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Geotechnical Risk Management Tools for Design-Build Projects
Monday, April 1, 20192:00-3:30 PM ET
TRANSPORTATION RESEARCH BOARD
The Transportation Research Board has met the standards and
requirements of the Registered Continuing Education Providers Program.
Credit earned on completion of this program will be reported to RCEP. A
certificate of completion will be issued to participants that have registered
and attended the entire session. As such, it does not include content that
may be deemed or construed to be an approval or endorsement by RCEP.
Purpose
Discuss NCHRP Research Report 884: Guidelines for Managing Geotechnical Risks in Design–Build Projects.
Learning Objectives
At the end of this webinar, you will be able to:
• Prioritize geotechnical risks• Identify one or more geotechnical risk
management tools to address each risk in order of priority
• Describe the challenges of each tool
Managing Geotechnical Risks in Design-Build Projects
Moderator: Ghada Gad, PhDCalifornia State Polytech University,
Pomona, CA
Presenters:Douglas D. Gransberg, PhD, PE
Gransberg & Associates, Inc.
Norman, OK
Bora Cetin, PhDIowa State University
Ames, IA
© 2019, All rights reserved, Douglas D. Gransberg 1
Agenda• Define the issue in the DB context• Benchmark state-of-the-practice
• Case law• Geotechnical risk management
• 5 strategies for managing DB geotechnical risk• Effective practices found in recent research
• RFP preparation• During procurement• Post-award
• Demonstrate emerging tools used on actual earthen dam project.
© 2019, All rights reserved, Douglas D. Gransberg 2
Recent Research on Design-Build Geotechnical Risk Management• Research teams included both engineers and
attorneys.• NCHRP Synthesis 429: Geotechnical Information Practices
in Design-Build Projects• NCHRP Legal Digest 68: Liability of Design-Builders for
Design, Construction, and Acquisition Claims• NCHRP 24-44: Guidelines for Managing Geotechnical Risks
in Design-Build Projects
© 2019, All rights reserved, Douglas D. Gransberg 3
NCHRP 24-44 Research TeamPrincipal Investigator – Douglas D. Gransberg, PhD, PE, DBIA
Co- Principal InvestigatorsMichael Loulakis, JD, DBIA
Capital Project Strategies, LLCReston, VA
Shannon Sweitzer, PE, DBIAS&ME
Raleigh, NC
Kevin McLain, PhD, PE, RGMissouri DOT
Jefferson City, MO
Ali Touran, PhD, PENortheastern University
Boston, MA
Dan Brown, PhD, PE, D.GEDan Brown and Associates
Jasper, TN
Bora Cetin, PhDIowa State University
Ames, IAGhada Gad, PhD
Cal Poly - PomonaPomona, CA
Ricardo Tapia, PhD, PMPPanama Canal Authority
Panama City, PN
Ivan CastroManatt Construction
Des Moines, IA
Industry AdvisorsJames Hunt, PE, CCM
Atkins AmericasNorman, OK
D. Micheal JamesDragados USA, Inc.
Tempe, AZ
Elizabeth M. Smith, PE, GE, D.GETerracon Consultants
Round Rock, TX
© 2019, All rights reserved, Douglas D. Gransberg 4
Research Instruments• Literature:
• Research - Update Synthesis 402 and Legal Digest 68• Case law – 1970 to 2017
• Content Analysis: 105 DB projects; 28 states. • Surveys
• Survey 1 – Agencies: 42 DOTs – 81% response rate• 20 > 10 DB projects; 8 < 10 DB projects;
• Survey 2 – Experts: 22 DOTs/24 industry – 31% response rate.• Case studies: 15 projects; 12 states + Panama Canal
Expansion Project
© 2019, All rights reserved, Douglas D. Gransberg 5
The Issue in Design-Build
• Owners typically select DB to accelerate project delivery (FHWA 2006).
• Owner design approval is a major hurdle to starting construction (Christensen and Meeker 2002).
• Geotechnical uncertainty is always high until the post-award site investigation and geotechnical design report can be completed (Hatem 2011).
© 2019, All rights reserved, Douglas D. Gransberg 6
The Issue in Design-Build
• Geotechnical and site engineering is the first major design package and the one with the highest pre-award uncertainty (Higbee 2004).
• Therefore:• It must be completed as expeditiously as possible (Koch et al
2010).
• The owner needs to reduce the impact of geotechnical uncertainty as expeditiously as possible (Kim et al 2009)
© 2019, All rights reserved, Douglas D. Gransberg 7
Key Risk Take-away• The owner is asking the design-builder to commit to a firm, fixed
price BEFORE the subsurface investigations and design are complete.
• Level of subsurface risk is in the eye of the beholder!• Directly related to the owner/design-builder’s individual and
collective perceptions.• Directly related to the contractual assignment of risk described in
the DB RFP.
