Alternative Quality Management Systems for Highway Construction (2015)

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APPENDIX L: I-595 EXPRESS CORRIDOR, FLORIDA Project Information Project Name: I-595 Express Corridor Improvements Project Name of Agency: Florida Department of Transportation (FDOT) Location: Broward County, Florida Project Delivery Method (DBB, DB, CMR, PPP, etc.): PPP Procurement Procedure (QBS, Best-Value, Low Bid): Best Value Contract Payment Provisions (Lump Sum, GMP, Cost +): Lump sum Project Description The I-595 Express Corridor Improvements Project consists of the reconstruction of the I-595 mainline and all associated improvements to frontage roads and ramps from the I-75/Sawgrass Expressway interchange to the I-595/I-95 interchange, for a total length along I-595 of approximately 10.5 miles, and approximately 2.5 miles on Florida Turnpike from Peters Road to Griffin Road. The design and construction cost of the project is approximately $1.2 billion. The major project components include: • Three ground level reversible express toll lanes, serving express traffic to/from the I-75/ Sawgrass Expressway from/to east of S.R. 7, with a direct connection to the median of Florida Turnpike. These lanes will be operated as managed lanes with variable tolls to optimize traffic flow, and will reverse direction during peak travel times (eastbound in the a.m. /westbound in the p.m.). • Continuous connection of S.R. 84 frontage road between Davie Road and S.R. 7. • The addition of auxiliary lanes on I-595 along with combined ramps, cross-road bypasses, and grade-separated entrance and exit ramps to minimize merge, diverge and weaving movements. • Widening / reconstruction of 2.5 miles of the Florida Turnpike mainline and improvements to theI-595/Florida Turnpike interchange. • Construction of the New River Greenway, a component of the Broward County Greenway System. • 13 sound barriers providing noise abatement for 20 communities. • Implementation of an Express Bus Service within the corridor. Project Quality Profile What makes the QMS on this project different from a traditional project? Because the project is PPP, and the concessionaire will also be operating the project for 30 years, the concessionaire held the majority of the responsibility of the quality responsibilities, which equates to the acceptance QAO, as shown in Figure L1. FDOT did hire several engineering consultants such as the design manager and the Oversight Construction Engineer Inspector 295

(OCEI). Overall, the design manager’s responsibility was to make sure that the produced design met the requirements of the contract. FDOT and the design manager did have more involvement in the design when it came to elements of the project that were related to safety or long term assets. The OCEI was responsible for conducting statistical sampling verification testing regarding the Concessionaire’s Construction Engineering Inspection. Project Acceptance Construction Quality Assurance Design Quality Assurance Design Quality Control Construction Quality Control Design Released for Construction Construction Released for Final Payment Independent Assurance (if req’d) - functional audit -physical audit Owner Verification Testing Quality Management Independent Assurance (if req’d) - functional audit -physical audit Owner’s Responsibility Concessionaires’s Responsibility Independent Engineering Consultant Figure L1: I-595 Express Corridor Improvements Project – Acceptance Quality Management Organization Owner’s reasons for using alternate QM system Because of the project delivery method, the QM had to be changed. The concessionaire is responsible for operating and maintaining the project for 30 years, thus the much of the risk has been shifted to the concessionaire, including quality management. Project Financial and Schedule Information Original Total Awarded Value of project: $1.2 billion design and construction, $1.6 Billion includes operation and maintenance Final Total Awarded Value of project: Same as above 296

Project Schedule: Initial Advertising: October 1, 2007 RFP Issued to Shortlist: April 18, 2008 Contract Award: March 3, 2009 Original Project Delivery Period: substantial completion March 26, 2014 Final Project Delivery Period: June 23, 2014 Project Delivery Method Decision Rationale Agency Project Delivery Experience Table L1: Agency Project Delivery Method Experience Project Delivery Method Legislative/Legal Authority Number of years of experience with PDM DBB NA; Pilot projects only; General authorization NA; 1-5; 5-10; > 10 CMGC NA; Pilot projects only; General authorization NA; 1-5; 5-10; > 10 DB NA; Pilot projects only; General authorization NA; 1-5; 5-10; > 10 PPP NA; Pilot projects only; General authorization NA; 1-5; 5-10; > 10 Other NA; Pilot projects only; General authorization NA; 1-5; 5-10; > 10 Reasons for Selecting Project Delivery Method (most significant reason) Florida requires all projects to “pay as you go” or have all the money required to complete a project in the bank before a project can begin. For the I-595 project there was a 50% funding shortfall. This funding shortfall was going to require the total project to be split into 15 different projects and be completed piecemeal based on the amount of available funding. FDOT decided to use PPP because it resolved the funding shortfall resulting in the ability to complete the project as one project and 15 years ahead of the traditional method. Case Study Project Procurement Process Summary Procurement Phase Summary The agency used a two-step process to procure the concessionaire team. First was a request for qualifications (RFP) that resulted in a shortlist of four teams. These four teams then responded to the request for proposals (RFP). The final contract was awarded based on a best value approach that scored the proposals based on bid price availability payment and the technical elements of the proposal. Quality management programs were a required element of the proposal submittal and were evaluated as part of the procurement process. The proposal also clearly stated that the concessionaire was responsible for all quality management staff on the project. The fact that the concessionaire is responsible for operation and maintenance on the project under the lump sum proposals essentially created quality incentive/disincentive elements. There were some disincentives also included in the proposal based on if the project didn’t meet the specifications/requirements of the contract. 297

