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63 | P a g e 5 Summary A project management plan is not complete if it does not include project risk management. Project risk management is an important tool to manage the broad spectrum of NEPA risks; project managers must use the tool wisely to focus on those risks that are most significant to meeting project objectives. In reviewing the framework for NEPA risk management provided in this guidance, it is clear that implementation of risk management principles requires skill and dedication from DOT project management staff. Risk management requires support at the DOT executive leadership level as well. Executive leaders need to understand the sources of NEPA risk in project management, and the specific strategies they can employ to manage those risks. For internal risks, executive leadership should understand the size of its program compared to financial and technical resources for delivery, and develop processes for the DOT to avoid pursuing projects which are not viable. It is also helpful to have a performance-based approach to program management, to track project delivery, improve processes, and communicate to stakeholders. Staffing and project development issues also play heavily as internal sources of NEPA risks. A variety of staff development strategies can address these risks, including assessment of core competencies and training. Project management can benefit from streamlining and the elimination of silos in management processes. The creation of project management offices helps to foster collaboration among different disciplines, and reduce the impact of staff turnover on project development. Executive leadership should also be mindful of external sources of NEPA risks, especially with resource agencies. While there are a number of tools that executive leaders can pursue, such as memoranda of understanding with resource agencies, partnering agreements, and the like, all such tools seek to foster an atmosphere of collaboration in NEPA process management, so that projects can be developed in a timely manner while resource issues are fully addressed to the letter and spirit of NEPA. Why Should DOT Leadership Adopt Risk Management Practices? Project development is a core function of state DOTs, yet as a discipline project management is too often ignored. DOT executive leaders are understandably preoccupied with myriad other management priorities, such as funding, labor issues, maintenance and constituent relations. With the number of competing priorities vying for a DOT leaderâs attention, why should the DOT leader care about risk management? The answer can be summarized by the major points below: ⢠Transportation project development carries a number of risks, including an ever-expanding portfolio of NEPA-related risks ⢠Project management is a core function of state DOTs, and risk management is inherent in good project management processes ⢠In any given year, DOTs at the local and state levels of government spend more than $1 billion on project development activities, from planning to final design. With this amount of funding in play, risks could easily total hundreds of millions of dollars annually.
64 | P a g e ⢠Risk management offers proven tools to identify and manage project development risks, which can ultimately benefit the public through avoiding o costly fees for redesigning projects because a risk was not identified or adequately managed o schedule delays, which can lead to construction cost escalation, and delay of the public benefits (safety, congestion relief) offered by the project o cost overruns in the construction phase of a project o impacts to the quality of the project, due to design compromises caused by unforeseen risks o damage to the agencyâs credibility and public perception of the agencyâs ability to deliver projects on time and on budget In summary, project risk management is not a new field of study, and the complexities of federal-aid project development beg for risk management solutions. DOT executive leaders are encouraged to embrace risk management as part of their overall program delivery processes, and use the guidance in herein to examine their own programs and processes for risk management opportunities, as part of improving overall service to the public.
