ACECNJ/NJDOT/FHWA 2013 DESIGN SUMMIT
Presentation Team: “Risky Business”
• Definition of Risk • What is Risk Management (RM) • Constructability • Risk reviews relationship • Integration of Risk Management at NJDOT • Constructability & Risk review • Route 202 over Passaic
What is Risk? A risk is defined as a future event, that can be either an opportunity or threat, that could occur and has a direct impact on the success of a program or project Event The things that may happen sometime in the future that will trigger an opportunity or threat
Opportunity Threat Benefit to our ability to deliver Detriment to our ability to the program or project and deliver the program or project achieve an objective and achieve an objective
Five Recognized Steps: 1. Plan for Risk 2. Identify Risk 3. Analyze and Prioritize the Risks 4. Plan and Execute Response Strategies 5. Monitor, Evaluate & Adjust
Product – The Scope Statements will document the extent of Risk Management on each project A failure to plan…is a plan to fail! Identify the context Analyze the Risks Plan and Assess Assess Prioritize Monitor, Plan for Identify Execute Risk Risk Assessed Evaluate Risk Risks Response Probability Impact Risks and Adjust Strategies Communication and Consultation occur at each step
Product – Risk Statements are documented within the Risk Register For each identified Risk, ask the following: • What are the possible risks to the project? • What are possible benefits to the project? • What are the challenges/barriers to the project? Analyze the Risks Plan and Assess Assess Prioritize Monitor, Plan for Identify Execute Risk Risk Assessed Evaluate Risk Risks Response Probability Impact Risks and Adjust Strategies Communication and Consultation occur at each step
Product – Each Risk Statement will be analyzed and documented within the Risk Register What events could affect the project? • Impacts? • Likelihood? Analyze the Risks Plan and Assess Assess Prioritize Monitor, Plan for Identify Execute Risk Risk Assessed Evaluate Risk Risks Response Probability Impact Risks and Adjust Strategies Communication and Consultation occur at each step
Product – Each Risk Statement, once analyzed, will be prioritized within the Risk Register • Use Matrix on previous slide to determine criticality (or lack thereof) of risk statements – relative status • Product – Each Risk Statement, once analyzed, will be prioritized within the Risk Register Analyze the Risks Plan and Assess Assess Prioritize Monitor, Plan for Identify Execute Risk Risk Assessed Evaluate Risk Risks Response Probability Impact Risks and Adjust Strategies Communication and Consultation occur at each step
Product – Response Strategies and Response Plans are documented within the Risk Register For each threat the response strategy is to: • Avoid • Mitigate • Accept • Transfer For each opportunity the response strategy is to: • Exploit • Enhance • Accept • Share Analyze the Risks Plan and Assess Assess Prioritize Monitor, Plan for Identify Execute Risk Risk Assessed Evaluate Risk Risks Response Probability Impact Risks and Adjust Strategies Communication and Consultation occur at each step
Product – Response Strategies and Response Plans are documented within the Risk Register • Monitor status of risk strategies & response plans • Document adjusted risk strategies & response plans • Monitor action plan status performance for lessons learned and best practices Analyze the Risks Plan and Assess Assess Prioritize Monitor, Plan for Identify Execute Risk Risk Assessed Evaluate Risk Risks Response Probability Impact Risks and Adjust Strategies Communication and Consultation occur at each step
Constructability & Risk Relationship
Time-driven Performance Risks • Agencies controlled by funding and political commitment deadlines • Designers judged by performance of deliverables • Construction contracts governed by milestones, performance windows and time-of-the-essence clauses
Transportation Project Special Risk Factors • Cost/Schedule are driven by how something is constructed versus what is constructed • Public in, around and through the construction site • Restricted work windows and work zones • Maintenance and protection of traffic – work zone safety for the public and construction crews
Risk Management Tools & Process • Risk Register • Constructability Reviews • Value Engineering Reviews Can be performed at any stage, concept thru construction!
