248 Chapter 7 • Risk Management CaSE STuDy 7.2 The Spanish Navy Pays Nearly $3 Billion for a Submarine That Will Sink Like a Stone In 2003, shipbuilders at Navantia, Spain’s stateowner shipyard, welcomed a contract from their navy to construct four state-of-the-art submarines. The S-80 class was going to be an engineering marvel, filled with the latest and most cutting-edge technology, including a diesel-electric propulsion system that would be 20% lighter than other ships, while delivering 50% more power. As the list of upgrades and new technical gadgetry grew, the delivery date for the Isaac Peral—the lead ship in the S-80 class—continued to ship further behind schedule. Nevertheless, it wasn’t the continuous upgrading and addition of new equipment that finally slammed the brakes on the project; it was the startling warning from Navantia’s engineers that the Isaac Peral was not seaworthy. The submarine, named in honor of the Spanish man credited by some as the inventor of the underwater vessel, was 75–100 tons overweight, an excess that could make it difficult or impossible for the submarine to surface after submerging. As a result, the Spanish navy was faced with the challenge of fixing a submarine that ran the risk of disaster whenever it decided to submerge! Navantia admitted the existence of “deviations related to the balance of weight” in the vessel and estimated it would take up to two years more to correct the problem, pushing the new delivery date to late 2018. The firm’s engineers are trying to determine their best options at this point. It appears that two choices are most likely: Find a way to trim the design of the overall ship, which would be very difficult at this stage in construction, or lengthen the hull of the already 233-foot submarine to compensate for the extra weight. The problem with this option is that designers have estimated that for every meter the hull is lengthened, it will end up costing nearly 10 million additional euros (about $14 million dollars). Unfortunately for the Spaniards, independent agencies report that they have already sunk the equivalent of $680 million into the Isaac Peral, and a total of $3 billion into the entire quartet of S-80 class submarines. The buoyancy problem is not the only difficulty facing the program; an analyst said that that submarine’s air-independent propulsion (AIP) system reactor is also underperforming. A Strategic Studies Group spokesperson said that the AIP system has been designed to enable the submarine to operate underway for 28 days but is currently able to manage only one week. The Group’s memo suggests, “The buoyancy problem alone could cost up to half a billion euros to cover redesign and extra construction, without considering the propulsion problem.” The submarine setback couldn’t have come at a worse time for Prime Minister Mariano Rajoy, who was already caught up in a corruption scandal and saw his approval rating hit a record low in 2013. Because of the poor shape of Spain’s economy, Rajoy’s austerity cuts trimmed the Spanish military budget by 30 percent in 2012, leaving much less room for added ballast. With reports that the S-80 program will be delayed an estimated two years and another general election looming in 2015, Rajoy likely will not see the submarines through to successful launch. How did such an expensive project get funded at a time when the Spanish military’s entire special weapons program received a 98% cut? Sheer pride seems to have been a factor: Spain hoped the S-80 class would be a new homegrown breakthrough achieved without foreign help. Now that Navantia has entered into a $15 million contract with the Electric Boat Division of America’s General Dynamics to help with the redesign, that dream seems dead in the water.17 Questions 1. Google “Spain’s S-80 class submarine” and read some of the articles posted. In your opinion, how does technical risk cause problems with major defense projects? 2. Why do you think it is common for defense contractors to add new features and modifications to current programs? In other words, why do defense agencies contract for one project, only to see it often evolve into something new by the time it is launched? 3. If you were an advisor brought in by the Spanish government, what advice would you offer them in managing their defense projects? Case Study 7.3 249 CaSE STuDy 7.3 Classic Case: Tacoma Narrows Suspension Bridge The dramatic collapse of the Tacoma Narrows suspension bridge in 1940, barely four months after completion, was a severe blow to the design and construction of large span bridges. It serves as a landmark failure in engineering history and is, indeed, a featured lesson in most civil engineering programs. The story of the collapse serves as a fascinating account of one important aspect of project failure: engineering’s misunderstanding of the effect that a variety of natural forces can have on projects, particularly in the construction industry. Opening in July 1941, the Tacoma Narrows Bridge was built at a cost of $6.4 million and was largely funded by the federal government’s Public Works Administration. The purpose of the bridge was essentially viewed as a defense measure to connect Seattle and Tacoma with the Puget Sound Navy Yard at Bremerton.18 As the third-largest single suspension bridge in the world, it had a center span of 2,800 feet and 1,000-foot approaches at each end. Even before its inauguration and opening, the bridge began exhibiting strange characteristics that were immediately noticeable. For example, the slightest wind could cause the bridge to develop a pronounced longitudinal roll. The bridge would quite literally begin to lift at one end and, in a wave action, the lift would “roll” the length of the bridge. Depending upon the severity of the wind, cameras were able to detect anywhere up to eight separate vertical nodes in its rolling action. Many motorists crossing the bridge complained of acute seasickness brought on by the bridge’s rising and falling. So well-known to the locals did the strange weaving motion of the bridge become that they nicknamed the bridge “Galloping Gertie.” That the bridge was experiencing increasing and unexpected difficulties was clear to all involved in the project. In fact, the weaving motion of Galloping Gertie became so bad as the summer moved into fall that heavy steel cables were installed