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July/August 2004
Sharing Experiences and Lessons Learned
by Chris Allen and Phil E. BarnesThe spirit of innovation on megaprojects reveals knowledge about engineering, construction, and effective management.
All projects offer opportunities to retool business processes, improve efficiency, and curtail costs and completion times without sacrificing project quality. Megaprojects are no exception, although they are bigger and more complicated than normal projects. The Federal Highway Administration's (FHWA) focus on continuous quality improvement sets the stage for incorporating lessons learned into standard practices.
A wealth of information about megaprojects is available, and FHWA division offices and State departments of transportation (DOTs) show an eagerness to share what they have come to know as best practices for the "megas." Nearing completion, Boston's Central Artery/Tunnel (CA/T or "Big Dig") Project has a well-organized collection of lessons learned that already has proven useful to other projects. Utah's Interstate 15 Corridor Reconstruction Project (I-15 Project), Boston's CA/T, and Denver's Transportation Expansion Project (T-REX) use the Web to share information, and the Woodrow Wilson Bridge Project in suburban Washington, DC, offers help through booths at conferences. In May 2003, T-REX produced an interim report on lessons learned. The Louisville-Southern Indiana Ohio River Bridges Project has not yet entered the design phase but already has gathered a succinct series of lessons the bistate (Kentucky and Indiana) team learned during the National Environmental Policy Act (NEPA) phase.
Some of the lessons learned may be surprising.
Operating in a Fishbowl
Megaprojects are not subtle. Highly visible, megaprojects require a broad base of support, not only from the traveling public but also from politicians and the media. Larry Heil, FHWA's interim project manager for the Louisville-Southern Indiana Ohio River Bridges Project, which will build two new bridges and reconstruct a busy interchange, says, "Megaprojects, by their nature, involve heightened interest by agency executives, elected officials, and opposition groups."
Learning More about Lessons Learned
In 2000, FHWA issued a concept paper for the creation of a headquarters-based Major Projects Team to provide a focal point for addressing FHWA's administration and oversight of all major projects. "We believe major projects are critical to our position in the global economy and our quality of life," says Tom Sorel, group leader for the Major Projects Team. The team:
- Serves as a focal point for policy and program issues for major projects
- Shares best practices and lessons learned
- Assists FHWA divisions during early planning and project development stages
- Assists FHWA divisions with the development of project management plans
- Manages audits by Office of the Inspector General and U.S. General Accounting Office
- Reports project statuses to Congress
- Provides independent review of financial plans
Management in full public view and scrutiny (or in a "fishbowl") is to be expected for any megaproject, and the experience need not be negative. "There was more positive public reaction to the I-15 Project," says Michael L. Morrow, P.E., field operations engineer for FHWA's Utah Division, "than any other project in my career. The traveling public and UDOT shared the same goal: get it done."
The project, which involved reconstructing 27 kilometers (17 miles) of I-15 before the opening of the 2002 Winter Olympic Games, featured the design-build concept, meaning that the design and construction processes occurred simultaneously. (See "Megaproject Procurement: Breaking from Tradition".) Expecting a 40- to 50-percent satisfaction rating, the project received unusually high ratings of 80 to 90 percent, a rare pleasure according to Morrow. There was a change in public perception as the team met its projected and expected timeline. Public confidence and trust rose. (In 1996, 51 percent surveyed were "confident [the] project will come in on schedule," and by 2000 this figure rose to 91 percent. In 2000, 90 percent also said the project was "worth the investment.") In the aftermath of the completed project, Morrow says, "There's a sense of 'can do' within Utah now." Morrow credited a solid public information effort, a spirit of partnering, visible progress, and delivery on promises with helping achieve the successful public approval ratings.
The rigorous schedule for Utah's I-15 project often required continuing paving operations through the night. The project team used the Internet to help keep the public informed about progress. With the ability to provide information already in broadcast format and with a quality ready for release to the media, the professional approach paid dividends in positive and accurate press and in the development of a trusting relationship with the traveling public.
"Construction projects today require communicating with project stakeholders in ways we didn't even consider 20 years ago," says former Executive Director of the Utah DOT Thomas R. Warne, currently of Tom Warne and Associates. "Now we need to consider different messages for the various stakeholder groups as well as the full array of delivery methods for this information."
