Feed these data into risk software and answer the following

Question

Question 1 -

The deterministic cost estimate from a construction project is shown below:

Cost Data	Base Case
Mobilization	$ 2,100.00
Site Preparation	$ 5,250.00
Framing	$ 4,200.00
MEP Systems	$ 2,100.00
Cabinatery	$ 1,050.00
Finishes	$ 525.00
Landscaping	$ 1,575.00
Overheads	$ 2,625.00

The Risk Manager of the company pulled the following historic data from past projects:

Cost Data	Minimum	Most Likely	Maximum
Mobilization	$1,800.00	$ 2,100.00	$2,400.00
Site Preparation	$4,350.00	$ 5,250.00	$6,000.00
Framing	$3,120.00	$ 4,200.00	$4,800.00
MEP Systems	$1,900.00	$ 2,100.00	$2,400.00
Cabinatery	$ 850.00	$ 1,050.00	$1,200.00
Finishes	$ 450.00	$ 525.00	$ 600.00
Landscaping	$1,275.00	$ 1,575.00	$1,800.00
Overheads	$2,000.00	$ 2,625.00	$3,000.00

Feed these data into Risk software and answer the following questions:

1. What is the probability that the cost will meet the baseline target?

2. What would be the total budget required for 90% confidence?

3. What would be the contingency required for 90% confidence?

4. What are the two top items that would have most impact on the cost variation? Include relevant graphs.

Question 2 -

Doug Casey is in charge of planning and coordinating next spring's sales management training program for his company. Doug listed the following activity information for this project.

Activity	Description	Immediate Predecessor	Optimistic	Time (weeks) Most Probable	Pessimistic
A	Plan topic	-	1.5	2.0	2.5
B	Obtain speakers	A	2.0	2.5	6.0
C	List meeting locations	-	1.0	2.0	3.0
D	Select location	C	1.5	2.0	2.5
E	Finalize speaker travel plans	B, D	0.5	1.0	1.5
F	Make final check with speakers	E	1.0	2.0	3.0
G	Prepare and mail brochure	B, D	3.0	3.5	7.0
H	Take reservations	G	3.0	4.0	5.0
I	Handle last-minute details	F, H	1.5	2.0	2.5

The anticipated start and finish dates are May 1, 2015 and September 25, 2015.

1. What is the expected project completion date?

2. What is the probability of completing the project on time?

3. If Doug wants a 0.99 probability of completing the project on time, how far ahead of the scheduled meeting date should he begin working on the project?

Use Triangular distribution.

Question 3 -

Solve the decision problem shown below. Assume an interest rate of 12% and use the attached table. Answer specifically what should be the decisions at nodes 1 and 2. Show your work clearly. You can either use Precision Tree or hand calculations.

Discount Table

n	F/P	P/F	F/A	A/F	P/A	A/P
1	1.120	0.8929	1.000	1.00000	0.893	1.12000
2	1.254	0.7972	2.120	0.47170	1.690	0.59170
3	1.405	0.7118	3.374	0.29635	2.402	0.41635
4	1.574	0.6355	4.779	0.20923	3.037	0.32923
5	1.762	0.5674	6.353	0.15741	3.605	0.27741
6	1.974	0.5066	8.115	0.12323	4.111	0.24323
7	2.211	0.4523	10.089	0.09912	4.564	0.21912
8	2.476	0.4039	12.300	0.08130	4.968	0.20130
9	2.773	0.3606	14.776	0.06768	5.328	0.18768
10	3.106	0.3220	17.549	0.05698	5.650	0.17698
11	3.479	0.2875	20.655	0.04842	5.938	0.16842
12	3.896	0.2567	24.133	0.04144	6.194	0.16144

Question 4 -

The Quebec Bridge, a heavy steel bridge over the St. Lawrence River, collapsed during construction in 1907 and killed 74 workers. Before the disaster, the responsibility for both the design and the construction were given to one firm. Later inspections indicated that the bridge components were increasingly misaligned. Describe why both events (DB contract and components misalignment) were precursors of the disaster?

Question 5 -

After the Tacoma Narrow bridge collapse in 1940 due to heavy wind thrusts (called aeroelastic flutter failure), bridge designers reacted in different ways - some designed heavier and stiffer bridges, but others found designs that could pre-empt the problem of aeroelastic flutter by re-stabilizing itself. Which one is a preventive action? Which one is a contingency plan?

Question 6 -

A building constructed by a GC in Huntsville, AL fell few years after construction due to a major snow storm? Who is at fault and liable (e.g. architect, engineer, GC, etc.)? Which insurance coverage might help the owners to recover the loss? Make suitable assumptions, if needed.

Question 7 -

A developer hired a general contractor to perform site-development work and build roads for a sub-division. The general contractor hired various sub-contractors to perform most of the work. After the project was completed, the roads deteriorated, and the developer brought an action against the contractor for breach of contract, breach of warranty, and negligence. Experts testified that the deterioration was caused by insufficient road sub-grade preparation, insufficiently thick road course, excessive traffic, improper drainage and other causes, including an inadequate edge of curb detail and increased frequency of heavy wheel loads on the pavement.

