Slide 1Maryland State Highway Administration
Cost and Schedule Management
Virginia*
*
Total Project Budget = $2.442 Billion
2002 Update Approved in March 2003
Total Project Budget = $2.564 Billion
2003 Update Approved in March 2004
Total Project Budget = $2.427 Billion
2004 Update Approved in February 2005
Total Project Budget = $2.449 Billion
2005 Update Approved in April 2006
Total Project Budget = $2.444 Billion
2006 Update Approved in March 2007
Total Project Budget = $2.476 Billion
2007 Update Approved in March 2008
Total Project Budget = $2.524 Billion
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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Woodrow Wilson Bridge Project
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
Woodrow Wilson Bridge Project
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.
Woodrow Wilson Bridge Project
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…
Woodrow Wilson Bridge Project
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
*
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.
Woodrow Wilson Bridge Project
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)
Woodrow Wilson Bridge Project
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.
Woodrow Wilson Bridge Project
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.
Woodrow Wilson Bridge Project
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.
Woodrow Wilson Bridge Project
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.
Woodrow Wilson Bridge Project
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.
Woodrow Wilson Bridge Project
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.
Woodrow Wilson Bridge Project
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.
Woodrow Wilson Bridge Project
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.
Woodrow Wilson Bridge Project
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.
Woodrow Wilson Bridge Project
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.
Woodrow Wilson Bridge Project
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.
Woodrow Wilson Bridge Project
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.
Woodrow Wilson Bridge Project
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…
Woodrow Wilson Bridge Project
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
Woodrow Wilson Bridge Project
Success! Some beautiful headlines relaying our bidding
successes.
Woodrow Wilson Bridge Project
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
Woodrow Wilson Bridge Project
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
Woodrow Wilson Bridge Project