Category:149 Project Delivery Determination and Initial Risk Assessment

Forms

Risk Assessment Brainstorm Sheet

Risk Assessment Worksheet

Figure

Project Delivery Method Determination Flow Chart

149.1 Project Delivery Method Determination

MoDOT uses innovative contracting to ensure that the public receives full value for every tax dollar invested in Missouri’s transportation system. Innovative contracting methods provide the ability to accelerate project delivery, reduce cost, improve quality and minimize impacts to the traveling public. A discussion of MoDOT’s various innovative contracting methods can be found in EPG 147 Innovative Contracting.

Project Delivery Method Determination Flow Chart

In order to select an appropriate project delivery method or innovative contracting tool, a project must be evaluated to determine how the project aligns with each available delivery method/innovative contracting tool. This evaluation is accomplished as shown in the Project Delivery Method Determination Flow Chart, by setting project goals, assessing project risks and examining the appropriateness of the available delivery methods given the specifics of the project. Although all projects benefit from this review, it is especially important that large and/or complex projects be considered in order that the most appropriate delivery method is used.

149.2 Project Goals

Establishing well defined project goals is essential for any project delivery analysis as these goals will provide the necessary standards to measure success at each phase of project delivery. Ultimately, the measure of any project’s success is how well it met or exceeded the established project goals.

Project goals should focus on how the project will be delivered – the conditions that define “during-construction” excellence. The challenge is to develop multifaceted, measurable project goals that capture all key stakeholders’ definitions of project delivery success.

149.3 Purpose and Objective of Project Goal-Setting

The determined project goals for a particular project will be the basis by which the project delivery method will be determined and the project specific procurement requirements will be developed. These goals allow decision-makers to evaluate the advantages and challenges of various procurement methods and to select a project delivery method that provides the best opportunity for success.

In order to effectively use project goals to guide the project delivery method selection, the goals must be prioritized in order of importance to MoDOT. The determined "priority order" allows project delivery decisions-makers to use the most important goal as the “pivot point” to analyze all delivery choices. The remaining goals, listed in descending order of importance, further define and shape the project’s procurement/delivery strategies.

149.4 Content of Project Goal-Setting

Project goals are standards that measure the success of a project. Most projects’ goals are complex and therefor require objectives to be established to define how each is to be measured. Objectives are the methods by which the project goals are achieved.

Questions that should be considered when determining the goals for a project include:

1. Is this goal detailed enough to guide preparation of the Procurement Documents?

2. Is this a goal which, if met or exceeded, the public would perceive the project as successful?

3. Is this goal “end-minded”?

4. Is this goal realistic?

5. Is this goal measurable?

6. Is this goal clear?

7. Who is this goal intended to benefit?

8. Is this goal based upon an objective assessment of the needs of the community, MoDOT, etc.?

9. Are the goals established in order of importance?

Questions that should be considered when determining the objectives pertaining to each goal include:

1. Does this objective contribute toward achieving the goal?

2. Will meeting this objective assist in meeting the goal?

3. Is this an objective for the entire project or for a specific area of the project? If it is for a specific area of the project, what are the objectives for the remaining areas that will help achieve the goal?

4. Is this objective time-constrained?

5. Is it an interim or during construction objective?

6. Is this objective achievable?

7. Is this objective measurable?

8. Does the objective provide additional definition in support of the goal?

Once these questions have been addressed and the goals have been developed and approved by MoDOT executive managment, the goals can be made public. Throughout the project development process, the goals should be clearly communicated to all project participants including all MoDOT project personnel, the design and construction industry and all project stakeholders.

Examples

The project goals listed below were developed for past projects. The goals are included as a reference for future goal setting efforts.

Project A

1. Maximize capacity and mobility improvements in the corridor within the program budget of $150 million.

2. Minimize inconvenience to the public during construction.

3. Provide a quality product.

4. Complete construction by end of calendar year 2008.

5. Provide a visually pleasing finished product.

Project B

1. Minimize inconvenience to adjacent properties and the traveling public.

2. Complete the Project by November 2009 within the budget established by the city. (Should include $ amount).

3. Construct to the highest quality and at the best value, a safe, functional and aesthetically pleasing parkway that will enhance adjacent properties and be relatively easy to maintain.

4. Encourage participation of local engineers, contractors and material suppliers.

5. Keep the public well informed throughout the duration of the project.

I-70 Mississippi River Bridge Project Goals

1. Deliver the project within the established budget of $640 million.

2. Open the new bridge and roadway to traffic by January 1, 2014.

3. Construct a river crossing supported by the region that can be reasonably maintained and have a century of useful service.

4. Increase mobility and improve capacity to provide a vital link in the national transportation network.

5. Provide employment opportunities for socially and economically disadvantaged individuals and businesses.

6. Communicate progress and key milestones to stakeholders and the public.

7. Seek and incorporate ideas from designers, contractors and suppliers to provide the best value for taxpayers.

I-29/I-35 kcICON Design-Build Project Goals

1. Deliver the I-29/I-35 Corridor improvements within the total program budget of $245 million.

2. Construct a landmark Missouri River bridge(s) that can be reasonably maintained to provide more than a century of useful service.

3. Maximize safety, mobility, aesthetic and capacity improvements in the corridor.

4. Engage stakeholders and the community to successfully develop and deliver the project.

5. Meet or beat the project completion date of October 31, 2011.

149.5 Risk Assessment

Performing a project risk assessment is necessary to determine and document the most appropriate delivery method for a project. A thorough risk assessment allows MoDOT to clearly identify, prioritize and assign resources to risk avoidance and mitigation opportunities in order to help eliminate or reduce risk to the project. The resultant risks and an understanding of the efforts required to properly manage the risk, provide the necessary perspective by which the appropriate project delivery method should be selected.