As evidenced by megaproject Web sites, keeping the public informed is a high priority. This information sharing goes beyond listing road closures or detours and reveals a fundamental culture change. "Government agencies that once may have guarded information carefully have undergone a dramatic change and now see the value in nurturing a trusting relationship with the public," says Craig Actis, project administrator for FHWA's Colorado Division Office.
In Virginia, the DOT put its construction project management tool, which lists all active projects scheduled to be advertised for competitive bids, on a publicly available Web site with the statement, "We are making it publicly available for one simple reason—you own it. In fact, we only serve as your agents." (See "Building Public Trust".)
Lessons Learned from I-15's Public Information Effort The following lessons learned were gleaned from Utah's public information effort for the I-15 Corridor Reconstruction Project and provide an example of the types of pointers available from the Major Projects Team and the FHWA division offices. Although this list is by no means exhaustive, it presents the basic lessons learned from the project on this topic and could help focus the public information efforts of any large project.
- Cultivate the commitment of top-level people to public information and demonstrate personal commitment to the project. A message delivered by top-level agency management carries significant weight with the public.
- Assemble a public information team that can listen, respond, and be accessible. A talented team is essential to ensure a responsive public information program.
- Maintain a flexible and dynamic process. What may have worked best at the beginning of a project may not work well later in the program.
- Rely on the research. The public information Request for Proposals should be developed after initial research has been completed. Use research to identify issues and shape responses.
- Present a clear and consistent message. No matter what the media, the message should be consistent.
- Seek a high level of internal trust within the project team. Identification of a project information manager with direct access to the top-level project management can be a key to success because it allows an immediate response and collaboration on project issues.
- Recognize the public's fear of the "unknown" aspects of a project. By addressing uncertainty, the team can educate the public about transportation projects in general and the megaproject specifically.
- Employ a staff with the skill set for public information/relations. Not everyone is a public involvement specialist or good public speaker. Consider hiring a professional public relations/information consultant.
- Use paid and free media to communicate information about the project. The cost of paid media may be worth it to ensure that a message is correct, accurate, and consistent.
- Employ a variety of media techniques to keep the news "new." Media techniques that may have worked well at the beginning of a project may not be accessed as frequently by the public midway through the project.
- Show visible progress on the job site. Activity translates into tax dollars being used wisely and can gain substantial credibility for the agency and the contractor.
"You can never do enough coordination and communication with the press and other interested parties," says Daniel C. Wood, division bridge engineer for FHWA's Massachusetts Division Office, home to Boston's Big Dig. A constant focus for the Big Dig was, "Make sure the press hears your message."
Heil points out that even though the Louisville-Southern Indiana Ohio River Bridges Project has just concluded the NEPA impact analysis and consultation process, it has become very evident that the public needs to be confident that government is listening to its concerns and responding accordingly.
Although not all stakeholder expectations can be met, good business practices that are essential for project success include ensuring a real understanding of people's expectations and keeping key stakeholders closely informed of progress, issues, and upcoming events. These practices minimize the potential for blindsiding the public, State and Federal agencies, and elected officials.
"Keeping stakeholders informed is very important, but maintaining a dialogue that encourages openness and a free exchange of information and ideas with stakeholders is essential to a successful project," says the Kentucky Transportation Cabinet Deputy State Highway Engineer Bill Gulick. "Stakeholders' ability to contribute to, and to have an effect on, the project is not only important but is an obligation to the owners the people who are influenced by and/or use these facilities."
"Good press is critical," says Actis of FHWA's Colorado Division Office where Denver's T-REX project will reconstruct 29 kilometers (18 miles) of I-25 and I-225, and add 31 kilometers (19 miles) of light rail transit (LRT) line with 13 new rail stations. The T-REX design-build project made minimizing the inconvenience to motorists its top project priority.
T-REX required that a minimum number of highway lanes remain open to the public during peak travel periods—thus obliging the contractor to do much of the work during nighttime hours. To meet this goal, the contractor implemented an additional lane for high-occupancy vehicle traffic for much of the project as well as a courtesy patrol to aid stalled motorists and assist in promptly removing vehicle crashes from travel lanes. Not only is the public kept informed of road closures due to this Colorado megaproject, but the project team devotes particular attention to the comfort of motorists during construction. "For some construction operations involving a great deal of noise, residents have been relocated to motels and the contractor brought in semitrailers to act as mobile sound barriers," says Actis.
