Influence of Geotechnical Investigation and Subsurface Conditions on Claims, Change Orders, and Overruns (2016)

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35 chapter five CONCLUSIONS Geotechnical risks in infrastructure construction are widely acknowledged to be significant; however, information quanti­ fying the risks is rare and information quantifying the risks in the context of subsurface investigation scope even rarer. This Synthesis reviews the nature of subsurface risks and geotech­ nical investigations for U.S. transportation agencies and iden­ tifies practices the agencies can implement to reduce the risks. It consists of a literature review, a survey of transportation agencies, and case examples of select agencies. This chapter provides a brief summary of each before presenting the most important conclusions, organized by topic. The literature review (chapter two) included five topics: (1) national subsurface investigation standards as well as agency subsurface investigation capabilities; (2) previous research at the Indiana Department of Transportation regard­ ing geotechnical change orders; (3) previous studies investi­ gating the effect of subsurface investigation on claims, change orders, and cost overruns; and literature regarding (4) human effects and (5) contracting practice effects attributed to sub­ surface conditions. Results of the survey are presented in chap­ ter three. Fifty­five agencies were contacted for the survey; 51 responded (93%). The survey consisted of three parts and was sent to geotechnical engineers, many of whom shared responsibility for completing the survey with construction per­ sonnel. Five agencies that indicated success in reducing claims, change orders, and cost overruns attributed to subsurface con­ ditions were identified for further examination. Case exam­ ples for these five agencies were presented in chapter four. SCOPE OF SUBSURFACE INVESTIGATION • Nearly 70% of responding agencies specify minimum subsurface investigation requirements that are equal to or generally consistent with requirements prescribed in the 2014 AASHTO LRFD Bridge Design Specifications and the 1988 AASHTO Subsurface Investigation Manual. Five of the responding agencies (10%) have minimum requirements that substantially exceed those prescribed in the AASHTO Specifications, three have requirements that are materially different from the AASHTO Specifi- cations, and one reported having requirements that are generally less stringent than the AASHTO Specifications. • Slightly more than half of the responding agencies reported that scopes for subsurface investigations occa­ sionally exceed the minimum requirements, whereas relatively few agencies mentioned that scopes for sub­ surface investigations commonly exceed minimum requirements. Approximately one­third of the respond­ ing agencies noted that scopes for subsurface investi­ gations rarely exceed the minimum requirements. • Approximately half of the responding agencies reported that site characterization is difficult because of highly variable subsurface conditions, whereas approximately half reported that site characterization is not difficult. A small percentage of agencies also indicated that site characterization is difficult because select types of soil and rock are difficult to characterize. • A small number of agencies have specifications that incentivize additional site characterization by pre­ scribing different resistance factors for different levels of investigation. • Other studies have indicated agency in­house sub surface investigation is common but decreasing, whereas use of the cone penetration testing (CPT) is less common but increasing. Badger’s survey in 2015 found that three­ quarters of the 36 responding agencies used CPT. CAUSES OF SUBSURFACE CONDITIONS CLAIMS, CHANGE ORDERS, AND COST OVERRUNS Claims, change orders, and cost overruns attributed to sub­ surface conditions most frequently fall under the heading of differing site conditions; however, the combinations of project applications and geologic settings that are associated with dif­ fering site conditions are diverse. The most common causes identified in the survey and case examples included pile overruns, higher than expected groundwater, misclassified or mischaracterized subgrade, unanticipated rock encountered during foundation construction, and mischaracterized rock for drilled shaft construction. These are consistent with causes identified in previous studies. In interviews, several agencies noted that subsurface investigation cannot completely remove the risk of claims, change orders, and cost overruns, a position that is supported by literature. SIGNIFICANCE OF SUBSURFACE CONDITIONS CLAIMS, CHANGE ORDERS, AND COST OVERRUNS The survey data shed light on the magnitude and frequency of claims, change orders, and cost overruns attributed to sub­ surface conditions among U.S. transportation agencies. Many of the conclusions are based on quantitative data provided by

