ASTM E2506-06

NOTICE: This standard has either been superseded and replaced by a new version or withdrawn.
Contact ASTM International (www.astm.org) for the latest information
Designation:E2506–06
Standard Guide for
Developing a Cost-Effective Risk Mitigation Plan for New
and Existing Constructed Facilities
This standard is issued under the fixed designation E 2506; the number immediately following the designation indicates the year of
original adoption or, in the case of revision, the year of last revision. A number in parentheses indicates the year of last reapproval. A
superscript epsilon (e) indicates an editorial change since the last revision or reapproval.
INTRODUCTION
Protecting constructed facilities from damages from natural and man-made hazards in a cost-
effective manner is a challenging task. Several measures of economic performance are available for
evaluatingbuilding-relatedinvestments.Thesemeasuresinclude,butarenotlimitedto,life-cyclecost,
present value net savings, savings-to-investment ratio, and adjusted internal rate of return. This guide
provides a generic framework for assessing the risks associated with natural and man-made hazards,
formulating combinations of risk mitigation strategies for constructed facilities exposed to those
hazards, and using measures of economic performance to identify the most cost-effective combination
of strategies.
1. Scope multiple stakeholders—owners and managers, occupants and
users, and other affected parties—in addressing natural and
1.1 This guide describes a generic framework for develop-
man-made hazards.
ing a cost-effective risk mitigation plan for new and existing
constructedfacilities—buildings,industrialfacilities,andother
2. Referenced Documents
critical infrastructure. This guide provides owners and manag-
2.1 ASTM Standards:
ers of constructed facilities, architects, engineers, constructors,
E 631 Terminology of Building Constructions
other providers of professional services for constructed facili-
E 833 Terminology of Building Economics
ties, and researchers an approach for formulating and evaluat-
E 917 PracticeforMeasuringLife-CycleCostsofBuildings
ing combinations of risk mitigation strategies.
and Building Systems
1.2 This guide insures that the combinations of mitigation
E 964 Practice for Measuring Benefit-to-Cost and Savings-
strategies are formulated so that they can be rigorously
to-Investment Ratios for Buildings and Building Systems
analyzed with economic tools. Economic tools include evalu-
E 1057 Practice for Measuring Internal Rate of Return and
ation methods, standards that support and guide the application
Adjusted Internal Rate of Return for Investments in Build-
of those methods, and software for implementing the evalua-
ings and Building Systems
tion methods.
E 1074 Practice for Measuring Net Benefits and Net Sav-
1.3 The generic framework described in this guide helps
ings for Investments in Buildings and Building Systems
decision makers assess the likelihood that their facility and its
E 1185 Guide for Selecting Economic Methods for Evalu-
contents will be damaged from natural and man-made hazards;
ating Investments in Buildings and Building Systems
identify engineering, management, and financial strategies for
E 1369 Guide for Selecting Techniques for Treating Uncer-
abating the risk of damages; and use standardized economic
tainty and Risk in the Economic Evaluation of Buildings
evaluation methods to select the most cost-effective combina-
and Building Systems
tion of risk mitigation strategies to protect their facility.
E 1557 Classification for Building Elements and Related
1.4 The purpose of the risk mitigation plan is to provide the
Sitework—UNIFORMAT II
most cost-effective reduction in personal injuries, financial
E 1765 Practice for Applying Analytical Hierarchy Process
losses, and damages to new and existing constructed facilities.
(AHP) to Multiattribute Decision Analysis of Investments
Thus, the risk mitigation plan incorporates perspectives from
1 2
This guide is under the jurisdiction of ASTM Committee E06 on Performance For referenced ASTM standards, visit the ASTM website, www.astm.org, or
of Buildings and is the direct responsibility of Subcommittee E06.81 on Building contact ASTM Customer Service at service@astm.org. For Annual Book of ASTM
Economics. Standards volume information, refer to the standard’s Document Summary page on
Current edition approved Sept. 15, 2006. Published September 2006. the ASTM website.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959, United States.
E2506–06
Related to Buildings and Building Systems 5.2 Investments in long-lived projects, such as the erection
E 1946 Practice for Measuring Cost Risk of Buildings and of new constructed facilities or additions and alterations to
Building Systems existing constructed facilities, are characterized by uncertain-
E 2103 Classification for Bridge Elements and Related ties regarding project life, operation and maintenance costs,
Approach Work revenues, and other factors that affect project economics. Since
E 2166 Practice for Organizing and Managing Building future values of these variable factors are generally unknown,
Data it is difficult to make reliable economic evaluations.
