Session 6 of 8

Tool: Risk Pools 

27 CM-GC

NCHRP Research Report 939 presents practical guidance for the post-award administration of projects delivered using alternative, nontraditional methods.

Tool: Risk Pools (27 CM-GC)
Session 6 of 8: October 27, 2022

What is it?

  • A fund set aside to cover risks that may occur on a project
  • Not for contractor risks associated with equipment and labor
  • Not for cost overruns or scope changes

Why use it?

  • A mechanism for quantifying and assigning risk
  • Encourages avoiding, mitigating, and eliminating risk and keeping costs low
  • Avoids contractor adding cost to the proposal to cover contingencies for the risk they are not best able to manage
  • Source of funds to cover risks without creating change orders

How to use it?

  • Collaboratively identify, analyze, and assign risk to the party best able to manage those risks
  • Assign risk to agency, contractor, or shared
  • Estimate the cost of handling each risk and create risk pools to cover risks
  • The agency compares the CM-GC risk cost estimate with the ICE
  • Convert risk pools into planned force accounts

Documents

NCHRP ACM Contract Admin – Session 6 Slides

Useful Links

Session 6

Sessions