Strategies for Reducing Risk on Design-Build Public Transit Projects

Michael B. EidlinPrincipal Program Manager

Gannett Fleming, Inc.

Outline

• Introduction• Federally Funded Transit Projects• Unique Characteristics of Transit

Projects• Common Problem Areas• Scope Development Topics• Risk Allocation Strategies

FTA’s Project Development Process

• Alternatives Analysis (AA)• Environmental Analysis

(EIS/EA)• Preliminary Engineering

(PE)*• Final Design (FD)*• Full-Funding Grant

Agreement (FFGA)*• Construction*• Start-up and Testing

* Prior FTA approval required

New Starts and Small Starts

Capital Investment Grants

New Starts• Complex Process• Annual submission and rating by FTA• Local Match is Critical

Small Starts (<$75 million federal funding)

Very Small Starts (Project <$50 million)

Exempt Projects (Project <$25 million)

New Starts

Title 49 US Code Section 5309 (49 USC §5309)80% federal funding possible; 50% more likelyAnnual Submittals to FTA

Ridership Projections

Base Case

Cost Effectiveness Calculation

Project Financial Plan

New Starts

Evaluation Factors• Local Financial Commitment• Project Justification Criteria

Ratings: High, Med-High, Medium, Med-Low, Low

Must get an overall MEDIUM to advance

http://www.fta.dot.gov/planning/newstarts/planning_environment_2619.html

Small Starts

Total Project Cost < $250 million

Funding Request < $75 million

Be a fixed guideway for at least 50% of the project length in the peak period; and/or

Be a corridor-based bus project with minimum elements, e.g.,• Substantial Transit Stations• Signal Priority / Pre-emption (for Bus/LRT)• Low Floor / Level Boarding Vehicles

Very Small Starts

Total Project Cost < $50 million

Bus, Rail or Ferry Projects

Required Elements, e.g.,• Transit Stations; • Signal Priority/Pre-emption (for Bus/LRT); • Low Floor / Level Boarding Vehicles; Special

Branding of Service• Less then $3 million per mile (excl. vehicles)

FTA Funded Projects

Affects Third-party Contracts

Brooks Act - Qualifications based selection of architects and engineers

Davis – Bacon wage rates for construction workers

Buy America requirements – No Waivers!

FTA Circular 4220.1FThird-party Contracting Guidance http://fta.dot.gov/legislation_law/12349_8641.html

Standard Cost Categories

100 FINANCE CHARGES

 90 UNALLOCATED CONTINGENCY

80 PROFESSIONAL SERVICES (applies to Cats. 10-50)

70 VEHICLES (number)

60 ROW, LAND, EXISTING IMPROVEMENTS

50 SYSTEMS

40 SITEWORK & SPECIAL CONDITIONS

30 SUPPORT FACILITIES: YARDS, SHOPS, ADMIN. BLDGS

20 STATIONS, STOPS, TERMINALS, INTERMODAL (number)

10 GUIDEWAY & TRACK ELEMENTS (route miles)

http://www.fta.dot.gov/13070_2580.html

FTA vs. FHWA

State DOTs get their money from a formula

Transit projects compete for funds nationally

DOTs generally experienced with contracting and D-B delivery

Transit agencies may have little contracting experience

FTA vs. FHWA

Highway project generally proceed after a Record of Decision (ROD)

FTA projects can buy ROW after ROD

DOTs generally require all ROW available before NTP; not true with transit projects

FTA involvement brings administrative burden

FTA stays involved in projects

FTA Project Management Oversight (PMOC)

Transit Project Characteristics

Linear corridors, sometimes 10 or more miles long

Multiple political jurisdictions with differing design and permitting requirements

Rights-of-way consisting of numerous parcels in differing ownerships

Projects in urban areas with significant existing utility infrastructure

Jurisdictions unfamiliar with rail transit

Transit Project Characteristics

Significant public involvement requirements throughout the project development process

Significant political interest and involvement in the project (often controversial)FTA funding brings additional regulatory requirements• NTP for Construction generally follows award of a Full-

Funding Grant Agreement (FFGA) or Project Construction Grant Agreement (PCGA)

