Impact of Project Delivery Methods on Risk Allocation during the Planning Phase of Transportation Projects

Abstract

The construction of transportation projects in the United States has been increasing over the last few decades; more mega projects are expected to be procured in the next few years due to the new bipartisan infrastructure bill, for example, the federal government has allocated USD 110 billion in additional funds for transportation repairs over the next five years. It thus becomes crucial to develop and adapt innovative and effective risk management strategies to minimize the potential impact of claims or disputes on these mega projects, which could include the use of innovative project delivery methods. Construction risks can materialize at any of the project phases: planning, pre-award, and postaward stage. However, the planning stage is considered the most critical stage of any construction project’s life cycle as it sets the stage for projects’ expectations and risk management strategies. Parties in this project phase need to make risk allocation decisions such as those for land acquisition, utility relocation, and third-party agreements risks, while allocating these risks to the parties best able to manage them. This paper aims to conduct an analysis of risk allocation strategies that could be employed in the planning phase of mega transportation projects in the United States, considering different project delivery methods. The aim is to provide a comprehensive understanding of the risk allocation strategies employed by owners in drafting their contracts, including factors they need to consider at that stage. Results showed that the most critical risks to be taken into consideration during the planning phase are governmental approvals, third-party approvals, environmental approvals, right of way, and utilities. The contribution of this paper is that it addresses contract risk allocation in various project delivery methods while considering the increased size and risk of transportation projects, with a focus on preplanning stage. It also provides owners and stakeholders with risk allocation strategies they can employ on their projects.