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Top 5 Risks & Mitigation Strategies: K-12 Facility and Construction Owners

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e-Builder.net 800.580.9322 info@e-builder.net 03/19/18 K-12 WHITE PAPER 2 School districts managing capital improvement bond programs face a diverse range of risks that can negatively impact schedule and cost-effective project delivery. Typically, these programs involve large expenditures, bring together parties with competing interests, and must address complex conditions and potential public scrutiny— all of which adds risk to already difficult undertakings. In a time where capital is tight, proactive owners have taken steps to minimize the chance for delays or overruns by enabling better project controls that provide measurable cost reductions. This white paper identifies the top 5 risks facing school districts who are managing ongoing capital construction projects and provides strategies and best practices for risk mitigation. For the purposes of this white paper, RISK is defined as an event, variable, process or activity that can create liabilities for an owner leading to: 1. Damage to reputation 2. Cost overruns and schedule delays 3. Claims and disputes 4. Regulatory noncompliance According to Dodge Data & Analytics 78% of education owners report having projects exceed budget. • About half (49%) report doing it infrequently (on less than 25% of their projects). • 19% say that a majority of their projects exceed budget. School Construction—It's a Risky Business Defining Risk as It Relates to the Construction Industry How Much Over Budget? Among the projects where education owners reported a cost overrun, over half (58%) were at least 5% over budget, with many owners (22%) citing more than 10% excess. Know the Numbers! Owners Exceeding Budget Amount that Projects Exceed Original Capital Allocation Projects that Exceeded Budget Percentage of education owners in each of the five performance brackets for how often the final construction costs exceeded the budget anticipated at the time of captial allocation. 5%-10% over budget 36% Less than 5% over budget 42% More than 10% over budget 22%

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