Risk Constructability Common Elements Multidiscipline Teams: • Architects, Engineers, Construction Managers • Procurement: Contract options, funding, legal • Specialists: Environmental, HAZOPS, Police, etc. • Operations Personnel: Maintenance, plant engineers • Contractors: Means & Methods, MOT/MPT, etc.
Example 1 FDOT – Miami Intermodal Center
Example 1 Combined RM/VE Workshop FDOT MIA-MIC
Example 2 NYSDOT – Work Zone Safety Initiative DOT HQ - Review Region Projects • Tech Design Not Reviewed • Maintenance of Traffic Only • Review Work Zone Layouts • Review Work Windows • Review Traffic Alternatives • Review Work Flows • No Costs Considered
Example 2 NYSDOT – Work Zone Safety Initiative Workshop Teams: • DOT HQ Construction Managers • FHWA Construction Managers • State/Local Police • Contractors • Specialty Consultants – Traffic, IT, etc. Goal to reduce risk by improving worker and public safety.
Example 2 Take-Away Points • Everything involves risk – risk cannot be eliminated, but it can be managed • RM documents (risk register, etc.) are not end products – they are tools to be used throughout the life of a project. They are tools to help manage risk • Value Engineering and Constructability Reviews are processes to help manage risk
Integration of Risk Management at NJDOT Objectives • Identifying risks early = opportunity to manage the risk • Reduction in design changes and scope = cost savings • Quality contract documents = enhanced project success
Current Practice • Project Managers, Designers & SMEs are performing informal project risk management without consistent procedures or practices and without consistent documentation • Project Managers, Designers & SMEs are performing project risk management without coordination of effort • Risks may be identified, but may not actually lead to implementation of response actions
Formal Risk Management • Risk Management will occur from Problem Screening through Construction • Risk Management will be scalable • Coordinated effort • Central and Accessible Repository • Compatible with the Capital Project Delivery process and CPD activities
Formal Risk Management Leverage current best practices: Interactive Communications Design Communications Report (DCR) with Future State: Formal and structured process allowing for opportunity to mitigate threats or embrace opportunities on projects
Benefits • Risks are formally documented and evaluated so the Project Team does not manage by crisis when a risk is realized • Allows for prioritization of high probability and high impact risks • Enhances communication between the Project Team and encourages a robust and diverse exchange of ideas and solutions • Strategy can be tracked and monitored for effectiveness
Next Steps • Risk Management Process Pilot Program • Monitor the Process for Refinement • Implementation with Training
Constructability Review & Risk Management: Case Study Route 202 over Passaic River
W EATHER D ELAYS Risk Rank & ID Risk Statement & Category Risk Analysis Matrix Risk Response Strategy & Response Planning Risk Category Risk Impact Risk Rank Unique ID # Risk Statement Risk Probability Schedule Cost Final Risk Response Risk Response Action Plan Final Risk Owner Action Plan Status Risk Last Score Score Score Strategy Updated Initial Risk Owner Risk May Occur In Schedule Cost Final Result Post-Construction As a result of Weather delays during Have a contingency of 2 days not shown in the We were lucky and there were no 1 1 construction which may occur, which would Construction Construction 5 - Very High 10 - Very High 4 - Moderate 50 20 70 Accept Threat contract documents that will allow for Contractor and NJDOT Plan Implemented 4/9/2013 weather delays. Future jobs can base lead to schedule delays unforeseen issues such as weather delays. this risk off of historical weather data. Define in the specs that the RE will determine if As a result of what can be considered a Although this was included in the spec the project is delayed due to weather. Since it weather delay which may occur, which would and not used, all involved with 1 2 Construction Construction 5 - Very High 10 - Very High 4 - Moderate 50 20 70 Accept Threat is a 24hr schedule, allow for hourly delays with Contractor and NJDOT Plan Implemented 4/9/2013 lead to conflict regarding schedule time construction agreed was the best impacts to working crews. Give additional time extensions approach to weather delays. to allow mob and demob detailed in the spec.
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