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Capital Project Delivery

 


Risk Management

(Pilot Program Use Only)

Summary

Risk Management is a process that enables project sponsors and project team members to make informed decisions on project-related risks. The New Jersey Department of Transportation (NJDOT) has developed a series of guidance documents that help to proactively manage risks over the life of the project.

NJDOT Senior Management has authorized several capital projects to begin a "pilot program" to determine the effectiveness of a formal Risk Management Process. These projects shall utilize the guidance provided on this web page to implement the proposed NJDOT Risk Management Process. The following nine projects shall implement the NJDOT Risk Management Process:

  • Route 38, Mile Post (MP) 0.0-6.1 (Route 130 to County Route 608)
  • Route 1&9 Local and Express, Newark, Pavement
  • Route 21 Ramp B over Delaware, Lackawanna and Western Railroad (DL&WRR)
  • Route 1&9 and Route 46 over Jones Road
  • Route 10 eastbound and westbound from Route 46 to Mt. Pleasant Turnpike
  • Route 94 Black Creek Tributary, Culvert Replacement
  • Route 130 Brooklawn Circles
  • Route 73/Fellowship Road and Route 73/Church Road Study
  • Route 9 Resurfacing, MP 116.75-135.65

Objectives

The process goal is to ensure that project risks are proactively managed over the life of the project. Accomplishing this goal helps to eliminate re-work, minimize design changes and ultimately minimize the cost of the project and the time required to complete the project.

Major Tasks

The Risk Management Process has five key components:

  • Risk Planning: Deciding how to approach, plan and execute the risk management activities for a project.
  • Risk Identification: Determining which risks might affect the project and documenting their characteristics.
  • Risk Analysis: Prioritizing risks for further analysis or action by assessing and combining their probability of occurence and magnitude of impact.
  • Risk Response Planning: Developing options and actions to enhance opportunities and to reduce threats to project objectives.
  • Risk Monitoring and Control: Tracking identified risks, monitoring residual risks, identifying new risks, executing risk response action plans and evaluating their effectiveness throughout the project life cycle.

Products

Risk Register

A Risk Register is a tool that the Project Manager and Designer can use to address and document project risks throughout the project life cycle. It is a living document that includes a comprehensive listing of risks and the manner in which they are being addressed as part of the Risk Management Process.

Major Risks (within the Alternatives Matrix)

Within the Alternatives Matrix, the Major Risks are listed for each alternative so that risks can be considered when selecting the Preliminary Preferred Alternative (PPA). Major Risks specific to each alternative should not be included within the Risk Register. Once the PPA is selected, the Major Risks for the PPA are transferred to the Risk Register to calculate probability and impact.

Utility Risk Assessment Plan

Based on the field inventory, the Designer assesses the project limits for potential high risk utility impacts and notes those impacts on the Utility Risk Assessment Plan. This plan will be utilized to complete the utility section within the Project Fact Sheet.

Quantitative Risk Analysis Worksheet and Report

Quantitative Risk Analysis is a way of numerically estimating the probability that a project will meet its cost and schedule objectives. If approved by the Project Manager and concurred with by the Program Manager, the Designer performs Quantitative Risk Analysis for projects with a total construction cost over $100 million during Concept Development. Quantitative Analysis may be performed on projects under $100 million if necessary as determined by the Project Manager.

Utilizing the Quantitative Risk Analysis Worksheet, the Designer includes each major risk for each alternative. For each risk that is added to the worksheet, the Designer calculates the probability of occurrence and magnitude of schedule and cost impact. For each risk that has a high or very high probability of occurrence and a high or very high magnitude of impact, the Designer performs Quantitative Risk Analysis. Quantitative Risk Analysis results in a more accurate estimation of probability of occurrence and a numerical value in days of schedule impact and dollars of cost impact. The Quantitative Risk Analysis is documented in the Quantitative Risk Analysis Report.

Risk Summary (within the Concept Development Report)

A Risk Summary section is included within the Concept Development Report that documents the risk management efforts conducted during Concept Development.

Risk Summary (within the Preliminary Engineering Report)

A Risk Summary section is included within the Preliminary Engineering Report that documents the risk management efforts conducted during Preliminary Engineering.

Risk Report (within the Final Design Submission)

A Risk Report is included within the Final Design Submission that documents the risk management efforts conducted during Final Design.

Some of the files below are in Portable Document Format (PDF). You will need Adobe Acrobat Reader, which is available free from the state Adobe Access page, to view the files.

Flow Charts

Guidance Documents

Templates

 
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  Department of Transportation
  P.O. Box 600
  Trenton, NJ 08625-0600
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  Last Updated:  November 6, 2013