At other times, local businesses have asked for improvements. For example, the University of Denver requested a simple but effective improvement to a light rail station: customize the station and parking garage nearest the university with the school color. Customizations that do not dramatically increase costs can be important for helping ensure that the public and other stakeholders embrace the project. When completed, crimson paint on the parking structure and the University Station LRT canopies will provide subtle accents that tell LRT riders they are in university territory. When possible to include such improvements in a contract, this is an effective means of incorporating community involvement.
John Leonard of UDOT (red jacket) and other project stakeholders are interviewed by local morning talk show host Doug Wright on KSL Radio. UDOT representatives updated listeners on project progress and responded to questions and concerns. One beneficial aspect of management in a fishbowl is that local businesses, communities, and institutions like the university are aware of the project and able to make their requests early enough in the project's life cycle to be considered. To manage effectively in an open environment, officials must be willing to communicate project progress—the highs and the lows—to the public in real time as developments occur. Providing stakeholder access despite the perceived risks can be vital to maintaining public trust throughout project delivery.
"The rule of 'no surprises' is crucial to maintain," says FHWA Deputy Administrator J. Richard Capka. "The management team must clearly demonstrate that the project is being managed honestly and effectively. There should be no perception that the project is fertile ground for an investigative reporter to uncover hidden data."
To comply with Denver's noise variance, the contractors implemented a comprehensive noise mitigation plan for the T-REX project. One innovative aspect of the plan involved placing mobile sound trailers along the shoulders of I-25 to mitigate construction noise in sensitive areas. Partnering: It Takes a Team
To deliver a project efficiently and successfully takes a team of public and private sector organizations. Defining relationships is critical and should be based on mutual understanding and an appreciation of goals and objectives, and should not be adversarial in nature. Partnerships have proven to be successful for many megaproject managers.
Partnering, according to the CA/T Project's Partnering Manual, "is a way of conducting business in which two or more organizations make long-term commitments to achieve mutual goals." Formal partnering, implemented in 1992 on the Big Dig, aims to improve schedule adherence, quality, safety, and project performance, as well as to reduce costs, disputes, and litigation.
"The partnering program is well documented," says Wood. "We hired an independent company to provide a facilitator for all partnering sessions, and the contractor and project split the cost of the program. The CA/T Project uses partnering extensively with the contractors, design consultants, community groups, and [any] agency or organization that is involved with the project. We even use partnering within the project organization and between all levels of management." The program is voluntary and contains a resolution tool for issues that come up on a daily basis.
In Utah, FHWA learned an early lesson on the I-15 Corridor Reconstruction Project: For those new to partnering, overcoming the inertia of doing things as they have always been done can be difficult. The culture change required by a partnering approach was particularly noted in Utah during construction inspections where the old paradigm of "catch, stop work, and punish" was replaced with "observe, inform, and partner the problem."
In Colorado, T-REX not only replicated the partnering concept employed on other megaprojects but also borrowed another concept from Utah—colocating the owner and design-build contractor team in the same office space. When feasible, collocation of the office hub facilitates team building and increases efficiency by reducing the need for travel and improving communication among partners.
Whereas most project insurance programs are owner-controlled, T-REX's insurance program is partner-controlled by both owner and contractor. Partner-controlled insurance provides an additional incentive for the contractor, who shares the burden of insurance claims.
T-REX is unconventional in several additional ways. Not only is it a design-build project that uses a partnering approach, but also it is an intermodal "One DOT" project in a tight corridor making it "cost effective and more expedient to make both road and light rail improvements at one time," says Actis. One DOT is a U.S. Department of Transportation (USDOT) multimodal management strategy that stresses collaboration between agencies to reduce duplication and save resources.
A parking garage being built near the University of Denver will be customized with the school colors one approach to including stakeholder preferences in a megaproject. To meet its particular needs, Actis says that T-REX learned "picking outside-the-box employees worked best." Staff members who are accustomed to thinking in traditional contracting terms can exhibit a steep learning curve when suddenly immersed in a design-build contract, where design and construction take place concurrently. To facilitate the swift progress possible through design-build contracting, managers should select staff members who can hit the ground running and whose work styles will not handicap the process.
A significant difference between a traditional project and the T-REX design-build effort is the amount of risk and responsibility shared by the contractor. On T-REX, the contractor performs material tests and inspections that traditionally would be performed by the owner. In place of directing the contractor's work, the owner audits the contractor's work. Staff needs to be comfortable with this relationship in order for the team to work well together.
