Airport Construction

Project Risk Management

Presented by:
Mindy Price- Direct Effect Solutions
 Topics
ACRP 01-22 Research Background
Research Findings and Conclusions
Project Risk Management
Recommendations for Airport Environments
Practical Application of Available Tools

Construction Risk Management Direct Effect Solutions January 14, 2014

 Research Objective
Development of a Guidebook to assist airports in
proactively assessing and managing risks
associated with capital and maintenance
projects to ensure project scope, schedule and
budget are met.
Guidebook will contain the following attributes:
Scalability by project type and complexity
Organization of material to allow flexibility to reader
Immediate applicability of information
Ability to tailor contents to current environment
Construction Risk Management Direct Effect Solutions January 14, 2014
 Definitions
Capital Project
Maintenance Project
Risk Management
Project Risk
Project Risk Management

Construction Risk Management Direct Effect Solutions January 14, 2014

 Processes with Risk Management
Strategic Business Plan
SWOT Analysis
Enterprise Risk Management
Project Risk Management
Process Improvements
Succession Planning
Continuity of Operations
Risk Modeling
Construction Risk Management Direct Effect Solutions January 14, 2014
Differences and Similarities in Airports
Differences: Similarities:

Geographic Safe and secure

location operations
Governance Runways,
structure terminals, parking
HUB size Revenue and
expenses
Running a
business
 Trends in Airport Business

Decreased AIP funding

Consolidations of airlines
Economic impacts
Aging workforce
Increased expectations of passengers
Rapid changing technology
Healthcare and retirement benefits
Budget constraints
Changing regulations
Regionalization of airports
Construction Risk Management Direct Effect Solutions January 14, 2014
Research Approach
 Research Approach
Existing Resources:
Literature Review
Methodologies Review
Data Collection:
Survey

Construction Risk Management Direct Effect Solutions January 14, 2014

Research Findings
Research Findings- Existing Resources
Literature Review
Drafted definitions and objectives for
project risk management
Methodologies
Determined project risk management
framework can be applied

Construction Risk Management Direct Effect Solutions January 14, 2014

Research Findings- Data Collection
Survey
Validated definitions for project risk
management, capital and maintenance
projects
Assessed maturity of risk programs
Identified potential focus group
participants

Construction Risk Management Direct Effect Solutions January 14, 2014

 Survey Results- Hub Size

This indicates the number of responses by airport type, not the number of unique
airports by size.

Page 13
 Survey Results- Governance

Page 14
 Survey Results- Geo Region

Page 15
 Survey Results- Risk Role

Page 16
 Survey Results- Risk Processes
in Capital v Maintenance

Do you have risk management processes Do you have risk management

established or embedded within your processes established or embedded
CAPITAL projects planning and/or within your MAINTENANCE planning
execution processes? and/or execution processes?
Page 17
Project Risk Management Definition
Type of Risk Description Sample Objectives
Management
Generic any uncertainty that, if it occurs,
would affect one or more
objectives.
Project Risk any uncertainty that, if it Time, cost, performance, quality,
Management occurs, would affect one or scope, client satisfaction
more project objectives.

Business Risk Any uncertainty that if it occurs, Profitability, Market share,

Management would affect one or more competitiveness Internal Rate of
business objectives Return, reputation, repeat work,
share price
Safety Risk Any uncertainty that if it occurs, Low accident rate, minimal lost
Management would affect one or more safety days, reduced insurance
objectives premiums, regulatory compliance
Technical Risk Any uncertainty that if it occurs, Performance, functionality,
Management would affect one or more reliability, maintainability
technical objectives
Security Risk Any uncertainty that if it occurs, Information security, physical
Management would affect one or more security, asses security, personnel
security objectives security
Construction Risk Management Direct Effect Solutions January 14, 2014
Project Risk Management Framework
 Research Approach
Data Collection:
Focus Groups
Interviews

Construction Risk Management Direct Effect Solutions January 14, 2014

Research Findings- Data Collection
Focus Groups
Clarified survey findings
Identified similar project types, tools and existing
processes
Interviews
Identified case studies
Validated audience
Identified scenarios and lessons learned

