Airport Capital Improvements: A Business Planning and Decision-Making Approach (2014)

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34 Before Getting Started with ACCE To ensure a smooth experience with ACCE, some preparations are necessary before running the application. These preparations include the collection of information that constitutes inputs to the cost-estimating approach. Since airport capital planning involves management, policy, planning, finance, and safety functions at the airport, the inputs should be vetted with relevant personnel and/or departments. Alternatively, ACCE can be run in a group setting to allow con- sensus discussion on the subjective inputs to the tool while it is being used. Some of the inputs required by ACCE should be collected prior to starting. This includes the definition of the construction project(s) under consideration, consisting of a project description, planned construction year, and values for the cost drivers that are used in the CER for the project in question. It may also be useful to have a printed reference copy of the quick reference guide for ACCE, especially when using it for the first time. The guide is reproduced in Appendix B. ACCE Work Flow The user interface is designed to ensure all relevant information is displayed and associated input is requested in a guided, logical sequence. This keeps the interface simple and allows a user to navigate intuitively through the tool. The input screen of the ACCE tool is divided into four sections (see Figure 2): 1. Contact information: This section allows the preparer to enter identifying information, including name, organization, e-mail, and a phone number. This information is optional. 2. Airport data: In this section, the user specifies airport information including three-letter FAA airport identifier, the state, and an airport description. Airport location information is used to geographically adjust cost estimates and to identify the project location. 3. Project input: This includes project-specific information such as the construction type and all relevant CIV values. 4. Cost estimate: This provides a running display of a range of cost estimates, identified as a low, most likely, and high estimates. If the project inputs are modified, the cost estimate is updated. Once the user is satisfied with the inputs, a report can be generated from this section. Airport Data Airport data is necessary primarily to account for the regional variation in project cost. Hav- ing an airport identifier is also useful as a reference to help identify the cost estimate. This is particularly useful when cost estimates are generated for several different airports. The airport data section requires the three-letter FAA identifier to be entered, the two-letter state identifier, C H A P T E R 5 ACCE—Airport Capital Cost-Estimation Tool

ACCE—Airport Capital Cost-Estimation Tool 35 and the name of the airport. For NPIAS airports, the three-letter FAA code identifier is sufficient, as the remaining information is automatically retrieved and populated by ACCE. Project Input The cost model supports a total of six horizontal and two vertical construction projects. Each project type requires a specific set of input variables needed to apply the CER in order to derive a cost estimate. The drop-down menu in the project input window allows the user to specify the project type of interest. Once the project type has been selected, input fields are created for entering values for all the CIVs associated with that project type’s CER. Table 11 lists the pos- sible user selections for the project input window, including the project types and the associated independent variables for each. Output: Cost-Estimating Report Once the inputs have been finalized, a cost-estimating report can be generated. A sample cost-estimate report is shown in Figure 3. The tool generates cost estimates including low, most likely, and high estimates. The most likely estimate is determined by the CER and the CIV input values provided by the user. The low-high range is developed using the statistical metrics associated with the CER associated with the project type in question. CERs that feature a high quality of fit against the historical data have narrower low-high ranges than those that have a fit of lower quality. The tool presents cost estimates both in base year (i.e., FY 2014) dollars and in nominal (i.e., then-year) dollars corresponding to anticipated construction year. The nominal dollar cost esti- mate is prepared using predicted GDP deflators to adjust for changes in prices. The cost-estimating report shows the percentage adjustment used to convert FY 2014 dollars to nominal dollars. For projects with a planned construction year of FY 2014, only the base year cost estimate is shown. Figure 2. ACCE main user interface.