1. Does general contractor responsible for the damage?

2. Which type of insurance coverage will compensate the developer? Make suitable assumptions, if needed.

Question 8 -

Please review the following case study and then answer the following questions:

Chinese-Singaporean Joint Venture for a Public Housing Project

Project:                Public housing scheme in Singapore

Cost: $80 million

Duration: 27 months

Shares: 40 (Chinese firm) - 60 (Singaporean firm)

The project was located in a newly developed town in the western part of Singapore and involved the construction of seven 20-story residential buildings and a multistory car park. It was developed by the Housing Development Board (HDB) of Singapore. The contract was won by a local medium-scale construction company, referred to as L, on a Design-Build basis. The project was beyond the financial capability of L to handle alone. It lacked sufficient capital, workforce and equipment. So L acted as the sponsor company formed a joint venture with foreign partner F (F-L JV). The foreign partner F is a state-run construction company from China and this was its first overseas project. The share distribution between L and F was to be 60% and 40%, respectively. The board of directors was composed of seven people; four from L and three from F, and the board meetings were to be held biannually.

After the project was awarded in September 2005, problems immediately emerged. The applications for employment passes for F company's staff were rejected by the Singapore Immigration Department. It was very difficult for the L-F JV to obtain the right staff in a timely manner. Lower wages for the F staff was one reason why it won the contract for its competitive bid price. There was no active progress during the whole year 2006. The project went far behind schedule and the work was of poor quality. The client was dissatisfied and the relationship between the JV and the client deteriorated.

When the F Company provided initial funds for setting up the L-F JV, it transferred US dollar to the Singaporean dollar. By April 2008, the exchange rate of SG$ to US$ had dropped 25% due to the Asian currency crisis. The company F lost around US$1,000,000 in this JV project due to the cost overruns, possible liquidated damages, and foreign exchange losses.

Serious negotiations are then held among the directors from the two parties and they agreed that the project could not be continued in the same manner.

1. What factors (risks) are responsible for this crisis?

2. If you were the Chief PM for the L-F JV, what would be your action plan before the project breaks ground?

3. What strategies both companies should adopt now to successfully complete this project without suffering additional financial losses or possible bankruptcy?

Question 9 -

Please read the case study and then answer the following questions:

Children's of Alabama Hospital Project

Children's of Alabama is a pediatric health system in Birmingham, Alabama. The system's main hospital is located on the city's Southside, with additional outpatient facilities and primary care centers throughout central Alabama. Recently, the Children's of Alabama received permission from the State Health Planning and Development Agency to expand facilities and services on its downtown medical center campus. A portion of this expansion (hereinafter referred as "the project") include a fit-up of approximately 4300 SM (46,000 SF) of the 4'" floor of the Existing Main Hospital (EMH) for a new 34 bed inpatient Child Psychiatry Center (CPC) and space for outpatient child psychiatry services. The project also include a renovation of approximately 1500 SM (16,000 SF) of existing space on the 3rd floor of the EMH for Physical Therapy and Occupational Therapy (PTOT) services and replacement of the HVAC unit serving this floor. The scope of work include infection control provisions, selective demolition; installation of gypsum board partitions and ceilings, lay-in ceilings, and masonry partitions: new finishes including carpeting, sheet flooring, rubber base, painting, new doors, frames and hardware; millwork; interior and exterior glazing and windows; and modifications and additions to the plumbing, mechanical, electrical and fire protection systems. The total estimated cost is approximately 59 million including the cost of the demolition package and the cost of renovation/retrofitting package. It will be a design-bid-build project with a demolition package released in the design development phase. The total project duration is 9 months. There are financial incentives for the GCs to complete this project under $9 million and within 9 months.

Some of the challenges in this project are as follows:

Children's of Alabama is a continuously operating hospital running all day every day, serving thousands of patients yearly. It is essential that any construction activity has a minimal impact on the hospital's environment. Since the project area is bounded by two operational floors, every modification to a service that travel between these floors involve a coordinated shutdown in consultation with the hospital's facilities department. In addition, there are various operating departments and circulation on the same floors. Large ducts and new piping mains are required to be run through the ceilings of these operating areas as part of the project scope of work. The acceptable time to shut down these areas is very small.

The first Children's of Alabama hospital building on the current campus was designed in 1959 and completed in 1960. Since hospitals in the 1960s contained significantly fewer utilities and services above ceilings, the floor to floor heights are very small (approximately 327 cm or 10'8"). The majority of the additions to the facility have to be confined to the same spacing as it is extremely difficult to modify the floor to floor heights without disrupting hospital activities.

Though the major Mechanical, Electrical and Plumbing (MEP) services are documented on an as-built facility inventory, the information is not sufficient for coordination and prefabrication of a new MEP system. This deficiency results from the nature of traditional as-built drawings - they lack the Z-attribute or elevations of the MEP scope. Exacerbating the problem, many of the facility drawings are prepared for design and maintenance related activities, including listing loads, sizing, and equipment identification, but they are not accurate enough for construction related activities such as coordination and installation of the new MEP system.

The inpatient psychiatry area of the project has special requirements beyond normal hospital construction. All building elements in patient rooms should be both tamper-proof and anti-ligature. As a result, maintenance and access equipment such as terminal unit valves, equipment control panel, plumbing zone valves, and electrical boxes must be located in congested hospital corridors to prevent patient access. This will prevent the possibility of a patient accessing and tampering with building systems.

You are acting as a Risk Manager for a GC who won the bid for this project. Brainstorm and identify all possible risks that are present in this project. Then using a Systematic Risk Management Approach (i.e. Risk Identification, Classification, Analysis, and Response), and develop a comprehensive risk management plan to successfully complete this project within budget and given time.