need, the second Strategic Highway Research Program (SHRP 2) has an intense, large-scale focus, integrates multiple fields of research and technology, and is fundamentally different from the broad, mission-oriented, discipline-based research programs that have been the mainstay of the highway research industry for half a century. The need for SHRP 2 was identified in TRB Special Report 260: Strategic Highway Research: Saving Lives, Reducing Congestion, Improving Quality of Life, published in 2001 and based on a study sponsored by Congress through the Transportation Equity Act for the 21st Century (TEA-21). SHRP 2, modeled after the first Strategic Highway Research Program, is a focused, time- constrained, management-driven program designed to com- plement existing highway research programs. SHRP 2 focuses on applied research in four areas: Safety, to prevent or reduce the severity of highway crashes by understanding driver behavior; Renewal, to address the aging infrastructure through rapid design and construction methods that cause minimal disruptions and produce lasting facilities; Reliability, to reduce congestion through incident reduction, management, response, and mitigation; and Capacity, to integrate mobility, economic, environmental, and community needs in the planning and designing of new trans- portation capacity. SHRP 2 was authorized in August 2005 as part of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). The program is managed by the Transportation Research Board (TRB) on behalf of the National Research Council (NRC). SHRP 2 is conducted under a memo- randum of understanding among the American Association of State Highway and Transportation Officials (AASHTO), the Federal Highway Administration (FHWA), and the National Academy of Sciences, parent organization of TRB and NRC. The program provides for competitive, merit-based selection of research contractors; independent research project oversight; and dissemination of research results. SHRP 2 Reports Available by subscription and through the TRB online bookstore: www.mytrb.org/store Contact the TRB Business Office: 202-334-3213 More information about SHRP 2: www.TRB.org/SHRP2 SHRP 2 Report S2-R09-RW-1 ISBN: 978-0-309-27430-2 © 2015 National Academy of Sciences. All rights reserved. Copyright Information Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copy- right to any previously published or copyrighted material used herein. The second Strategic Highway Research Program grants permission to repro- duce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, or FHWA endorsement of a particular prod- uct, method, or practice. It is expected that those reproducing material in this document for educational and not-for-profit purposes will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from SHRP 2. Note: SHRP 2 report numbers convey the program, focus area, project number, and publication format. Report numbers ending in âwâ are published as web documents only. Notice The project that is the subject of this report was a part of the second Strategic Highway Research Program, conducted by the Transportation Research Board with the approval of the Governing Board of the National Research Council. The members of the technical committee selected to monitor this project and review this report were chosen for their special competencies and with regard for appropriate balance. The report was reviewed by the technical committee and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the Governing Board of the National Research Council. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board, the National Research Council, or the program sponsors. The Transportation Research Board of the National Academies, the National Research Council, and the sponsors of the second Strategic Highway Research Program do not endorse products or manufacturers. Trade or manufacturersâ names appear herein solely because they are considered essential to the object of the report.
The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. On the authority of the charter granted to it by Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achieve- ments of engineers. Dr. C. D. (Dan) Mote, Jr., is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, on its own initiative, to identify issues of medical care, research, and education. Dr. Victor J. Dzau is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academyâs purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. C. D. (Dan) Mote, Jr., are chair and vice chair, respectively, of the National Research Council. The Transportation Research Board is one of six major divisions of the National Research Council. The mission of the Transportation Research Board is to provide leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisci- plinary, and multimodal. The Boardâs varied activities annually engage about 7,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transporta- tion, and other organizations and individuals interested in the development of transportation. www.TRB.org www.national-academies.org