Transit Project Characteristics

Project elements such as stations, bridges that require special aesthetic attention or incorporate public art elements

Project sponsors may lack experience in contracting and use of design-build delivery

Project sponsors may lack a thorough understanding of their project’s technical requirements

Common Problems

Claims associated with lack of access because all ROW is not available on NTP

Significant additional costs due to the discovery, relocation or reconstruction of utilities

Delays and additional costs common if freight railroads occupy the same corridor, intersect the rail transit line or form part of the rail transit line

Common Problems

Differing design and regulatory requirements imposed by multiple political jurisdictions

Unexpected conditions imposed by jurisdictions

Local jurisdictions unfamiliar with urban rail transit and its associated elements

Contract documents that inappropriately assign risks that are beyond the contractor’s ability to control or manage

Scope Development Topics

Environmental mitigation

requirements

Right-of-way availability

Jurisdictional obligations and

differences

Utility construction, relocation and

protection

Known hazardous materials

Special design or aesthetic

requirements

Owner furnished materials/ equipment

Beneficial occupancy of

completed work

Scope Development Topics

Moratoria and special events

Freight railroad coordination and

flagging costs

Coordinationwith other

work/contractors

Compatibility with existing

systems

Testing and start-up

responsibilities

Re-use of existing

structures(e.g., bridges)

Betterments or Concurrent Non-Project Activities

Risk Allocation Strategies

Industry review of contract documents

Identification of significant risks in proposal with mitigation and proposed allocationNarrative approach with key assumptions, inter-dependencies, work windows, etc.

Escrow of proposal documents

Geotechnical Baseline Report

Dispute Review Board

Risk Allocation Strategies

Alternate technical proposals – price and schedule

Responsibility for permitting of alternative concepts

Stipend or other consideration for use of alternate technical proposals

Legal and contractual requirements for JV dispute resolution in proposal

Establish intermediate schedule milestones

Risk Allocation Strategies

Best value selection/public opening of price proposalsUse of provisional sums for uncertain scopePricing for force account and additional workResponsibility for errors in owner supplied prescriptive specs

Excusable and Compensable delays

Payment for materials received on site

Risk Allocation Strategies

Unanticipated archeological and biological resources or hazardous materials

Obligation to discover utilities

Risk of delay due to unidentified utilities

Remedy for defects/warranty

Transit Technical Resources

Statutes• 49 U.S. Code Chapter 53 (Transit Laws)

Federal Regulations• Title 49 Code of Federal Regulations Chapter

VI(example: 49 CFR 611)

FTA Circulars

Other FTA Publications

Lessons Learned

FTA Circulars

4220.1F Third-party Contracting

Guidance

• http://fta.dot.gov/legislation_law/12349_8641.html

5010.1D Grant Management Requirements

• http://fta.dot.gov/legislation_law/12349_8640.html

5200.1A Full-funding Grant Agreements

Guidance

• http://fta.dot.gov/legislation_law/12349_4119.html

9300.1B, Capital Investment

Program Guidance and Application

Instructions

• http://fta.dot.gov/legislation_law/12349_8642.html

Other FTA Publications

Construction Project Management

Handbook (September 2009)

Focus is Small Starts

• http://www.fta.dot.gov/documents/Construct_Proj_Mangmnt_CD.pdf

Project and Construction Management

Guidelines (May 2003)

• http://www.fta.dot.gov/grants/grants_14122.html

Best Practices Procurement

Handbook

• http://www.fta.dot.gov/grants/12831_6037.html

FTA Capital Cost Database

• http://www.fta.dot.gov/12305_11951.html

Other FTA Publications

Project Management

Oversight Lessons Learned

• http://www.fta.dot.gov/grants/12840.html

Quality Assurance and Quality

Control Guidelines

• http://www.fta.dot.gov/grants/13923_3876.html

Project Management

Oversight Procedures

• http://www.fta.dot.gov/grants_12048.html

DISCUSSION

CONTACT INFORMATION

Mike EidlinPrincipal Program

ManagerGannett Fleming, Inc.

Seattle, WA503-679-0602 (cell)meidlin@gfnet.com