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HIGH.S PEED RAI L: CONNECTING AND TRA NSFORMING CA I.IFORNIA

CALIFORNIA HIGH.SPEED RAIL AUTHORITY

PROGRAM RISK MANAGEMENT PLAN

*L12 "\

Number Ðescription Revision Number Date

PLAN-RISK-01

Program Risk

Management Plan

March 29,2OL7 (Supersedes June 4, 2013

PROC-QUAL-04)

Name Date Signature

Checked William Underwood, Policy Manager vl< lr-' (1 ll/,Í!ÅlL//ø-^*"1-

Prepared Suresh Kataria, Program Lead Risk Analyst

4la¡uw lt l^r,14, Prepared Noel R. Berry, Program Risk Manager \oftþ - Drgitâlly signed by Noel R. Berry

J e.r rv 3,I,,iliii;'"5;"i.ü ï;iÎ:"="""ii:äï,iüJ*'' I J Date:2017.04.18 16:33:38 -05'oo

KVÁ4,Recommended Gary Griggs, Program Director

Approved Jon Tapping, 1 Director of Risk Management -/l*1

Collaboration Diversity Excellence lnnovation Safety Sustainability

California High-Speed Rail Authority

Risk Management

Program Risk Management Plan

(PLAN-RISK-01)

Revision 2

March 2017

California High-Speed Rail Authority

Risk Management

Program Risk Management Plan

(PLAN-RISK-01)

Revision 2

March 2017

California High-Speed Rail Authority

Risk Management

Program Risk Management Plan

(PLAN-RISK-01)

Revision 2

March 2017

CALIFORNIA

High-Speed Rail Aulhorily

APPROVAL

Wlliam Underuood

Suresh Kataria

NoelR. Berry

Gary Griggs

Jon Tapping

REVISIONS

California High-Speed Rail Authorþ 0312912017, Revision 2

'tlvløtY R. Seny

R, Meßgemnl, 45'm' lnitialRelease

Update

Update n 2ß"t.

PLAN-RISK-OI

Program Risk Management Plan ilPage

Policy Manager

ItV'lL/l/*PeA,-d- Program Lead Risk Analyst î"4t€4byl Program Risk Manager

\n^,qerryä,ür"* Program Director

M Director of Risk Management

I I

DateNarne ïitle Signature

November 28, 2012

June 04, 2013

March29,2017

Rev¡sron DescriptionDate

California High-Speed Rail Authority PLAN-RISK-01 03/29/2017, Revision 2 Program Risk Management Plan ii | P a g e

TABLE OF CONTENTS

1 INTRODUCTION

2 DEFINITIONS

3 RISK MANAGEMENT ORGANIZATION

3.1 Roles and Responsibilities

3.2 Risk Management Program Integration

3.2.1 Risk Management and Project Controls

3.2.2 Risk Management and Quality Management

3.2.3 Risk Management and Safety and Security

4 RISK MANAGEMENT IMPLEMENTATION

4.1 Risk Allocation

4.2 Setting Project Contingency

4.3 Project Level Risk Management Processes

4.3.1 Pre-Alignment Risk Management

4.3.2 Pre-bid Project Risk Management Process

4.3.3 Interim Risk Management Process – Post-bid, Pre-Start-of-

Contractor Operations

4.3.4 Continuing Project Risk Management Process – Following bid award

4.4 Program Level Risk Register

RISK REGISTER TEMPLATE ...................................................... A-1

RISK IDENTIFICATION ............................................................... B-1

RISK ASSESSMENT CRITERIA ................................................. C-1

RISK AVOIDANCE AND MITIGATION STRATEGIES ................ D-1

RISK MANAGEMENT STATUS REPORTS ................................. E-1

SAMPLE RISK ALLOCATION TEMPLATE .................................. F-1

California High-Speed Rail Authority PLAN-RISK-01 03/29/2017, Revision 2 Program Risk Management Plan ii | P a g e