© 2019, All rights reserved, Douglas D. Gransberg 8
DBB Versus DB Risk Profiles• Owners tend to bring a DBB
mentality to risk in DB contracts.• Shed risk = More cost• Share risk = Less cost• Perceptions are important!• Perceptions are driven by
personal experiences.• Perceptions may not be uniform
nor logical.
Design-Builder Owner Geotechnical Scope Risk
DBB • Warranties and Guarantees • Latent Defects - Workmanship • Competent Geotechnical
Construction Personnel Available
• Design Error and Omissions • Latent Defects - Design • Direct and Tacit Approval of
Constructive Changes to Design
DB
• Design Errors & Omissions • Warranties & Guarantees • Latent Defects - Design - Workmanship • Competent Geotechnical Design
Personnel Available
• Clear Geotechnical Scope Definition • Direct and Tacit Approval of
Constructive Changes to Geotechnical Design
• Geotechnical Design Review Comments and Directives
• Technical Review Capability Geotechnical Cost Risk
DBB
• Rework • Subcontractor Default • Market Fluctuation after Award
• Redesign and Resultant Rework • Construction Contract Amount • Market Fluctuation During Design
− Material − Labor
DB
• Rework • Redesign • Subcontractor Default • Market Fluctuation During Design
− Material − Labor
• Design-Build Contract Amount • Prompt Payment • Design-Builder Default
Geotechnical Schedule Risk
DBB • Contract Completion • Date • Liquidated Damages
• Timely Design Completion • Owner Furnished Property Delivery
DB • Delivery on Approved Schedule • Fast-Track Geotechnical Rework • Liquidated Damages
• Unrealistic Schedule • Timely Geotechnical Design
Approvals on Fast-Track Project • Owner Furnished Property Delivery
© 2019, All rights reserved, Douglas D. Gransberg 9
High Level Interpretation of Findings• US construction case law demonstrates that owners rarely win
differing site conditions (DSC) claims. When they do, it is usually based on a technicality like untimely notification.
• Nevertheless, Owners continue to rely on exculpatory language to try and shed geotechnical risk in DB projects.
• The industry recognizes the risk shedding bias and perceives geotechnical risk to be much higher than the authors of Owner DB requests for proposal (RFP).
• The result is the inclusion of contingencies for risks that may not be realized, which must logically increase the overall cost of the project.
© 2019, All rights reserved, Douglas D. Gransberg 10
Risk Management Measures
• Manage this risk by the following measures:• Requiring highly qualified and experienced geotechnical
personnel on design-builder’s staff (Scott et al 2006).
• Assigning the agency’s most qualified geotechnical personnel to DB project oversight (Potter and McMahon 2006).
• Mandating the use of geotechnical design solutions with which the agency is confident (Papernik and Farkas 2011).
• Retaining most, if not all, the traditional quality management (QM) roles and responsibilities for geotechnical features of work (Shane et al 2011).
© 2019, All rights reserved, Douglas D. Gransberg 11
Risk Management Measures
• Enhanced communication in the proposal preparation phase
• Confidential one-on-one meetings for ATCs• Permit competing DB teams to request/obtain additional site
investigation before submitting bid.• Explicit differing site conditions clauses.
• NOTE: DSC not required in Federal-aid DB projects• Risk sharing clauses• Expedited geotechnical design reviews
© 2019, All rights reserved, Douglas D. Gransberg 12
NCHRP 24-44 Guidelines
•Major conclusion: • The Owner and its industry partner need to align their
perception of geotechnical risks and business objectives as early as practical during the delivery of a DB project.
© 2019, All rights reserved, Douglas D. Gransberg 13
State-of-the Practice Benchmarks• Significant geotechnical risks does not constrain the
selection of DB as the project delivery method.• Owners seek to shed geotechnical risks in DB projects.• DSC clauses used to share risk in DB projects.• Some owners seek to limit the scope of the DSC clause
with exculpatory verbiage – “For information only -not for bidding purposes”
© 2019, All rights reserved, Douglas D. Gransberg 14
State-of-the Practice Benchmarks
• “Common perceptions of contractual risk allocation are the basis of a harmonious, effective and efficient construction project” (Loosemore and McCathy 2008).
• Perceptions of geotechnical risks between Owners and the DB industry are markedly different.
• Industry adds contingencies for risks it perceives.• Owners may be paying to unsuccessfully shed
geotechnical risk.
