Supplementing Value for Money (VfM) Analysis with Bayesian Networks
During the past decade Public Private Partnerships (PPPs) have gained significant recognition in the United States (US). PPPs can help transport agencies to fund the impending demands for constructing and maintain highways, expected to cost about $3.6 trillion. Value for Money (VfM) assessment is used to determine whether PPPs would offer more value than traditional procurement. VfM assessment consists of analyzing the impact of prominent risks and estimating the “value” from a candidate project. Majority of these risks are endogenous and have a legible impact on projects. However, several risks exist that are exogenous and have blurred influence on the project. Current VfM assessment does not allow due attention to exogenous risks. Furthermore, the VfM practice struggles to integrate qualitative and quantitative assessment outcomes, making it even difficult to determine the combined impact of exogenous qualitative risks on the overall value. Here, the authors present Bayesian Network (BN) as a tool that allows inclusion of endogenous and exogenous risk factors irrespective of whether they are qualitative or quantitative. This approach supplements the decision making process and increases transparency in decision process. The authors conclude by presenting the application of proposed approach on Caltrans’ Presidio Parkway.
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Supplemental Notes:
- This paper was sponsored by TRB committee AFH15 Standing Committee on Project Delivery Methods.
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Corporate Authors:
500 Fifth Street, NW
Washington, DC United States 20001 -
Authors:
- Sharma, Deepak K
- Mishra, Phoolendra K
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Conference:
- Transportation Research Board 95th Annual Meeting
- Location: Washington DC, United States
- Date: 2016-1-10 to 2016-1-14
- Date: 2016
Language
- English
Media Info
- Media Type: Digital/other
- Features: Figures; References; Tables;
- Pagination: 20p
- Monograph Title: TRB 95th Annual Meeting Compendium of Papers
Subject/Index Terms
- TRT Terms: Bayes' theorem; Project delivery; Public private partnerships; Risk analysis; Valuation
- Identifier Terms: Presidio Parkway
- Geographic Terms: California
- Subject Areas: Administration and Management; Construction; Transportation (General); I10: Economics and Administration; I50: Construction and Supervision of Construction;
Filing Info
- Accession Number: 01590731
- Record Type: Publication
- Report/Paper Numbers: 16-6795
- Files: TRIS, TRB, ATRI
- Created Date: Feb 22 2016 1:15PM