Maturation of Risk Concepts in the Management of Infrastructure - Lessons from the US Army Corps of Engineers

"1. Introduction and Backgrounda. In its fundamental form, risk is simply the likelihood of an adverse impact. Expanding on this theme, the Corps of Engineers has broadly defined risk associated with infrastructure as a factor of three distinct elements: a probabilistic assessment of a hazard such as a flood or earthquake; a probabilistic assessment of how the infrastructure performs in the face of this hazard; and a measure of the likely consequences – loss of life, economic damage, environmental impacts – associated with the resulting inundation scenarios.b. The lessons and observations described herein relate to the Corps of Engineers experiences in implementing risk concepts for infrastructure management during the period 2005 through 2013. The Corps of Engineers is a large, decentrally operated and centrally led federal agency that plans, designs, constructs, operates, maintains, and/or manages a portfolio of over 3,000 built dam and levee systems within the United States. The infrastructure in this portfolio is 55 years old on average, and although much of the structures provide for flood risk management benefits, many of the dams deliver multi-purpose benefits. Scale matters – where scale and uncertainty are large, risk concepts provide great opportunity and arrangement for application.c. The amount of organizational change that is demanded for the implementation of risk concepts is considerable and should not be under estimated, but need not be feared if the path others have taken is considered. This paper is, in many ways, an opportunity to step back from the last seven years of implementing risk informed management, check our own azimuth and maturation, and share the purpose and energy behind our own continuing actions. Hopefully, this azimuth check is also beneficial to those that are either considering the use of risk or are in the process of implementing risk concepts.d. Success at managing the massive change related to incorporation of risk concepts will directly affect success of the infrastructure program. The three key organizational elements to consider –human systems such as governance and competencies; policies that outline the who, when, and why of decisions and management; and the processes and technology that outline how work is to be performed - are changed fundamentally. From senior leaders to project team members and all of the people in between, there is a need to discuss, confront, and vet the change and the role people and organizations have in the process. For the Corps of Engineers, with a history of over two centuries, deeply embedded beliefs about infrastructure aren’t transformed over night - the change process is decadal in scope. Given our self imposed “project execution” mantra and corporate objective, risk seemed threatening at first to the cost and schedule of delivering infrastructure projects. In reality, risk concepts have been responsible for savings and cost avoidance of nearly $6 billion over the last three years alone while at the same time justifying increased investment by several fold for the highest risk needs."