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84 NCHRP LRD 86 Herbert C. Bonner Bridge Project Delivery Method: Design-Build Project Cost: $252 million Owner Agency: NCDOT e chief engineer for the North Carolina Turnpike Authority on this project was interviewed. He has over 30 years of experience and had been personally involved with the Bonner Bridge project for four years as the State Alternative Delivery Engineer. NCDOT has completed over 100 DB projects. e Herbert Bonner Bridge project was located in Bodie Island and Hatteras Island, NC and had a four year project duration from 2016 â 2020. Risks were identied by reviewing the dierent scopes and assigning risk to the most appropriate parties. Partnering and a dispute escalation ladder were used on this project for handling claims, although there were no issues that reached a claim status. e interviewee said the choice of using DB was inuenced by the size and complexity of the project due to construction risk and the amount of geotechnical work. is project was funded by traditional state and federal funding. e funding sources did not impact the contractor selection method. e contract type was a lump-sum xed price. e contractor was selected through a best-value selection method and went through a short-list process. One-on-one meetings and ATCs were used during the procurement process. is project did not require a NEPA reevaluation, however there was an 18 month project delay related to the original NEPA document. e owner also required the contractor to provide performance and payment bonds, and the same were required from the subcontractors. e contract had one warranty that was for one year and is expressed in the contract. e project delivery method helped lessen the number of change orders and claims, and the size and complexity of the project did not necessarily in- crease the amount of change orders. e project had incentives that were $1000 per hour for lane narrowing and lane closure in time for holidays, as well as $500 per 15-minute period for con- struction operations road closure and time restrictions. e contractor was responsible for preparing permit appli- cations, while NCDOT reviewed and submitted these permits. ere was little risk for third-party approvals because there was minimum ROW acquisition needs and low utility relocation. NCDOT assumed most risk for paleontological, archaeological, and cultural resources, and endangered species. e specica- tions were very aggressive to protect against corrosion for at least 100 years. Diering site condition clauses are not allowed on NCDOT projects. NCDOT did early coordination with envi- ronmental agencies because there were many permits required. e key risks on this project were the geotechnical risks due to the foundation and the constructability of the project given the harsh environment. e major lessons learned by the owner were that a proper mitigation and risk assessment was key for this project; the ex- tensive one-on-one meetings and clarications helped prevent signicant issues from arising. is led to seven revised RFP documents, which ultimately helped NCDOT identify major risks early on in the project process. APPENDIX B- REPRESENTATIVE CASE STUDY SUMMARIES I-15/I-215 Interchange Improvement (Devore) Project Project Delivery Method: Design-Build Project Cost: $208,150,000 Owner Agency: Caltrans e chief ocer interviewed on this project has over 32 years of experience with Caltrans and had been personally involved with the I-15/I-215 project for six years as the Procurement Manager and Program Manager. is was Caltransâ 14th DB project. e I-15/I-215 is located in San Bernardino, CA and was constructed in four years from 2012 â 2016. is project implements an internal standard risk manage- ment program through the Caltrans. e interviewee reported that the size of the project did not aect the delivery method se- lection, but the complexity aected it due to the modications to the standard risk assessment program that were required. is project was funded through the State Highway Account and the San Bernardino local governments. e funding sources did not impact the contractorâs selection method. e contract type was a lump-sum xed price. Atkinson was the selected contractor by a best-value selection method. For the procurement process, one-on-one meetings, clarication requests, ATCs, and best- value proposal scorings were used. is project required a NEPA reevaluation, but this did not cause any delay. e owner also required the contractor to provide performance, payment, and warranty bonds. ere was only one claim made on the insurance policy. e contract has an explicit warranty for three years, with only two years on the pavement due to trac and road maintenance. e project delivery method helped lessen the number of change orders and claims, however the project still included owner-directed changes. It was the contractorâs responsibility to obtain all govern- mental, third-party, environmental, and utility permits/approv- als, as well as bear the paleontological, archeological, cultural resource risks. e contractor also assumed most risk for en- dangered species, hazardous materials, and diering site condi- tions. Caltrans although assuming most responsibility for ROW risk, still had a risk sharing mechanism for ROW in place. e most notable risks during this project were associated with the ROW, diculty to quantify the bridges details, and utility risks. ese risks were all successfully handled. e owner learned that quick and early resolution was nec- essary for handling claims. e project encountered one issue â the size of one bridge. ere was no base line for this specic bridge, and it was not appropriately priced, so the cost was in- ated by $300,000. . Because the bridge was existing and not re- ected on the as-builts, it ended up being a shared risk between the owner and the contractor. e owner agreed to pay half of the additional cost while the contractor paid for the other half.
