D1-Level of Effort · 2017 PEPS Conference LEVEL OF EFFORT & NEGOTIATIONS 2017 PEPS Conference Phil Howlett, P.E. │ Richard De La Cruz, P.E. November 3, 2017

2017 PEPS Conference

LEVEL OF EFFORT & NEGOTIATIONS2017 PEPS Conference

Phil Howlett, P.E. │ Richard De La Cruz, P.E.

November 3, 2017


Table of contents

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Welcome

Pre-Level of Effort (LOE)

Level of Effort (LOE): Scopes

Level of Effort (LOE): Schedule

Level of Effort (LOE): Budget

Good Practice – Bad Practice

Closing Remarks/Questions?

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First Thought

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Productivity is never an accident. It is always the result of a commitment to excellence, intelligent planning, and focused effort.

Paul J. Meyer


Look at the Big Picture – We have different types of contracts

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Schematic and Environmental (S&E)

Plans Specifications & Estimates (PS&E)

Utility Engineering

Traffic Engineering

Survey

Geotechnical Engineering

Materials Engineering

Value Engineering

Planning

General Engineering Consultant (GEC)

Construction Engineering Inspection (CEI)

Intelligent Traffic Systems (ITS)

Other


When do we negotiate Level of Effort?

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Master Contracts•Specific Deliverable (SD) Contracts – Negotiation

of LOE•Indefinite Deliverable (ID) Contracts – N/A

Work Authorizations•SD Contracts – Some Negotiation may be

required•ID Contracts – Negotiation of LOE

Supplemental Agreements - maybe Supplemental Work Authorizations - maybe


Level of Effort (LOE)

It is absolutely necessary that both parties have a clear understanding of the work to be accomplished and deliverables expected in order to develop a Level of Effort and evaluate the reasonableness of a cost proposal.

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–Scope (What do we want accomplished and Deliverables)

–Schedule (When are things to be accomplished)

–Budget (How much will it cost and a breakdown of who will do the work?)


Level of Effort (LOE) Negotiation

Challenging

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What would it be like to negotiate with a …..

Time Consuming

Looking for the Win-Win

Fair and Reasonable

There is no easy button

..Dentist..

…for a Tooth Extraction?

2017 PEPS Conference 8


First Things First

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(Pre-Level of Effort)


Pre-Level of Effort

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Scoping MeetingCommunication

Project Information

Scopes

Invoicing

Accountability


Scoping Meeting – Communication

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Org Charts

Points of Contact

Best method

How often

Change of Personnel

Escalation Process


Scoping Meeting – Project Information

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Project Limits

Control Section Job (CSJ) Numbers

Schedule / Milestones

• Project unknowns• Stakeholders• Drainage, driveway, seasonal work, etc.…

• Project unknowns• Stakeholders• Drainage, driveway, seasonal work, etc.…

Challenges


VisionAssumptions

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Scoping Meeting - Scopes

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Establish the basis of payment.

Review both scopes line by line.

Document what needs to be added, modified, or removed.

Very Important: clearly define all deliverables.


Scoping Meeting - Invoicing

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Obtain understanding of what will be allowed.

Remember: the basis of payment used must be in the master contract.

•Well thought out and documented deliverables.•If you need help, ask. (PEPS can help)•Well thought out and documented deliverables.•If you need help, ask. (PEPS can help)

What ensures good invoicing?


Scoping Meeting - Invoicing

Remember:

Any direct labor, unit cost, or other direct expense classification not included in the contract is not eligible for use under a work authorization.

Any direct labor, unit cost, or other direct expense classification included in the contract, but not in a work authorization, is not eligible for payment under that work authorization.

If the rates are not in the work authorization, they cannot be billed.

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Scoping Meeting - Accountability

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•Quality•Timeliness•Communication

•Quality•Timeliness•Communication

Understanding of Expectations

Provider Evaluations


Scope Meeting Tips

Have an agenda

Ensure the right people attend

Everybody reviews the scopes ahead of time

Visit/Drive the project ahead of time

Bring a list of questions

Summarize

–Review understandings and expectations

–Delegate action items

Document

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Allow time for this meeting


Scopes• (What and deliverables)

Schedule• (When)

Budget• (How much and who)


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Level of Effort (LOE) - Scopes

Finalize the scopes (clean up comments from the scoping meeting).

Ensure the scopes have the level of detail needed based on the basis of payment.

– Lump Sum

– Specific Deliverable, Cost Plus Fixed Fee, Unit Cost

Be sure to elaborate on specific details where needed.

Spell out all acronyms the first time used.

List well-defined deliverables.

Consider using a phased approach when appropriate.

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Level of Effort (LOE) - Scopes

Remember:

If the services are not in the master contract’s scope, they cannot be put it in the work authorization’s scope.

If the services are not in the work authorization’s scope, those services cannot be performed and payment cannot be expected.

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Use the master contract’s scope tocreate your work authorization’s scope.


Level of Effort (LOE) - Schedule

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Think of it as a management reporting tool as well as an implementation tool to help pace the detailed activities.

•Work Breakdown Structure•Work Breakdown Structure

Establish milestones and submittal dates.

Tasks must follow the scopes of services and the fee schedule.

Include sufficient review times (for both the State and consultant).


