Alternative Quality Management Systems for Highway Construction (2015)

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APPENDIX M: SH130 TURNPIKE EXTENSION, TEXAS Project Information Project Name: SH 130 Turnpike Project Exclusive Development Agreement Name of Agency: Texas Department of Transportation (TxDOT) – Texas Turnpike Authority Location: SH 130 through Travis and Williamson Counties, Texas 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 +): Guaranteed Lump Sum SH130 was constructed using an Exclusive Development Agreement (EDA), which was a guaranteed lump sum, guaranteed completion-date contract obligating the Developer (contractor) to perform all work necessary to complete the Development Work. Project Description State Highway (SH) 130 is an approximately 49-mile new toll-way extending from IH-35 near SH 195, north of Georgetown, Texas Southward to US Highway 183 southeast of Austin. It is an eastern bypass for the City of Austin, Texas, located generally parallel to and east of IH-35, through the Texas counties of Travis and Williamson. SH 130 is a four-lane controlled-access toll-way with discontinuous frontage roads and directional interchanges where warranted, including interchanges at IH-35, SH 45 North, US 290, SH 71, and US 183. The Case Study project includes: Work for this project included the design, right-of-way acquisition, utility adjustment, construction, and fifteen years of capital maintenance (if elected by TxDOT). Preliminary estimates of quantities for this 49-mile project were as follows: • 445 lane miles of pavement • 35 million cubic yards of earthwork • 2.7 million square yards of Portland cement concrete pavement • 1.7 million tons of hot-mix asphalt concrete pavement • 13 miles of pipes and box culverts • 125 bridges of various sizes (5.2 million square feet) • 4 mainline toll plazas • 30 additional toll facilities on entrance and exit ramps 304

Project Quality Profile The SH 130 project QC/QA program consisted of four inter-dependent components: the QC Program, the Owner Oversight Program, the Independent Assurance (IA) Program, and the independent Construction Quality Assurance (CQA) Program. A project-specific quality assurance program (QAP) that addressed the Federal Highway Administration’s (FHWA) requirements was developed for the SH130 project by TxDOT. The Program Manager worked with FHWA and TxDOT to develop the SH 130 QAP in compliance with Code of Federal Regulations (CFR) requirements. The QAP addressed the independent assurance and acceptance program requirements in the CFR with additional owner safeguards in the development agreement. In addition to the safeguards in the QAP, the EDA had several measures to ensure the quality of workmanship and materials incorporated into the project. The measures were broken into three basic categories which were quality control, acceptance testing and inspection, and owner verification. The Owner representatives (FHWA, TxDOT, and its Program Manager) were responsible for compliance with the CFR and other applicable state and contractual requirements. The Owner Oversight program included Owner Verification testing (OVT), Owner Verification inspection (OVI), audits of Developer’s records, and the authority to order a cessation or stoppage. The Developer was responsible for submitting a Construction Quality Program for TxDOT’s approval. The program outlined processes and procedures that the Developer and its Independent Construction Quality Firm would employ to ensure compliance with the construction specifications. All of the acceptance testing and inspection was performed by the Independent Construction Quality Firm (ICQF), who was selected and paid for by the Developer. Test results produced by the ICQF were statistically validated by the Program Manager’s Materials Manager who managed the Owner Verification Testing (OVT) duties. The Program Manager also performed periodic audits of the ICQF’s testing and inspection facilities, equipment, personnel, and records. In addition, the Construction Quality Control Manager (CQCM) and his quality control area staff may not be involved with any production activities and reports directly to the Developer’s Management Team. TxDOT reviewed and approved the Construction Quality Program prior to the start of construction. However, it was a living document which was updated periodically based on the circumstances encountered during construction. TxDOT was responsible for meeting the CFR and other state requirements including fulfilling Owner’s oversight testing and inspection responsibilities. FHWA performed federal oversight on the project. Given the size, scope, and national interest of the Central Texas Turnpike Project, FHWA conducted project level oversight rather than FHWA’s traditional program level oversight. FHWA’s Project Manager provided technical guidance during the development of, and was responsible for approving the project-specific QAP developed for SH 130. Throughout construction of the project, FHWA conducted independent reviews and inspections of ongoing construction operations, technician and laboratory certifications, and materials sampling and testing. On a quarterly basis the FHWA Project Manager reviewed the Materials Manager’s quarterly statistical validation report and confirmed that material acceptance decisions on the project had been made in accordance with the approved QAP for the Project. At the end of the project, FHWA was to concur with the project Materials Certification, as required by the CFR. 305

