October 14, 2020
TxDOT’s Focus on Pre-Procurement ActivitiesShort Course 2020Presented by Randall Grones, PFD Project Manger and Adam R. Ramirez, PFD Deputy Project Manager
October 14, 2020
October 14, 2020
Table of contents
2
4-9
10-11
12
13
3DB 5-Year Project Plan
Project Readiness
Risk Allocation
Benefits of Pre-Procurement Activities
Questions
1
2
3
4
5
October 14, 2020
DB 5-YEAR PROJECT PLAN
Reduced to 50-75 Projects based on District feedback
250-300 Projects after filtering
using 13 classifications and
$100M+ construction cost
~50 Projects sequenced through
Decision Lens
5-YEAR DB PLANNING TABLOID
PM-D
IS P
RO
JEC
TSPr
ojec
ts le
t with
in s
peci
fied
FY
Sept – Oct Oct – Nov
TXDOT CONNECT using
13 project classifications and $100M minimum construction cost
Decision Lens with Project Strategic
Need Criteria:SafetyPreservationCongestionConnectivityEnvironmentEconomic
Development
District review of Portfolios
Decision Lens with Project Strategic
Need Criteria (10%) and
Readiness Criteria (90%)
2,500-3,000 Projects available
over $100M construction cost
Tabloid with DB Projects allocated
per fiscal year
District status of Project Readiness
Criteria:EnvironmentalDesignROWUtilityGeotechFunding
Filter Applied
Resulting Portfolios
Nov – Dec Dec - Feb
ADS Tool Analysisand
DB 5-Year Plan Review
Reduced to ~50 Projects based on
add’l District feedback and
Project grouping
October 14, 2020
PROJECT READINESS
October 14, 2020
Project Readiness - Purpose
Project readiness involves a systematic process to identify, assess, respond to and monitor risk to have better scope, schedule and cost certainty prior to initiating a TxDOT alternative delivery project procurement.
5
PROJECT
SCHEDULE
October 14, 2020
Project Readiness – Collaboration between District and PFD-SCM
Project readiness includes an effective and engaging risk management process early during pre-procurement across all levels of TxDOT’s organizational structure (District, PFD-SCM, Senior Leadership).
Increased collaboration between the District and PFD-SCM during pre-procurement.
6
District
PFD-SCM ADM
TxDOT Design-Build Project Phase Pre-procurement Procurement
Project Development
Responsibilities
THEN District District / PFD-SCM
NOW District / PFD-SCM District / PFD-SCM
October 14, 2020
Project Readiness – Early Risk Management
The District and PFD-SCM will collaborate to develop successful strategies to identify and manage risk early during project development.– The District and PFD-SCM will identify a project
team risk “champion”– Promotes a risk culture and awareness of risk
within the project team– Implements an integrated QA/QC process
7
October 14, 2020
Project Readiness Assessment Categories and Risk Priorities
The project team performs quarterly project readiness assessments
A risk priority is provided to evaluate readiness
8
No. Assessment Category Risk
Priority
1 Environmental Approval 1
2 Final Schematic 3
3 Obtain Stakeholder/Third Party/Railroad Agreements 2
4 ROW Acquisition 3
5 Utility Investigations Complete 2
6 Geotechnical Investigations Complete 2
7 Funding Availability 2
8 High Priority Risk Mitigation 1
9 Other RID Development 2
October 14, 2020
Project Readiness Assessment
Tier I Risk Assessment
(Project team level)
Tier II Risk Assessment
(Senior Leadership)
9
The project team performs a Tier I risk assessment to assess whether a project should be recommended for a Tier II assessment.
Senior leadership assesses the risk of initiating a procurement and the need to re-sequence projects in the 5-year DB Program.
October 14, 2020
Risk Allocation
Higher amounts of risks are placed on DB Contractor in DB projects than traditional DBB
This approach often results in high risk pricing TxDOT coordinated with the Industry to identify risks that could be mitigated
by TxDOT Programmatic DB Contract language to shift the risk allocation to the party
best positioned to manage those risks Better partnering atmosphere and reduced overall project costs
10
October 14, 2020
Risk Allocation – Then and Now
11
Risk Item Previous Risk Assignment
New Risk Assignment Details
Right of Way – Eminent Domain Delays DB Contractor Shared Schedule and overhead relief if the Critical Path is
impacted after an initial specified time period
Railroad Coordination –Railroad Agreement Delays
DB Contractor Shared TxDOT to obtain C&M Agreement Schedule and overhead relief if the Critical Path is
impacted after an initial specified time periodRailroad Coordination –Changes to Railroad Documents
DB Contractor TxDOT Potential cost, schedule, and overhead relief for
changes to the Railroad Documents made after the Proposal Due Date
Utility Delays DB Contractor Shared Schedule and overhead relief for Uncooperative Utility
Delays, Utility Owner Delays and Public Utility Owner Delays (subject to risk sharing thresholds)
October 14, 2020
Benefits of Pre-Procurement Activities
Reduces uncertainty and risk before initiating a TxDOT alternative delivery procurement
Increased due-diligence activities during pre-procurement will provide better price and schedule certainty during a procurement
Minimizes risk to proposers resulting in better competition TxDOT and industry are better able to anticipate and allocate resources
12
October 14, 2020
Questions
13
Randall Grones, P.E.
Project Finance, Debt and Strategic Contracts, TxDOT
Adam R. Ramirez, P.E.
Project Finance, Debt and Strategic Contracts, TxDOT