The National Academies

NCHRP 08-93 [Final]

Managing Risk Across the Enterprise: A Guidebook for State Departments of Transportation

  Project Data
Funds: $500,000
Research Agency: Gordon Proctor and Associates
Principal Investigator: Gordon Proctor
Effective Date: 4/17/2014
Completion Date: 7/14/2016

STATUS: The research is complete.  The final report will be published by AASHTO.  Links to the contractor's final deliverables are below.

NCHRP 08-93 Project Overview Presentation (This PowerPoint presentation provides an overview of the research.  It can be downloaded and used as-is or modified as needed.)

The objective of this research is to produce a guidebook for state DOTs that (1) provides a comprehensive framework to identify and manage risk and (2) identifies available tools, and develops new tools where appropriate, that agencies might find useful in identifying and managing risk. The guidebook will (1) assist state DOTs in planning, staffing, implementing and evaluating consistent and effective risk management functions, (2) demonstrate the benefit and strategic value of enterprise risk management to executive and senior staff, and (3) build on the findings of previous research and international scan findings.

The concept of risk generally involves the identification of uncertain events that may occur and the likely consequences that may follow. Risk management includes identifying the various events or circumstances that may prevent or enable an organization to achieve its objectives and to devise ways to mitigate, avoid, transfer, or accept the consequences of uncertain events. Risk management is a common practice in many private sector fields such as banking, insurance, and information technology.

U.S. transportation officials are managing a widening range of risks that stem from changing social, economic, political, and technical dynamics at local, state, national, and global levels. The current federal-aid highway legislation, Moving Ahead for Progress in the 21st Century (MAP-21), has highlighted the need for U.S. transportation agencies to understand and apply the principles of risk management throughout their organizations. Recent research confirms that successful transportation agencies manage risk at the enterprise level, and not within traditional silos. The contractor’s report for NCHRP Project 20-24 (74),
Executive Strategies for Risk Management by State Departments of Transportation,  analyzed information from 43 state DOTs, benchmarked the use of risk management techniques, and identified executive-level strategies that may be useful to DOT leadership in implementing enterprise-wide risk management. The research found that (1) most state DOTs practice risk management in project delivery, (2) only a few state DOTs have begun to apply enterprise risk management broadly across their agencies, and (3) enterprise risk management tools exist and are adding value to those agencies that are using them. A 2011 international scan of transportation agency risk management practices found that leading transportation agencies in Australia, England, Germany, the Netherlands, and Scotland have mature risk management policies and procedures integrated throughout their organizations. Their practices generally follow ISO 31000:2009 Risk Management--Principles and Guidelines,  guidelines that have yet to be implemented in most U.S. transportation organizations. The scan report, Transportation Risk Management: International Practices for Program Development and Project Delivery  identified international agency best practices that demonstrate value by using risk analysis tools combined with asset management practices and performance management. The 2012 NCHRP Web Doc 183 Guide for Managing NEPA-Related and Other Risks in Project Delivery  addressed high-risk issues in project delivery related to expediting NEPA decisionmaking and presents case studies that illustrate the value of risk management approaches. NCHRP Project 8-36, Task 121 Successful Implementation of Enterprise Risk Management in State Transportation Agencies  developed case studies of successful enterprise risk management in state DOTs. The research to date, including research conducted by the International Standards Organization, the Project Management Institute, the Federal Highway Administration, and the state DOTs in California, Minnesota, New York, and Washington, has not produced a guidebook that can aid state DOTs in developing and implementing the enterprise risk management strategies, processes, and tools they need to successfully manage risk.

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