The Construction Quality Assurance Manager (CQAM) had overall responsibility for the Construction Quality Assurance Firm (CQAF) operation with the Construction Quality Assurance Inspection Manager (CQAIM) and the Construction Quality Assurance Testing Manager (CQATM) assisting to form the CQAF Management Team. The CQAM reported to both TxDOT and the Developer project directors. The CQAIM provided oversight of the inspection operations, including the storm water pollution prevention plans (SW3P). Furthermore, the inspection organization was separated into three regional areas corresponding to the functional organization of the Developer. Each area was managed by a Construction Quality Assurance Area Manager (CQAAM) assisted by a graduate engineer with at least one senior inspector and a number of other inspectors relative to the amount of construction activities. Material testing operations were managed by the CQATM. Laboratory Engineers and the Laboratory Supervisor assisted the CQATM in on-site testing operations, such as laboratory accreditation, testing personnel training and certifications, material quality and trend statistical analyses, forensic investigations and pavement design assumption verifications. Technicians operated within the laboratory and were available for dispatch to areas along the development corridor to perform field and supplier sampling and testing, as well as plant inspections. Project Financial and Schedule Information Original Total Awarded Value of project: $1.1 billion Final Total Awarded Value of project: $1.5 Billion Project Schedule: Project Approved to start process: June 2000 Project Office Established: April 2001 Contract Award: June 19 2002 Original Project Delivery Period: 50 months Final Project Delivery Period: April 30 2008 The EDA was executed on June 19, 2002 and the first Notice to Proceed was issued on July 8, 2002. The project was divided into four segments. The first 12 miles of toll roads in Segment 2 were opened to traffic on November 1, 2006 and the approximately 11-mile-long Segment 1 was expected to be substantially completed by November 30, 2006, 37 months after ground breaking in October 2003. The remaining 23 miles were scheduled to open to traffic by November 2007. 306

Project Delivery Method Decision Rationale Agency Project Delivery Experience Table M1: 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 Agency Project Delivery Decision-making Process State highway agencies have been facing growing pressures for accelerated delivery of highway infrastructure and the constraints of funding and staff resources. Therefore, alternative project delivery methods such as design-build and concession have been utilized more frequently. Reasons for Selecting Project Delivery Method (most significant reason) The major reason for selecting the delivery method was the need for a fast-track project delivery. Case Study Project Risk Analysis Process Risk Technique used to Draft Contract: A Risk Allocation table was developed during the industry review process. Furthermore, during preparation for the Request for Detailed Proposals (RFDP) draft as much information as possible was collected in order to reduce the risk. Preparation included the following elements: Developing schematic design and other preliminary engineering Defining details for evaluating proposals Preparing RFDP documentation Case Study Project Procurement Process Summary Procurement Phase Summary Table M2: Administrative Project Delivery Method Experience Designer prequalification program factors Administrative 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 Administrative 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 ☐ 307

Table M3: Require Bidding Documents Requirements of the project advertising/solicitation documents (i.e. IFB, RFQ, RFP, etc.) Required proposal/ bid package submittal Evaluated to make the award decision Required submittal after contract award 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 ✓ ✓ ☐ Design Phase Summary Table M4: Design Quality Management Roles Responsibility allocation for design management tasks Agency personnel Consultant design staff Constructor’s preconstructio n staff Agency-hired QA/oversight consultant Technical review of design deliverables ✓ ✓ Checking of design calculations ✓ ✓ Checking of quantities ✓ ✓ Acceptance of design deliverables ✓ ✓ Review of specifications ✓ Approval of final construction plans & other design documents ✓ ✓ Approval of progress payments for design progress ✓ Approval of post-award design QM/QA/QC plans ✓ 308

Construction Phase Summary Table M5: Construction Quality Management Roles Responsibility allocation for construction management tasks Agency personnel Consultant design staff Constructor’s construction staff Agency-hired QA/oversight consultant 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. ✓ Quality Management Planning QA/QC Plans The SH 130 was the first design-build highway infrastructure project in Texas where contractor QC testing was used in the acceptance decision for all project-produced materials. A project specific quality assurance program that addresses the Federal Highway Administration’s requirements was developed for the project. An enhancement to the previous owner verification process was the new three-tiered approach. In this approach Level 1 is applied to the tests which are strong indicators of performance and provides the highest level of confidence in the contractor’s QC testing through the running of continuous F- and t- tests. Level 2 is applied to tests that are secondary indicators of performance through running quarterly independent verification on the contractor’s QC test results. Level 3 is applied to tests with extremely low test frequencies where independent verification cannot be meaningfully performed or tests on materials whose risk of failure does not affect the long-term performance of the facility past the contractual maintenance obligations. While the previous DB quality assurance programs served TxDOT well, this new approach was an enhancement that focused verification efforts on tests that were better indicators of material performance. Use of mandated agency quality management plans The Quality Control/Quality Assurance Program (QC/QAP) for the SH 130 project was developed with the TxDOT Construction Contract Administration Handbook in mind. Slight deviations from TxDOT practices were embedded into the QC/QAP to accommodate certain EDA requirements. For instance, payment to the Developer was based on percentage complete with scheduled activity items versus aggregation of detailed measurements and calculations for estimates of completion with the traditional TxDOT project and, therefore, the CQAF developed 309