36 Airport Capital Improvements: A Business Planning and Decision-Making Approach Interpreting the Results The cost-estimating report contains five distinct elements, which should all be taken into consideration when interpreting the results: 1. Inputs: This section summarizes the inputs that were used to generate the cost-estimating report. This includes the contact information for the preparer, the airport data, and the project-specific inputs, including the user-entered CIV values. The airport data is used to Project Type Category Input 1 Input 2 Input 3 Input 4 ARFF Facility Vertical Year Combined floor area (sq. ft.) Apron Horizontal Year Pavement area (sq. ft.) Design aircraft MTOW (lbs.) Automated Weather Observing System Horizontal Year Perimeter Fencing Horizontal Year Length (ft.) PAPI Horizontal Year Number of systems/ runway ends Runway Horizontal Year Pavement area (sq. ft.) Design aircraft MTOW (lbs.) Landing gear configuration SRE Building Vertical Year Combined floor area (sq. ft.) Taxiway Horizontal Year Pavement area (sq. ft.) Design aircraft MTOW (lbs.) Table 11. Project input selections. Figure 3. Sample cost-estimating report.

ACCE—Airport Capital Cost-Estimation Tool 37 determine the adjustment for regional variation (based on the state the airport is located in). However, the airport location should also be considered when interpreting the resulting cost estimate. In particular, unique characteristics about the airport can affect the validity of the cost estimate. Examples include airports that are located remotely (e.g., island airports) or in environmentally sensitive surroundings (e.g., tidal marshes), which can substantially increase construction costs. The values entered for the CIVs are critical in understanding the cost estimate, as the proj- ect cost is directly linked to these values through the CER. The project description provides context to the project. While this is an optional field that allows for free-form entry, a well- crafted project description can provide important context to allow for a critical and thorough evaluation of the resulting cost estimate. The CERs were developed through a statistical analysis of a wide range of historical values for the CIVs. It was assumed that cost is a linear, well-behaved function within these ranges of values. While the model allows for user entry of CIV values that fall outside the range used to develop the CER for that project type, the resulting cost estimate will fall outside of the range used to validate the model. In these cases, a warning message is displayed (see Figure 4) and the resulting cost estimate should be viewed as uncertain. 2. Most likely cost estimate: The term “most likely cost estimate” (simply labeled “Cost Esti- mate” in the output table) is intended to emphasize that cost estimating is a stochastic science. In other words, every cost estimate is inherently uncertain and should be viewed as a range consisting of a random distribution of possible estimates. The most likely value in that distri- bution is generally accepted to be the best cost estimate. However, in interpreting the results, it is important to keep in mind that the most likely cost estimate is just one point in a range of possible values. 3. Cost estimate range: A range of cost estimates is formed by specifying the most likely cost estimate, as well as low and high estimates. These three values form a simplified representa- tion of the underlying random distribution that makes up the output of the cost model. The low and high estimates are determined by adding and subtracting a percentage offset to the most likely cost estimate. The percentage value applied to create the range is computed using a rule-of-thumb that draws on the standard error resulting from the linear regression analysis used to develop the CER in question. Since the standard error measures the amount of scatter in the historical data about the best fit, the percentage range will vary by project type. Project types that have a CER where historical cost estimates closely match predicted cost estimates will tend to have a more narrow difference between the low and high estimates. Table 12 shows the resulting percentage values used to establish the low and high estimates. 4. Inflation-adjusted cost estimate: The base year for the cost model is FY 2014 and all cost estimates are displayed in FY 2014 dollars. However, for projects with a planned construction start beyond FY 2014, the cost estimate is also shown in inflation-adjusted dollars for the construction year in question. The base year results allow for comparing the costs of different Figure 4. Warning message for CIV values outside range used to develop CER.

