TRANSPORTATION CDOT/FHWA Peer Exchange · CDOT/FHWA Peer Exchange Florida Department of...

1

CDOT/FHWA Peer Exchange

Florida Department ofTRANSPORTATION

Phillip “Greg” Davis, P.E. Program Management Office

State Estimates Engineer May 10-11, 2016

Risk Based Cost Estimation

in Florida DOT

Double Tree Denver-Aurora

13696 East Iliff Place

Aurora, Colorado

1

Florida Department of Transportation

FDOT Organization

2

2


Estimating Systems

3

Design Quantities and Estimatesfor Final Design Cost Estimates

Long Range Estimating Systemfor Conceptual Cost Estimates

Traditional vs Risk-Based

Traditional Estimating

u Contingency is intended to include

all risk known/unknown

u Little control of cost and schedule

u Reactive

Risk-Based Estimating

u Risk are clearly identified and

quantified in estimate

u Reasonable control of cost and

schedule

u Proactive

Contingency

Threat

1, 2,3,etc

Threat

1, 2,3,etc

Opportunity

1, 2, 3, etc


3


FDOT History

5

o Major Project Cost Estimate Review

o FHWA Risk Management Training

o Pilot Projects

o Risk Management Practice

o State Risk Management Team


Statewide Risk Management Team

6

Greg Davis, PE

State Estimates Engineer

Kurt Lieblong, PE, CVS

State Value Engineer

Tim Brock

District VE/Utilities

Administrator

Frank Chupka, PE

District Court Engineer

Rob Quigley, PE

State Project Management

Engineer

4


Regional Risk Management Teams

7

o Membership in each District consists of :

• District Value Engineer

• District Estimates Engineer

• Design Project Manager

• Construction Project Manager

o Monthly Teleconferences with SRM Team

o Identify Projects for Workshops

o Support Workshops with Staff & Facilities

o Change Culture by Promoting Risk Management


Project Selection Guidelines – Risk Analysis

8

o Complex project or total project cost greater than $500 Million – Consultant-led Independent Risk Analysis Workshop

o Total project cost between $100 - $500 million - Risk Analysis Workshop using commercial risk modeling program

o Projects not requiring a formal workshop - Risk Analysis Modeling Tool by HDR

o Qualitative Risk Analysis - Risk Based Graded Approach Worksheet

5


Tools & Strategies

9

o Risk Analysis Self-Modeling Software

• Project Manager at their desk

• Consult with SME as needed

• Project – 95% / Cost – 45%

o Risk Analysis Workshops

• Consultant Led

• Regional Team Support

• Commercial Software

• Projects – 5% / Cost – 55%


Performance Measures

10

-50.00%

-40.00%

-30.00%

-20.00%

-10.00%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

2011 2012 2013 2014 2015

Statewide

LB vs OE (+/-10%) LB vs AD (+/-15%) Ph 2 vs IE (+/-15%) AD vs IE (+/-25%)

6


Monthly Bid Analysis

11

What is Risk?

�Project Management Institute (PMI) Says:

“An uncertain event or condition that, if it occurs,

has a positive or negative effect on the project’s

objectives.”


7

Risk Analysis Workshops

• 2 to 3 day structured event

• Identify and quantify

threats and opportunities

• Identify risk management

strategies

• Collaborative team

approach!


Who participates in a Risk Workshop

• Project Manager and Design Team

• External Subject Matter Experts

• Internal and External Stakeholders

• Disciplines

– Construction

– Bridge & Structures

– Environmental

– Right of Way

– Geotechnical

– Construction

– Utilities

– Local agencies

– Others depending on project scope


8

Objectives of a Risk Workshop

• Identify project risk to account for uncertainty in scope,

cost and schedule

• Assess project risks by quantifying impacts to cost and

schedule:

– Likelihood (probability) of occurrence

– Impact (if it occurs)

• Analyze the project risks through modeling to develop a

baseline risk assessment.

• Produce a Risk Register for future monitoring of

identified project risks.


Project Team Roles in Workshops

• Provide Project Information:

– Project location maps, drawings, etc.