methodologies for tracking the percentage complete with work activities for the purpose of certifying the Developer’s draw requests. In addition to the traditional TxDOT prescriptive specifications, the project adopted several performance-related specifications. For example, the acceptance of the completed embankment and subgrade were subject to pavement design verifications for subgrade resilient modulus and the depths of non-swelling materials (NSMs). Also, bonus and penalty pay adjustments for pavement smoothness were determined by the CQAF based on the measured International Roughness Indices (IRIs). Furthermore, the Developer was obligated to maintain the completed facility to meet the performance criteria over the capital maintenance period. Performance- related specifications and responsibilities of capital maintenance drove the Developer and the CQAF to implement a rigorous CQA program. Quality staff qualifications The Independent Construction Quality Manager had to be a registered Professional Engineer in the State of Texas and was required to be employed by the ICQF. The CQAF testing personnel were required to pass a certification examination for each test method prior to performing such tests on the project. To maintain their qualification for certain test methods specified by the TxDOT IA program, qualified CQAF technicians and inspectors were required to participate in the annual proficiency sample testing program. The CQAF laboratory also participated in CCRL (Cement and Concrete Reference Laboratory) and AMRL (AASHTO Materials Reference Laboratory) laboratory inspection and proficiency sample programs. Furthermore, the CQAAMs implemented inspector training programs providing instructions on the procedures contained within the QC/QAP, specific inspection techniques, and testing procedures to provide continuing education for the CQAF inspection personnel. Offsite formal training needs were identified for each inspector and arrangements pursued to attain the training. The Independent Assurance (IA) Program used the system approach for qualifying personnel and equipment qualification. The IA firm evaluated personnel and equipment based on TxDOT’s acceptable tolerance limits for split and proficiency samples. All ICQF and Owner Verification Testing (OVT) personnel were evaluated through a written and performance test to establish their qualifications to perform testing on the project. Contractor quality assurance test results: Yes. General Quality Management Procedures Standard of Care No different from DBB projects. Alternate Quality Management Systems The SH 130 construction QC/QA program was different from previous, conventional TxDOT CQA programs because it involved an independent Construction Quality Assurance Firm (CQAF) who was responsible for the CQA Program and making acceptance decisions. The CQAF program included the following: 310

• Inspection of all development work • Material sampling and testing • Auditing of records, documentation, and procedures of Developer’s QC program • Reviewing and approving Portland cement and hot mix asphalt concrete mix designs • Environmental compliance inspections Though it was considered as part of the Developer’s team, the CQAF was technically an independent entity that reported to management from both TxDOT and the Developer. Such a private-public partnership on quality assurance allowed the Developer and TxDOT to effectively capitalize from the expertise and resources of the private sector and address the critical CQA needs of the fast-track project delivery. Summary QA Project Approach The QAO shown in Figure M1 displays the QAO of the PPP SH130 Project in Texas. The project involved an acceptance QAO in which the only formal quality role that the owner has is acceptance. 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 M1: Acceptance QAO Model for SH130 Texas 311

