Woodrow Wilson Bridge Project 1 Maryland Department of Transportation State Highway Administration District of Columbia Department of Transportation Virginia

Slide 1Maryland State Highway Administration
Cost and Schedule Management
Virginia*
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Total Project Budget = $2.442 Billion
2002 Update Approved in March 2003
2004 Update Approved in February 2005
2005 Update Approved in April 2006
Update is on www.wilsonbridge.com
On Time, On Budget
36 Projects Advertised and Bid to Date in MD & VA
$1.494 Billion in Contracts Awarded to Date
$119 Million under budget
Contract Bid Performance
Woodrow Wilson Bridge Project
Developing the Project Scope
The old bridge had to be replaced because it was failing
Close proximity of adjacent two interchanges on each side of the bridge required reconfiguration of bridge approaches through the four interchanges
High traffic volumes through corridor warranted additional ramps and through lanes
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Developing the Project Budget
Cost per Mile Estimates
MSHA keeps databases of costs incurred over the years for different types of work
Initial budgets developed using cost/mile for roadway work and cost/SF for bridge work, depending on type of work
Added extra for intense MOT required
40% contingency for all cost/mile estimates
Additional 15-30% added for potential utility impacts
Early right-of-way costs also included
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Signature Bridge Estimates
Since signature bridges are not often built in Maryland, looked for cost estimates for similar type structures around the country
Added on additional costs for unique features of the project (i.e. bascule drawspan)
Added on heavy contingencies to (hopefully!) cover any unknowns
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As the Project progressed into Preliminary Engineering stage, major quantities estimates were prepared
Quantities and costs for major categories of Grading, Structures, Paving, Shoulders, Major Landscaping and Major Traffic and Utility Items were estimated
Remaining category items’ (MOT & Preliminary Items, Drainage, Other Landscaping and Other Traffic and Utility Items) costs estimated as a percentage of the major categories
Right-of-way and utility estimates also updated
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Refining the Estimates
Unified Preliminary Investigation (PI) or 30% Plans prepared for the main bridge and each interchange to facilitate better cost estimating
Work broken into contracts based on construction and MOT needs
The design of work that was needed first was advanced first, while the rest of the work remained at the PI stage
Detailed cost estimates prepared as design advanced beyond the PI stage
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The Financial Plan
The FHWA requires Financial Plans for all megaprojects (>$1 billion), updated yearly
FP shows expenditures, updated project schedule, projected costs yet to be incurred (with appropriate inflation factors), how projected costs were estimated, how costs will be covered, and changes in the total cost of the Project
FP encourages cost accountability
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4% to pay for GEC
10% for construction changes or claims
10% for construction contract management
0.5% for miscellaneous
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# Addenda: 10
# Questions: 182
Foundation Locations
Regular Cofferdams
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Advertised: June 25, 2001
# Addenda: 6
# Questions: 15
Ramps E & F
66,100 Linear Feet
# Addenda: 7
# Questions: 130
Engineer’s Estimate
. . . $487 million, the largest construction contract ever advertised by the Maryland State Highway Administration
One Bid
. . . For $860 million by the joint venture of Kiewit, Tidewater & Clark (KTC), 75% (or $373 million) above the estimate
Funding Responsibility
. . . By agreement in the Project’s Financial Plan, Maryland was responsible for covering any cost overruns on its contracts
Budget Implications
. . . The difference between bid and estimate could not be covered by the existing budget and no readily available sources of additional funding (such as increased tolls).
For the contract to build the substructure and superstructure of the Woodrow Wilson Bridge . . .
On December 13, 2001, the Maryland State Highway Administration opened bids on the largest construction contract it had ever advertised. The contract was to build the substructure and the superstructure of the new Woodrow Wilson Bridge, a project valued at approximately $2.5 billion to reconstruct a corridor of I-95 in the Washington DC area. The engineer’s estimate for the contract was for $487 million. The low bid, by the joint venture of Kiewit, Tidewater, and Clark was for $860 million—a difference of $373 million, or 75% higher than the estimate. The project’s budget could not possibly cover the cost difference and the Project’s Financial Plan required Maryland to cover any cost overruns—a daunting responsibility. This presentation explains how the Project Team overcame this “minor” setback and describes lessons learned in the process.
