Risk Distribution in the Construction Phase: Timing, Cost Impact, and Root-Cause Sources of Individual Risk Factors
Risk management is a critical aspect of effective construction project control. In order to investigate the influence of risk management actions on project performance, this study systematically documented all risk events encountered by project teams on 68 construction projects. Whereas much risk management research in the construction industry has analyzed change orders, this study contributes an additional level of detail by studying individual risk events. This additional level of detail is important because a single change order often reflects the combined cost and schedule impacts from multiple risk events; further, many risk events occur during the construction process that do not result in change orders, yet still require substantial risk management effort to be expended by the project team. In order to investigate risk management effectiveness at this level of detail, this study catalogued 1,502 individual risk events that occurred throughout the construction phase from Notice to Proceed to final completion and project close-out. For each risk event, the associated risk management actions of the project team were documented based upon the timing of risk identification actions. The corresponding cost impact of each risk was recorded along with the root-cause source that triggered each risk to occur. Results of the study indicate that unique risk sources have different characteristics related to cost impacts as well as the timing of associated risk management actions.
Performance-Based Contracting for Rest Area Maintaining
To maintain rest area stops in the United States, three methods are used: the In-House method, Method-Based Contracting (MBC), and Performance-Based Contracting (PBC). Unlike the In-House and the MBC methods, the PBC method is an output-based method that uses performance-based specification, which focuses on the output of the work performed. In recent years, the PBC method has become increasingly popular. The purposes of this study are to identify the best practices for rest area maintaining, evaluate existing criteria, save cost with using the PBC method, identify reasons for switching to the PBC method, and identify lessons learned from using the PBC method. A survey was conducted with state departments of transportation personnel to collect in-depth information regarding rest area maintenance. Results show no fewer than 15 states use the PBC method to maintain their rest area stops. Across Montana, the PBC method is used at a small number of locations. Switching to this method has been beneficial since using the PBC method reduces the strain of managing contracts, generates more business in the public sector, increases the level of service, and reduces the costs of maintaining rest area stops. This study also suggested modification of the existing incentive program.