© 2019, All rights reserved, Douglas D. Gransberg 15
Owner vs. Industry Expert Risk Perceptions
IMPORTANCE INDEX [%]
47.00-51.00 Groundwater/ Water table
Seismic RiskSettlement in generalContaminated material
Scour of bridge piersSoft compressible soilSettlement of bridge approachesSettlement of adjacent structureLiquefaction
Ground water infiltrationPresence of rock/bouldersUnderground manmade debrisSoft clays, organic silts, or peatSensitiveness of public consideration
Groundwater/ Water table Slope instabilityLandslidesLateral spreadingHighly compressive soilsExisting structures likely to be impacted by the work (other than utilities)
Settlement in general Rock Faults/ FragmentationSoft compressible soil Subsidence (subsurface voids)Slope instability Unsuitable materialSettlement of bridge approaches Karst formationsScour of bridge piers Caverns/voids
Highly compressive soilsPresence of rock/bouldersUnsuitable material
Sensitiveness of public consideration Replace in situ material with borrowed material
Soft clays, organic silts, or peatExisting structures likely to be impacted by the work (other than utilities)Contaminated material
LandslidesUnderground manmade debris Eroding/mobile ground conditionsSettlement of adjacent structure Chemically reactive groundGround water infiltration
Subsidence (subsurface voids)Rock Faults/ Fragmentation
Eroding/mobile ground conditionsKarst formationsSeismic RiskLiquefactionLateral spreadingChemically reactive groundCaverns/voids
INDUSTRY PERSPECTIVESIMILAR PERSPECTIVEDOTs PERSPECTIVE
15.00-19.00
23.00-27.00
35.00-39.00
27.00-31.00
39.00-43.00
43.00-47.00
31.00-35.00
19.00-23.00
Common
Owners’ risk perception
Design-builders’ risk perception
• 27 geotechnical risk factors identified in the research.
• Asked to rate the frequency and impact.
• Computed an importance index.
© 2019, All rights reserved, Douglas D. Gransberg 16
Potential Solution from Findings• Proposed solution: Align the perceptions of
geotechnical risk of the Owner and the DB team early in the project delivery process.
• Potential contractual mechanisms to permit the early alignment of geotechnical risk perceptions.
• Progressive DB (Maryland)• DB with multiple notices to proceed (Ohio +)• DB with a fixed scope validation period (Virginia)
© 2019, All rights reserved, Douglas D. Gransberg 17
Strategies for Aligning Perceived Geotechnical Risk
• Implement early contractor design involvement through encouraging geotechnical ATCs during procurement.
• Use DB process to address other subsurface issues like utility company timeliness by involving third party stakeholders as early as practical in project development and delivery.
• Raise the visibility of geotechnical issues in DB projects to ensure competing contractor teams understand the level of criticality on each project.
© 2019, All rights reserved, Douglas D. Gransberg 18
Strategies for Aligning Perceived Geotechnical Risk
• Avoid differing site conditions claims through enhanced contract mechanisms designed specifically for addressing geotechnical risks.
• Promote an atmosphere of life cycle-based design and construction decision-making with respect to geotechnical risk on DB projects.
Life cycle-based geotechnical design: Make design decisions to minimize life cycle cost…
i.e. maximize cost certainty – rather than minimize capital cost.© 2019, All rights reserved, Douglas D. Gransberg 19
Effective Practices during RFP Development• Geotechnical baseline report (GBR)• Database of geotechnical information from all past projects• Identify and sample possible contaminated material sites• Gather property owner subsurface history during right of way
acquisition• Flexible project footprint during NEPA clearance• Prescriptive geotechnical design• Performance specifications for post-construction performance
(subsidence, etc.)
© 2019, All rights reserved, Douglas D. Gransberg 20
Effective Practices during Procurement
• Weight geotechnical qualifications in the RFQ and carry over the evaluated score to the final award.
• Include weighted geotechnical evaluation criteria in best value award scheme
• Include geotechnical life cycle criteria in best value award scheme
• Differing site conditions clause
© 2019, All rights reserved, Douglas D. Gransberg 21
Effective Practices during Procurement• Progressive DB procurement• Encouraging geotechnical alternative technical concepts (ATC)• Allow competitors to designate boring locations during
proposal preparation• Unit prices for contaminated material remediation• Unit prices for selected geotechnical pay items
© 2019, All rights reserved, Douglas D. Gransberg 22
Effective Practices during Post-Award• Scope validation period to define the final geotechnical
scope of work after which differing site conditions claims are disallowed.
• Multiple notices to proceed• Design-builder produced GBR (GBR-C)• Negotiated GBR interpretation• Use of allowances
• Differing site conditions allowance• Contaminated material allowance• Unforeseen utilities allowance
© 2019, All rights reserved, Douglas D. Gransberg 23
Effective Practices during Post-Award
• Validate proposed life cycle elements during design• Encourage life cycle related value engineering
proposals from subcontractors • Pro-active production-based scheduling to quantify
parameters of DSC claims if they occur.
© 2019, All rights reserved, Douglas D. Gransberg 24
Proactively Mitigate DSC Impacts
• Uncertainty is always high in DB geotechnical features of work.