E 2204 Guide for Summarizing the Economic Impacts of 5.3 Thetraditionalapproachtouncertaintyinprojectinvest-
Building-Related Projects ment analysis is to apply economic methods of project evalu-
2.2 ASTM Adjuncts: ation to best-guess estimates of project input variables, as if
Discount Factor Tables they were certain estimates, and then to present results in a
single-value, deterministic fashion. When projects are evalu-
3. Terminology
ated without regard to uncertainty of inputs to the analysis,
3.1 Definitions—For definitions of terms used in this guide, decision makers may have insufficient information to measure
and evaluate the financial risk of investing in a project having
refer to Terminologies E 631 and E 833.
a different outcome from what is expected.
4. Summary of Guide
5.4 To make reliable economic evaluations, treatment of
uncertainty and risk is particularly important for projects
4.1 This guide presents a generic framework for developing
affected by natural and man-made hazards that occur infre-
a cost-effective risk mitigation plan for constructed facilities
quently, but have significant consequences.
exposed to natural and man-made hazards. The generic frame-
5.5 Following this guide when performing an economic
work consists of three interrelated components. The three
evaluationassurestheuserthatrelevanteconomicinformation,
components are: (1) perform risk assessment; (2) specify
including information regarding uncertain input variables, is
combinations of risk mitigation strategies; and (3) perform
considered for projects affected by natural and man-made
economic evaluation. The generic framework builds on an
hazards.
approach presented in Chapman and Leng (3).
5.6 Use this guide in the project initiation and planning
4.2 This guide identifies related ASTM standards and ad-
phases of the project delivery process. Consideration of alter-
juncts and describes why measuring uncertainty and risk is
native combinations of risk mitigation strategies early in the
critical in the development of cost-effective protective strate-
project delivery process allows both greater flexibility in
gies for constructed facilities. In addition to ASTM standards
addressing specific hazards and lower costs associated with
and adjuncts, this guide identifies technical documents and
their implementation.
software that support the generic framework.These documents
5.7 Use this guide for economic evaluations based on
and software are summarized in Appendix X1.
Practices E 917 (life-cycle costs), E 964 (benefit-to-cost and
4.3 Data about the frequency and consequences of natural
savings-to-investment ratios), E 1057 (internal rate of return
and man-made hazards are helpful when assessing the risks
and adjusted internal rate of return), E 1074 (net benefits and
that a particular facility faces from these hazards. Historical
net savings), and E 1765 (analytical hierarchy process for
patterns of natural disasters, in particular, indicate which areas
multiattribute decision analysis).
are more prone to these specific hazards in the future. Many
5.8 Use this guide in conjunction with Guide E 2204 to
analysts refer to past incidences of man-made hazards, such as
summarize the results of economic evaluations involving
crime, as predictors of future occurrences. Sources of hazards
natural and man-made hazards.
data are presented in Appendix X2.
6. Procedures
5. Significance and Use
6.1 The recommended steps in developing a cost-effective
5.1 Standard practices for measuring the economic perfor-
risk mitigation plan are as follows:
mance of investments in buildings and building systems have
6.1.1 Establish risk mitigation objectives and constraints.
been published by ASTM. A computer program that produces
6.1.2 Conduct assessment and document findings.
economic measures consistent with these practices is avail-
6.1.3 Review alternative risk mitigation strategies.
able. The computer program is described in Appendix X3.
6.1.4 Select candidate combinations of risk mitigation strat-
Discount factor tables have been published by ASTM to
egies.
facilitate computing measures of economic performance for
6.1.5 Develop cost estimates and sequence of cash flows for
most of the practices.
each candidate combination.
6.1.6 Select appropriate economic method(s) for evaluating
the candidate combinations of risk mitigation strategies (see
Available from ASTM International Headquarters. Order Adjunct No.
Guide E 1185).
ADJE091703.
6.1.7 Compute measures of economic performance for each
The boldface numbers in parentheses refer to the list of references at the end of
this standard.
candidate combination.