Level of Effort (LOE) - Schedule

First activity should be “Start Date = Date of Execution” (Not an actual date)

– Do NOT use “Notice to Proceed” in schedule.

Activity dates are later than the actual (anticipated) date of execution.

Termination Date

– Indefinite deliverable (ID) contracts are limited to a 5-year maximum.

– Be sure to include “Termination Date = xx/xx/20xx.”

– Should typically be the last calendar day of a month

– Try not to end a work authorization in August or December.

– Work authorization termination date cannot go beyond the master contract’s termination date

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Level of Effort (LOE) - Budget

Ensure tasks identified in the fee schedule align with the scope and the work schedule.

Ensure the rates and labor classifications are used in accordance with the contract.

ODEs must be assigned a function code.

• Significantly helps with consistency for summary sheet• Significantly helps with consistency for summary sheet

Calculations should be made from numbers rounded to the nearest penny (except mileage).

• Not every item needs a quantity (classifications, unit costs, ODE, tasks)

• Primary control is that maximum amount payable is a not to exceed amount

• Not every item needs a quantity (classifications, unit costs, ODE, tasks)

• Primary control is that maximum amount payable is a not to exceed amount

Allow some flexibility.


Level of Effort (LOE) - Budget

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Ensure HUB goal or DBE goal will be met.

Include a summary sheet broken out by firm, function code, and CSJ.

•Use the latest table of deliverable template.•Align the function codes with the scope and fee schedule•Ensure each deliverable description is distinguishable from one

another.

•Use the latest table of deliverable template.•Align the function codes with the scope and fee schedule•Ensure each deliverable description is distinguishable from one

another.

Include a table of deliverables if using lump sum.

Rates, labor classifications and other direct expenses can only be invoiced if they are included in both the contract and the work authorization.

Perform a thorough quality review of spreadsheet calculations.


Remember

Clearly define deliverables.

Ensure consistency between scopes, budget, and work schedule.

– Activities

– Task titles

– Function codes

– Formatting

Use the available checklists to help QC contracts and work authorizations.

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Work Authorization Review Checklist (Example)

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EXHIBITS A & B

□ Check Headers and Footers• Legacy Contract No. & WA/SWA No. (Upper Right)• Contract PS No. & PS PO No. (Upper Right)• Page Numbers and Exhibit A/B in Footer

□ Ensure WA scope MUST match master contract scope□ Ensure Acronyms are spelled out at least once□ Find and Replace

• TxDOT to the State• the State shall to the State will• the Engineer will to Engineer shall• the Surveyor to the Engineer’s Surveyor (exception – Survey Contracts)• Do not use "you" or "we"• this Contract to this Work Authorization

□ Check General Formatting (Margins, excess spacing between paragraphs,justifications, etc.)

□ Exhibit B should have CSJ, HWY, project limits, county, and district.



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EXHIBIT C

□ Check Headers and Footers• Legacy Contract No. & WA/SWA No. (Upper left)• Contract PS No. & PS PO No. (Upper Right)• Page Number(s) and Exhibit C in Footer

□ Dates do not begin prior to WA Execution□ Tasks follow Exhibit B and Exhibit D□ Ensure it has "Work Authorization No. XX termination date: xx/xx/20xx"□ Ensure it has "Prime Provider Name: xxxxxxxxxxx" (exact name)□ Change "Notice to Proceed" or "NTP“ to "Start Date = Date of Execution”□ Termination Date must not go beyond Contract Termination Date□ Ensure the termination date is the last working day of the month

• Avoid termination dates at the end of the fiscal year and the end ofthe calendar year



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EXHIBIT D□ Total amount is covered in the contract (Check PS-CAMS) and correct WA number□ Fee Schedule is split out by CSJ□ Ensure the correct Method of Payment is being used and is in master contract□ Check Headers and Footers

• Legacy Contract # & WA/SWA # (Upper left)• Contract PS # & PS PO # (Upper Right)• Method of Payment (Center Header)• Page Numbers and Exhibit D in Footer

□ Ensure "Prime Provider Name: xxxxxxxxxxx" or "Sub-Provider Name: xxxxxxxxx" is on each page

□ General Formatting (Margins, excess spacing between paragraphs, justifications, etc.)□ Staffing Classification Names and Rates MUST match contract□ Formulas add up□ Tasks follow Exhibit B and Exhibit C□ Other Direct Expenses

• Function Code assigned• Names and rates match contract • Include columns: Description, Unit, Cost, Quantity

□ Summarization by Provider (Prime and Subs), Function Code and CSJ□ Lump Sum WA's have a Table of Deliverables and $ amounts match


If you have any questions,

PEPS is here to help.

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Productivity is never an accident. It is always the result of a commitment to excellence, intelligent planning, and focused effort.

Paul J. Meyer

An effective Level of Effort

Philip Howlett


Thank you !

Questions?


Contact Information

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Phil Howlett, P.E.TxDOT | PEPS San Antonio(210) [email protected]

Richard De La Cruz, P.E.TxDOT San Antonio(210) [email protected]

Documents

D1-Level of Effort · 2017 PEPS Conference LEVEL OF EFFORT & NEGOTIATIONS 2017 PEPS Conference Phil Howlett, P.E. │ Richard De La Cruz, P.E. November 3, 2017