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PREFACE xi <p>ACKNOWLEDGMENTS xix</p> <p><b>CHAPTER 1: WHY AND WHAT IS RISK MANAGEMENT? 1</b></p> <p>Introduction 1</p> <p>What Is an Estimate? 3</p> <p>What Is Uncertainty? 4</p> <p>What Is Risk? 4</p> <p>What Is Risk Management? 4</p> <p>Why Risk Management? 5</p> <p>The Limitations of Risk Management 6</p> <p>Objective of This Book 8</p> <p><b>CHAPTER 2: PROJECT COST AND SCHEDULE ESTIMATES 11</b></p> <p>Introduction 11</p> <p>Cost Estimating Methodology 14</p> <p>Cost Estimating Process 14</p> <p>Cost Estimating Data 18</p> <p>Cost Estimating and Project Development Level 18</p> <p>Estimate Documentation 24</p> <p>Basis of Estimate 24</p> <p>Conclusion 25</p> <p><b>CHAPTER 3: THE RISK-BASED ESTIMATE 27</b></p> <p>RBE—The Process 27</p> <p>Risk-Based Estimate—How It Works 42</p> <p>Base Cost and Schedule 43</p> <p>Risks as Events 63</p> <p>The Micro-Project 87</p> <p>Eastside Corridor Program 90</p> <p>RBE and Estimate Accuracy 100</p> <p>Conclusions 105</p> <p><b>CHAPTER 4: RISK ELICITATION 109</b></p> <p>Importance of Elicitation for Project Risk Management 109</p> <p>Elicitation and Biases 111</p> <p>Risk and Base Variability 121</p> <p>Risk Conditionality 124</p> <p>Summary 146</p> <p><b>CHAPTER 5: RISK MANAGEMENT 149</b></p> <p>Introduction 149</p> <p>Risk Response Planning 153</p> <p>Value Engineering and Risk Management 157</p> <p>Risk Monitoring and Control 164</p> <p>Summary 168</p> <p><b>CHAPTER 6: RISK-BASED ESTIMATE SELF-MODELING SPREADSHEET 169</b></p> <p>Overview 169</p> <p>Model Accuracy 172</p> <p>RBES—Cost and Schedule Data Input and Output 174</p> <p>Risk Conditionality and RBES 183</p> <p>Model Outputs 198</p> <p>Risk Management 200</p> <p>Critical Issues 207</p> <p>Tutorials/Case Studies 208</p> <p>Summary 229</p> <p><b>CHAPTER 7: RISK-BASED ESTIMATE WORKSHOP 231</b></p> <p>Introduction 231</p> <p>Preworkshop Activities 234</p> <p>Conditioning Workshop Par ticipants 236</p> <p>Workshop Objectives 237</p> <p>Risk Identification Process 237</p> <p>Postworkshop Activities 244</p> <p>Everyone Has Duties 245</p> <p>Helpful Hints 249</p> <p>Sample Questions to Ask 249</p> <p>INDEX 253</p>

"In summary, this is a good and an easy to read book. It provides a general overview on project costs and schedule estimates, and touches on a couple of risk management tools." (<i>Construction Management and Economics</i>, July 2012)

<p><b>OVIDIU CRETU, P<small>H</small>D, PE,</b> is Cost Estimating and Modeling Unit Manager at the Washington State Department of Transportation. With more than forty years of experience, Cretu earned the Extra Mile Award with Washington State for his development and support of cost risk assessment with strategic thinking and innovation. <p><b>ROBERT B. STEWART, CVS-L<small>IFE</small>, FSAVE, PMP,</b> is President at Value Management Strategies, Inc., where he has been practicing the management of value and risk for more than twenty years. During this time, he has led more than 300 value and risk studies for clients in both the private and public sectors on a wide range of products, services, and facilities—from simple product studies to multibillion-dollar transportation projects. He has authored several books on the management of value and risk. <p><b>TERRY L. BERENDS, PE,</b> is an Assistant State Design Engineer at the Washington State Department of Transportation, where he is responsible for the statewide cost estimating, risk analysis, and value engineering programs. Berends is the cofounder of the self-modeling spreadsheet and the implementation of the risk reserve budgeting process.

<p><b>The essential risk assessment guide for civil engineering, design, and construction</b> <p>Risk management allows construction professionals to identify the risks inherent in all projects, and to provide the tools for evaluating the probabilities and impacts to minimize the risk potential. This book introduces risk as a central pillar of project management and shows how a project manager can be prepared for dealing with uncertainty. Written by experts in the field, <i>Risk Management for Design and Construction</i> uses clear, straightforward terminology to demystify the concepts of project uncertainty and risk. <p>Highlights include: <ul> <li>Integrated cost and schedule risk analysis</li> <li>An introduction to a ready-to-use system of analyzing a project's risks and tools to proactively manage risks</li> <li>A methodology that was developed and used by the Washington State Department of Transportation</li> <li>Case studies and examples on the proper application of principles</li> <li>Information about combining value analysis with risk analysis</li> </ul> <p>"This book is a must for professionals who are seeking to move towards a proactive risk-centric management style. It is a valuable resource for students who are discovering the intricacies of uncertainties and risks within value estimation. For professionals, the book advocates for identifying and analyzing 'only' risks whose impact are of consequence to a project's performance."<br/> <b>—JOHN MILTON, P<small>H</small>D, PE</b><br> <b>Director of Enterprise Risk Management, Washington State Department of Transportation</b>

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