36 seven agencies. The number of agencies providing such quanti­ tative data was limited because such data are difficult to extract from databases of all claims, change orders, and cost overruns. • Three­quarters of responding agencies recognize claims, change orders, and cost overruns from all sources as a significant problem. Slightly more than half reported subsurface conditions as a significant problem. • Most responding agencies perceive that the magnitude and frequency of claims, change orders, and cost over­ runs has remained steady over the last decade, although some agencies have perceived some decrease and others an increase in the magnitude and frequency. • Change orders attributed to subsurface conditions are considerably more frequent than claims or cost overruns. The same trend was observed among claims, change orders, and cost overruns attributed to all causes. There was less difference among the average cost per individual occurrence, although claims were somewhat more costly than change orders or cost overruns, which is contrary to the trend observed considering all causes, for which change orders were considerably less costly on average than claims and cost overruns. Considering both the fre­ quency and the average cost per occurrence, subsurface conditions change orders have the largest impact on agency budgets. • By number, 5% of all claims, change orders, and cost overruns reported in the survey were attributed to sub­ surface conditions; by cost, 7% were attributed to sub­ surface conditions. These values are consistent with the majority response to a survey question requesting esti­ mates of the percentage of claims, change orders, and cost overruns attributed to subsurface conditions: 30 of 47 respondents estimated less than 20%. That slightly more than one­third of respondents estimated greater than 20% suggests there is a perception among some agencies or some personnel that greater percentages of claims, change orders, and cost overruns can be attributed to sub­ surface conditions than the quantitative data suggest. • Cumulative costs for claims, change orders, and cost over runs attributed to subsurface conditions represented up to 1% of total agency construction budgets. The impact on individual project budgets is likely far greater. Individual, project­level data were not collected; how­ ever, total annual agency costs of subsurface conditions change orders, for example, represented as much as 7% of the total agency spending on all projects associ­ ated with the change orders. The impact on individual project budgets was therefore likely much greater than 7% for some projects, because 7% is an average of many projects and the variability of claims, change order, and overrun data was observed to be considerable. The impact of a change order costing even 7% of the project budget is likely significant, especially relative to proj­ ect contingency funds, which are often limited. • Problems related to subsurface conditions claims, change orders, and cost overruns do not follow any obvious geo­ graphic patterns. However, there do appear to be regions of the country, particularly the Midwest and South Atlan­ tic, where site characterization is less difficult and sub­ surface condition problems are less prevalent; trends that are likely explained by geologic regions. • The reported relative costs of subsurface conditions claims, change orders, and cost overruns were gener­ ally consistent with values reported in previous studies focusing on transportation projects and less than values reported for other construction sectors. • The quantitative data reported in the survey included only direct costs of claims, change orders, and cost over runs. A similar study by Mott MacDonald and Soil Mechanics, Ltd. in 1994 found indirect costs to be greater than direct costs. PRACTICES TO REDUCE SUBSURFACE CONDITIONS CLAIMS, CHANGE ORDERS, AND COST OVERRUNS Practices that were effective in reducing claims, change orders, and cost overruns attributed to subsurface conditions were discovered in the literature review, survey, and case examples and are summarized here. • Improvements implemented by agencies have had mixed effects on the occurrence of claims, change orders, and cost overruns, with some agencies experiencing sub­ stantial reductions in the occurrence, whereas others have not experienced such reductions or are still evalu­ ating the effects. • Targeted improvements to subsurface investigation prac­ tices to address specific issues leading to claims, change orders, and cost overruns appear to be more success­ ful and less costly to implement than across­the­board changes to practice. • Communication and training involving a broad spectrum of agency and contractor personnel (including designers, contractors, inspectors, and field crews) appear to be key elements to realizing the benefits of improvements to site characterization practices. Such communica­ tion may include improvements to agency guidelines, specifications, and standards; improvements to agency design, bid, and contract documents; and regular train­ ing opportunities. These factors, essentially the human factors emphasized in literature, may be significant when geotechnical risks are especially significant, such as for design­build projects. • Conduct of subsurface investigations by well­trained agency personnel appears to aid in improving site char­ acterization and in reducing claims, change orders, and cost overruns. • Even if improvements to subsurface investigation prac­ tices do not produce substantial reductions in claims, change orders, and cost overruns, they have often led to substantial improvements to design efficiencies.