ACKNOWLEDGMENTS This work was sponsored by the Federal Highway Administration in cooperation with the American Asso- ciation of State Highway and Transportation Officials. It was conducted in the second Strategic Highway Research Program (SHRP 2), which is administered by the Transportation Research Board of the National Academies. This project was managed by James W. Bryant, Jr., Senior Program Officer for SHRP 2 Renewal, and Andy Horosko, Special Consultant for SHRP 2 Renewal. The research team consisted of William Roberds and Travis McGrath of Golder Associates Inc. and Keith Molenaar of the University of Colorado at Boulder as co-principal investigators, supported by Michael Loulakis and Ted Ferragut. They thank all those transportation professionals who provided their expertise and time to this research. The team particularly thanks the following state departments of trans- portation personnel (listed in alphabetical order) for their participation in developing the guide and imple- mentation materials: Brian Blanchard, Florida; Thomas Bohuslav, Texas; Dan DâAngelo, New York State; Steven DeWitt, North Carolina Turnpike Authority; Fred Doehring, Utah; Pat Friesen, Colorado; Mark Gabel, Washington State; Mike Ginnaty, Minnesota; Nabeel Khwaja, Texas; Thomas Pelnik, Virginia; and Ken Solak, California. SHRP 2 STAFF Ann M. Brach, Director Stephen J. Andrle, Deputy Director Neil J. Pedersen, Deputy Director, Implementation and Communications Cynthia Allen, Editor Kenneth Campbell, Chief Program Officer, Safety JoAnn Coleman, Senior Program Assistant, Capacity and Reliability Eduardo Cusicanqui, Financial Officer Richard Deering, Special Consultant, Safety Data Phase 1 Planning Shantia Douglas, Senior Financial Assistant Charles Fay, Senior Program Officer, Safety Carol Ford, Senior Program Assistant, Renewal and Safety James Hedlund, Special Consultant, Safety Coordination Alyssa Hernandez, Reports Coordinator Ralph Hessian, Special Consultant, Capacity and Reliability Andy Horosko, Special Consultant, Safety Field Data Collection William Hyman, Senior Program Officer, Reliability Linda Mason, Communications Officer David Plazak, Senior Program Officer, Capacity and Reliability Rachel Taylor, Senior Editorial Assistant Dean Trackman, Managing Editor Connie Woldu, Administrative Coordinator
In recent years, risk management has become an area of emphasis for transportation agen- cies. Project risks must be managed regardless of how they are allocated between the con- tractor and the transportation agency. Transportation agencies continue to seek a balanced approach to risk allocation because, generally speaking, increased risks to the contractor will be reflected in increased bid prices. The incorrect allocation of risks can also lead to project delays and increased costs. Agencies are moving toward the use of innovative contracting approaches and accelerated construction techniques to complete projects more rapidly. Although guidance exists and is being developed for managing risks on transportation projects, this guidance has generally not included consideration of the unique features of rapid renewal projects, which are the ones that use accelerated project delivery. Several state transportation agencies have been exposed to the formal risk management required by the Federal Highway Administration on infrastructure projects that exceed a total estimated cost of $500 million. Few transportation agencies use formalized risk assess- ment and management programs that are not associated with âmajor projects.â This report and the associated guide and supporting products provide information and tools that transportation agencies can use to apply risk management principles systemati- cally to their projects. They are specifically useful for projects that are below the $500 million threshold for major projects. The primary objectives of SHRP 2 Renewal Project R09 were to address the general lack of understanding of risk and risk management options associated with the unique aspects of rapid renewal projects and to develop practical guidance and materials for the application of risk management methods to the rapid renewal project development process in a manner consistent with state transportation agency business practices. The products developed as part of this project include (1) a comprehensive guide, with checklists and an example application, and (2) associated implementation materials for conducting risk management on nonmajor rapid renewal projects, including a presenta- tion introducing the risk management process and a Microsoft Excel template (with userâs guide) for both documenting the process and conducting the necessary analyses. The report, guide, and training materials provide the state of the practice for risk man- agement on rapid renewal projects, as well as a detailed process of risk identification and mitigation strategies. The materials will be useful to state departments of transportation, municipal agencies, and consultants working on projects that involve accelerated project delivery and will make the risk management process more accessible for use as a standard project solution. F O R EWO R D James W. Bryant, Jr., PhD, PE, SHRP 2 Senior Program Officer, Renewal
C O N T E N T S 1 Executive Summary 3 CHAPTER 1 Background 3 Problem Statement from Request for Proposal 3 Background 4 Research Objectives 5 Research Approach 6 CHAPTER 2 Findings and Applications 6 Overview 6 Task 1: Develop a Work Plan 13 Task 2: Develop a Draft Guide and Implementation Materials 19 Task 3: Conduct Pilot Workshops 22 Task 4: Finalize Guide and Implementation Materials 22 Task 5: Manage the Study 23 CHAPTER 3 Conclusions and Suggested Additional Research 23 Conclusions 23 Suggested Additional Research 25 References 26 Appendix A. Annotated Bibliography and Agency Contact List 34 Appendix B. Study Management 35 Appendix C. Gap Analysis 47 Appendix D. Other Research Activities and Results 50 Appendix E. Pilot Workshops 61 Appendix F. Recommendations for Future Work