Moving the NEPA process earlier in the transportation planning phase of a project may bring a potentially volatile portion of project planning to the forefront. Throughout the NEPA process, members of the Louisville-Southern Indiana Ohio River Bridges Project team dealt with purpose and need issues. "Clarification regarding the need for two new bridges was critical," says Heil. "We needed to articulate efficiency in terms of dollars and user benefits via improved system efficiency, and the information had to stand legal scrutiny. It is important to have the project manager on board when the NEPA process is beginning and to make sure that person is project manager for only this one project," says Heil. Managing a megaproject takes a team-based approach and is a full-time job that does not tolerate a project manager attending to multiple projects.
Promoting Innovation From the Ground Up
If there is any truth to the saying that "necessity is the mother of invention," then it is no surprise that megaprojects have spurred innovations proportional to their size. Extraordinary innovations are solving a diverse range of problems, whether on air (noise mitigation, air quality), water (slurry wall construction, bridge engineering, tunnel ventilation, tunnel jacking), or land (soil improvement, green space development, material disposal).
A generational effect drives many innovations with regard to megaprojects, as older projects make advances that later efforts refine and build upon. "It is very helpful to visit a similar megaproject that is further along to learn from its experiences," says Heil. "INDOT [Indiana DOT], KYTC [Kentucky Transportation Cabinet], and the FHWA project manager all benefited by visiting the Woodrow Wilson Bridge Project," he says. In turn, the staff managing the Woodrow Wilson Bridge Project learned a great deal from the CA/T Project.
The Web site for the CA/T Project (www.bigdig.com) describes the Big Dig as "the largest, most complex, and technologically challenging highway project ever attempted in American history." The CA/T Project also is one of the longest running projects in the Nation. This "granddaddy of megaprojects" offers advancements so numerous that USDOT and FHWA developed a technology transfer tool known as the Innovations and Advancements Program (www.bigdig.com/thtml/fhwa02.htm) that features 12 topics worthy of consideration by managers of future projects. Below are highlights from the Big Dig's landmark innovations.
Tunnel ventilation. One of the CA/T Project's world-class innovations is the tunnel ventilation system, which "is the largest mechanical ventilated system in the world," says Wood. The ventilation system is designed to manage smoke and heat during a fire; however, during normal operations, the ventilation system keeps poisonous carbon dioxide gas from reaching unhealthy levels inside Boston's tunnels. Research performed by the Memorial Tunnel Fire Ventilation Test Program, partially funded through the Big Dig, aided in the design of the ventilation system. Researchers conducted 100 full-scale fire tests and 7 ventilation configurations examined in the Memorial Tunnel, an abandoned road tunnel in Charleston, WV. Prior to this testing effort, all tunnels in the United States were designed based on empirical values, past experience, and theoretical analyses. Another benefit of the test program was the creation of SOLVENT, a computational tool that simulates fluid flow, heat transfer, and smoke transport in tunnels (see www.tunnelfire.com). SOLVENT not only influenced tunnel-building practices but can be used to improve firefighting practices as well.
Air quality. In 2001, Engineering News-Record quipped that "air quality in and around Boston's $14-billion Central Artery/Tunnel Project has now improved so much that officials may qualify the job for State air quality credits." Equipment used for the duration of the project was outfitted with catalytic converters costing between $1,000 and $3,000 each and requiring just 1 to 2 hours to install. With 350 pieces of equipment working on the project at the time, the impact was noticeable estimates indicate that the controls have cut carbon monoxide emissions by 32.8 metric tons (36.2 tons) per year, hydrocarbons by 11 metric tons (12.1 tons) per year, and particulates by 2.7 metric tons (3 tons) per year.
Noise mitigation. To mitigate noise complaints, the CA/T Project severely restricted noise while preserving the project's ambitious schedule. Simple solutions, like creating a nighttime noise patrol to monitor and enforce regulations on construction noise and turning down the volume on backup alarms to levels approved for nighttime operations by the Occupational Safety and Health Administration, resulted in a 50-percent drop in construction noise.