For each project risk assessment, the assessment team is composed of MoDOT staff from all applicable functional units. Typically, this team consists of traditional core team members, with each member having different areas of expertise, such as design, construction, right of way, utilities, geotechnical, traffic and maintenance. Depending on the project, you may include staff from other expertise areas including environmental and customer relations. Each of the core disciplines applicable to the project should be included in the risk assessment meeting. It may also be helpful to include a facilitator to organize, streamline and expedite the process.

149.5.1 Content of Risk Assessment

The first step of a risk assessment is to brainstorm project risks. A brainstorming spreadsheet can be used to capture all project risks. Examples of areas of risks that should be evaluated during a risk assessment include:

Risk Assessment Brainstorm Sheet

1. Drainage: Are there third party approvals necessary for drainage design?

2. Environmental: Are there environmental permits that MoDOT can obtain? How can the NEPA document allow for flexibility in the ultimate project solution?

3. Noise Walls: Can MoDOT agree with the public to a height, elevation, etc. of a noise wall or to a process to reach agreement on a noise wall?

4. Method of Handling Traffic: Can MoDOT agree to detour routes with a public entity?

5. Public Information: Are there research efforts that can assist in formulating a public information plan or method of handling traffic plan? Are there key audiences that could derail the project?

6. Right of way: Are there parcels that acquisition can be avoided? Can the amount of right of way acquired be minimized?

7. Roadway design: Are there variances or exceptions that will be required? Is an AJR required?

8. Structures: Are there approvals or variances that need to obtained?

9. Third Party Agreements and Permits (other than environmental): Are there local IGA’s, railroad agreements, process agreements, standards agreements that need to be obtained?

10. Utilities: What utilities are possible conflicts? Are there utilities with long relocation schedules? Should a SUE be pursued?

149.5.2 Risk Assessment Process

A Risk Assessment Worksheet should be used to document the risk and the resultant mitigation efforts, if any, that will be performed. Traditionally the steps in the risk assessment process are as follows:

Risk Assessment Worksheet

• A broad area of risk is identified and listed on the form as a “Risk Category”.
• For each risk category, all associated specific risk elements are identified and listed on the risk worksheet under the heading “Risk Element”. If a project has several risks, multiple risk worksheets can be filled out for each risk category.
• The risk assessment team evaluates each risk elements “impact factor”. The impact factor is the significance of the impact that each risk element could have to the goals of the project, rated on a 0 to 6 scale (6 being the greatest impact – 0 being no impact). The impact factor is recorded in column A.
• Next, the risk assessment team evaluates the magnitude or “level of the effort factor” required to avoid or mitigate each specific risk element. This level of effort factor is rated on a 0 to 6 scale (6 being the greatest effort – 0 being no effort) and is recorded in column B.
• Next, for each risk element the risk assessment team determines the probability of the risk impact occurring if no action to avoid or mitigate the risk is taken. The probability factor rated on a 0 to 1.0 scale is recorded in column C.
• As a result of the ratings, a Risk Factor is calculated (Column A * Column B * Column C) for each risk element. The greater the Risk Factor, the higher the priority for MoDOT to identify the appropriate mitigation efforts necessary to reduce the risk and the greater the level of resources that must be employed to mitigate that risk.
• The final step in the risk assessment process is to identify the risk mitigation tasks that need to occur to reduce the risks to the project goals.

149.6 Delivery Method Determination

In order to determine the best delivery method for a project, it is helpful to consider the advantages and disadvantages (i.e. the pros and cons) of each delivery method. This may include a review of likely risk allocations which would occur if the design-build delivery method were pursued, as discussed in EPG 139 Design - Build. After reviewing the project goals, the project specific risks and the advantages and disadvantages of each delivery method, the project core team recommends a delivery method to their district management.

Some advantages of design-build are:

• Allows innovation on projects with multiple solutions
• Allows significant opportunity for innovation
• Permits extreme cost control
• Designs tailored to a contractor’s strengths
• Establishes single point of responsibility between MoDOT and contractor
• Coordinates design & construction expertise
• Allocates risks to best party
• Bases contract on performance requirements & specifications
• Saves time

Some advantages of traditional design-bid-build are:

• Maintains MoDOT’s control of design process and solutions
• Designer works directly for MoDOT
• Works well for projects with tight constraints that may limit innovation (i.e. floodplain, schedule, environmental issues ROW)
• Allows for “on-the-shelf” plans being developed in advance, i.e. an upfront construction funding allocation is not required
• Applies best for use on routine projects, such as overlays

Some advantages of traditional design-bid-build with Alternate Technical Concepts (ATCs) are:

• Allows implementation at any stage
• Allows opportunity for contractor innovation, but MoDOT maintains control of ultimate design solution
• Tailors designs to a contractor’s strengths to achieve the most economical design
• Entices smaller contractors, increasing competition
• Uses plans that have been developed to an advanced stage
• Maximizes competitive bidding

149.7 Documentation and Approval

Documentation of the project delivery method determination must include the following:

• Project background
• Project specific details
• Project Goals
• High Risk Elements
• Delivery Method Comparison (Pros/Cons)
• Summary & Recommendation
• Attachments/Exhibits

If design-build is the recommended delivery method, the Chief Engineer, Assistant Chief Engineer, State Design Engineer, State Bridge Engineer, Design-Build Coordinator and/or Chief Financial Officer must approve the recommendation. Approval is required to ensure MoDOT is using design-build on the most appropriate projects and to ensure that MoDOT does not exceed its legislative authority of 2% of the number of projects per year. To obtain approval, contact the Design-Build Coordinator or State Design Engineer to discuss making arrangements for staff to consider the project.

If DBB with ATCs is the recommended delivery method, the project team should contact the Bidding and Contract Services and their Design Liaison for further guidance.