externally to the span in an attempt to reduce the wind-induced motion. The first attempt resulted in cables that snapped as they were being put into place. The second attempt, later in the fall, seemed to calm the swaying and oscillating motion of the bridge initially. Unfortunately, the cables would prove to be incapable of forestalling the effects of the dynamic forces (wind) playing on the bridge; they snapped just before the final critical torsional oscillations that led to the bridge’s collapse. On November 7, 1940, a bare four months after opening of the bridge, with winds of 42 miles per hour blowing steadily, the 280-foot main span that had already begun exhibiting a marked flex went into a series of violent vertical and torsional oscillations. Alarmingly, the amplitudes steadily increased, suspensions came loose, the support structures buckled, and the span began to break up. In effect, the bridge seemed to have come alive, struggling like a bound animal, and was literally shaking itself apart. Motorists caught on the bridge had to abandon their cars and crawl off the bridge, as the side-to-side roll had become so pronounced (by now, the roll had reached 45 degrees in either direction, causing the sides of the bridge to rise and fall more than 30 feet) that it was impossible to traverse the bridge on foot. After a fairly short period of time in which the wave oscillations became incredibly violent, the suspension bridge simply could not resist the pounding and broke apart. Observers stood in shock on either side of the bridge and watched as first large pieces of the roadway and then entire lengths of the span rained down into the Tacoma Narrows below. Fortunately, no human lives were lost, since traffic had been closed in the nick of time. The slender 12-meter-wide main deck had been supported by massive 130-meter-high steel towers comprised of 335-foot-long spans. These spans managed to remain intact despite the collapse of the main span. The second bridge (TNB II) would end up making use of these spans when it was rebuilt shortly thereafter, by a new span stiffened with a web truss. Following the catastrophic failure, a threeperson committee was immediately convened to determine the causes of the Tacoma Narrows Bridge collapse. The board consisted of some of the top scientists and engineers in the world at that time: Othmar Ammann, Theodore von Karman, and Glenn Woodruff. While satisfied that the basic design was sound and the suspension bridge had been constructed competently, these experts nevertheless were able to quickly uncover the underlying contributing causes to the bridge collapse: • design features—The physical construction of the bridge contributed directly to its failure and was a source of continual concern from the time of its completion. Unlike other suspension bridges, one distinguishing feature of the Tacoma Narrows Bridge was its small width-to-length ratio—smaller than any other suspension bridge of its type in the world (although almost one mile in length, the bridge was only constructed to carry a single traffic lane in each direction). That ratio means quite simply that the bridge was (continued) 250 Chapter 7 • Risk Management incredibly narrow for its long length, a fact that was to contribute hugely to its distinctive oscillating behavior. • Building materials—Another feature of the construction that was to play an important role in its collapse was the substitution of key structural components. The original plans called for the use of open girders in the construction of the bridge’s sides. Unfortunately, at some point, a local construction engineer substituted flat, solid girders that deflected the wind rather than allowing for its passage. The result was to cause the bridge to catch the wind “like a kite” and adopt a permanent sway. In engineering terms, the flat sides simply would not allow wind to pass through the sides of the bridge, reducing its wind drag. Instead, the solid, flat sides caught the wind that pushed the bridge sideways until it had swayed enough to “spill” the wind from the vertical plane, much as a sailboat catches and spills wind in its sails. • Bridge location—A final problem with the initial plan lay in the actual location selected for the bridge’s construction. Although the investigating committee did not view the physical location of the bridge as contributing to its collapse, the location did play an important secondary role through its effect on wind currents. The topography of the Tacoma Narrows over which the bridge was constructed was particularly prone to high winds due to the narrowing down of the land on either side of the river. The unique characteristics of the land on which the bridge was built virtually doubled the wind velocity and acted as a sort of wind tunnel. Before this collapse, not much was known about the effects of dynamic loads on structures. Until then, it had always been taken for granted in bridge building that static load (downward forces) and the sheer bulk and mass of large trussed steel structures were enough to protect them against possible wind effects. It took this disaster to firmly establish in the minds of design engineers that dynamic, and not static, loads are really the critical factor in designing such structures. The engineering profession took these lessons to heart and set about a radical rethinking of their conventional design practices. The stunning part of this failure was not so much the oscillations, but the spectacular way in which the wave motions along the main span turned into a destructive tossing and turning and led finally to the climax in which the deck was wrenched out of position. The support cables snapped one at a time, and the bridge began to shed its pieces in larger and larger chunks until the integrity was completely compromised. Tacoma Narrows Bridge: The Postmortem Immediately following the bridge’s collapse, the investigating board’s final report laid the blame squarely on the inadequacy of a design that did not anticipate the dynamic properties of the wind on what had been thought a purely static design problem. Although longitudinal oscillations were well understood and had been experienced early in the bridge’s construction, it was not until the bridge experienced added torsional rolling movements that the bridge’s failure became inevitable. One member of the