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Cost-Effective Responses to Terrorist Risks in Constructed Facilities.


pdf icon Cost-Effective Responses to Terrorist Risks in Constructed Facilities. (1429 K)
Chapman, R. E.; Leng, C. J.

NISTIR 7073; 146 p. March 2004.

Keywords:

building economics; disaster mitigation; economic analysis; homeland security; life cycle cost analysis; optimization; terrorism; risk assessment; decision making

Abstract:

The September 11th attacks on the World Trade Center and the Pentagon and the potential for future terrorist attacks have changed the way the owners and managers of constructed facilities approach homeland security-related issues. This report presents a three-step protocol for developing a risk mitigation plan for optimizing protection of constructed facilities. This protocol helps decision makers assess the risk of their facility to damages from low-probability, high-consequence events; identify engineering, management, and fmancial strategies for abating the risk of damages; and use standardized economic evaluation methods to select the most cost- effective combination of risk mitigation strategies to protect their facility. By using these economic evaluation methods, the owners and managers of constructed facilities can reduce the life-cycle costs associated with low-probability, high-consequence events. The development of a cost-effective risk mitigation plan is facilitated through the use of evaluation methods and software for implementing these methods. This report focuses on the development of a decision methodology covering step three of the protocol-the economic evaluation of alternative risk mitigation strategies-and a proposed software product for implementing the decision methodology. The decision methodology is based on the life-cycle cost method. This method is supported by a voluntary industry standard, ASTM E 917. Three additional standardized methods are employed to demonstrate how the use of multiple measures of economic performance enhances decision making. The report also includes information on a variety of disaster mitigation-related issues. These sections of the report provide guidance and insights for readers interested in learning more about ways in which economic analysis contributes to protecting constructed facilities against natural hazards and terrorist acts that occur infrequently, but result in devastating damages.