TABLE OF CONTENTS

1 INTRODUCTION

2 DEFINITIONS

3 RISK MANAGEMENT ORGANIZATION

3.1 Roles and Responsibilities

3.2 Risk Management Program Integration

3.2.1 Risk Management and Project Controls

3.2.2 Risk Management and Quality Management

3.2.3 Risk Management and Safety and Security

4 RISK MANAGEMENT IMPLEMENTATION

4.1 Risk Allocation

4.2 Setting Project Contingency

4.3 Project Level Risk Management Processes

4.3.1 Pre-Alignment Risk Management

4.3.2 Pre-bid Project Risk Management Process

4.3.3 Interim Risk Management Process – Post-bid, Pre-Start-of-

Contractor Operations

4.3.4 Continuing Project Risk Management Process – Following bid award

4.4 Program Level Risk Register

RISK REGISTER TEMPLATE ...................................................... A-1

RISK IDENTIFICATION ............................................................... B-1

RISK ASSESSMENT CRITERIA ................................................. C-1

RISK AVOIDANCE AND MITIGATION STRATEGIES ................ D-1

RISK MANAGEMENT STATUS REPORTS ................................. E-1

SAMPLE RISK ALLOCATION TEMPLATE .................................. F-1

TABLE OF CONTENTS

INTRODUCTION

DEFINITIONS

RISK MANAGEMENT ORGANIZATION

3.1 Roles and Responsibilities

3.2 Risk Management Program Integration

3.2.1 Risk Management and Project Controls

3.2.2 Risk Management and Quality Management

3.2.3 Risk Management and Safety and Security

4 RISK MANAGEMENT IMPLEMENTATION

4.1 Risk Allocation

4.2 Setting Project Contingency

4.3 Project Level Risk Management Processes

4.3.1 Pre-Alignment Risk Management

4.3.2 Pre-bid Project Risk Management Process

4.3.3 Interim Risk Management Process — Post-bid, Pre—Start-of—

Contractor Operations

4.3.4 Continuing Project Risk Management Process — Following bid award

4.4 Program Level Risk Register

APPENDIX A RISK REGISTER TEMPLATE ......................................................A-1 APPENDIX B RISK IDENTIFICATION ............................................................... B-1 APPENDIX C RISK ASSESSMENT CRITERIA ................................................. C-1

APPENDIX D RISK AVOIDANCE AND MITIGATION STRATEGIES ................ D-1

APPENDIX E RISK MANAGEMENT STATUS REPORTS ................................. E-1

APPENDIX F SAMPLE RISK ALLOCATION TEMPLATE .................................. F-1

California High-Speed Rail Authority PLAN-RISK-Ol iill’age iii | P a g e

ACRONYMS AND ABBREVIATIONS

Authority California High-Speed Rail Authority

CHSRP California High-Speed Rail Program

BMP best management practice

Caltrans California Department of Transportation

EIR Environmental Impact Report

EIS Environmental Impact Statement

FHWA Federal Highway Administration

FRA Federal Railroad Administration

HSR High-speed Rail

PMI

PRMT

Project Management Institute Program Risk Management Team

RDP Rail Delivery Partner

SR State Route

California High-Speed Rail Authority PLAN-RISK-01 03/29/2017, Revision 2 Program Risk Management Plan iii | P a g e

ACRONYMS AND ABBREVIATIONS

Authority California High-Speed Rail Authority

CHSRP California High-Speed Rail Program

BMP best management practice

Caltrans California Department of Transportation

EIR Environmental Impact Report

EIS Environmental Impact Statement

FHWA Federal Highway Administration

FRA Federal Railroad Administration

HSR High-speed Rail

PMI

PRMT

Project Management Institute Program Risk Management Team

RDP Rail Delivery Partner

SR State Route

ACRONYMS AND ABBREVIATIONS

Authority

CHSRP

BMP

Caltrans

EIR

EIS

FHWA

FRA

HSR

PMI

PRMT

RDP

SR

California High-Speed Rail Authority

California High-Speed Rail Program best management practice

California Department of Transportation

Environmental Impact Report

Environmental Impact Statement

Federal Highway Administration

Federal Railroad Administration

High-speed Rail

Project Management Institute Program Risk Management Team

Rail Delivery Partner

State Route

California High-Speed Rail Authority 03/29/2017, Revision 2

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1 INTRODUCTION

The Authority is committed to providing a high-speed rail system that meets, or exceeds, its objectives and that is ultimately judged to be a successful program. Risk is a measure of the potential inability to achieve program objectives within defined scope, cost and schedule constraints and assumptions.

Essentially, risk management serves as a process for evaluating the program to determine whether the optimal management processes have been employed, and assess whether any necessary waivers, deviations or non-conformances to these practices – either real or potential – have been identified. When combined, this information allows for a characterization of the resulting risks to the program.

Risk management is viewed as essential for successful project management and builds upon and extends other project management processes. A successful risk management program both requires and encourages individual commitment and responsibility, interdisciplinary collaboration and organizational commitment. Accordingly, the California High-Speed Rail Program (CHSRP) recognizes that effective management of risks is one way to significantly increase the chances of delivering a successful program and has developed a Risk Management Plan for this purpose.

The Risk Management Program provides the Authority with a formal, systematic approach to identifying, assessing, evaluating, documenting and managing risks that could jeopardize the success of the Project.

These include specific engineering, environmental, planning, right-of-way, procurement, construction, organizational, stakeholder, budget and schedule risk, or any other potential inabilities to deliver the required results.