Jacking boxes as big as a highway had never been used in North America until the Big Dig. Shown are the first of three jacked tunnel sections nearly complete, with the spacers fully extended behind the tunnel section. Tunnel jacking. To build the CA/T Project's three massive tunnels under operating rail tracks without disrupting service, the team used an innovative tunnel jacking process, which involved excavating horizontally using hydraulic jacks. Three "jacking pits" were dug along the path of I-90 just east of the Southeast Expressway. Two of the pits were responsible for the main line of I-90; the third was a ramp from I-90 westbound to the underground I-93 northbound beneath Atlantic Avenue. Inside these pits, the contractor installed tunnel boxes 24.4 meters (80 feet) wide and 12.2 meters (40 feet) high and then pushed them under the railroad tracks using hydraulic jacks. The jacked sections ranged from 46 meters (150 feet) long for the I-90 ramp to 80 meters (260 feet) for I-90 westbound and 116 meters (380 feet) for I-90 eastbound.
Soil stabilization. The geologic conditions of the Fort Point Channel presented the CA/T Project with one of the most complicated design challenges. To construct the "cut and cover" tunnel section through Boston's soft, blue clays, the contractor added cement to strengthen the stability of more than 535,500 cubic meters (700,000 cubic yards) of soil that was too weak to support the proposed structures. The Big Dig's deep soil mix program represents the largest such project in the United States. The Woodrow Wilson Bridge Project recently placed 124,700 cubic meters (163,000 cubic yards) of soil mix on the Virginia side of the Potomac River.
Material disposal. Disposing of waste on a megaproject can be a challenge because of the sheer volume of material. One innovative approach to disposal included filling in the Granite Railway Company quarry in Quincy, MA, in 1999. The 122-meter (400-foot)-deep pit provided a temptation for local teens, some of whom lost their lives while trespassing in the quarry. The Big Dig also disposed of materials on Spectacle Island, an open landfill in the middle of Boston Harbor that had leaked thousands of gallons of eroding material into the surrounding water. Working with the island's owners, the city of Boston, the Massachusetts Department of Environmental Management, and the Massachusetts Department of Environmental Protection, the CA/T Project devised a plan to solve the island's erosion and pollution problem by depositing 2.9 million cubic meters (3.8 million cubic yards) of excavated material as a cap on the landfill—at a lesser cost than disposing of the material in alternate sites throughout Massachusetts. With a 46-centimeter (18-inch) clay cap and a layer of topsoil 0.5 to 1.5 meters (2 to 5 feet) thick to sustain trees and other plants, the island has been turned into a new park for the city.
Slurry walls are the concrete walls that run from the surface of the ground down to bedrock, defining the area to be excavated for the underground highway and eventually forming the actual walls of the new Central Artery. They were essential to the success of the Big Dig, particularly under the old elevated highway where there was no headroom for taller, conventional excavators. Slurry walls produced a rigid work area for excavating the tunnel without the need for a much wider conventional trench with sloping sides, which would have been impossible in the narrow corridor where the elevated highway now stands. A total of more than 7,900 meters (26,000 linear feet) of slurry walls—about 8 kilometers (5 miles) worth—went into the project.
A cruise ship passes through the lifted old Woodrow Wilson Bridge, which opens about 265 times per year, halting traffic. The new, taller bridge will reduce openings to about 65 times per year. Bridges. The underground Central Artery surfaces at Causeway Street and crosses the Charles River on the Leonard P. Zakim Bunker Hill Bridge, presently the widest cable-stayed bridge in the world (until perhaps, Missouri and Illinois build their planned 68-meter [222-foot]-wide cable-stayed Mississippi River bridge) and the first in the United States with an asymmetrical, hybrid design using both steel and concrete in its frame. The main span consists of a steel box girder and floor beams, while the back spans contain post-tensioned concrete. The bridge is 10 lanes wide and 436 meters (1,432 feet) long, and its towers reach a height of 82 meters (270 feet). Eight lanes pass through the legs of the twin towers, and two lanes, which will accommodate northbound traffic from the Sumner Tunnel and the North End, are cantilevered on the east side. The cantilevered portion provides the bridge's unique, asymmetrical design. The northbound and southbound sections of I-93 opened to traffic in 2003, and the two cantilevered lanes will open sometime in 2005.
The Storrow Drive Connector Bridge, a 253-meter (830-foot)-long, four-lane companion to the Zakim Bunker Hill Bridge, connects the Leverett Circle area on the northwestern edge of downtown Boston with points north of the Charles River. The Storrow Drive Connector Bridge is comprised of nine box girder sections that, in cross section, are the largest in North America and were floated into place on a barge and raised by cranes or (in the main span) jacks. This bridge opened to traffic 8 days ahead of schedule in October 1999.
