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Recent (and historical) worldwide failures in managing and delivering large, complex projects have increasingly
gained prominent media coverage. As a result, owners and managers of major transportation infrastructure projects
are coming under increasing pressure to deliver projects as promised. Some of the requirements faced by
these owners include:
- Generating and maintaining public support for the project;
- Developing an adequate project scope, budget, and schedule, particularly in the face of tightening budgets; and
- Managing and delivering the project to the established budget and schedule.
It is difficult early in project development to establish single-value estimates for project budget and schedule
that will adequately reflect the ultimate project cost and schedule. Uncertainties in project scope, unit prices,
quantities, activity durations, and the occurrence and impacts of potential problems or opportunities all result in
uncertainty in the ultimate project cost and schedule. These uncertainties lead to project risk.
Traditional methods for dealing with project risk rely on the inclusion of one or more contingencies.
These contingencies usually lump together the consequences of an unspecified number and type of potential
problems. While based on the judgment of the estimators, these contingencies do not allow for identification and
management of project uncertainties and risk.
The TRUE approach explicitly identifies and quantifies project cost and schedule risks (to varying degrees, as
appropriate) to help the owners and managers make better project-related decisions, by:
- Enhancing communication among members of the project team;
- Improving understanding of the project scope, phasing, project-delivery strategy, information shortfalls, and
risks and opportunities;
- Developing more realistic expectations for ultimate project cost and schedule (i.e., project performance);
- Identifying critical risks and uncertainties affecting project cost and schedule; and
- Evaluating the cost-effectiveness of strategies for managing these risks.
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