board investigating the accident, Dr. Theodore von Karman, faced the disbelief of the engineering profession as he pushed for the application of aerodynamics to the science of bridge building. It is in this context that he later wrote his memoirs in which he proclaimed his dilemma in this regard: “Bridge engineers, excellent though they were, couldn’t see how a science applied to a small unstable thing like an airplane wing could also be applied to a huge, solid, nonflying structure like a bridge.” The lessons from the Tacoma Narrows Bridge collapse are primarily those of ensuring a general awareness of technical limitations in project design. Advances in technology often lead to a willingness to continually push out the edges of design envelopes, to try and achieve maximum efficiency in terms of design. The problem with radical designs or even with well-known designs used in unfamiliar ways is that their effect cannot be predicted using familiar formulae. In essence, a willingness to experiment requires that designers and engineers begin to work to simultaneously develop a new calculus for testing these designs. It is dangerous to assume that a technology, having worked well in one setting, will work equally well in another, particularly when other variables in the equation are subject to change. The Tacoma Narrows Bridge collapse began in high drama and ended in farce. Following the bridge’s destruction, the state of Washington discovered, when it attempted to collect the $6 million insurance refund on the bridge, that the insurance agent had simply pocketed the state’s premium and never bothered obtaining a policy. After all, who ever heard of a bridge the size of the Tacoma Narrows span collapsing? As von Karman wryly noted, “He [the insurance agent] ended up in jail, one of the unluckiest men in the world.”19 Internet Exercises 251 Questions 1. In what ways were the project’s planning and scope management appropriate? When did the planners begin taking unknowing or unnecessary risks? Discuss the issue of project constraints and other unique aspects of the bridge in the risk management process. Were these issues taken into consideration? Why or why not? 2. Conduct either a qualitative or quantitative risk assessment on this project. Identify the risk factors that you consider most important for the suspension bridge construction. How would you assess the riskiness of this project? Why? 3. What forms of risk mitigation would you consider appropriate for this project? Internet Exercises 7.1 Go to www.informationweek.com/whitepaper/ Management/ROI-TCO/managing-risk-an-integratedapproac-wp1229549889607?articleID=54000027 and access the article on “Managing Risk: An Integrated Approach.” Consider the importance of proactive risk management in light of one of the cases at the end of this chapter. How were these guidelines violated by de Havilland or the Tacoma Narrows construction project organization? Support your arguments with information either from the case or from other Web sites. 7.2 FEMA, the Federal Emergency Management Agency, is responsible for mitigating or responding to natural disasters within the United States. Go to www.fema.gov/about/divisions/mitigation.shtm. Look around the site and scroll down to see examples of projects in which the agency is involved. How does FEMA apply the various mitigation strategies (e.g., accept, minimize, share, and transfer) in its approach to risk management? 7.3 Go to www.mindtools.com/pages/article/newTMC_07. htm and read the article on managing risks. What does the article say about creating a systematic methodology for managing project risks? How does this methodology compare with the qualitative risk assessment approach taken in this chapter? How does it diverge from our approach? 7.4 Using the keyword phrase “cases on project risk management,” search the Internet to identify and report on a recent example of a project facing significant risks. What steps did the project organization take to first identify and then mitigate the risk factors in this case? 7.5 Go to www.project-management-podcast.com/index.php/ podcast-episodes/episode-details/109-episode-063-howdo-risk-attitudes-affect-your-project to access the podcast on risk attitudes on projects. What does the speaker, Cornelius Fichtner, PMP, suggest about the causes of project failures as they relate to issues of risk management? PMP certificAtion sAMPle QUestions 1. The project manager has just met with her team to brainstorm some of the problems that could occur on the upcoming project. Today’s session was intended to generate possible issues that could arise and get everyone to start thinking in terms of what they should be looking for once the project kicks off. This meeting would be an example of what element in the risk management process? a. Risk mitigation b. Control and documentation c. Risk identification d. Analysis of probability and consequences 2. Todd is working on resource scheduling in preparation for the start of a project. There is a potential problem in the works, however, as the new collective bargaining agreement with the company’s union has not been concluded. Todd decides to continue working on the resource schedule in anticipation of a satisfactory settlement. Todd’s approach would be an example of which method for dealing with risk? a. Accept it b. Minimize it c. Transfer it d. Share it 3. A small manufacturer has won a major contract with the U.S. Army to develop a new generation of satellite phone for battlefield applications. Because of the significant technological challenges involved in this project and the company’s own size limitations and lack of experience in dealing with the Army on these kinds of contracts, the company has decided to partner with another firm in order to collaborate on developing the technology. This decision would be an example of what kind of response to the risk? a. Accept it b. Minimize it c. Transfer it d. Share it 4. All of the following would be considered examples of significant project risks except: a. Financial risks b. Technical risks c. Commercial risks d. Legal risks e. All are examples of significant potential project risks 5. Suppose your organization used a qualitative risk assessment matrix with three levels each of probability and consequences (high, medium, and low).
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