Washington Post-December 14, 2001
To give you an idea of the emotional impact of this turn of events, here is the headline of the Washington Post’s Metro section from December 14, 2001. A nightmare headline for any Project Manager…
Development of Engineer’s Estimate
Value Engineering review of initial estimates conducted by Project Team in 1999.
Engineer’s Estimate prepared by bridge design consultant 1999-2001
Detailed review and approval by Federal Highway Administration
Acceptance by the USDOT Office of the Inspector General
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265 Round Steel Piles (2.5’ – 4.5’ Diameter)
40,400 Cubic Yards
4,500 Cubic Yards
50,200 Cubic Yards
50,900 Cubic Yards
How Could This Have Happened?
This was the first question asked—by the press, politicians, the public and the project team. The project team consists of the General Engineering Consultant (the joint venture of Parsons Brinckerhoff, URS and RK&K), the designer of record (Parsons Transportation Group), and the owners (FHWA, VDOT and SHA). Team members possessed extensive experience on large-scale projects from around the world. No one thought a lack of bidder interest would become a problem for this project. The trend in the industry at the time the construction contracts were sized was to allow big projects to stay big to achieve economies of scale advantages and to lessen contractor coordination and contract interface risk. Competition and good bids had resulted for the first two bridge contracts and many contractors had bought plans and asked questions during the early part of the bidding phase of the superstructure contract. As the Ad Date neared, however, only one team was still asking questions. We hoped that even if only bid was submitted, it would be low enough to award the contract.
Uncertainty in the economy (especially after Sept. 11)
Contract size / complexity
Surety bonding issues
Many mega-transportation projects across the US had a concurrent bidding period
Many contract specifications were not seen as "contractor friendly”
Uncertainty about the Project Labor Agreement (PLA)
In general, these issues were seen as being the most likely causes of limited competition. (Discuss each briefly)
Continue Building the Bridge’s Foundations
Act Quickly, but Get it Right
Collect the Best Advice Available
In the aftermath of this project bombshell, a myriad of ways of proceeding was possible. To provide focus for a strategy, certain constraints had to be applied. The first was to preserve the approved bridge concept. A great deal of time and energy had been expended in developing this concept and gaining the public’s support for it. Starting over would have resulted in delays with lengths impossible to determine. The bridge’s foundations were already being built. Stopping this construction would only further delay the project. Time was of the essence, so the pressure was on to come up with a strategy as soon as possible. However, there was also a great deal of pressure to “get it right”. A second unsuccessful bidding attempt would have reflected extremely poorly on the project team and on Maryland. With the stakes high, we began searching for the best advice available.
to Help Understand the BR-3 Bid
Committee of nationally recognized construction and design experts is providing an independent evaluation of the factors that inhibited competition and resulted in bid prices far in excess of the engineer’s estimate.
Evaluation includes recommendations that the MSHA will consider in gaining additional competition and reduced bid prices, such as;
negotiating with the sole bidder.
re-advertisement of the project.
repackaging the bid documents into smaller contracts and re-advertising.
Changes to the design of the project including value engineering recommendations, and changes in bid requirements that could result in more competition and reduced cost, are also being evaluated.
Mission of Committee
Here are the names of the members of the IRC.
Contractor Interviews
Re-advertisement Scenarios
The IRC had four main tasks: review the design to see if there were ways of making it less expensive, review the contract documents to see if anything was unduly onerous for the contractors, interview contractors that would seem likely to bid on this work to find out why they did not, and develop re-advertisement scenarios.
Review of Contract Documents
Were Requirements too Difficult / Confusing / Unclear ?
Were Contract Provisions Burdensome to Contractor ?
The IRC reviewed the contract documents with these questions in mind.
Potential Bidders Were Asked Their Perceptions Regarding:
The IRC interviewed potential bidders to ask them their thoughts on these aspects of the contract. Neither constructability nor schedule was indicated as a major concern by any of the contractors interviewed. Availability of materials was perceived to be significant since only one precast concrete supplier was able to cast the segments. Encouraging the use of an on-site or off-site temporary casting yard or allowing a cast-in-place option would allow competitive alternatives. Bonding and Insurance were major issues for smaller contractors who might have liked to bid on the contract. They requested breaking the contract down into smaller segments or allowing reduced bonding requirements. Layers of contract oversight was perceived to be a big issue, given all the jurisdictions involved, the existence of a GEC and the proximity of the federal government to the project. The PLA was also a very troubling. Maryland had very much wanted a Project Labor Agreement, but including one required federal approval. Very late in the bidding period, the FHWA rejected the PLA and it was not included. This led to a great deal of uncertainty about what the contract’s labor requirements would be, turning off many firmly “open shop” contractors. Some of the contract terms were perceived to be very burdensome to the contractor, especially regarding mobilization. Contract size was an obvious issue for smaller contractors. At the time the contract was advertised, several other megaprojects were also advertising around the country. Contractors have only so many resources for preparing large bids, so they had to choose. Environmental issues were also of concern. Since the project is so close to all the nation’s regulatory agencies, some contractors felt they would receive undue scrutiny, further increasing their risk.