The Risk Management Program’s objectives are to:

· Systematize the process by which the Authority responds to circumstances that could significantly delay, halt or increase cost on CHSRP - minimize differences between project plans and objectives, determining risks and costs of proposed project changes and identify project alternatives that satisfy the Authority’s objectives and priorities

· Increase transparency regarding challenges to project plans and objectives - prepare internal and external information that is reliable, timely and relevant, providing the means to achieve an acceptable level of cost and schedule certainty

· Capture project opportunities - aid the identification, and ability to take advantage of, positive events quickly and efficiently

· Satisfy legal and regulatory requirements and meet the needs and expectations of other stakeholders

- support efforts to ensure compliance with legal and regulatory requirements, identify risks of non-compliance and identify and manage challenges of particular importance to local communities and other stakeholders

· Rationalize allocation of resources - allow the project to deploy resources more effectively by identifying key drivers of Development and Delivery and providing the means to manage cost estimate contingency and schedule float, thereby reducing overall capital requirements and improving capital allocations

In furtherance of the above objectives and in accordance with SB 1029, this document is intended to provide the following:

(a) A comprehensive risk management plan that defines roles and responsibilities for risk management and addresses the process by which the Authority will identify and quantify project risks, implement and track risk response activities, and monitor and control risks throughout the duration of each project [this document].

(b) Quantification of the effect of identified risks in financial terms.

(c) Development of documents that will be used to track identified risks and related mitigation steps.

(d) Plans for regularly updating its estimates of capital and support costs.

(e) Plans for regularly reassessing its reserves for potential claims and unknown risks, incorporating information related to risks identified and quantified through its risk assessment processes.

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1 INTRODUCTION

The Authority is committed to providing a high-speed rail system that meets, or exceeds, its objectives and that is ultimately judged to be a successful program. Risk is a measure of the potential inability to achieve program objectives within defined scope, cost and schedule constraints and assumptions.

Essentially, risk management serves as a process for evaluating the program to determine whether the optimal management processes have been employed, and assess whether any necessary waivers, deviations or non-conformances to these practices – either real or potential – have been identified. When combined, this information allows for a characterization of the resulting risks to the program.

Risk management is viewed as essential for successful project management and builds upon and extends other project management processes. A successful risk management program both requires and encourages individual commitment and responsibility, interdisciplinary collaboration and organizational commitment. Accordingly, the California High-Speed Rail Program (CHSRP) recognizes that effective management of risks is one way to significantly increase the chances of delivering a successful program and has developed a Risk Management Plan for this purpose.

The Risk Management Program provides the Authority with a formal, systematic approach to identifying, assessing, evaluating, documenting and managing risks that could jeopardize the success of the Project.

These include specific engineering, environmental, planning, right-of-way, procurement, construction, organizational, stakeholder, budget and schedule risk, or any other potential inabilities to deliver the required results.

The Risk Management Program’s objectives are to:

· Systematize the process by which the Authority responds to circumstances that could significantly delay, halt or increase cost on CHSRP - minimize differences between project plans and objectives, determining risks and costs of proposed project changes and identify project alternatives that satisfy the Authority’s objectives and priorities

· Increase transparency regarding challenges to project plans and objectives - prepare internal and external information that is reliable, timely and relevant, providing the means to achieve an acceptable level of cost and schedule certainty

· Capture project opportunities - aid the identification, and ability to take advantage of, positive events quickly and efficiently

· Satisfy legal and regulatory requirements and meet the needs and expectations of other stakeholders

- support efforts to ensure compliance with legal and regulatory requirements, identify risks of non-compliance and identify and manage challenges of particular importance to local communities and other stakeholders

· Rationalize allocation of resources - allow the project to deploy resources more effectively by identifying key drivers of Development and Delivery and providing the means to manage cost estimate contingency and schedule float, thereby reducing overall capital requirements and improving capital allocations

In furtherance of the above objectives and in accordance with SB 1029, this document is intended to provide the following:

(a) A comprehensive risk management plan that defines roles and responsibilities for risk management and addresses the process by which the Authority will identify and quantify project risks, implement and track risk response activities, and monitor and control risks throughout the duration of each project [this document].

(b) Quantification of the effect of identified risks in financial terms.

(c) Development of documents that will be used to track identified risks and related mitigation steps.

(d) Plans for regularly updating its estimates of capital and support costs.

(e) Plans for regularly reassessing its reserves for potential claims and unknown risks, incorporating information related to risks identified and quantified through its risk assessment processes.

1 INTRODUCTION

The Authority is committed to providing a high-speed rail system that meets, or exceeds, its objectives and that is ultimatelyjudged to be a successful program. Risk is a measure of the potential inability to achieve program objectives within defined scope, cost and schedule constraints and assumptions.

Essentially, risk management serves as a process for evaluating the program to determine whether the optimal management processes have been employed, and assess whether any necessary waivers, deviations or non-conformances to these practices — either real or potential — have been identified. When combined, this information allows for a characterization of the resulting risks to the program.

Risk management is viewed as essential for successful project management and builds upon and extends other project management processes. A successful risk management program both requires and encourages individual commitment and responsibility, interdisciplinary collaboration and organizational commitment. Accordingly, the California High-Speed Rail Program (CHSRP) recognizes that effective management of risks is one way to significantly increase the chances of delivering a successful program and has developed a Risk Management Plan for this purpose.

The Risk Management Program provides the Authority with a formal, systematic approach to identifying, assessing, evaluating, documenting and managing risks that could jeopardize the success of the Project.

