NCHRP 08-60 [Final]
Guidebook on Risk Analysis Tools and Management Practices to Control Transportation Project Cost
| Project Data
||University of Colorado - Boulder|
||Keith R. Molenaar|
Identification, analysis, and management of the risk of project-cost escalation are fundamental challenges facing the transportation industry. Recently completed NCHRP Project 8-49, "Procedures for Cost Estimation and Management for Highway Projects During Planning, Programming, and Preconstruction," focused on the issue of cost escalation and developed a guidebook on highway cost-estimation management and tools aimed at achieving greater consistency and accuracy in long-range transportation planning, priority programming, and preconstruction estimates. The scope of NCHRP Project 8-49 called for development of multiple strategies for controlling cost escalation, but did not allow for in-depth treatment of methods and tools necessary to implement a specific strategy for risk management. NCHRP Project 8-49 identified risk analysis and management as primary strategies to help control cost escalation (see Special Note F). Factors that continue to make identification, analysis, and management of risk difficult include
- Inconsistent definition and application of the terms "cost escalation" and "risk" (see Special Note G).
- Inconsistent application of contingency to risk management and cost estimation (see Special Note H).
- Lack of uniformity in methods of documenting and tracking risk within a comprehensive cost-control strategy or program.
- Insufficient procedures for determining timing of risk management within various phases of project development.
- Need for matching appropriate tools to different project scales.
- Policy and political issues.
- Insufficient organizational structure, organizational commitment, performance measurement, and accountability within transportation agencies.
- Regulatory environment.
There is a need for more in-depth research and guidance on the application of risk-related management practices and analysis tools for controlling project costs, especially during planning, priority programming, and preconstruction that can effectively account for project costs from project inception through completion.
The objective of this research is to develop a comprehensive guidebook on risk-related analysis tools and management practices for estimating and controlling transportation project costs. The guidebook must include a plain language toolbox for transportation agencies to use in selecting appropriate strategies, methods, and tools to apply in meeting their cost-estimation and control goals and objectives. This guidebook will be especially applicable to planning, priority programming, and preconstruction phases.
The guidebook was published as NCHRP Report 658 and is available here.
The project research report that contains supplemental information developed during the conduct of the research is available here.