Development of Risk Management Strategies for State DOTs to Effectively Deal with Volatile Prices of Transportation Construction Materials (Risk Management Systems for GDOT)

Project Number: 
Project Description: 

The overarching objective of this project is to enhance transportation agencies’ understanding of the opportunities, challenges and best practices for utilizing risk management strategies for the asphalt cement price volatility in transportation projects. The final deliverable of this project is a comprehensive risk management guide that systematically addresses risk management for asphalt cement price volatility. The specific research objectives are:

  1. Identify and analyze the latest developments and trends in utilization of risk management strategies for the mitigation of asphalt cement price risk;
  2. Identify key features for the most promising risk management strategies and establish their respective potential benefits and limitations;
  3. Enhance the assessment of risk management strategies considering the strategic objectives of transportation agencies and unique project goals;
  4. Enhance the quantitative assessment of risk management strategies considering their key respective parameters;
  5. Devise appropriate risk identification and allocation matrices for the successful adoption of asphalt cement price risk management strategies; and
  6. Transform research findings into educational and professional development activities.


  1. Recommended Guide for Next Generation of Transportation Design-Build Procurement and Contracting in the State of Georgia (September 2013)
  2. Analysis of the Effect of Offering Price Adjustment Clauses on Highway Construction Bid Prices in Georgia (September 2013)
  3. Analysis of the Effect of Offering Price Adjustment Clauses on Highway Construction Bid Prices in Georgia (September 2014)

Project Information Forms:

  1. January 2013
Anticipated Impacts/Benefits of Implementation: 
Time series analysis of asphalt cement (AC) index in the state of Georgia was conducted. Several time series models were created to explain AC index variation and predict future AC index value. This time series approach was developed and presented to Dr. Wu from GDOT Office of Materials and Research in a progress meeting. In addition, a transportation risk management education module was developed and taught in BC7100 class in the fall 2012.
Principle Investigator(s) Contact Information: 
280 Ferst Drive, 1st Floor, Atlanta, GA 30332-0680 Phone: (404)385-7608 Fax: (404)894-1641 Email:
Georgia Institute of Technology
Start and End Dates: 
5/1/12 - 06/30/14
Asset Management

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