Renderings of the Woodrow Wilson Bridge's original box girder design and the value engineering solution of plate girders. Controlling Costs: The Bottom Line
It is no secret that megaprojects garner a reputation for escalating costs and pay the price in lost credibility with political leaders and the public. Careers are affected, investigations are made, and schedules are delayed. Many of the most complex lessons learned from megaprojects center around cost and have covered the entire project continuum. How are accurate estimates created? What methods are used to ensure that cost scheduling and status reporting are effective? Is cost containment being pursued aggressively enough? All of these issues have generated lessons learned; some have resulted in refined best practices. (See "Accounting for Megaproject Dollars")
Inaccurate estimates erode critical project support both from elected officials and the public. Creating an accurate estimate is of utmost importance and the way in which that estimate is represented is equally important. Critics of Boston's Big Dig are quick to point out that this $14.6 billion project was originally estimated at $2.6 billion. What few realize is that initial estimates created in 1982 did not allow for inflation. According to Wood, "Fifty-five percent of the cost escalation was due to inflation alone." Estimates should be in year-of-expenditure dollars.
Innovative Contracting, Big Dig Style When additional scope is added to a construction contract via a new work order, there may be circumstances that complicate the negotiating price, such as the risk of meeting a certain milestone. Both owner and contractor may find it advantageous to include an incentive-disincentive clause in the contract language, unique to the issue at hand, so that the contractor is commercially motivated to meet the owner's objectives.
As an example of this approach on the CA/T Project, construction of a temporary ramp needed to be added to a particular contract and to be finished by a date that would be certain to avoid a delay claim by a follow on contractor. A major problem in finalizing a forward-priced agreement was encountered: The layout and detailed design of the ramp was not yet complete, and, even had these materials been available, the contractor's original position was that, on a straight-time basis, completion could not be achieved until 1 month later than the owner's need date. A baseline forward price was agreed upon, and a second, incentive-disincentive pay item was included to pay the contractor an extra agreed-upon amount if the owner's ramp completion need date was met. But this extra amount would be reduced on a per diem basis should the ramp completion be later than the need date, regardless of who caused the delay. Further, this per diem reduction of the extra amount would be in addition to any liquidated damages that might apply.
Note that the owner's objectives were to overcome any resource problems that might arise for the contractor and get the ramp completed on time. The contractor's focus was to avoid any delay seven those caused by the owner in the completion of the design because such delays could lessen its chances to earn the incentive bonus by invoking the per diem reduction clause, in addition to triggering applicable liquidation damages. The contractor's perspective was that the incentive payment provided the ability to focus resources to meet the deadline, including adding extra shifts. Therefore, the contractor's only risk factor that could preclude timely completion of the ramp and the award of the incentive pay was a design delay due to the owner. Since the owner wanted the ramp to be completed on time, owner delays were highly unlikely. The odds favored that the owner would ensure that the design would be ready for the contractor to build the ramp on time and earn the incentive bonus as well.
The result? The ramp was completed a day early.
Beginning its design phase almost 20 years after the start of the Big Dig, the Woodrow Wilson Bridge Project, which will replace the aging 6-lane bridge with a new 12-lane double structure and reconstruct adjacent interchanges in both Maryland and Virginia, provided estimates in year-of-expenditure dollars by starting with current costs and then adding an appropriate inflation rate. Jitesh Parikh, project manager for FHWA's Maryland Division Office, estimates that the inflation rate used today generally "ranges between 2 and 4 percent," depending on the practices of the State in which a particular project occurs. Local economy, bond issues, and a host of other factors go into creating an accurate cost estimate and a corresponding inflation rate. To date, 22 of 27 contracts for the Wilson Bridge Project have come in under estimate, which will save taxpayers tens of millions of dollars and may benefit the project schedule by accelerating some work.
"If project cost estimates are low, it's better to see that early," says Heil. Building public trust is essential to a successful project. Cost estimates need to be accurate and enduring, and take into account areas of potential cost increases and the time values of money. When the expectations of elected officials and the public are not met, confidence in good fiscal management erodes.
Colorado's Actis agrees, "The numbers have to be realistic." This is particularly true on a design-build project like T-REX in which there are no contingency funds in the design-build portion to cover unanticipated technical problems or cost creep. The T-REX Project Management Team has been very rigorous in managing the project within the budget and contingency. As numerous third parties have requested additional work, the team has consistently considered changes as long as the third party was willing to fund the work and it did not extend the project schedule or add to the cost of the original work.
