Empirical Identification and Evaluation of Risk in Highway Project Delivery Methods

Abstract

The highway industry currently uses three fundamental delivery methods, design-bid-build (D-B-B), design-build (D-B), and construction manager/general contractor (CM/GC), to deliver transportation projects. Selecting an appropriate project delivery method is a complex decision and often fraught with risk and uncertainty. This article presents the results of a two-tiered approach to evaluating the impacts of risks and uncertainties on project delivery selection in highway projects. Tier 1 involved identifying and verifying 31 risk factors related to project delivery based on the responses of experts with an average of 25 years of relevant experience. Tier 2 involved an empirical evaluation of project delivery risks through the analysis of 274 completed highway projects (122 D-B-B, 118 D-B, and 34 CM/GC) collected from 26 transportation agencies. The risk score of each risk factor was determined. The Cronbach’s alpha test and correlation analysis were conducted to verify the internal consistency, interdependency, and reliability of delivery risk factors. The results showed that the following eight risk factors substantially impact the project delivery decision: (1) delays in completing in railroad agreements, (2) project complexity, (3) uncertainty in geotechnical investigation, (4) delays in a right-of-way (ROW) process, (5) unexpected utility encounter, (6) work-zone traffic control, (7) challenges to obtaining environmental documentation, and (8) delays in delivery schedules. These eight risk factors are discussed in detail using the content analysis of Tier 1 and the relevant literature. Highway agencies and other practitioners can use these risk factors to make more effective and defensible decisions on which delivery method is the most suitable for their transportation projects.