38 Airport Capital Improvements: A Business Planning and Decision-Making Approach projects regardless of scheduling. The nominal (i.e., then-year) results allow the airport to account for the general increase in price levels over time. Such increases can be significant: For example, price levels 10 years beyond the FY 2014 base year are projected to increase by nearly 20%. 5. Disclaimer: Each cost-estimating report generated by ACCE is accompanied by a disclaimer (Figure 5). The purpose of the disclaimer is to remind the user that the ACCE model was devel- oped as a proof-of-concept tool, using a cost database limited in scope and through an applied research project within the ACRP. The cost estimates developed through ACCE are inherently un certain, both because of the statistical method used, which is based on a sample of historical cost data with random variation, and because of limitations in both the data and the method- ology. Prior to using cost estimates developed in ACCE for airport planning and development purposes, it is important that the user fully understands the limitations of the results. To allow for a proper interpretation of the results and to understand the underlying limita- tions, a set of checklists follow—one each for the horizontal and vertical construction domain, respectively. The purpose of these checklists is to help identify factors that could cause the cost estimate to be either unusually high or low. They provide a mechanism for evaluating the uncer- tainty of the cost estimate through a self-assessment process to be conducted by the user after preparing a cost-estimating report using ACCE. If the responses to the checklists indicate the presence of several risk factors, the user should lean toward the high range of the cost estimate and/or seek an alternative estimate. Checklist for Horizontal Projects Existing Conditions • Will the project be planned on a site that has evidence of previous environmental hazards such as contaminated soil, asbestos, lead paint, or the presence of threatened or endangered species, historic structures, or other unforeseen existing conditions? This may require special Project Type Low/High Range Construct or rehabilitate taxiway ±24.9% Construct or rehabilitate apron ±23.2% Construct, extend, or rehabilitate runway ±25.9% Install perimeter fencing ±8.4% Install PAPI ±18.1% Install weather reporting equipment ±10.6% Construct ARFF facility ±5.9% Construct SRE building ±6.4% Table 12. Values used to establish low and high cost estimates. Figure 5. Cost model disclaimer.

ACCE—Airport Capital Cost-Estimation Tool 39 environmental studies, stakeholder negotiations, and mitigation initiatives, resulting in addi- tional on- or off-site improvements or in-lieu fee transfer of funds. If so, an allowance for the related costs must be added to the estimate provided by ACCE. • If this is a large pavement project, is the airport located far from the nearest asphalt or concrete supply plant? If so, the higher range of the estimate generated by ACCE is likely more reflec- tive of the final cost. • Is this project located on an island? If so, the higher range of the estimate generated by ACCE is likely more reflective of the final cost. • Will the FAA require more than 60% protection from frost for the pavement design? Gener- ally, 60% is the standard for cold-weather regions; however, in extremely cold climates, an increase in this value to 80% is sometimes required. If so, the higher range of the estimate generated by ACCE is likely more reflective of the final cost. • Is the project located in a hot-weather region where grass is difficult to grow and maintain year round? This may require alternative site stabilization in areas between runways and taxiways, such as local stone products or hardscaping. The stone must be properly sized to prevent foreign object damage hazards, which increases cost. If so, the higher range of the estimate generated by ACCE is likely more reflective of the final cost. • Is this project located in an urban community? Projects that have sensitive socio-economic factors can add time to construction due to public outreach requirements, restricted work hour requirements, and restricted work area requirements. If so, the higher range of the esti- mate generated by the ACCE is likely more reflective of the final cost. • Will there be other construction projects ongoing near the project at the same time? This may result in more favorable bids and unit prices due to economies of scale. If so, the lower range of the estimate generated by ACCE may be more reflective of the final cost. Project Scope • Will the project be a combination of two or more separate project types? If so economies of scale may exist. If combining estimates generated by ACCE for projects occurring simultane- ously, the lower range of the estimate is likely more reflective of the final costs. • Will the project include non-standard materials such as warm-mix asphalt, underground stormwater treatment systems, or artificial turf? If so, the higher range of the estimate gener- ated by ACCE is likely more reflective of the final cost. • Will the project require newer, environmentally friendly technologies such as light-emitting diode lighting, solar-powered lighting, pervious pavement, or low volatile organic compound paint? If so, the higher range of the estimate generated by ACCE is likely more reflective of the final cost. • Will the project provide improvements to technology infrastructure that is ancillary to the core