CLIENT

Los Angeles World Airports (LAWA)

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LOCATION

Los Angeles, CA

 

SERVICES

Risk Assessment and Risk Management

Decision Support Tool Development

Clifton A. Moore Administration Building at Los Angeles International Airport

Source: SHA Analytics, LLC

SHA Analytics, LLC worked with Los Angeles World Airports (LAWA) to develop and implement a program-level contingency and risk assessment framework for its capital budget. The budget covered 10 years of capital investments at Los Angeles International Airport (LAX) and, for the first time, was constrained by an affordability limit—requiring LAWA to ensure that selected projects could be delivered within that limit. Given this new constraint, LAWA needed an approach that accounted for potential cost overruns. SHA Analytics, LLC reviewed the projects within the proposed capital budget, evaluated project- and program-level contingency requirements, and worked with the LAWA team to develop a risk-based methodology for assessing program-level contingency needs. We also worked with LAWA to formalize the process into their existing capital planning policies and procedures.

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As part of the engagement, SHA Analytics, LLC developed a Capital Budget Contingency Management Tool for LAWA to support both the initial allocation of contingency within the capital budget and the ongoing management of contingency requirements during budget implementation. We also prepared a comprehensive user manual and delivered a structured training session for LAWA staff. The training included an overview and walkthrough of the tool’s structure, discussion of questions and feedback from the participants, and example exercises using projects from the capital program to demonstrate how the tool distinguishes between contingency attributable to design maturity versus project risk.