During the project planning process, a number of unknowns can increase the difficulty of making accurate estimates. Estimates for underground work are particularly complicated and prone to unanticipated additional costs because the geology can present surprises ranging from large boulders that are difficult to excavate to soft soils that are incapable of supporting infrastructure. The Big Dig encountered both.
"As part of public involvement and information sharing we must explain that estimates and predictions are part of the process," says Gulick, "and that we cannot truly know what complexities await us underground, what unexpected construction problems will develop, what social or physical change may occur during the life of the project. We must develop with our partners the principles—a framework—for how such problems will be addressed." Today, this framework relies heavily on planning and budgeting for contingencies, and performing risk analyses where needed. Larry Heil explains that the Louisville-Southern Indiana Ohio River Bridges Project plans to drill a 1.8-meter (6-foot) test bore for a tunnel to find out exactly what is underground that may not be revealed by core samples. In testimony before Congress, FHWA Administrator Mary E. Peters stated, "The use of contingencies based on risk analyses is an essential planning tool to help ensure against significant cost growth."
Because an estimate during the planning/programming phases is usually conceptual in nature, and still an approximation, Parikh says, "It may be appropriate to express the costs as a range." According to Parikh, as a project progresses from planning to environmental and design stages, the cost estimate should be refined. In preparing the estimate, appropriate contingencies based on project risks and unknowns should be determined and applied. When bids arrive, they should validate the accuracy of estimates by coming reasonably close.
Unfortunately, this is not always the case. The Woodrow Wilson Bridge Project initially received only one bid, which was significantly higher than anticipated so much higher that the controversial decision to repackage the project was made and a value engineering approach applied. The result for the Wilson Bridge Project? The steel box girders of the original design were replaced by steel plate girders, and the project was divided into three separate contracts. "Because of that design change, more steel fabricators could bid on the job," says Parikh.
Three main factors combined to create the need to repackage the Woodrow Wilson Bridge Project. "First," says Parikh, "there are not that many contractors that can bid on a contract of that size. Second, the economic conditions were also a factor. At the time when our bid went out, there were a few other megaproject bids in process. Then, third, there is the insurance. It is extremely hard for contractors to get bond on a project of such a large value."
How to avoid this situation in the future? "What we have learned from the Wilson Bridge we will apply to future contracts," says Parikh. In fact, the lessons learned can be implemented seamlessly. In the early planning stages of another megaproject in Maryland, Parikh explains, "the thinking is to break it down into smaller contracts." The advantage is that more contractors of varying sizes will be able to present bids, and their insurance costs will be proportionately lower. From the owner's perspective, however, there is a disadvantage to this approach because contract administration tasks multiply with the number of contracts.
When estimates go awry, the status report can be used as "an early warning system," says Wood. Bad news is better if known and acted on quickly. "Catch problems early enough so there is no domino effect on other projects and contracts," advises Wood.
Viewed from the existing bridge operator's tower looking south, these concrete slabs are seen supported by steel forms that trace the graceful faux-arch design of the new Woodrow Wilson Bridge in Virginia. The team for the Woodrow Wilson Bridge Project, which has 23 prime contractors and 119 subcontractors, has found that a weekly 30-minute teleconference is an efficient means of reviewing a status report. The teleconference is accompanied by an agenda and an update for each contract that includes a brief description of current progress, planned activities for the upcoming 30 days, potential community impacts, issues and concerns, and key interface dates. "It's a great communication tool and a proactive approach for making sure that we are addressing issues before they become a problem," says Parikh.
Cost creep presents another financial pitfall, particularly for projects with the lengthy lifespan of a megaproject. FHWA has begun a State-level process of determining cost growth on all projects, measured from the point of contract award. This process is augmented at the national level by FHWA's Corporate Dashboard initiative, which tracks cost growth on all projects greater than $10 million.
Innovations from Other Megaprojects
Problem: The tight right-of-way available on the T-REX Project would not allow traditional building techniques and excavation.
Innovation: The contractor used caisson walls in which vertical holes were drilled into the ground and then filled with concrete. This technique enabled the contractor to stay within the right-of-way.
Problem: Performing an intermodal project in a narrow corridor.
Innovation: T-REX combined both rail and highway improvements into a single contract awarded to a single contractor.