project scope, such as airfield lighting touchscreen control panels, new access control hardware or software, new utility metering, stormwater collection, or outlet improvements? If so, the higher range of the estimate generated by ACCE is likely more reflective of the final cost. • Will the project include many different trades of work? For example, if a project includes site work, paving, metal work, concrete work, electrical work, security work, and carpentry work, there is an increased chance that there will be multiple subcontractors reporting to one prime contractor. This has the potential to increase cost due to increased management oversight, as well as multiple levels of overhead and profit. If so, the higher range of the estimate generated by ACCE is likely more reflective of the final cost. Conversely, if a project scope is limited to a runway mill and overlay with minor supporting site work, the lower range of the estimate generated by ACCE is likely more reflective of the final cost. • Will the FAA and the relevant state aviation/transportation agency support the use of poly- vinyl chloride (PVC) conduit for all runway and taxiway electrical conductor circuits? In some regions, this is justified in order to protect wiring from damage by fire ants, reduce mainte- nance costs, or improve safety. The use of PVC conduit can add a significant amount of cost

40 Airport Capital Improvements: A Business Planning and Decision-Making Approach to runway and taxiway projects. If so, an allowance for the related costs must be added to the estimate provided by ACCE. Specific Project Conditions • Will the project start in the fall within a cold-weather region? If a project starts late within a cold-weather region, there is potential the project mobilization cost will increase due to mul- tiple start and stops. It is typical that an airfield pavement project will be temporarily shut down in November and restarted in May to avoid final paving, topsoil, and seeding activities in cold conditions. If so, the higher range of the estimate generated by ACCE is likely more reflective of the final cost. • Is the project being constructed at a very busy airport? Cost of construction increases for an airport with high numbers of operations, especially when commercial operations dominate. High levels of activity can require construction phasing plans, which add time and cost to construction. If so, the higher range of the estimate generated by ACCE is likely more reflec- tive of the final cost. • Is there a risk associated with weather delays and damage due to severe weather events such as tropical storms, hurricanes, floods, or tornados? While difficult to predict, if a project is located in an area known to be subject to these weather hazards, the higher range of the esti- mate generated by ACCE is likely more reflective of the final cost. • For pavement projects, will the project include a simple mill and overlay of existing pavement versus a full-depth reconstruction? If so, the lower range of the estimate generated by the ACCE is likely more reflective of the final cost. • For pavement projects, will the project include replacement of an existing airfield lighting system such as taxiway or runway lights? If so, the higher range of the estimate generated by ACCE is likely more reflective of the final cost. • For perimeter fence projects, will the fence serve as both a security fence and a wildlife deter- rent fence? The FAA and U.S. Department of Agriculture have recently increased design requirements for wildlife deterrent fencing. Also, wildlife deterrent fencing is more likely to be located in wetlands or other environmentally sensitive areas. If so, the higher range of the estimate generated by ACCE is likely more reflective of the final cost. Project Jurisdiction • Will this project involve frequent coordination with the TSA or U.S. Immigration and Cus- toms Enforcement? If so, the price of construction may result in significant increased costs due to added facility requirements and the application of non-standard facility layout require- ments. Facility foundation plans and other supporting utility items can be affected by changes in wall locations, elevator shaft locations, and baggage handling support columns. If so, an allowance for the related costs must be added to the estimate provided by ACCE. • Will the project have sources of funding from multiple agencies such as the FAA, Economic Development Administration, TSA, or state agencies? This may create additional delineations of work and/or present a construction phasing burden to the sponsor, contractor, and inspect- ing team. If so, the higher range of the estimate generated by ACCE is likely more reflective of the final cost. • Are there deed restrictions or existing protective land overlays on the proposed project site? For example, is there a regional or district water protection overlay within an area where stormwater improvements are proposed? This may create added requirements and/or admin- istrative and legal costs related to mitigation initiatives. If so, an allowance for the related costs must be added to the estimate provided by ACCE. • Will any agency or municipality require special construction considerations such as energy- efficient vehicle fleets or idling restrictions for construction equipment? This will add cost to the project related to alternative fuel equipment or work site restriction. If so, the higher range of the estimate generated by ACCE is likely more reflective of the final cost.