These include specific engineering, environmental, planning, right-of-way, procurement, construction, organizational, stakeholder, budget and schedule risk, or any other potential inabilities to deliver the required results.

The Risk Management Program’s objectives are to:

o Systematize the process by which the Authority responds to circumstances that could significantly delay, halt or increase cost on CHSRP - minimize differences between project plans and objectives, determining risks and costs of proposed project changes and identify project alternatives that satisfy the Authority’s objectives and priorities

0 Increase transparency regarding challenges to project plans and objectives - prepare internal and external information that is reliable, timely and relevant, providing the means to achieve an acceptable level of cost and schedule certainty

0 Capture project opportunities - aid the identification, and ability to take advantage of, positive events quickly and efficiently o Satisfy legal and regulatory requirements and meet the needs and expectations of other stakeholders

- support efforts to ensure compliance with legal and regulatory requirements, identify risks of non-compliance and identify and manage challenges of particular importance to local communities and other stakeholders o Rationalize allocation of resources - allow the project to deploy resources more effectively by identifying key drivers of Development and Delivery and providing the means to manage cost estimate contingency and schedule float, thereby reducing overall capital requirements and improving capital allocations

In furtherance of the above objectives and in accordance with SB 1029, this document is intended to provide the following:

(a) A comprehensive risk management plan that defines roles and responsibilities for risk management and addresses the process by which the Authority will identify and quantify project risks, implement and track risk response activities, and monitor and control risks throughout the duration of each project [this document].

(b) Quantification of the effect of identified risks in financial terms.

(0) Development of documents that will be used to track identified risks and related mitigation steps.

(d) Plans for regularly updating its estimates of capital and support costs.

(e) Plans for regularly reassessing its reserves for potential claims and unknown risks, incorporating information related to risks identified and quantified through its risk assessment processes.

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(f) Plans for regularly integrating estimates for capital, support costs, and contingency reserves in required reports.

The Risk Management Program serves to balance the competing demands of scope, time, cost, quality, resources and risk. In pursuit of these objectives, the Program adopts the following standards for risk management deliverables:

1. Deliverables are presented within a substantively complete and appropriate engineering or project management context.

2. Deliverables are appropriately quantified, fully integrated, traceable and consistent, and compatible with findings or stated facts.

3. Where risk management deliverables are qualitative in nature, they are properly structured and clearly identified with respect to authorship.

4. Material analytic results of risk analysis are capable of independent analysis or reproduction using disclosed methods and assumptions generating similar analytic results within an acceptable degree of imprecision or error.

5. Funding agencies are able to assess whether it is appropriate to question the adequacy, accuracy, and completeness of the third party data, information, modeling or analysis.

The Risk Management Program will identify key risks and respective mitigation plans, and prioritize actions. These items are documented in the Program’s risk registers, which will be periodically updated, reviewed with management at stipulated intervals, and used as the basis of reporting.

The Risk Management Plan is based on the following:

· The Authority is responsible for final risk allocation options.

· The risk management process meets the Authority’s risk objectives.

· The risk management process provides for a pragmatic and balanced assessment of the Authority’s objectives and the construction industry’s reasonable risk allocation issues and concerns.

In addition, CHSRP will be subject to the requirements of a number of funding and jurisdictional agencies that each have a certain amount of control over cash availability, permits, approach to the work, and construction processes. Risks associated with the foregoing will be addressed. To be successful, the Program must interact extensively with third parties, which figure predominately in this environment. Risks to effective third party interaction will likewise be identified and managed.

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(f) Plans for regularly integrating estimates for capital, support costs, and contingency reserves in required reports.

The Risk Management Program serves to balance the competing demands of scope, time, cost, quality, resources and risk. In pursuit of these objectives, the Program adopts the following standards for risk management deliverables:

1. Deliverables are presented within a substantively complete and appropriate engineering or project management context.

2. Deliverables are appropriately quantified, fully integrated, traceable and consistent, and compatible with findings or stated facts.

3. Where risk management deliverables are qualitative in nature, they are properly structured and clearly identified with respect to authorship.

4. Material analytic results of risk analysis are capable of independent analysis or reproduction using disclosed methods and assumptions generating similar analytic results within an acceptable degree of imprecision or error.

5. Funding agencies are able to assess whether it is appropriate to question the adequacy, accuracy, and completeness of the third party data, information, modeling or analysis.

The Risk Management Program will identify key risks and respective mitigation plans, and prioritize actions. These items are documented in the Program’s risk registers, which will be periodically updated, reviewed with management at stipulated intervals, and used as the basis of reporting.

The Risk Management Plan is based on the following:

· The Authority is responsible for final risk allocation options.

· The risk management process meets the Authority’s risk objectives.

· The risk management process provides for a pragmatic and balanced assessment of the Authority’s objectives and the construction industry’s reasonable risk allocation issues and concerns.