– Project cost estimate and backup

– Design and construction schedule or flow chart

– Develop comprehensive list of risks, typically using starter risk list

• Workshop Support:

– Provide information on project history and key decisions as these items come up in discussion

– Provide input on risk identification, quantification and mitigation


9

Workshop Preparation with Project Team

• Risk Analysis Process Overview

• Project Overview & Identify Risk Areas

• Develop Project Starter Risk List

• Review Base Cost Estimate

• Create a flowchart of the project schedule

• Assign tasks to the project team members

• Set the agenda for the workshop


FDOT Risk Starter List

Florida Department of TransportationFlorida Department of Transportation

Functional Area Risk NameInclude Risk

Comments84

Contracting and

ProcurementChanges in Contract Packaging 1

Assumption is Segment 1 then separate contract for 2/3, low likelihood of

change. Currently assuming a 2 month gap between projects, may reevaluate

the staggering of projects based on estimated construction duration

Contracting and

Procurement

Other Issues Related to Contract Language (Warranties, Liquidated

Damages, DBE, Insurance/Bonding, etc.)1

Contracting and

ProcurementDelays in Ad/Bid/Award Process due to Addenda or Bid Protests 1

Contracting and

ProcurementLack of Qualified Bidders 1

Contracting and

Procurement

Other construction projects in region limit supply of labor, bid costs

are higher as a result1 Potential issue, $600 M in lets in D2, twice of normal

Contracting and

ProcurementContractor Non-Performance 1

Contracting and

ProcurementLabor and/or Productivity Disruptions 1 probably not a major concern - review vs. base schedule

Structures &

GeotechChanging Geotechnical Conditions (Due to New Information) 1

Segment 1, all design geotech complete (Drilling complete, analysis is in and

reports are being completed), very close to final in 90% submittal; Segment 2

not all borings are complete, have some issues accessing properties due to

hunting season, there have been issues raised by one property owner about

damage to property during drilling. Segment 3, have everything except for

OH sign geotech and need some borings at north end for local access road.

10

Base Cost Variability Review


Project Schedule Review

Florida Department of TransportationFlorida Department of Transportation

11

$533.2

$605.3

$674.4

$360

.7

$452

.10%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

$250.0 $350.0 $450.0 $550.0 $650.0 $750.0

Pro

bab

ility

of N

ot E

xcee

din

g

Project Cost, Millions of Dollars

Alternative 1 - Risk-Based Total Cost

(Pre-Response)

Alternative 1 - Base Cost Estimate

(mean value, 2010 $)

Alternative 1 - Base Cost Estimate

(mean value, escalated)

Baseline Risk Assessment Results

$650.0

Contingency

$650.0 - $605.3 = $44.7

$658

.9

$652.2

$739.5

$775.7

$829.5

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

$500 $550 $600 $650 $700 $750 $800 $850 $900 $950

Pro

bab

ility

of

No

t Ex

ceed

ing

Cost, Millions of Dollars

Non-Escalated Design-Build

Contract Base Cost, Program

Non Escalated Design-Build

Contract Risk-Adjusted Total Cost,

Program


Baseline Risk Assessment Results

$1.4

$1.5

$1.7

$1.9

$2.3

$2.3

$3.8

$3.8

$25.5

$51.0

$0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00

MGT 900.03 - Loss of Toll Revenue due to complex MOT

ENV 30.01a12 - Expected Controversy on Environmental Grounds - Alt

1/2

RR 20 .01 - Cost for Railroad Flaggers

ENV 80.01 - New Storm water Rule - Water quantity and quality

issues

ENV 60.06a1 - Development of mitigation plan to offset impacts to

public lands - Alt 1

STG 10.01 - Design Changes on Bridge or Overpass

ENV 10.01a1 - Determination of Significance Requiring EIS - Alt 1

CNS 30.01 - Excavation impacts during construction due to weather

ENV 20.04a1 - Determination of indirect impacts to wetlands - Alt 1

ENV 20.03a1 - Determination of direct impacts to wetlands - Alt 1

Expected Value Cost Impact ($ millions)

Based on Risks that Impact Alternative 1 Activities

Alternative 1 - Cost EV ($M) (Pre-Response)


12

Risk Register


�The Risk Register is the single most powerful Control Tool

�Incorporate it in your Progress Reports!

Workshop Deliverables

• Final report detailing the results of the workshop

• Final Risk Register for Project Manager to use

managing the identified risks


13

Risk Management – Outcomes


o Validate project cost & schedule

o Replace project contingency with risk-based estimate

o Create a risk Response plan

• Identify high cost and schedule risk drivers

• Develop mitigation strategies

o Manage contingency

• Reduce contingency as project evolves

• Allocate excess funds to other projects

Risk Response


14

Risk Management

“Hope is not a Strategy”Florida Department of Transportation


General Lessons Learned

28

o Challenges

o Strengths

o Lessons Learned

o Best Practices

15


17

7/18/2014

Greg Davis, PE

State Estimates Engineer

[email protected]

850-414-4170

TRANSPORTATION CDOT/FHWA Peer Exchange · CDOT/FHWA Peer Exchange Florida Department of...

Documents

Transcript of TRANSPORTATION CDOT/FHWA Peer Exchange · CDOT/FHWA Peer Exchange Florida Department of...