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  Risk-Based Integrated Cost and Schedule Analysis for Major Infrastructure Projects

  Effective cost and risk management is essential for the success of large infrastructure projects as demonstrated by a long history of cost overruns. In order to achieve cost transparency and to adequately consider cost and schedule uncertainties (risks), base cost validation and probabilistic methods need to be used for a full risk assessment. Probabilistic methods include identification and characterization of risks (estimates of probabilities and consequences) to allow a determination of the probability of project delivery within cost and schedule goals. More advanced processes, to better identify and manage such risks on complex tunneling projects, have been developed over the last 20 years including risk-based methods for improved cost and schedule estimation. However, cost and schedule uncertainties were generally treated separately instead of integrating them into one model. This integration is highly relevant as schedule delays are very often the root cause for severe cost overruns. This paper presents a fully-integrated probabilistic cost and schedule model that provides a basis for better cost and schedule analysis (including “what if” analysis) on a management level. The application is based on combination of two practice-proven approaches, i.e. CEVP (Cost Estimate Validation Process, Washington State Department of Transportation) and RIAAT (Risk Administration and Analysis Tool, RiskConsult) resulting in a powerful tool for the management of complex risk environments.

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