The NIST Cost-Effectiveness Tool for Capital Asset Protection helps users
6.1.8 Recomputemeasuresofeconomicperformancetaking
calculatemeasuresofeconomicperformanceforbuildingsandbuildingsystemsthat
into consideration uncertainty and risk (see Guide E 1369 and
are consistent with ASTM standards. The program is downloadable from www2.bfrl.nist.gov/software/CET/>. Practice E 1946).
E2506–06
6.1.9 Analyze results and recommend the most cost- consequences of disasters. Engineering strategies provide pro-
effective combination of risk mitigation strategies. tection against both natural and man-made hazards. Engineer-
6.1.10 Prepare report with documentation supporting rec- ing strategies also help defend against man-made hazards,
ommended risk mitigation plan. where their ability to detect or deter may reduce the likelihood
or consequences of such hazards.
7. Perform Risk Assessment
8.1.1.2 Protective engineering strategies are intended to
7.1 Establish Risk Mitigation Objectives and Constraints:
reduce harm to occupants, damage to the structure, and
7.1.1 Specify the decision-maker’s objectives. This is cru-
disruption of business if a disaster occurs. Protective engineer-
cial in defining the problem and determining the suitability of
ing strategies may improve the structural integrity of a build-
the economic evaluation method(s).
ing, facilitate evacuation of occupants, or circumvent compro-
7.1.2 Identifytheconstructedfacilityorsetoffacilitiestobe
mised systems.
evaluated. Identify the types of hazards to be evaluated.
8.1.1.3 There is some overlap among engineering strategies
7.1.3 Specify the design or system objective that is to be
that deter, detect, and protect against terrorist attacks and other
accomplished. Identify any constraints that limit the available
criminal acts. Detection and protective engineering strategies
options to be considered.
that are observable to potential terrorists may deter them from
7.2 Conduct Assessment and Document Findings:
attacking. Closed-circuit television (CCTV), for example, is
7.2.1 Form an assessment team composed of individuals
designedtodetectunauthorizedactivities,butitsvisibilitymay
familiar with the type of facility or set of facilities to be
deter these activities.
evaluated, individuals familiar with assessment tools and
8.1.1.4 Risk mitigation strategies may also be hazard-
techniques, and individuals who have breadth and depth of
specific. Reinforced building shell, shatter-resistant glass, and
experience and understand other disciplines and system inter-
use of barriers and bollards to achieve increased setback
dependencies. Refer to the risk assessment guidance docu-
distances for existing buildings are examples of engineering
ments and software tools summarized in Appendix X1 to gain
strategies that protect against blast.
assessment insights on specific hazards or classes of hazards.
8.1.2 Management:
Supplement your data sources with those described in Appen-
8.1.2.1 Management strategies can be procedural or techni-
dixX2tocompileinformationonthelikelihoodandseverityof
cal. Some management strategies relate to security, training,
specific hazards or classes of hazards.
and communications. Others relate to decisions on where to
7.2.2 Use information from the documents and software
locate the building and who should have access to its systems
summarized in Appendix X1 to produce an assessment plan.
and subsystems. Some management strategies complement
Provide the assessment team with the tools, such as laptop
engineering strategies, while others substitute for them.
computers and electronic forms/data collection sheets, needed
8.1.2.2 Security practices are the use of security personnel
to implement the assessment plan.
and procedures to prevent terrorist or criminal breaches from
7.2.3 Make assignments and deploy the assessment team.
happening by detection or deterrence. They may be used to
Collect and compile information on specific hazard types, their
perform identification checks at building entrances, conduct
likelihood, and consequences.
background checks on individuals with access to sensitive
7.2.4 Use an agreed upon format, such as Classifications
areas and information, patrol facilities, and monitor CCTVs.
E 1557 or E 2103 or Practice E 2166, to create a compiled set
Security personnel may also be used to capture attackers or
of information collected from the assessment team that docu-
facilitate recovery if a breach occurs.
ments the findings of the risk assessment. Transmit the com-
8.1.2.3 Training practices are used primarily to prepare
piled set of information to a central repository to insure that
responses to disaster. Building owners and managers may
access to sensitive information can be limited to those with a
institute periodic emergency response drills for building occu-
legitimate need to know.
pants. These drills may include information about evacuation
8. Specify Comb
...