NCHRP LRD 86 85 Pennsylvania Rapid Bridge Replacement Project Project Delivery Method: P3 Project Project Cost: $899 million Owner Agency: PennDOT e Project Manager who worked on this project was in- terviewed. He had 30 years of experience with PennDOT and has been personally involved in Rapid Bridge Replacement project for seven to eight years. is was PennDOTâs third P3 project. e Rapid Bridge Replacement project is located in Pennsylvania and had a project duration of ve and a half years from 2015 â 2020, with Walsh and Granite JV as the joint venture team leading construction contractor. e project in- cluded a 25-year operations and maintenance contract. is project employed a special risk management program to identify, assess, and allocate risks because it was a major FHWA project. e project contained 558 bridgeâs replacement, which means 558 dierent worksites. PennDOT tried to use the same risk management program on all of the 558 worksites. However, the geotechnical analysis was spread out through Pennsylvania, so it had to be completed separately. is project was totally funded by the concessionaire, who received a milestone pay- ment up-front, and then availability payments throughout the course of the project. Four bidders were short-listed, and the winner was selected based on a 90 percent nancial and 10 per- cent technical proposal. e complexity and size of the project impacted the level of competition on this project, with ve sub- mitted proposals. e owner used one-on-one meetings, clari- cation requests, ATCs, and the best value proposal scoring pro- cess to choose the most qualied contractor. e contractor was required to submit a performance bond, surety bond, and a letter of credit. e developer is respon- sible for the bridges for 25 years. A Use-For-Life analysis was to be conducted aer 5 years of operations. e bridges need to maintain a minimum rating of 7/10 for the 25 years contract length. e project contained over 500 change orders for the 558 bridges. Most of the change orders were related to existing utili- ties. For this project, the internal process for handling claims was done by a committee that met twice a week; the two parties would resolve any claims or disputes internally. A subcommittee was to look over the claim if the main committee could not re- solve the claim or dispute. If the internal process failed to resolve the issues, the two parties could move to a DRB and a formal process. e developer assumed full responsibility for all environ- mental and governmental approvals; paleontological, archeo- logical, and cultural resources; and endangered species and haz- ardous materials. e developer and the owner shared the risk for third-party approvals and utility adjustments. PennDOT, as an owner, had to accept some additional risks on the project to manage the cost. PennDOT representatives believe that pass- ing every possible risk to the developer signicantly increases the total cost of the project. PennDOT had to follow the state regulations and assumed responsibility for the ROW, where they experienced some delays. is was a compensational event Project Neon Project Delivery Method: Design-Build Project Cost: $600 million Owner Agency: NDOT e Chief of Project Management that worked on this project was interviewed. He had 15 years of experience with NDOT and had been personally involved with Project Neon for three years. NDOT had more than ten other projects where DB delivery method was used. Project Neon was located in Las Vegas, NV and had a project duration of four years from 2015 â 2019, with Kiewit Infrastructure West Company as the design-build contractor and Atkins North America as the main project designer. is project used NDOTâs typical risk management pro- grams that they would employ on major projects, along with a few cost risk assessments tools. e interviewee reported that the size of the project did aect the delivery method selection because they had to go through a major process to nd which delivery method would accommodate the cost, timeline, and complexity of the project. NDOT is one of the only states that can receive unsolicited proposals. is project was funded through state revenue bonds and federal highway funds. e funding sources did not impact the contractorâs selection method. e contract type was a lump-sum xed price. e design-builder was selected through a best-value selection method. For the procurement process, one-on-one meetings, clarication re- quests, ATCs, and best-value proposal scorings were used. is project required NEPA reevaluations every three years, but never ran into any major issues. e owner also required the contractor to provide bid and performances bonds, and payment bonds. e contract did include warranties. e inter- viewee does experience is that that the delivery method im- pacted the amount of change orders because of how fast paced the process was and that the contractor had to make quick changes oen during the design phase. e governmental approvals were handled up front and stated in the DB contract. Due to the location, there were certain design exceptions noted. NDOT tried to get all design approvals done before the base design, but if there were changes, the con- tractor had to take responsibility. NDOT also tried to handle third-party approvals early to get an advance in the project schedule, and when they reached 50-60 percent design level, they started the ROW acquisitions. To minimize risk, NDOT did everything they could to give all utility information to the design-builder and to make it part of contract documents. e most notable risks during this project had to do with the trac because they had to completely reconstruct the free- way. ey used partnering and a dispute resolution board, but did not run into any formal disputes. Ongoing issues-meetings created an open forum that helped to timely resolve any mis- understandings. e contract included both liquidated damages and incentives. Incentives were used for milestones when cer- tain roadways could be opened. Every incentive had a liquidated damage clause associated with it.