Construction Risk Management Direct Effect Solutions January 14, 2014

 Project Types
Airside/ Airfield Landside Terminal- secure and non-secure
Projects occurring outside the security
Projects occurring on the airfield, apron,
perimeter fence. Projects occurring in secure and non-secure
taxiways, runways, tug roads, hangars and
Includes public roadways, parking areas, areas of the terminal
landscaping
garages, landscaping
New runway/taxiway Reconfigure roadway entrance to airport Signage - way finding
Pavement rehabilitation Pavement repairs Terminal modernization
Glycol collection system repairs Drainage repairs Facility painting, carpeting
Connector taxiways Golf course Small concessionaires
Storm water detention Storm water detention New concessionaires build or remodel
NAVAID repair/replacement Building repairs/remodels not associated with Escalators
Ramp Expansion terminal Elevators
New/replacement and marking New road construction Restrooms - maintain, remodel, build
Full parallel taxiway and additional aircraft Landscaping Tenant improvement requests
parking Paving- roads, parking, public thru -fares, Facility security projects - bollards
Apron expansion/repairs parking lots Terminal redesign - secure area
Taxiway demolition and rebuild, Parking garage maintenance and repair, Terminal renovation
Pavement reconstruction paving, gate maintenance Baggage handling replacement
Airfield lighting repairs Signage - road, DOT compliant Maintaining jet bridges
Spot pavement repairs Striping Substation panel - replacement
Vehicle gate maintenance Non-airfield roads Chiller
Terminal hangar, Hangar rehab, Hangar door Airport owned roadway system outside of Generators
repairs airfield Parking lot maintenance Changing filters, faucets, toilets
Paving - Taxiways Parking facility rehab and improvements Gas and water leaks
Drains Mowing Roof, window, door repairs
Aprons Patching roads Mechanical systems
Runways Replacing signage
Patching roads, Rubber removal
Replacing signage
Landscaping
Striping
 Interview Findings
Airport Project Risk Project Management Project Risk Management Techniques Used
Focus Areas Techniques Used Risk Identification Risk Assessment Risk Management
Port Authority of New Schedule CPM Schedule Brainstorming Qualitative (Risk Risk Register
York New Jersey Budget Periodic status meetings Expert Interviews matrix) Risk Management
Contingency budgeting Quantitative (Monte Plans
Carlo simulation) to
establish risk-based
contingencies
Columbus Regional Schedule Project charter Brainstorming Consultant Consultant
Airport Authority Budget Project plans Consultant contributions contributions
Periodic status meetings contributions
Capital Project Committee
San Diego Regional Schedule Project plans Consultant Consultant Consultant
Airport Authority Budget Periodic status meetings contributions contributions contributions
Contingency budgeting Risk workshop with Quantitative Analysis Risk Register
subject matter experts (Monte Carlo Risk Management Plan
simulation) to forecast
schedule and cost as a
function of confidence
level and to establish
risk-based cost
contingencies
Seattle- Tacoma Port Schedule Periodic status meetings Brainstorming Contractor solutions Contractor solutions
Authority Budget Consultant
contributions
St Petersburg Schedule Contractor solutions Contractor solutions Contractor solutions Contractor solutions
Clearwater Budget Regulatory requirements Regulatory Regulatory Regulatory
International Airport requirements requirements requirements
Orlando International Schedule Contractor solutions Contractor solutions Contractor solutions Contractor solutions
Authority Budget Regulatory requirements Regulatory Regulatory Regulatory
requirements requirements requirements
Albert Whitted City mandated Contractor solutions Contractor solutions Contractor solutions Contractor solutions
Regional Airport processes City processes
Conclusions
 Conclusions
Project Risk Management Practices
Increasing use of risk management in organizations

Inconsistent or immature in most airports

Basic risk framework applies to airport projects

Consistent practices benefit airports

Practices are scalable determined by project type

Construction Risk Management Direct Effect Solutions January 14, 2014

 Conclusions
Project Risk Management Tools
Complexity of the project can determine scalability of tool
use

Regardless of formality of project management practices,

tools apply

Although staff performing project work may be different,

tools may be the same

Need a flexible, simple, clear, and easy to navigate set of

tools for any type or complexity of airport project
Construction Risk Management Direct Effect Solutions January 14, 2014
Recommendations
 Conclusions to Recommendations
Project Risk Management Practices
Increasing use of risk management in organizations
Inconsistent or immature in most airports
Basic risk framework applies to airport projects
Consistent practices benefit airports
Practices are scalable determined by project type
RECOMMENDATION:
Develop guidebook with narrative section by project risk
management phases which include scenarios illustrating
application of the project risk management phase and
related tools in an airport project example

Construction Risk Management Direct Effect Solutions January 14, 2014

 Conclusions to Recommendations
Project Risk Management Tools
Complexity of the project can determine scalability of tool
use
Regardless of formality of project management practices,
tools apply
Although staff performing project work may be different,
tools may be the same
Need a flexible, simple, clear, and easy to navigate set of
tools for any type or complexity of airport project
RECOMMENDATION:
Develop a set of simple and complex tools related to each
project risk management phase to allow audience to select
tool relative to complexity of the project
Construction Risk Management Direct Effect Solutions January 14, 2014
Benefits of Project Risk
Management Practices
 Project Risk Management
Practice Benefits
Review project scope, schedule, budget
for feasibility- revise before issues occur
Lower cost
Project priority and resource management
Establish realistic contingencies
Increase communication about progress,
efforts, outcomes
Better estimating for future projects
Construction Risk Management Direct Effect Solutions January 14, 2014
Practical Application of Tools
 Tool Set
Step High Risk Low Risk
(Large, Critical, or Complex Projects) (Simple or Small-Scale Project)
Planning Tool: Risk Management Plan

Identification Tool: Risk Register Tool: Risk Checklist

Analysis Tool: Updated Risk Register Tool: Probability and Impact

(based on quantitative and/or Matrix Worksheet
qualitative analysis)

Response Tool: Updated Risk Register Brainstorming Session

Planning

Monitor & Tool: Risk Register Periodic status meetings as

Control required, including discussion
of progress, issues, etc.

Construction Risk Management Direct Effect Solutions January 14, 2014

Probability and Impact Matrix
Probability and Impact Matrix
 Questions

Presented by:
Mindy Price- Direct Effect Solutions
Mindy.Price@DirectEffectSolutions.com
614-214-6227