01553492

Component

Project cost estimation can be a challenge in highway design and construction projects due to risks and uncertainties. The initial cost estimates can be prepared in the planning phase and then revised through the programming and design phases of project development. The accuracy of early estimates is often characterized by high levels of uncertainty. Cost overruns in highway design and construction projects are a major problem for state highway agencies. Risk and uncertainty are primary factors that influence cost escalation and schedule delays. Project risk management is a tool to manage cost and time overruns in highway projects. However, this approach considers a project within an organization as an independent component. Although highway projects are often interconnected with other projects or programs, a limited body of research and non-proprietary management tools exist to address the cost uncertainty in highway projects at the program level. This research presents an approach for program risk management and its application in highway design and construction projects. Monte Carlo-based risk models were developed to investigate the impacts of risks and uncertainties on cost estimating at both project and program levels. The model was developed based on a series of interviews with Washington State Department of Transportation (WSDOT). The results of this study indicate that the use of program-based risk management can increase cost certainty and provide the ability to better allocate resources among multiple projects. The proposed approach was evaluated and verified by experienced professionals in WSDOT to determine its distinct advantages and disadvantages when compared to the traditional approach of project risk management.

This paper was sponsored by TRB committee AFH10 Construction Management.

01550057

15-5267

English

15p

2015

Transportation Research Board 94th Annual Meeting

Digital/other

Figures; References; Tables

Construction management; Construction projects; Cost estimating; Cost overruns; Program management; Project management; Risk management; Road construction; State highway departments

Washington State Department of Transportation

Administration and Management; Construction; Finance; Highways; I10: Economics and Administration

Transportation Research Board Annual Meeting 2015 Paper #15-5267

PRP, TRIS, TRB, ATRI

Dec 30 2014 1:46PM