Monday, September 19, 2011

Managing Risk in Public Works

Any discussion of risk management in public works project delivery must consider the primary causes of project failure. In a landmark study, sponsored by AASHTO, which looked at project delivery history of over 26,000 project delivered over a five-year period by 20 state DOTs identified the following common causes:

• Environmental permitting issues

• Inability to get utilities relocated (especially if a railroad is involved)

• Inability to get rights of way

• Political/public opposition to the project

• Underground surprises

All five of these causes can be managed, particularly if they are recognized early in the project delivery process. The key here is to initiate the process early, monitor progress regularly and take aggressive corrective action when appropriate.

• Environmental. There is a prescribed process for complying with the environmental permitting process. Although broadly based on the NEPA process, the various Corps Districts have developed their own implementing processes and consequently, timelines. Establishing and maintaining liaison with the local Corps District office can determine the processes and timelines.

• Utility coordination relocation. Utility companies will, of course, be responsible for the relocation. These companies, often quasi-public, are typically understaffed, have their own capital program and relocation for a public project is simply a distraction. Early identification of utilities and proactive interaction with utility companies can help smooth the process. Railroads are particularly problematic. Across all of North America railroad permitting is a common challenge. Although the railroads have a process for working with public agencies, these same agencies regardless of whether they are state or local consistently report that railroad coordination takes inordinate time, costs excessively and remains a challenge. If a project requires coordination with a railroad, allow substantial extra time and budget.

• Rights of way. Acquisition of rights of way for public projects must, by law, follow an established, prescribed process. Much of the process has timelines attached to it that cannot be shortened. Again, recognizing and respecting the process and understanding the time that right of way acquisition takes can help prevent unanticipated delays.

• Political/public acceptance. A fundamental truth about political and public acceptance is that it is subject to change. A project that is needed and even clamored for can suddenly fall from public acceptance. Thus a proactive outreach program, encompassing both public and political interests, is essential. Be careful with timing, any public outreach occurring during election season can, and probably will, become a campaign issue. This is not a comfortable place to be!

• Underground surprises. If a project requires digging a hole, prepare for a surprise. Anything from uncovering an archeological site, finding contaminated soil, unknown utilities or unsuitable soil conditions can be found. Expect it! Remember, it’s cheaper and easier to find these conditions before construction begins than later with the backhoe. The fundamental rule here is “Do not short change the underground investigation even if you think you know what’s there.”

These risks have much in common— they involve coordination and the cooperation with other individuals and agencies unmotivated by the mission to build the project. Thus common rules can be followed. Start early, allow time, respect the processes of the other agency, provide for a contingency in both schedule and budget and don’t shortchange the underground investigation.

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