LAWA Capital Budget Contingency Planning and Risk Assessment Framework
Capital Budget Risk Assessment
CLIENT
Los Angeles World Airports (LAWA)
LOCATION
Los Angeles, CA
SERVICES
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.