Coping with Uncertainty in Environmental Construction: Decision-Analysis Approach

Abstract

The environmental-cleanup market offers new and emerging business opportunities for the construction industry. However, these opportunities present substantial risks to contractors that decide to engage in cleaning up hazardous and toxic waste (HTW) sites. These risks can be attributed to the uncertainties of the technological and legal environment. Of all the risks present in this type of work, legal liability may be the most daunting. The intent of this paper is to provide a structured methodology to estimate risks associated with Superfund cleanup during construction and to quantitatively relate them to potential contractor liability. A decision-analysis technique that incorporates features from influence diagrams and decision trees was used to develop a model that estimates a contractor's liability. This model was developed through eliciting information from five industry experts. These experts are knowledgeable regarding the variables influencing events that effect a contractor's liability. The developed model is implemented in DPL, a decision software package, and applied to an actual Superfund project.