In addition, CHSRP will be subject to the requirements of a number of funding and jurisdictional agencies that each have a certain amount of control over cash availability, permits, approach to the work, and construction processes. Risks associated with the foregoing will be addressed. To be successful, the Program must interact extensively with third parties, which figure predominately in this environment. Risks to effective third party interaction will likewise be identified and managed.

(f) Plans for regularly integrating estimates for capital, support costs, and contingency reserves in required reports.

The Risk Management Program serves to balance the competing demands of scope, time, cost, quality, resources and risk. In pursuit of these objectives, the Program adopts the following standards for risk management deliverables:

1. Deliverables are presented within a substantively complete and appropriate engineering or project management context.

2. Deliverables are appropriately quantified, fully integrated, traceable and consistent, and compatible with findings or stated facts.

3. Where risk management deliverables are qualitative in nature, they are properly structured and clearly identified with respect to authorship.

4. Material analytic results of risk analysis are capable of independent analysis or reproduction using disclosed methods and assumptions generating similar analytic results within an acceptable degree of imprecision or error.

5. Funding agencies are able to assess whether it is appropriate to question the adequacy, accuracy, and completeness of the third party data, information, modeling or analysis.

The Risk Management Program will identify key risks and respective mitigation plans, and prioritize actions. These items are documented in the Program’s risk registers, which will be periodically updated, reviewed with management at stipulated intervals, and used as the basis of reporting.

The Risk Management Plan is based on the following:

o The Authority is responsible for final risk allocation options.

0 The risk management process meets the Authority’s risk objectives.

0 The risk management process provides for a pragmatic and balanced assessment of the Authority’s objectives and the construction industry’s reasonable risk allocation issues and concerns.

In addition, CHSRP will be subject to the requirements of a number of funding and jurisdictional agencies that each have a certain amount of control over cash availability, permits, approach to the work, and construction processes. Risks associated with the foregoing will be addressed. To be successful, the Program must interact extensively with third parties, which figure predominately in this environment. Risks to effective third party interaction will likewise be identified and managed.

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2 DEFINITIONS

Change – Alterations or variations to the scope of work and/or any other approved or baseline project control plan (e.g., schedule, budget, resource plans, etc.).

· Potential Change - A potential change is a change status from initiation (Initial rough order of magnitude (ROM) numbers submitted by contractor or estimate and the finding of fact (FOF) document from the consultant) through completion of negotiations.

· Pending Change - A pending change is a change status from completion of negotiations to execution.

· Executed Change - An executed change is a change which has been signed by the authorized authority. Consequence – The magnitude of the outcome of a Program decision, activity or other event.

Contingencies – Set-aside estimated amounts (either monetary set-asides for cost or time set-asides for schedule) included in the overall cost or schedule targets for the project. The amounts are designated to be used to overcome increases in cost or schedule resulting from potential risks when no other mitigation measure is available. These contingency amounts may either be associated with a particular activity or category of cost, or they can be set aside in a general fund. In most cases, the amount of risk a project experiences reduces as the project progresses toward completion. Similarly, it is expected that the amount of contingencies required for a project also decrease over time. However, it should never be assumed that the contingency is totally consumed until all project risks have been removed. Removal usually happens only when a project has been completed or beyond.

Contingency is a risk mitigation measure that provides for additional monies or time if a risk or uncertainty is identified through the HSR program’s risk management process. The process requires contingency to be built into the program’s budgets to offset inherent variability in pricing and account for risks and uncertainties that cannot be fully eliminated or mitigated using aggressive scope/cost/schedule containment measures. For the purposes of this plan, contingency refers only to cost contingency.

· Risk-Informed Project Contingency (RIPC) - The amount, corresponding to the desired confidence level, determined by post-bid contingency analysis and allocated to the project to account for risks and uncertainties associated with a defined scope of work that are, or are ultimately likely to be, the responsibility of the Owner; the desired confidence level will be determined by the Owner based on the particulars of the project but will in no case be less than the Median result of the post-bid contingency analysis.

· Contract-Allocated Contingency - The portion of RIPC under direct management of the Project Manager; as a percentage of RIPC, will vary based on the particulars of the project but will in no case be greater than the Median result of the post-bid contingency.

· Contract-Allocated Reserve - The portion of RIPC under control of the Program Director; these funds are released to the Project Manager at the discretion of the Program Director and only if all Contract-Allocated Contingency funds have been exhausted.

Contingency Plan – A fallback plan developed for implementation if a risk response turns out to be not fully effective or an accepted risk occurs, along with identification of the conditions that trigger the execution of the plan.

Issue – A ‘proto-risk’, a circumstance, situation or event that may develop into a risk with the potential to impact the project and for which monitoring and, possibly, anticipatory action, is advisable. Issues included as part of the risk register have a description and may have a designated owner and mitigation actions, though these are not required. Issues are differentiated from risks in that they are not assessed qualitatively or quantitatively.

Likelihood – Assigned probability, expressed either qualitatively or quantitatively, that an identified risk will occur.