Example of Alternate QM System Used on This Project SH130 generated large volumes of data that needed to be processed, stored, and analyzed quickly. As of July 2006, the ICQF had generated and transmitted approximately 65,000 test records and 30,000 inspection reports to TxDOT. The Program Manager had generated approximately 7000 oversight test records and 15,000 inspection oversight reports. This large volume of documentation was anticipated early on in the project and TxDOT tasked the Program Manager with developing and implementing an Electronic Data Management System (EDMS) for TxDOT to meet this demand. TxDOT’s EDMS was a web-based tool used on the SH 130 project to enter, receive, search and analyze project testing and inspection records. The Program Manager’s field personnel used PDAs (personal digital assistants) to record test data and write oversight inspection reports on-site. Field sampling and testing results as well as inspection reports were entered into the PDA in the field. At the end of each work day, the oversight technicians and inspectors hot-synced their PDAs to a local network computer and the information was transferred from the PDA into TxDOT’s EDMS. Prior to submitting the report for supervisor review, the oversight technicians and inspectors reviewed the information on a regular computer monitor to check for and correct any errors. The respective supervisors received the submitted report via electronic workflow and reviewed it prior to approval. If the supervisors had any concerns regarding the report, they could reject it back to the technician or inspector for correction before approving it at a later time. Laboratory test results were entered directly into TxDOT’s EDMS using the local network machines. The ICQF collected the data using hard copy testing and inspection reports and entered them into their EDMS. The ICQF testing reports were transmitted into TxDOT’s EDMS for statistical validation. The ICQF inspection reports were transmitted into TxDOT’s document management system. TxDOT’s EDMS had the capability to search for Owner Verification Testing (OVT) and ICQF test results based on various criteria and run various statistical analyses and data plots. Data could be selected based on the testing laboratory, test method, geographic area, roadway designation, station, feature, structure number, date ranges, sample type (independent versus split samples or random versus fixed locations samples), material code and supplier. Observations of the Researcher The SH130 Project progressed with a lot of communication and recording. The amount of communication contributed to the success of the project and provides a good example for future projects. Furthermore, the EDMS seemed to be a valuable tool as long as it is used regularly by those responsible for inputting data. Effective Quality Management Practices Effective quality management practices that contributed to the success of the SH130 Project were communication between all parties involved, co-location of team counterparts, partnering early on in the project and the development of an escalation matrix. These practices are described in the following paragraphs. • Co-location: Due to the magnitude of the project, it was critical for all parties to be co- located on the project. This allowed for the easy access to counterparts within the Program Manager, ICQF, and Developer teams. The full-time on-site FHWA project engineer was also important for understanding potential FHWA concerns and getting FHWA review quickly. In addition, the co-location of FHWA, TxDOT, and the Program 312

Manager enabled the group to work seamlessly in developing and implementing the QAP. • Escalation Matrix: Prior to construction, there was a construction partnering session that included nearly every project team member on the construction side of the project. An escalation matrix was developed to provide a clear chain of command for escalating issues that could not be agreed upon, while promoting the resolution of issues at the lowest possible levels. Additional partnering sessions (formal and informal) continued through the life of the project. • Clarification Requests and Reports: Continuous communication on the project site is critical for keeping all parties up to date on the latest changes in plans, specifications, and schedules. Field clarification requests (FCRs) were used to clarify plans that had disconnects or discrepancies. Construction Deficiency Reports (CDRs) and Non- Conformance Reports (NCRs) were used to track non-conforming materials and workmanship. • The Web-Based EDMS: The Electronic Laboratory Verification Information System (ELVIS) is a set of web-based data management and engineering analysis tools originally developed to process material testing data and electronically transmit them to TxDOT for statistical validation. To meet the project needs, ELVIS was further expanded to support CQAF construction inspection reporting and manage pavement surface ride quality. The system consists of eight key functional components: the integrated database, workflow-driven data management functions, material baseline information management applications, online information delivery system, deficiency management tools, engineering decision tracking functions, statistical analysis tools, and system\administration tools. Data from inspections, sampling and testing, and ride quality measurements are entered into ELVIS by CQAF clerks. CQAF engineers review inspection and testing reports and complete on-line authorization by assigning appropriate stamp codes. The data is then compiled into databases which are electronically transmitted to TxDOT and the Developer simultaneously each day. ELVIS also serves as the primary tool used by CQAF engineers to track and monitor construction deficiencies and non-conformances captured through inspections and testing. The system automatically earmarks failing inspections and material tests and pavement sections with unsatisfactory surface roughness. When a quality deficiency has been corrected or reworked and the product has passed re-inspection(s), retest(s), or re- profiling, through secure web pages, CQAF engineers document the non-conformance disposition decisions and corrective actions and close the deficiency by changing the deficiency status from “Pending” to “Closed”. Accessed by hundreds of authorized users, ELVIS serves as a secure, real-time, common information-sharing platform among a broad constituency of users, including managers, engineers, QC and CQAF technicians and inspectors, superintendents and designers. 313

• Industry Review Process: The industry review process included the development of a risk allocation table as a trade-off with the proposers and includes a reiterative cycle of subtasks. Initially, the Department released draft sections of Request for Detailed Proposal (RFDP) to the short-listed firms and waited for their written comments. A round of one-on-one meetings was scheduled for discussing these comments. The documentation was reviewed, modified, and edited by the legal consultants and resubmitted to the proposers with other draft sections. Depending on the project complexity, as well as on the procurement schedule pressure, this task requires between two and four rounds of meetings. 314