Presentation on theme: "The Big Dig: Managing Risk and Complexity on Mega Projects Presentation to PM Connect Thursday, December 15, 2011 Virginia A. Greiman, Assistant Professor,"— Presentation transcript:
Why are Mega Projects Consistently Underestimated? A review of large public works projects over the last century concluded that costs are consistently underestimated, a phenomenon attributed to the desire of the project advocates to have their projects approved. (Flyvbjerg, Megaprojects and Risk: An Anatomy of Ambition, 2002)
National Transportation Research Board 2006 Cost Estimation Report Identified 8 Strategies linked to 18 different causes of cost escalation on highway projects in the United States. Notably, the research concluded that most efforts in cost estimation have focused on creating tools to improve cost estimates with less emphasis on tools for cost estimation management. (Anderson et. al. 2006).
Major Complexity Challenges on the Big Dig: Project Integration – (150 Major Employers – One Team) 5,000 workers, thousands of complex processes Risk Management – Worlds Largest Wrap-up Program Technology Integration – Monitoring the Critical Path Claims and Changes - Partnering
Project Integration Management Project Charter 1 Close Project 7 Integrated Change Control 6 Project Mgmt Plan 3 Monitor And Control 5 Direct and Manage Execution 4 Scope Statement 2 Project Management Institute, PMBOK, 4 th ed.
Lessons from Practice Source: Central Artery Tunnel Project, Photo of Fort Point Channel
Classification of Catastrophic Loss
Major Catastrophic Losses Event Estimated Loss ($MM) Hurricane Katrina (2005)$43B-$60B World Trade Center (2001)$30-40B Earthquake in Chile (2010)$30B ($8B insured) Hurricane Andrew (1992)$18B California Earthquake (1994)$12.5B Hurricane Hugo (1989)$ 4.2B Japan Typhoon Murielle (1991)$ 6.4B Hurricane Georges (1998)$ 2.9B Hurricane Floyd (1999)$ 2.0B Oakland, CA fire (1991)$ 1.7B IRA Bombing, London (1993)$ 1.0B Source: Lloyds, Munich Re, Swiss Re 19
Risk Analysis Events and Condition Chart What? How? And Why? 21 Accident Occurred U.S. Dept. Of Energy Events and Causal Factors Analysis, Root Cause Analysis is any analysis that identifies underlying deficiencies in a safety management system that, if corrected, would prevent the same and similar accidents from occurring.
Big Dig Safety and Health Programs and Practices Substance Abuse and Prevention Program Shared Responsibility Continuous Improvement Practices Training and Best Practices Safety Incentive Program (SHARE) Mitigation Program Emergency Response Public Image Threat Assessment Community Involvement Program Abutter Program Zero Accident Tolerance And many more… Owner Controlled Insurance Program 1,344 Environmental Commitments
Rate Recordable Rate People 5000 4500 4000 3500 3000 2500 2000 1500 500 0 Peak Manpower/Year Actuals per year National Average