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

with the construction contractor. The effect of such alternative project delivery methods should be
considered in consultation with the FTA work order manager.
The extent and effectiveness of third party risk transfers and sharing is a component of the OP‐35
product.
SCC Category Cost Range Establishment SCC Cost Elements within an SCC Category are assumed
to be positively correlated and therefore the total SCC Category Cost Range for a given SCC category
is the sum of the ranges of the individual SCC Category Elements. These calculations are modeled
in the FTA Cost Risk Assessment Worksheet.
6.2.2.3 Project Cost Risk Assessment
Project risk is an aggregated amount of the risk associated with all of the SCC Category Cost Ranges.
It is assumed to be normally distributed and partially correlated at 33% of the difference between
the fully correlated and fully independent cases. Example worksheets with the appropriate
calculations are available from the WOM.
As directed by the COTR/WOM, the Project level risk model shall be successively modeled and
iteratively advanced at each future Project Milestone.
The PMOC shall also produce a separate chart that lists the SCC/BCEs with their assessment data
ranked by their variability in terms of the standard deviations and percentage effect on the overall
budget. The PMOC will then perform additional assessments and present, in a narrative format, its
analysis on those project elements with the largest variability in cost in order to identify the cost,
schedule and technical risk drivers.
The work order manager or COTR may direct the PMOC to perform additional analysis of
covariance/correlation in the form of logic diagrams, matrices, etc. In addition, development of a
second risk transfer curve that represents the PMOC’s estimate of risk transferred to third party
project participants, using information developed in the OP‐35 may be required, as directed by the
work order manager.
6.3 Project Schedule Risk
The PMOC shall use its professional judgment to identify, assess, and evaluate the uncertainties in
the Grantee’s project schedule, in terms of the project’s social, political, legal, financial and physical
environment. Such evaluation shall be based on the PMOC’s review of the Grantee’s structure, and
the project’s scope, schedule, cost estimates, and delivery process, including prior reviews
conducted under other Operational Procedures. Further, the PMOC will document and report its
recommendations for responding to identified items of likely risk, including recommendations of
adjustment to the Grantee’s schedule and Project Management Plan.
6.3.1 Schedule Risk Event Identification
The PMOC shall identify and document the uncertainties in the project schedule using information
provided by the Grantee. Such assessment shall generally be conducted in a manner similar to that
outlined for Cost Risk Identification (see 6.2.1, above). Special attention should be focused on the
interrelationship between identified Cost Risk Events and Schedule Risk Events.
OP 40 Risk Assessment and Mitigation Review
Revision 0, June 2008
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