FTA Oversight Procedures - Federal Transit Administration - U.S. ...

SCC40.02 thru 40.04 and SCC60:
SCC70:
SCC80:
A BRF below 2.0 but above 1.75 implies the existence of Market Risk (bidding risk),
indicated by uncertainty associated with reliable market data short of a project specific
firm price;
A BRF below 1.75 but above 1.35 indicates uncertainty associated with
Geotechnical/Utility or similar activities exist. This is usually associated with
activities occurring during the first 20% of construction. Full mitigation of risk during
this period for simple LRT stations that are the equivalent of bus pads is indicated by a
BRF of 1.35, while full mitigation of risk for certain elements such as guideway or
systems is indicated by a BRF of 1.50.
A BRF between 1.35 and 1.20 (or between 1.50 and 1.20 for certain elements such as
guideway or systems) indicates uncertainty associated with mid-construction risks
inclusive of major claims, delays, impacts, etc., usually associated with 75% complete,
have been mitigated; β’s below this range imply increasing mitigation in the areas of
normal change order activity.
A BRF between 1.20 and 1.05 indicates uncertainty associated with late construction
activities, including activities through start-up and substantial completion.
A BRF of 1.0 implies that there is no risk or uncertainty of any kind associated with
this item and represents the perfectly mitigated state of a project scope item.
BRFs shall be estimated at 50-75% greater than that of SCCs 10 through 50 discussed
above.
BRFs shall be estimated at 75% greater than that of SCCs 10 through 50 discussed
above.
BRFs shall be estimated greater than that of SCCs 10 through 50 discussed above, and
shall also be cross checked to accommodate the potential for project delay in the
resultant 90th percentile estimate.
Mean (or 50% Likely) Cost Element Value Establishment The mean and variance of the
suggested range distribution are fully determined using the assumed lognormal distribution, the
10th percentile estimate and the BRF. These calculations are modeled in the FTA Cost Risk
Assessment Worksheet.
Project Delivery Method For traditional project delivery methods, the PMOC shall use the above
recommendations and procedures. Project Delivery methods affect the timing and scope of risk
sharing but not the sequence of risk mitigation as discussed in OP‐35.
Traditional project delivery methods (Design‐Bid‐Build) transfer or share risk at the completion of
design and market risk mitigation. Alternative project delivery methods such as Design‐Build
transfer or share some components of requirements, design, and market risk prior to the
completion of all design and requirements risk, often sharing the market risk of subcontracting
OP 40 Risk Assessment and Mitigation Review
Revision 0, June 2008
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