Table L2: Administrative and Performance Based Prequalification Requirements Designer prequalification program factors Prequalification Type Administrative Performance Based Prequalification required for all projects Prequalification required for selected projects only Prequalification standards are the same for all projects Prequalification standards are different by project class Construction prequalification program factors Prequalification Type Administrative Performance Based Prequalification required for all projects Prequalification required for selected projects only Prequalification standards are the same for all projects Prequalification standards are different by project class For this case study independent questionnaires were received from the design builder (D), the concessionaire (C), the agency (A) and the engineer (E). Not all four responded the same way to the questionnaire, thus each of these tables shows how each party responded. Table L3: Required Bidding Documents Did your project advertising/solicitation documents (i.e. IFB, RFQ, RFP, etc.) contain the following? Required proposal/ bid package submittal? If required, is it evaluated to make the award decision? If not required, is it a required submittal after contract award? Yes Yes Yes Qualifications of the Design Quality Manager Qualifications of the Construction Quality Manager Qualifications of other Quality Management Personnel (design reviewers, construction inspectors, technicians, etc.) Design quality management plan Design quality assurance plan Design quality control plan Construction quality management plan Construction quality assurance plan Construction quality control plan Quality management roles and responsibilities Design criteria checklists Construction testing matrix Quality-based incentive/disincentive features Warranties Optional warranties 298

Design Phase Summary For this case study independent questionnaires were received from the design builder (D), the concessionaire (C), the agency (A) and the engineer (E). Not all four responded the same way to the questionnaire, thus each of these tables shows how each party responded. Table L4: Design Quality Management Roles Responsible Party (select all that apply) Responsibility allocation for design management tasks Agency Design Staff Agency PM Staff Design Consultant Staff Constructor’s Pre-const. Staff Agency-hired QA/oversight Consultant Other, specify below Technical review of design deliverables 1 Checking of design calculations 2 Checking of quantities 2 Acceptance of design deliverables Review of specifications 2 Approval of final construction plans & other design documents Approval of progress payments for design progress 2 Approval of post-award design QM/QA/QC plans 2 Other: 1 – Is FDOT design construction; 2 – Is the Concessionaire Construction Phase Summary For this case study independent questionnaires were received from the design builder (D), the concessionaire (C), the agency (A) and the engineer (E). Not all four responded the same way to the questionnaire, thus each of these tables shows how each party responded. 299

Table L5: Construction Quality Management Roles Responsibility allocation for construction management tasks Agency Design Staff Agency PM Staff Design Consultant Staff Constructor’s Construction Staff Agency-hired QA/oversight Consultant Other, specify below Technical review of construction shop drawings Technical review of construction material submittals Checking of pay quantities Routine construction inspection Quality control testing Verification testing Acceptance testing Approval of progress payments for construction progress Approval of construction post-award QM/QA/QC plans Report of nonconforming work or punchlist. Other: Concessionaire and Concessionaire CEI Quality Management Planning QA/QC Plans The concessionaire holds most of the risk associated with gaining a quality product, in that they are responsible for operation and maintenance of the corridor for 30 years after construction. To ensure that quality was a priority, as part of the contract FDOT required a QA and QC plans for both design and construction be submitted and approved before work began. The concessionaire created an overall QM plan, while the designer created the design QM, QA, and QC plans and the design builder created the construction QM, QA, and QC plans. Use of mandated agency quality management plans There were no requirements to use agency quality management plans. But the agency did mandate numerous non-traditional checklist and procedures such as; witness and hold; IRT (inspection and testing Request, Pre-activity meetings….) and direct auditing by OCEI and the Concessionaire were mandated. Quality staff qualifications The resumes of the Concessionaire’s quality managers, showing their qualifications, were required to be submitted to FDOT. All others did not have to submit their resumes, but they had to meet the standard FDOT design and construction requirements; P.E. and CTCQP certification. 300

