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Cost-Effective Responses to Terrorist Risks in Constructed Facilities



Robert E. Chapman, C J. Leng


The owners and managers of constructed facilities face the challenge of responding to potential future terrorist attacks in a financially responsible manner. The Office of Applied Economics (OAE) in the Building and Fire Research Laboratory at the National Institute of Standards and Technology, has developed a methodology to evaluate the alternatives available to building owners and managers to address these risks. The methodology includes three mitigation strategies for reducing exposure to terrorist-related losses: (1) engineering alternatives; (2) management practices; and (3) financial mechanisms.How these mitigation strategies are integrated into a cohesive risk mitigation plan is a complex decision problem. To make efficient decisions about protective measures, building owners and managers require risk assessment information about threats, vulnerabilities, and consequences of terrorism; information about the types and effectiveness of mitigation strategies that are available; and the costs associated with these protective measures. Given such information, we present analytical methods for performing the economic evaluation of different strategies that are based on voluntary industry consensus standards. The methodology presented in this report indicates the best set of mitigation strategies and related investments for achieving the desired level of building protection. Future work by OAE will integrate the methodology into a software package for use by building owners and managers.
NIST Interagency/Internal Report (NISTIR) - 7073
Report Number


building economics, disaster mitigation, economic analysis, homeland security, life-cycle cost analysis, optimization, risk assessment, terrorism


Chapman, R. and Leng, C. (2004), Cost-Effective Responses to Terrorist Risks in Constructed Facilities, NIST Interagency/Internal Report (NISTIR), National Institute of Standards and Technology, Gaithersburg, MD, [online], (Accessed June 24, 2024)


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Created March 1, 2004, Updated July 7, 2009