• Even with the most thorough site investigations, the possibility of encountering differing conditions still exists.
• Therefore, the DB construction administration system should be established to provide the necessary benchmarks for measuring time and schedule impact when a compensable DSC is realized.
© 2019, All rights reserved, Douglas D. Gransberg 25
Planned (CPM) versus Actual (Data) This can be done automatically from
DWRs submitted to a cloud from an iPhone.
© 2019, All rights reserved, Douglas D. Gransberg 27
“How the Honolulu Geotechnical Baseline Reports Reduced the Subsurface Risk at Bid Time”
• Example of Site Characterization:
• Ground conditions can be easily visualized
• Key Soil and rock layers are defined
• Profiles not individual boring logs
Steven R. Saye, P.E. Kiewit Engineering Group
© 2019, All rights reserved, Douglas D. Gransberg 28
Preconstruction Visualization and Risk AssessmentConvert soil profile to a risk rating
© 2019, All rights reserved, Douglas D. Gransberg 29
Preconstruction Visualization and Risk Assessment
© 2019, All rights reserved, Douglas D. Gransberg 30
CPM was invented in 1968. Linear scheduling method
was used to build the interstate system in the 50s,
60s, and early 70s.
Monte Carlo simulation results for grout curtain production
Example Forensic DSC Claim Analysis ModelUse the linear scheduling format as a communication tool to explaining the events that either support or deny a contractual breach.• Daily Reports as data source: Work performed between stations in a given date.• Use the linear scheduling model: x-axis as physical alignment and y-axis as time.• No activities or production rates, just actual data plotted as lines.• Influential factors may be included graphically, such as underground conditions,
rainfall data, production as volumes or any other physical unit within the time unit.
© 2019, All rights reserved, Douglas D. Gransberg 31
Panama Canal Expansion - Borinquen Dam 1E Model• Linear Schedule Model:
• Identify key activities (Critical Path) with unique colors:• Grout Curtain• Foundation Treatments• Blankets• Embankment Core
Blankets
Core
FoundationTreatmentsGrout Curtain
© 2019, All rights reserved, Douglas D. Gransberg 32
Borinquen Dam Core Construction
© 2019, All rights reserved, Douglas D. Gransberg 33
Borinquen Dam 1E Model• Linear Schedule Model:
• Extract data from daily reports:• Activity Type• Initial Station• Final Station • Date
Task-ID Name Date Start.Distance End.DistanceA-00001 / Capa 1 16-Jul-13 620 630 A-00002 / Capa 2 17-Jul-13 645 670 A-00003 / Capa 3 17-Jul-13 620 630 A-00004 / Capa 4 23-Jul-13 645 675 A-00005 / Capa 5 24-Jul-13 660 670 A-00006 / Capa 6 24-Jul-13 675 695 A-00007 / Capa 7 24-Jul-13 660 670 A-00008 / Capa 8 25-Jul-13 675 695 A-00009 / Capa 9 25-Jul-13 670 695 A-00010 / Capa 10 25-Jul-13 660 670 A-00011 / Capa 11 25-Jul-13 695 700 A-00012 / Capa 12 25-Jul-13 660 670 A-00013 / Capa 13 25-Jul-13 690 700
© 2019, All rights reserved, Douglas D. Gransberg 34
NCR
NCR
NCR
NCRNCR NCR
NCR
NCR
NCRNCRNCR
NCR
NCRNCR NCR
© 2019, All rights reserved, Douglas D. Gransberg 35
Baseline Grouting Sequence
Actual Grouting Sequence
© 2019, All rights reserved, Douglas D. Gransberg 36
© 2019, All rights reserved, Douglas D. Gransberg 37
Summary• Best way to mitigate DB geotechnical risk: start digging as
soon as practical, identify the in situ conditions and retire it early.
• Best way to minimize the cost of DB geotechnical risk in procurement: align the Owner and the Design-builder’s perceptions and implement risk sharing.
• Best way to mitigate the cost of DB geotechnical realized risks: proactive as-built schedule documentation.
• Bottom-line – Paying for unrealized geotechnical risks adds no value to the project. So bring a DB mentality to the DB project.
© 2019, All rights reserved, Douglas D. Gransberg 38
Today’s Speakers
• Ghada Gad, California State Polytech University, Pomona, [email protected]
• Doug Gransberg, Gransberg & Associates, Inc., [email protected]
• Bora Cetin, Iowa State University, [email protected]
Get Involved with TRB• Getting involved is free!• Join a Standing Committee (http://bit.ly/2jYRrF6)• Become a Friend of a Committee
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– Create your account– Update your profile
Receiving PDH credits
• Must register as an individual to receive credits (no group credits)
• Credits will be reported two to three business days after the webinar
• You will be able to retrieve your certificate from RCEP within one week of the webinar