Contractor quality assurance test results Yes, contractor test results were used for quality assurance. This is due to the fact that the concessionaire team was responsible for all quality assurance on the project, and thus they decided to use the contractors test results. General Quality Management Procedures Standard of Care FDOT held the Concessionaire team to the same standard of care as of a traditional DBB project or a DB project. Alternate Quality Management Systems The agency was responsible for independent assurance and had an oversight construction engineering Inspector. The concessionaire team was responsible for all other elements of quality management. Summary QA Project Approach Overall on the project a PPP approach was used on the project. Because the concessionaire was responsible for the long term (30 year) operation and maintenance of the project they held the majority of the responsibility regarding quality. The agency did hire two separate consultants, one for design and one for construction. The primary responsibility of both was to audit the concessionaire team. If the QA approach is investigated from the perspective of the concessionaire it was more of a DB approach because the design builder had the primary responsibility for QA and QC even though there was a concessionaire CEI on the project. Example of Alternate QM System Used on This Project • The PPP project delivery method shifts the majority of the risk for quality onto the concessionaire team. This inherently requires a different QM system from that of DBB. Also FDOT decided to go with two oversight consultants, one hired by the agency – Owner Construction engineering Inspection (OCEI) and one hired by the concessionaire- Construction Engineering Inspection (CEI). The OCEI role is to give the agency reporting on the concessionaire adherence to the contract for completing the job. The OCEI is essentially auditing the CEI based on a statistical representation of the construction activities. There are no requirements as to a minimum score the OCEI results have to meet. The project currently has a 93% OCEI average score, which is higher than the agency expected. • During the construction phase the design builder implemented a quality management system for all subcontractors to follow. Two major procedures of the quality system which affect all project work are the witness and hold procedure and the testing and sampling (TSR) procedure. Between these two processes all work and materials used to advance the project are recorded and regulated by multiple parties (contractor’s QC staff, CCEI, OCEI) with regard to quality. • The concessionaire performed training of more than 160 subcontractors on project quality management system, despite unfamiliarity of south Florida subcontractors with PPP and 301

overall ISO requirements (The ISO requirements were only used as reference materials for the this project). • Higher level of Construction Engineering Inspection (CEI) oversight. The Concessionaire’s CEI (CCEI) conducts all onsite and offsite verification inspection and testing. The Oversight CEI (OCEI) that was hired by FDOT performs audits on a regular basis. Observations of the Researcher This project is the first PPP or design-build finance operate maintain project that the state of Florida has undertaken. Since 2000 FDOT has been outsourcing more and more of what would have been considered a core competency for DOTs, essentially shifting the core competency for FDOT more towards project management rather than project design and construction inspections etc. Also FDOT has been using the DB project delivery method for ten years which has also broadened the experiences of FDOT when it comes to shifting FDOT’s role to more project management. Because of these experiences it appears that FDOT was able to shift relatively smoothly to an understanding of their role in a PPP project, which is very hands off. PPP was selected primarily because the project would be delivered 15 years earlier than through any other project delivery method. FDOT also saw that an advantage of PPP is that by the nature of the delivery method is that quality inherently is built into the project because the concessionaire is responsible for the operation and maintenance of the project for 30 years after the completion. There are a few provisions for the condition of the asphalt, structures, concrete, etc. for when the corridor is turned over to FDOT in 30 + years, but ultimately it is the concessionaire’s best interest to complete a quality project to minimize operation and maintenance costs over the duration of the contract. The selected concessionaire project team has experience internationally with PPP project and also several of the team members have ISO certifications in Europe. This concessionaires experience provided for a minimal learning curve with the overall quality responsibility. The bulk of the learning curve was learning the local subs and understanding what sorts of education and partnering were needed to ensure that the subs are producing the level of quality needed by the project. Partnering was a large effort on this project because of the tight timeline for the entire project everyone had to find a way to work well together. At the highest level there were partnering exercises between FDOT and the concessionaire to make sure everyone understood the roles and expectations on the project. Similar partnering exercises also were necessary between the OCEI and the CEI because this was this first time this sort of arrangement was implemented on a project and both needed to gain a better understanding of how the two were to work together. Lastly there were partnering exercises held between the design builder and the subs to make sure that everyone was on the same page with the expectations of the project from a quality, budget and schedule standpoint. Even the training exercises regarding quality can be viewed as a partnering exercise. Currently there are no claims on the project, everyone is working well together, the project is on schedule, and the budget in still on track. Much of this success is due to the partnering efforts by all. 302

Effective Quality Management Practices • OCEI and CEI practice. The Concessionaire is still responsible for the day to day CEI practice, while the OCEI is statistically auditing the results. • Training of subs on quality management practices, expectations and creation of assurance/control plans for the project. This training focused on FDOT expectations and the concessionaires expectations. The ISO guidelines were also discussed and offered to the subs as reference materials. • Witness and hold process. • Custom developed database and communications software for the project. The entire concessionaire team indicated that it would be useful to implement the software on future projects. • Long-term concessionaire agreement inherently builds quality into the project due to the long term nature of the contract • Continuous internal process audit conducted by the Concessionaire team. • All of the work on the project was not contracted out at one time by the design builder. Subs had to keep their quality up to high levels in order to have future opportunities on the project. 303