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2 DEFINITIONS

Change – Alterations or variations to the scope of work and/or any other approved or baseline project control plan (e.g., schedule, budget, resource plans, etc.).

· Potential Change - A potential change is a change status from initiation (Initial rough order of magnitude (ROM) numbers submitted by contractor or estimate and the finding of fact (FOF) document from the consultant) through completion of negotiations.

· Pending Change - A pending change is a change status from completion of negotiations to execution.

· Executed Change - An executed change is a change which has been signed by the authorized authority. Consequence – The magnitude of the outcome of a Program decision, activity or other event.

Contingencies – Set-aside estimated amounts (either monetary set-asides for cost or time set-asides for schedule) included in the overall cost or schedule targets for the project. The amounts are designated to be used to overcome increases in cost or schedule resulting from potential risks when no other mitigation measure is available. These contingency amounts may either be associated with a particular activity or category of cost, or they can be set aside in a general fund. In most cases, the amount of risk a project experiences reduces as the project progresses toward completion. Similarly, it is expected that the amount of contingencies required for a project also decrease over time. However, it should never be assumed that the contingency is totally consumed until all project risks have been removed. Removal usually happens only when a project has been completed or beyond.

Contingency is a risk mitigation measure that provides for additional monies or time if a risk or uncertainty is identified through the HSR program’s risk management process. The process requires contingency to be built into the program’s budgets to offset inherent variability in pricing and account for risks and uncertainties that cannot be fully eliminated or mitigated using aggressive scope/cost/schedule containment measures. For the purposes of this plan, contingency refers only to cost contingency.

· Risk-Informed Project Contingency (RIPC) - The amount, corresponding to the desired confidence level, determined by post-bid contingency analysis and allocated to the project to account for risks and uncertainties associated with a defined scope of work that are, or are ultimately likely to be, the responsibility of the Owner; the desired confidence level will be determined by the Owner based on the particulars of the project but will in no case be less than the Median result of the post-bid contingency analysis.

· Contract-Allocated Contingency - The portion of RIPC under direct management of the Project Manager; as a percentage of RIPC, will vary based on the particulars of the project but will in no case be greater than the Median result of the post-bid contingency.

· Contract-Allocated Reserve - The portion of RIPC under control of the Program Director; these funds are released to the Project Manager at the discretion of the Program Director and only if all Contract-Allocated Contingency funds have been exhausted.

Contingency Plan – A fallback plan developed for implementation if a risk response turns out to be not fully effective or an accepted risk occurs, along with identification of the conditions that trigger the execution of the plan.

Issue – A ‘proto-risk’, a circumstance, situation or event that may develop into a risk with the potential to impact the project and for which monitoring and, possibly, anticipatory action, is advisable. Issues included as part of the risk register have a description and may have a designated owner and mitigation actions, though these are not required. Issues are differentiated from risks in that they are not assessed qualitatively or quantitatively.

Likelihood – Assigned probability, expressed either qualitatively or quantitatively, that an identified risk will occur.

2 DEFINITIONS

Change — Alterations or variations to the scope of work and/or any other approved or baseline project control plan (e.g., schedule, budget, resource plans, etc.).

0 Potential Change - A potential change is a change status from initiation (Initial rough order of magnitude (ROM) numbers submitted by contractor or estimate and the finding of fact (FOF) document from the consultant) through completion of negotiations.

0 Pending Change - A pending change is a change status from completion of negotiations to execution.

o Executed Change - An executed change is a change which has been signed by the authorized authority. Consequence — The magnitude of the outcome of a Program decision, activity or other event.

Contingencies — Set-aside estimated amounts (either monetary set-asides for cost or time set-asides for schedule) included in the overall cost or schedule targets for the project. The amounts are designated to be used to overcome increases in cost or schedule resulting from potential risks when no other mitigation measure is available. These contingency amounts may either be associated with a particular activity or category of cost, or they can be set aside in a general fund. In most cases, the amount of risk a project experiences reduces as the project progresses toward completion. Similarly, it is expected that the amount of contingencies required for a project also decrease over time. However, it should never be assumed that the contingency is totally consumed until all project risks have been removed. Removal usually happens only when a project has been completed or beyond.

Contingency is a risk mitigation measure that provides for additional monies or time if a risk or uncertainty is identified through the HSR program’s risk management process. The process requires contingency to be built into the program’s budgets to offset inherent variability in pricing and account for risks and uncertainties that cannot be fully eliminated or mitigated using aggressive scope/cost/schedule containment measures. For the purposes of this plan, contingency refers only to cost contingency.

o Risk-Informed Project Contingency (RIPC) - The amount, corresponding to the desired confidence level, determined by post-bid contingency analysis and allocated to the project to account for risks and uncertainties associated with a defined scope of work that are, or are ultimately likely to be, the responsibility of the Owner; the desired confidence level will be determined by the Owner based on the particulars of the project but will in no case be less than the Median result of the post-bid contingency analysis.

