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August 11, 2008 8 th Annual Technical Forum Geohazards in Transportation in the Appalachian Region Risk Management in Geotechnical Decision Making Benjamin S Rivers PE Benjamin S. Rivers, PE Geotechnical Engineer Federal Highway Administration

Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

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Page 1: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

August 11, 2008

8th Annual Technical Forum

Geohazards in Transportation pin the Appalachian Region

Risk Management in Geotechnical Decision Making

Benjamin S Rivers PEBenjamin S. Rivers, PEGeotechnical EngineerFederal Highway Administration

Page 2: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

Competing Demands…p g

Page 3: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

Asset Management Perspective

• National Highway System Practically Complete• Maintain, Improve, Manage

• System Management and MonitoringSystem Management and Monitoring• Construction and System Preservation• Evaluation and Economic Investment

Managing Decisions…

Page 4: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

Risk Management …a decision making tool.

Systematic Process Involving…

• Identification• AnalysisAnalysis• Planning• Management

Page 5: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

Risk

• Future Phenomenon• May or May Not Occur• Direct Impact to Project/Program• Benefit or DetrimentBenefit or Detriment

Page 6: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

Risk Management – Why?

• Limit Surprises• Minimize Management by Crisis• Operate Proactively instead of Reactively• Reduce Long-term Costs and/or VariancesReduce Long term Costs and/or Variances• Increase Likelihood of Success• “Do It Right” the First Time

P t Mi i i B d Thi f H i• Prevent or Minimize Bad Things from Happening• Gain Competitive Advantage

Minimize Threats Maximize Opportunities

Page 7: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

Construction Claims

• Changed Conditions• Legitimate

Inadequate site characterizationBust in processBust in process…

• FraudulentLoopholes in contracting method(s)P bl /C fli t ithi ifi ti i lProblems/Conflicts within specifications, special provisions, documentation…

Page 8: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

Failures…due to…Failures…due to…• Geohazards

• Complex Geologic ConditionsMan Made Conditions• Man-Made Conditions

• Inadequate Design• Inadequate Characterization• Inadequate Construction• Inadequate QA…

Page 9: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

Inherent to Geotechnical EngineeringInherent to Geotechnical Engineering…• Geological and subsurface conditions are

quite variable and dynamicquite variable and dynamic• Subsurface conditions are typically not

readily apparent• Generalize conditions on limited physical• Generalize conditions on limited physical

data

Page 10: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment
Page 11: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

Types of Risks…

• Pure Risks• Business Risks

• Identified Risks - “Known Unknowns”Identified Risks Known Unknowns• Unidentified Risks – “Unknown Unknowns”

Page 12: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

Maximum Value Approach

Greatest Reduction in Risk for the Cost

Compare Benefits of Response Strategies to Overall Cost

Expected Value = Probability of Risk Event X Impact of Risk Event

Quantitative or Qualitative

Page 13: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

Effective Responses to Risks

• Appropriate to the Severity of the Risk• Cost-Effective• Timely• Realistic and within ContextRealistic and within Context• Mutual buy-in from all involved• Ownership/Responsibility

P i d B k St t i• Primary and Backup Strategies

Page 14: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

Threat Responses

• Avoid• Transfer• Mitigate• AcceptAccept

Page 15: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

Opportunity Responses

• Exploit• Share• Enhance• AcceptAccept

Page 16: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

Risk Management An Opport nit for the EngineeringRisk Management: An Opportunity for the Engineering Geology and Geotechnical Engineering Professions

• A Rational Method for Showing Value

Page 17: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

August 11, 2008

Risk Management Resources

NHI Course No. 134065: Risk Management

Other Sources:

Bernstein, Peter L. Against the Gods: The Remarkable Story of Risk. New York: John Wiley & Sons, 1998.

Project Management Institute Standards Committee. A Guide to the Project Management Body of Knowledge. 3rd Edition. Newtown Square PA : Project Management Institute 2004Square, PA.: Project Management Institute, 2004

Page 18: Risk Management in Geotechnical Decision Making · Decision Making Benjamin S Rivers PEBenjamin S. Rivers, PE Geotechnical Engineer ... • Evaluation and Economic Investment

Questions?