37 FUTURE RESEARCH This Synthesis presents findings that significantly reduce uncertainty regarding subsurface conditions claims, change orders, and cost overruns, especially at an agency level. It has also identified several challenges, particularly related to recordkeeping and project­level data, which make further reduction in uncertainty difficult. In addition, this Synthesis describes several areas where modifications to agency prac­ tices could produce notable cost reductions or performance improvements. The findings are therefore motivation for future research. Ideas for future research are introduced here: • Many of the difficulties in collecting quantitative data regarding subsurface conditions claims, change orders, and cost overruns resulted from agency practices for documentation. The use of database reason codes (e.g., as documented for the Indiana Department of Trans­ portation), and specifically the practice of assigning a single reason code to each make it difficult to iso­ late projects with true subsurface conditions claims, change orders, and cost overruns. Alternative methods of archiving, tracking, and coding could be explored to improve the accuracy of, and increase opportunities for, efforts that rely on databases of claims, change orders, and cost overruns. The improved database would be an extremely valuable tool for agencies to track project risk sources and regularly evaluate and improve prac­ tices. Claims, change orders, and cost overruns are a significant learning opportunity for agencies, as several case example agencies have demonstrated with targeted improvements that have successfully addressed specific issues leading to claims, change orders, and cost over­ runs. Database improvements would also benefit the other research efforts suggested here. • Because of difficulties in collecting quantitative data, the information presented in this Synthesis was gathered at an agency level, not a project level. The agency­level data are useful for broadly defining the significance of subsurface conditions claims, change orders, and cost overruns; however, project­level data are necessary to evaluate the effects of specific subsurface investigation risk practices. Project­level data regarding the details of subsurface investigation (number and type of investiga­ tions, cost, etc.) and the specific cause and cost of corre­ sponding subsurface conditions claims, change orders, and cost overruns could be collected. Project­level data are necessary for many of the following ideas. • The list of frequently encountered subsurface conditions claims, change orders, and cost overruns from this Syn­ thesis study was developed primarily from the reports of the case example agencies. A more intensive study of subsurface conditions causes of claims, change orders, and cost overruns could be conducted and incorporate cost information. Results would include a more robust list of subsurface conditions issues, which would be valuable in its own right and could also be used to quan­ tify construction risks. Quantified construction risks are necessary for any rigorous effort to evaluate methods for reducing claims, change orders, and cost overruns, including several subsequent research ideas. • Agency communication and training were identified as critical to realizing the benefits of improvements to site characterization practices. Additional information regarding specific agency communications and training practices related to geotechnical investigation would help identify the most effective practices and, in turn, allow agencies to fully realize the benefits of other site characterization practices, a possible topic for a new NCHRP Synthesis study. • For most agencies, subsurface investigation requirements are consistent with the 2014 AASHTO LRFD Bridge Design Specifications and the 1988 AASHTO Subsurface Investigation Manual, both of which recommend a mini­ mum number of borings for each project location (e.g., bridge bent and length of retaining wall) without consid­ ering variations in project­specific ground conditions or geologic risks. Research could be conducted to identify the level of geotechnical investigation scope that pro­ duces a consistent level of risk of claims, change orders, and overruns as a function of site conditions. Results of such work would also demonstrate the economic value of subsurface investigation and could help agencies estab­ lish an appropriate contingency level for geotechnical construction. • Use of CPT, geophysical methods, and other alterna­ tive investigation techniques was found to vary widely among agencies. Research could be conducted to identify the most effective use of alternative investigation tech­ niques. The objective would be to identify appropriate replacement rates (alternative investigations instead of conventional borings) for various types of construction and ground conditions. The results could also be used to evaluate the economic benefit of alternative investiga­ tion techniques. • Although use of alternative investigation techniques varied considerably, the agencies generally perceived such techniques as having improved overall geotechni­ cal investigation practice. Such reports motivate addi­ tional investment into continued development of new and emerging techniques for subsurface investigation (e.g., various geophysical methods and in situ testing methods) to benefit highway design and construction applications.