Problem: The construction schedule does not allow sufficient time for embankment settlement.
Innovation: To address settlement and reduce utility conflicts, I-15 was the first project in Utah to use geofoam, a lightweight fill material approximately one-tenth the weight of granular fills. As detailed in the I-15 Corridor Reconstruction Project Design/Build Evaluation Final Report, the expanded polystyrene foam was fabricated as large blocks approximately 1.2 meters (4 feet) square by 6 meters (20 feet) long and used for embankments. The blocks were stacked and held together with metal connectors before placement. Once in place, the block assembly was wrapped in a geotextile fabric that encapsulated them. The geotextile fabric was topped with a concrete load distribution slab that was reinforced with an epoxy-coated reinforcement steel. After placing the concrete, the contractor applied at least 1 meter (3.3 feet) of granular fill material to encapsulate the foam blocks completely. After placing the fill, the contractor used the standard section for pavement or abutments.
Problem: Soils along the I-15 corridor are soft and highly compressible, which means they can settle considerably under load. When I-15 was originally built, UDOT weighted the soils for several years prior to constructing the final pavements and structures, but the schedule for the reconstruction project did not allow for years of settlement.
Innovation: The contractor used wick drains to hasten the settlement process and meet scheduled project milestones. A corrugated plastic wick wrapped in a geotextile filter fabric and driven into the ground can accelerate the rate of settlement by providing an avenue to release moisture from the compressed soils. Wick drains also are being used in the Woodrow Wilson Bridge Project.
Although the accuracy of costing details is essential to forming credible project budgets, the big picture is equally essential. According to Wood, "One of the key elements for managing any project, especially a megaproject, is cost control and, in a broader sense, financial control. Not only do the requirements of the project from a cost perspective need to be defined, but revenue sources or revenue opportunities need to be established to validate that funding is available at the time the bills are arriving."
The right mix of funds is equally critical. "Having a surplus of bridge-related funds will not be beneficial if there is no bridge construction underway," says Wood. "The project fiscal schedule must recognize not only the total value of funds, but also the type of funding that is necessary to support the program timetable."
In the Transportation Equity Act for the 21st Century (TEA-21) legislation, to oversee the big financial picture more effectively, Congress made the creation of a financial plan a requirement for all megaprojects. This overall plan is a comprehensive management tool that reflects the cost and revenue structure of a project, and provides a reasonable assurance that sufficient financial resources will be available to implement and complete the project as planned. The financial plan should identify funding shortfalls along with proposed resource solutions. It provides management with a roadmap to all funding issues throughout the project continuum.
Deploying Lessons Learned
This article touches on only some of the lessons that project managers and engineers have learned by working on a megaproject. Whether lessons learned involve maintaining the public trust, making technological advancements, changing the way contracting is approached, or improving how private contractors, government, and the public work together, the end result is to continue to improve how transportation business gets done.
Chris Allen currently serves on the Major Projects Team in the FHWA headquarters Office of Infrastructure in Washington, DC. This position includes risk assessment and management responsibilities and the identification of stewardship best practices. Previously, he served as technology transfer specialist in FHWA's Resource Center. In his 14 years with FHWA, Allen also served as a structural engineer and as an area engineer in FHWA's New York Division Office in Albany. He holds a B.S. in civil and environmental engineering from Clarkson University.
Phil E. Barnes is a financial specialist who serves on the Major Projects Team in the FHWA headquarters Office of Infrastructure in Washington, DC. This position includes the review of major project financial plans, tracking cost growth, the development of cost growth countermeasures, and the identification of stewardship best practices. He also is involved in FHWA's Professional Development Program and has traveled the Nation studying major project trends and best practices. Previously, Barnes worked in the private sector as a consultant for financial institutions. He earned his B.S. in finance from the University of Nebraska-Lincoln.
For more information on lessons learned, contact Chris Allen at 202-366-4104 or chris.allen@fhwa.dot.gov, or Phil Barnes at 202-366-0733 or philip.e.barnes@fhwa.dot.gov.
Other Articles in this issue:
Megaprojects — They Are a Different Breed
From Highways to Skyways and Seaways — the Intermodal Challenge
Accounting for Megaproject Dollars
Megaproject Procurement: Breaking from Tradition
Sharing Experiences and Lessons Learned
A Well-Conceived Plan Will Pull It All Together
July/August 2004 · Vol. 68 · No. 1