ACCE—Airport Capital Cost-Estimation Tool 41 Checklist for Vertical Projects Existing Conditions • Is the proposed site for the new building cleared of obstructions and level? If not, an allowance for this work must be added to the ACCE estimated value. • Does an existing structure need to be demolished to make way for the new building? If so, an allowance for this work must be added to the ACCE estimated value. • Do existing underground utility lines—including steam tunnels, NAVAIDs, power, water, sewer, fuel, communications, and security—require relocation to make way for the new building? If so, an allowance for this work must be added to the ACCE estimated value. • Where existing structures and/or utilities are required to be removed, has a hazardous materials assessment survey (asbestos, PCB, lead paint, etc.) been performed? If not, it is recommended that this be performed prior to finalizing a cost estimate for the project, as hazardous materials remediation can represent a significant additional cost as well as a potential delay to the proj- ect schedule. Such impacts may be significant enough to reconsider the location of the new building. • Have geotechnical borings and soils analysis been performed and analyzed? If not, it is recom- mended that this be performed prior to finalizing a cost estimate for the project, as unsuitable (organic) soils, contaminated soils, and rock/ledge would need to be removed and replaced with structural fill, resulting in a significant additional cost as well as a potential delay to the project schedule. Such impacts may be significant enough to reconsider the location of the new building. • Has a comprehensive site survey been performed? If not, it is recommended that this be per- formed prior to finalizing a cost estimate for the project, as potential cost/schedule impacts related to underground utilities/structures and property boundaries can be revealed and estimated. • Is the project site in an area where archaeological resources may be present? If so, it is recom- mended that the local and/or state historic commission be consulted regarding their potential requirements for study prior to proceeding with construction, as this could impact the project schedule. Project Scope • Is the proposed project a renovation? If so, has an existing conditions assessment been per- formed in relation to code deficiencies which may be required to be addressed as part of a renovation? If not, it is recommended that this be performed prior to finalizing a cost esti- mate for the project. Examples include structural, energy efficiency, and accessibility (ADA) upgrades which may be triggered by the local building code and increase the intended scope of the renovation. Such impacts may be significant enough to consider demolition and new construction rather than renovation. • Is the proposed project an addition to an existing building? If so, has an existing conditions assessment been performed in relation to code deficiencies in the existing building which may be required to be addressed as part of an addition? If not, it is recommended that this be performed prior to finalizing a cost estimate for the project. A significant size addition may require code-related upgrades to the existing building even if such upgrades are not desired by the owner. Such impacts may be significant enough to consider construction of a separate new building rather than an addition. • Does the existing and/or new building contain tenant spaces? If so, a number of consider- ations come into effect: – If the tenant will be displaced, temporary facilities to allow the tenant uninterrupted opera- tions may be required. – If the tenant lease includes a clause which limits disruption from noise or vibration, certain construction activities may need to be limited to occur after hours.

