Contingency Factors to Account for Risk in Early Construction Cost Estimates for Transportation Infrastructure Projects (2022) / Chapter Skim
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43 Implementing a tracking and monitoring method is necessary in order to understand the performance of construction contingencies over time. A particular type of risk and its associated contingency may retire frequently or early with managerial actions or minor design adjustments.
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44 Contingency Factors to Account for Risk in Early Construction Cost Estimates for Transportation Infrastructure Projects in which milestone meetings need to be held during the design phase are when preliminary, intermediate, and PS&E designs are completed. In terms of design development level, milestone workshops are held at 30%, 60%, and 90% of design completion (see Figure 20)
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Guidelines for Tracking and Monitoring Construction Contingencies 45 Risk analysis -- Risk analysis evaluates the identified risks' impacts and probability and prioritizes these risks for further analysis or mitigation. Once risks are identified, they can be converted into the probability of occurrence and their consequences should they transpire.
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Before risk response After risk response Before risk response After risk response Before risk response After risk response Before risk response After risk response R01 359,833 317,500 304,800 296,333 254,000 254,000 190,500 169,333 R02 123,000 112,067 102,500 102,500 88,833 82,000 65,600 61,500 R03 122,542 116,775 111,008 100,917 89,383 86,500 74,967 69,200 R04 123,750 116,875 104,500 96,250 85,250 82,500 70,125 59,125 R05 103,133 92,213 84,933 80,080 72,800 72,800 60,667 50,960 R06 210,750 187,333 175,625 168,600 152,208 140,500 124,108 117,083 R07 84,858 79,867 71,880 69,883 64,892 57,903 50,915 47,920 R08 30,000 30,000 28,800 26,000 24,000 23,200 22,000 20,000 R09 20,000 20,000 20,000 18,800 16,000 14,800 14,000 12,800 R10 24,000 22,000 20,000 18,000 16,000 14,800 14,000 12,800 R11 19,200 18,000 17,200 16,000 16,000 14,000 12,000 12,000 R12 20,800 20,000 18,000 16,000 14,800 14,000 12,800 12,000 9,000 8,000 Actual paid amounts 2,501 8,000 12,000 11,000 10,000 150,000 20,000 50,000 200,000 10,000 Construction contingency monitoring and tracking Scoping 30% design 60% design 90% design End of construction 0 200000 400000 600000 800000 1000000 1200000 1400000 Before response After response Before response After response Before response After response Before response After response Actual paid amounts Scoping 30% design 60% design 90% design End of construction R01 R02 R03 R04 R05 R06 R07 R08 R09 R10 R11 R12 Figure 21. Example of visualized changes of risk identification and impact quantification.
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Guidelines for Tracking and Monitoring Construction Contingencies 47 The metrics in Table 15 and Table 16 are also suggested as part of construction contingency tracking and monitoring efforts (see Table 15 and Table 16) for consistent evaluation.
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48 Contingency Factors to Account for Risk in Early Construction Cost Estimates for Transportation Infrastructure Projects This section provides holistic guidelines on a working feedback loop that can act as a system for the continuous improvement of construction contingency estimating. Figure 22 graphically represents the main steps required to develop a feedback loop.
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Guidelines for Tracking and Monitoring Construction Contingencies 49 highway agencies can recognize and determine the data that are necessary for construction contingency estimating. The dispersion of stored data due to the involvement of multiple stakeholders also requires a database that can integrate different types of data with a predetermined data structure.
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50 Contingency Factors to Account for Risk in Early Construction Cost Estimates for Transportation Infrastructure Projects Step 3: Analyze The main purpose of this step is to conduct an in-depth analysis that focuses on why contingency errors happened. This step requires identifying root causes of estimating errors and investigating the relationship between the identified root causes and project-specific characteristics.
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