0 Contract-Allocated Contingency - The portion of RIPC under direct management of the Project Manager; as a percentage of RIPC, will vary based on the particulars of the project but will in no case be greater than the Median result of the post-bid contingency.

o Contract-Allocated Reserve - The portion of RIPC under control of the Program Director; these funds are released to the Project Manager at the discretion of the Program Director and only if all Contract-Allocated Contingency funds have been exhausted.

Contingency Plan — A fallback plan developed for implementation if a risk response turns out to be not fully effective or an accepted risk occurs, along with identification of the conditions that trigger the execution of the plan.

Issue — A ‘proto-risk’, a circumstance, situation or event that may develop into a risk with the potential to impact the project and for which monitoring and, possibly, anticipatory action, is advisable. Issues included as part of the risk register have a description and may have a designated owner and mitigation actions, though these are not required. Issues are differentiated from risks in that they are not assessed qualitatively or quantitatively.

Likelihood — Assigned probability, expressed either qualitatively or quantitatively, that an identified risk will occur.

California High-Speed Rail Authority PLAN-RISK-Ol

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Monte Carlo analysis – A technique that performs a project simulation many times to calculate a distribution of likely results. See simulation. (PMI)

Opportunity – An uncertain condition or event that, if it occurs, has a positive effect on a project’s objectives.

Probable Cost – The mean value of cost derived from combining distributions for cost and probability of occurrence.

Project Objectives – To deliver on an agreed-upon target such as cost, time, scope, or quality. For example, the project cost objective is to deliver the program within the agreed upon budget.

Qualitative risk analysis – Performing a qualitative analysis of risks and conditions to prioritize their effects on project objectives. It involves assessing the probability and impact of project risk(s) and using methods such as the probability and impact matrix to classify risks into categories of high, moderate, and low for prioritized risk response planning. (PMI)

Quantitative risk analysis – Measuring the probability and consequences of risks and estimating their implications for project objectives. Risks are characterized by probability distributions of possible outcomes. This process uses quantitative techniques such as simulation and decision tree analysis.

(FHWA)

Residual Risk – A risk that remains after risk responses have been implemented.

Risk – An uncertain condition or event that, if it occurs, has a negative effect on a project’s objectives.

See also Issue and Trend

Risk Assessment – Process of evaluating both the likelihood of an identified risk and the magnitude of its consequence.

Risk Evaluation – Process of comparing assessed risk ratings against pre-established criteria for the purpose of ranking the risks and identifying priorities.

Risk Level – the ‘level’ of a given risk is determined based on the risk’s potential consequences and the organizational level at which it is most effectively managed, either project-level or program-level. In cases where there is a conflict between these two metrics, e.g., where the potential consequences are limited to an internal project deadline but management of the risk requires a decision by senior management; the Program Risk Manager will determine appropriate categorization. Project Managers are not responsible for placing risks on the Program risk register but are expected to alert the Program Risk Manager when a risk is identified at the project level that has the potential to affect the wider program. In no case does placement or ‘promotion’ of an identified project-level risk obviate the risk’s continued inclusion on the project’s risk register.

· Organizational risks - risks related to program integration, communication, socio-political, reputational, administrative processes that, if not managed well, have potential to impact program milestones or budgets

· Programmatic risks - risks with the potential to impact program milestones or budgets, including applying to Program director for release of Reserve Project Contingency funds, and require actions or decisions by Program-level personnel to effectively manage.

· Project Delivery risks: risks whose potential consequences will be limited to internal (to the project) milestones or budgets and are most effectively managed by the Project Manager

Risk Management – Systematic process, guided by the approved Risk Management Plan, which identifies, assesses, evaluates, mitigates, and manages risks for the purpose of significantly increasing the probability of delivering a successful Project.

Risk Management Plan – The document that describes how project risk management will be structured and performed on the project. It is different from the risk register or the risk database that contains the data gathered and used in the risk management process.

Risk Management System – An enterprise, web-based repository to collect, maintain, analyze, and report data gathered and used in the risk management processes.

California High-Speed Rail Authority PLAN-RISK-01 03/29/2017, Revision 2 Program Risk Management Plan

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Monte Carlo analysis – A technique that performs a project simulation many times to calculate a distribution of likely results. See simulation. (PMI)

Opportunity – An uncertain condition or event that, if it occurs, has a positive effect on a project’s objectives.

Probable Cost – The mean value of cost derived from combining distributions for cost and probability of occurrence.

Project Objectives – To deliver on an agreed-upon target such as cost, time, scope, or quality. For example, the project cost objective is to deliver the program within the agreed upon budget.

Qualitative risk analysis – Performing a qualitative analysis of risks and conditions to prioritize their effects on project objectives. It involves assessing the probability and impact of project risk(s) and using methods such as the probability and impact matrix to classify risks into categories of high, moderate, and low for prioritized risk response planning. (PMI)

Quantitative risk analysis – Measuring the probability and consequences of risks and estimating their implications for project objectives. Risks are characterized by probability distributions of possible outcomes. This process uses quantitative techniques such as simulation and decision tree analysis.

