COVER STORY SPECIAL ISSUE : RISK Deep Foundations Many individuals in the geocommunity believe that they Risk in Geoconstruction and Geoengineering This article provides a general and high-level summary of risks and risk management related to their importance to the geoconstruction and geoengineering community. For convenience, the term “project” is used throughout the article, but it is intended to reflect risks that may occur at all levels within an agency or organization. The term risk is used routinely in our daily personal and professional conversations with a variety of different definitions and meanings, some of which are incorrect and incomplete. One commonly understood meaning is risks are uncertainties regarding future events that may have either positive (opportunities) or negative (threats) impacts to specifically defined objectives. An example of a personal objective may be getting to and from work on time and safely during a given amount of time. Several threats and opportunities may prevent or enable us to complete this objective. Each of these “risks” has a different chance of occurrence (probability of occurrence), is unique and has a different impact (severity) on our objective. In the geoconstruction and geoengineering communities, we commonly think of risks solely in a negative context, as threats to our success (often overlooking positive opportunities, which are unfortunate). We also tend to focus excessively on the risk topic of differing site conditions (DSCs). Although, without any doubt, differing site conditions present a significant threat to almost every geoconstruction project’s success, this is only one threat that can have a significant impact to the important objectives of increasing revenue and increasing profit. Other routinely encountered threats include poorly prepared plans and specifications, unfair risk allocation between owners and contractors, and designs and construction details that lack constructability considerations. Risks on geoprojects can affect any or all of the parties involved in the project development and delivery chain (e.g., owners, consultants, material suppliers and contractors — both general and specialty subs). Risks can and do occur at multiple levels with each respective party (organizational levels, program, project and activity). Impacts of risks may influence many different aspects of an objective: cost, schedule, safety, litigation, health, operational, and system management. understand risks well and routinely perform some form of risk management as part of their professional and job-related responsibilities. To be effective, a “risk management” program must be formal, flexible and culturally tailored to the respective organizational processes. Moreover, to be effective, a risk management program must identify, rank and manage risks based on the defined objectives (goals). One common misconception is that development of a risk register is risk management. Although development of a com- prehensive risk register is critical to a successful risk management plan, it is only one of the steps. The following critical steps must be followed to achieve a successful risk management outcome: 1. Establish a clearly defined project scope and objectives. 2. Identify a comprehensive set of threats and opportunities (risks). 3. Rank each risk by severity (severity is the product of the probability of occurrence and the impact on cost, schedule, safety and, sometimes, longevity). Effect The effect of uncertainty on objectives Uncertainty Positive or Negative Always in the future May or may not happen Objectives Know what you are trying to achieve Apply to organization, program, or project Components of risk definition 4. Develop a risk implementation plan and secure sufficient resources (staff and costs) to implement potential strategies (select strategies with a good chance of success and those having a significant positive impact) to reduce negative impacts and secure opportunities. 5. Implement the plan with specifically assigned responsible risk facilitators and time sensitive milestones (the risk facilitator is not responsible for doing all the work). 6. Document the risk management activities (steps 1-5) in a concise and yet complete report that is easy to follow by all team members and upper management. 7. Periodically track the plan for progress and necessary changes. AUTHOR Jerry A. DiMaggio, P.E., D.GE, Applied Research Associates, Inc. 14 • DEEP FOUNDATIONS • JAN/FEB 2018