86 NCHRP LRD 86 North Tarrant Express Segments 1 & 2 Project Delivery Method: P3 Project Cost: $2.1 billion Owner Agency: TxDOT e Deputy Manager who worked on this project had 13 years of experience with the TxDOT and was the Project Man- ager for the North Tarrant Express project for seven years. is was the intervieweeâs fourth P3 project. e North Tarrant Ex- press project was located in Fort Worth, Texas and included a 48 year O&M contract. e project team used a risk matrix to dene, assess, and al- locate possible risk events throughout the projectâs duration and into the O&M. e size of the project was perceived not to af- fect the delivery method selection, but the complexity aected it due to required modications to the standard risk assessment program. e project was funded through federal funds, TIFIA, PABs, state funds, and the developerâs equity. ere were also limited public funds, which aected the scope of the project. is project was a lump-sum agreement. e contractor was selected through a best-value selection process, which included a short-list of proposers based on their qualications statement. A second short-list of proposers based on the best values was proposed to TxDOT. e contractor was required to submit bid, payment, and performance bonds. e contract included express and implied warranties. TxDOT obtained a pass-through warranty. e interviewee believed that the P3 delivery method resulted in reduced change orders. e contract identied the specic cir- cumstances under which the developer could receive a change order, which meant fewer opportunities for the developer to seek a change order. Also, since the developer was going to re- tain toll revenues, the developer was incentivized to complete the project on schedule. e developer assumed responsibility for all governmental, third-party, environmental, paleontologi- cal, archeological cultural resources, and endangered species approvals, except for the NEPA approval. e contract also allocated responsibility for ROW acquisition, governmental approvals (other than NEPA), and utility relocation to the de- veloper. us, there was less risk of TxDOT slowing the devel- oper down. Also, TxDOT started ROW acquisition before and during procurement, then turned over responsibility for ROW acquisition at contract execution. e parties used an escalation ladder (based on an organi- zation chart) to resolve issues at the lowest level possible. e contract also required the use of an independent engineer (IE) who performed oversight, inspection, testing, and auditing of the developerâs work. e IE was paid by both the developer and TxDOT to ensure being independent. e IE also helped re- solve issues between the parties and provide recommendations regarding relief events and compensation events. ere were very few change orders on the project that were mostly owner- directed changes.. P3 was successful in such a mega project, as the contractor was incentivized to deliver the project on time to collect toll that the developer received payment for. e key risks for the owner on this project were the utility adjustments, ROW, and NEPA evaluation. e biggest risk for the contractor was per- mit approval. e contractor tried to pass this risk to the owner but was unable to do so. Key takeaways noted were the need for better evaluation and investigation for existing utilities before the contract, a necessary timeline for ROW proceeds, and the formal establishment and documenting of the dispute resolu- tion process.
NCHRP LRD 86 87 I-70 West Vail Pass Auxiliary Lanes Phase 1 Project Delivery Method: CM/GC Project Cost: $700 million Owner Agency: CDOT e Resident Engineer interviewed who worked on this project has over 20 years of experience with CDOT and has been personally involved with the Vail Pass project for four years. e Vail Pass project is located in Vail, Colorado and had just started construction in 2020. e West Vail Pass project has plans to employ a formal Risk Management Program. Since at the time of this publication, the documents had not been nalized, ROW discussions are to begin early. is project was funded by federal and state funds. e contract type was a lump-sum xed price and the contrac- tor was selected using a best-value selection method. e inter- viewee reported that the project size and complexity aected the amount of competition for the project because this was a very political project. A formal dispute resolution method is expected to follow the standard guidelines from the CDOT, including a dispute resolu- tion board as well as an internal escalation ladder between the project team and sponsors where they will make a formal sub- mittal if there seems to be an issue. ere are no incentives or disincentives formally decided yet, but CDOT has used them before in other CM/GC projects. ere may be provisions added to encourage certain contractor behavior, e.g., a specic timeline to keep the project on track for completion. Since the contract is still in the works, provisions for risk and responsibility for third-party approvals have potential to be mentioned in the contract, including third-party utilities pos- sibly being transferred to the contractor. e risk of ROW is still being discussed but CDOT has plans to have a close working re- lationship with USFS and with FHWA. Environmental approval risk is on the contractor and they are required to ensure that all environmental, safety, and permit commitments specied in the plans, specications, and contract documents are implemented. e project documents have mentioned that there will be no potential impacts on archeological, paleontological, or cultural resources but if they were to run into any during construction, CDOT must be notied immediately. e risk for diering site conditions has been identied, especially for shallow bed rock that they might encounter. ey are currently working on the mitigation for this risk. e West Vail Pass project plans to employ a formal Risk Management Program, which encompasses a table of risks and mitigation strategies that is shared in the RFP. Overall, the in- terviewees believed that there are low risks associated in the delivery of the Vail Pass Safety and Operations Improvements Project in terms of schedule and cost. revenue. TxDOT learned that educating employees and the public about P3s is critical and can eliminate public opposition. TxDOT tried not to dictate means or methods and worked to ensure a timely review of submittals to enable the developer to maintain its schedule.