(FHWA)

Residual Risk – A risk that remains after risk responses have been implemented.

Risk – An uncertain condition or event that, if it occurs, has a negative effect on a project’s objectives.

See also Issue and Trend

Risk Assessment – Process of evaluating both the likelihood of an identified risk and the magnitude of its consequence.

Risk Evaluation – Process of comparing assessed risk ratings against pre-established criteria for the purpose of ranking the risks and identifying priorities.

Risk Level – the ‘level’ of a given risk is determined based on the risk’s potential consequences and the organizational level at which it is most effectively managed, either project-level or program-level. In cases where there is a conflict between these two metrics, e.g., where the potential consequences are limited to an internal project deadline but management of the risk requires a decision by senior management; the Program Risk Manager will determine appropriate categorization. Project Managers are not responsible for placing risks on the Program risk register but are expected to alert the Program Risk Manager when a risk is identified at the project level that has the potential to affect the wider program. In no case does placement or ‘promotion’ of an identified project-level risk obviate the risk’s continued inclusion on the project’s risk register.

· Organizational risks - risks related to program integration, communication, socio-political, reputational, administrative processes that, if not managed well, have potential to impact program milestones or budgets

· Programmatic risks - risks with the potential to impact program milestones or budgets, including applying to Program director for release of Reserve Project Contingency funds, and require actions or decisions by Program-level personnel to effectively manage.

· Project Delivery risks: risks whose potential consequences will be limited to internal (to the project) milestones or budgets and are most effectively managed by the Project Manager

Risk Management – Systematic process, guided by the approved Risk Management Plan, which identifies, assesses, evaluates, mitigates, and manages risks for the purpose of significantly increasing the probability of delivering a successful Project.

Risk Management Plan – The document that describes how project risk management will be structured and performed on the project. It is different from the risk register or the risk database that contains the data gathered and used in the risk management process.

Risk Management System – An enterprise, web-based repository to collect, maintain, analyze, and report data gathered and used in the risk management processes.

Monte Carlo analysis — A technique that performs a project simulation many times to calculate a distribution of likely results. See simulation. (PMI)

Opportunity — An uncertain condition or event that, if it occurs, has a positive effect on a project’s objectives.

Probable Cost — The mean value of cost derived from combining distributions for cost and probability of occurrence.

Project Objectives — To deliver on an agreed-upon target such as cost, time, scope, or quality. For example, the project cost objective is to deliver the program within the agreed upon budget.

Qualitative risk analysis — Performing a qualitative analysis of risks and conditions to prioritize their effects on project objectives. It involves assessing the probability and impact of project risk(s) and using methods such as the probability and impact matrix to classify risks into categories of high, moderate, and low for prioritized risk response planning. (PMI)

Quantitative risk analysis — Measuring the probability and consequences of risks and estimating their implications for project objectives. Risks are characterized by probability distributions of possible outcomes. This process uses quantitative techniques such as simulation and decision tree analysis.

(FHWA)

Residual Risk — A risk that remains after risk responses have been implemented.

Risk — An uncertain condition or event that, if it occurs, has a negative effect on a project’s objectives.

See also Issue and Trend

Risk Assessment — Process of evaluating both the likelihood of an identified risk and the magnitude of its consequence.

Risk Evaluation — Process of comparing assessed risk ratings against pre-established criteria for the purpose of ranking the risks and identifying priorities.

Risk Level — the ‘level’ of a given risk is determined based on the risk’s potential consequences and the organizational level at which it is most effectively managed, either project-level or program-level. In cases where there is a conflict between these two metrics, e.g., where the potential consequences are limited to an internal project deadline but management of the risk requires a decision by senior management; the Program Risk Manager will determine appropriate categorization. Project Managers are not responsible for placing risks on the Program risk register but are expected to alert the Program Risk Manager when a risk is identified at the project level that has the potential to affect the wider program. In no case does placement or ‘promotion’ of an identified project-level risk obviate the risks continued inclusion on the project’s risk register.

0 Organizational risks - risks related to program integration, communication, socio-political, reputational, administrative processes that, if not managed well, have potential to impact program milestones or budgets o Programmatic risks - risks with the potential to impact program milestones or budgets, including applying to Program director for release of Reserve Project Contingency funds, and require actions or decisions by Program-level personnel to effectively manage.

0 Project Delivery risks: risks whose potential consequences will be limited to internal (to the project) milestones or budgets and are most effectively managed by the Project Manager

Risk Management — Systematic process, guided by the approved Risk Management Plan, which identifies, assesses, evaluates, mitigates, and manages risks for the purpose of significantly increasing the probability of delivering a successful Project.

Risk Management Plan — The document that describes how project risk management will be structured and performed on the project. It is different from the risk register or the risk database that contains the data gathered and used in the risk management process.

Risk Management System — An enterprise, web-based repository to collect, maintain,…