Decrease Cost of the Structure
So, we had three fundamental objectives: minimize delay in implementing the project, increase competition and decrease the cost of the structure.
Advertise the Bascule Work ASAP
To minimize delay some critical path work was moved from the superstructure contract to other contracts underway. The bascule was advertised first, since it had the longest duration of construction and was easiest portion of work to break into its own contract.
Stagger Ad Dates of the Three Contracts
Clarify PLA Requirements
Conduct Nationwide Marketing Campaign
The work was broken into three contracts. The Ad Dates of these contracts were staggered to allow the same bidding teams to bid on multiple contracts. PLA requirements were clarified, in that the contract would neither require nor prohibit a PLA. Many, many specifications were modified to make them more contractor friendly. And a nationwide marketing campaign was undertaken to drum up contractor interest in the contracts.
MD Marine
Work (BR-3C)
VA Land-based
Work (BR-3B)
So this is how we broke down the work. The bascule (or drawspan) which was all cast-in-place work and had the longest duration of construction. The Virginia approach to the bascule, which was precast work almost entirely over land. And the Maryland approach to the bascule, which was precast work almost entirely over water.
Aug. 15, 2008
Oct. 17, 2008
Dec. 31, 2008
The three contracts were advertised starting in July 2002—one contract every three months. Four-month bidding periods were scheduled to allow the contractors time to prepare good bids.
Advertisements were placed in major trade media
Personal calls were made to construction firms to:
Inform of changes to contract
Encourage to consider bidding
Request further suggestions for improving the project
This was unprecedented for us—we had never considered courting contractors before. We kept potential bidders aware of our progress by sending them updates. We placed ads in major trade media. Personal calls were made to possible bidders by the Maryland State Highway Administrator, Woodrow Wilson Bridge Project Director and the Project’s Chief Bridge Engineer themselves to try to encourage contractors to bid and to gain further suggestions for improvement.
Reduced insurance requirements
Lowered Retainage Provisions
Provided Lump Sum breakdowns
Clarified PLA Requirement
Many, many specifications were changed to make them more contractor friendly. Here are the more significant ones.
Options of pre-casting piers or cast in place piers
V-piers refined to simplify tie beams and knuckle connection
Structural elements redesigned to increase uniformity and repeatability
To reduce the cost of the structure these main design changes were made…
Bidding Results for BR-3A, BR-3B, and BR-3C
18 contractors submitted bids for contracts BR-3A,
BR-3B, and BR-3C either singly or as part of joint ventures
BR-3A (Bascule Contract) attracted 5 bidding teams
Low Bid: American Bridge/Edward Kramer & Sons for $186 million
10.7 % over the estimate
27.7% under the estimate
$191 million
Success! Some beautiful headlines relaying our bidding successes.
Lessons Learned
Avoid advertising at the same time as other signature bridges, if possible
Remember that when it comes to signature bridges, the owner needs contractors more than they need the owner
Reach out to the contracting community early and often to spark and maintain interest
Try to make the contract terms contractor friendly
Remove as much uncertainty as possible from the contract prior to advertising
Emphasize the owner’s active involvement
Lessons Learned (Continued)
Must balance need for competition with risks associated with multiple contractor interfaces
Use extreme caution when incorporating anything into a contract that might lessen competition
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# Addenda: 5
# Questions: 206
Work Area
# Addenda: 5
# Questions: 123
Work Area
# Addenda: 6
# Questions: 128
Work Area
Budget control is crucial
The public, the press, elected officials and the FHWA expect megaprojects to be built within the budget
A Project Financial Plan helps assure budget accountability
The Project budget should have adequate contingencies to cover potential field changes/claims