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Title:

Risk-Based Estimating for Capital Projects: Does It Work?

Accession Number:

01857839

Record Type:

Component

Abstract:

The objectives of this paper are to examine the effectiveness of risk-based approaches to capital project cost and schedule estimation. Risk-based approaches are intended to produce more reliable cost and schedule forecasts, enhance risk management, and improve project management and project delivery outcomes. However, limited research has been conducted regarding the true effectiveness of such risk assessment programs.  The impact of process change must be measured to appraise the value differential. Where a high value proposition exists, it is the duty of public servants to disseminate the opportunity to the industry for the good of the public. This paper measures and compares the cost and schedule performance of 28 highway projects completed in Washington state between 2016 and 2019. Results from a group of projects that deployed a formal cost/schedule risk assessment with risk management (referred herein as “CRA”) are compared with a second group that did not.  The data reveals that projects that completed a CRA were more likely to be completed with a total contract cost at or below the engineer’s estimate, experience lower post-award cost and schedule growth, and experience more predictable outcomes than those projects that did not deploy a CRA. Additional observed benefits of a CRA process are also discussed. The authors offer a diverse blend of experience with risk-based estimating programs representing differing perspectives, including an owner public agency with an established program, an owner public agency with a developing program, and a consultant practitioner.

Supplemental Notes:

This paper was sponsored by TRB committee AKC20 Standing Committee on Project Delivery Methods.

Report/Paper Numbers:

TRBAM-22-00624

Language:

English

Authors:

Gabel, Mark
Sujka, Mark
Davis, Zachary W
Keizur, Alan E

Pagination:

18p

Publication Date:

2022

Conference:

Transportation Research Board 101st Annual Meeting

Location: Washington DC, United States
Date: 2022-1-9 to 2022-1-13
Sponsors: Transportation Research Board

Media Type:

Digital/other

Features:

Figures; References; Tables

Geographic Terms:

Washington (State)

Subject Areas:

Construction; Finance; Highways; Planning and Forecasting

Source Data:

Transportation Research Board Annual Meeting 2022 Paper #TRBAM-22-00624

Files:

TRIS, TRB, ATRI

Created Date:

Jul 19 2022 12:23PM