42 Airport Capital Improvements: A Business Planning and Decision-Making Approach – If the tenant requires special infrastructure (i.e., power, grease trap, ventilation, etc.), facili- ties (i.e., hazmat storage), or fit-out of furnishings and equipment (i.e., cooking/kitchen equipment), it is recommended the costs associated with these items be negotiated between tenant and airport prior to finalizing a cost estimate for the project. • Are the required utility connections (power, water, gas, sewer, and telecommunications) available directly at the proposed building location? If not, extension of the primary utility lines to the building location may be required as part of the project, and consultation with the utility companies to establish additional costs is recommended prior to finalizing a cost estimate for the project. • Are there any separate but related “enabling” projects that must occur for this project to proceed? If so, the capital plan should clarify if these enabling project costs are to be included in the cost of this project, or are to be addressed separately. Examples include relocation of a security fence, construction of new space for current occupants of a building scheduled to be demolished, construction of a new access road, etc. • Does the new facility require purchase of any special equipment, technology, or infrastructure which is beyond that typically provided as part of this type of facility? If so, the higher range of the estimate generated by ACCE is likely more reflective of these special equipment costs. • Will the project include all new furniture, computers, communications equipment, appli- ances, and the like? If so, the higher range of the estimate generated by ACCE is likely more reflective of these added costs. • Will the airport need to engage the services of a professional moving company to relocate their furniture, materials, and operational items from an existing facility into the new facility? Will any of these items need to be placed in off-site storage during construction? If so, the higher range of the estimate generated by ACCE is likely more reflective of these moving and storage costs. Specific Project Conditions • Is the airport located in a remote area where construction labor and materials are in limited supply, or where physical access to the airport is challenging (i.e., an island location). If so, the higher range of the estimate generated by ACCE is likely more reflective of these remoteness costs. In this instance the airport may consider setting the project schedule so that the major- ity of work occurs during periods of the year where access to the airport is least challenging and therefore least expensive. • If the airport is located in a cold-weather climate, will major portions of the exterior construc- tion be performed during winter months? If so, the higher range of the estimate generated by ACCE is likely more reflective of these winter-conditions costs. In this instance the airport may consider modifying the project schedule to avoid exterior construction work during cold-weather months. • Will temporary facilities be needed for operational staff during construction? In cases of a major renovation, or where the demolition of an existing building is required to occur prior to the new building being ready for operations, some form of temporary facility is needed to maintain operations until the new building is complete. If so, an allowance for this work must be added to the ACCE estimated value. • Will the project be phased in order to accommodate both construction and ongoing airport operations within the same general area? Limiting the physical areas where construction work may proceed to various time periods is very common with airport projects, but does involve cost premiums. If so, the higher range of the estimate generated by ACCE is likely more reflec- tive of these winter-conditions costs. • Does a critical completion date exist for the project? Furthermore, must the project be com- pleted within an accelerated time frame? If so, the higher range of the estimate generated by ACCE is likely more reflective of this accelerated schedule.

ACCE—Airport Capital Cost-Estimation Tool 43 • Does the project involve airside construction? If so, the higher range of the estimate gener- ated by ACCE is likely more reflective of these security/operational costs, as airside projects require more extensive security and operational restrictions. In this instance the airport may consider relocating the SIDA barrier temporarily to allow for the project site to be designated as occurring landside throughout construction. Project Jurisdiction • Are any federal or state environmental permits required? It is recommended that this be determined prior to finalizing a cost estimate for the project, as both state and federal envi- ronmental permit processes can last a year or longer and incur significant consultant fees. • Are any special local variances, hearings, or approvals required? Local approvals which can sometimes impact a project cost and/or schedule include the following: – Local design review board: Many communities have regulatory design standards (some- times related to historic districts), which are often more appropriate to residential and/or small commercial developments than to functional and secure airport facilities. – Conservation commission: Stormwater drainage, rare species habitats, and wetlands habitat are common considerations. – Zoning board: Airport buildings are often larger than typical buildings in small communi- ties, and thus require zoning exemptions and/or special permits. • Will any special mitigation measures be required by local authorities in order to obtain approval for the project? It is recommended that this be determined prior to finalizing a cost estimate for the project, as certain mitigation measures can significantly impact both cost and schedule. Examples include creation of a replacement habitat elsewhere on airport prop- erty, noise/visual barriers between the project location and abutters, and purchase of adjacent properties. There are of course numerous other considerations which could affect project cost and sched- ule and which are unique to each airport. The preceding checklists are intended to assist the airport in anticipating and planning for potential issues in advance, thus assisting in a more pre- dictable process of design and construction which would more closely align with the estimates developed by ACCE.