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LAWA Capital Budget Contingency Planning and Risk Assessment Framework

Capital Budget Risk Assessment


Los Angeles World Airports (LAWA)


Los Angeles, CA



Risk Assessment and Risk Management

Decision Support Tools

Clifton A. Moore Administration Building at Los Angeles International Airport

Source: SHA Analytics, LLC

SHA Analytics, LLC is working with Los Angeles World Airports (LAWA) to develop and implement a program-level contingency and risk assessment framework for its upcoming capital budget. This capital budget covers 10 years of capital investments at Los Angeles International Airport (LAX). For the first time, LAWA’s capital budget is constrained by an affordability limit, meaning that LAWA must ensure the projects selected for the capital budget can be delivered at or below this limit. Given this new constraint, LAWA needs an approach that accounts for potential cost overruns. As part of this project, SHA Analytics, LLC reviewed the projects within the proposed capital budget, evaluated project-level and program-level contingency requirements, and worked with the LAWA team to develop a risk-based approach for assessing program-level contingency budgets..

We are currently working with the LAWA team to formalize the process developed to-date into their policies and procedures. As part of this project, we will also develop a capital budget contingency management tool to assist with the contingency budget update and management process.

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