Guide for the Process of Managing Risk on Rapid Renewal Projects (2012)

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19 INTRODUCTION What Is Rapid Renewal? Rapid renewal projects constitute a unique subset of highway projects. They have three primary objectives: (1) completing renewal of existing highways quickly; (2) doing so with minimal disruption to the community; and (3) producing facilities that are long- lasting At the core of rapid renewal projects are elements intended to realize optimal benefits for the project and public: a new way of managing collaborative relationships and decision making; better integration of management, planning, design, construc- tion, and maintenance; and more synergistic use of technologies and methods. The following are examples of rapid renewal projects: • Reconstruct a busy rural highway quickly by using precast, posttensioned concrete panels in critical inter sections to reduce lane closure times; and using high-early-strength concrete elsewhere to reduce curing times and achieve earlier opening. Ensure lon- gevity by requiring a 10-year performance warranty. • Accelerate delivery of a critical urban freeway recon- struction project by pursuing public–private partner- ship to secure funding and deliver the project many years earlier than possible with traditional funding and delivery methods. • Replace an aging overpass bridge structure in an urban area by prefabricating a replacement bridge “offline,” and then moving the replacement bridge into place over a single weekend during a full road closure. 3 CONTEXT FOR RAPID RENEWAL Apply various management and/or technical techniques to reduce delivery time and dis- ruption without adversely affecting project cost and longevity, although performance uncertainty and volatility might increase.

20 GUIDE FOR THE PROCESS OF MANAGING RISK ON RAPID RENEWAL PROJECTS • Reconstruct a major urban freeway with a full closure or directional closures. In certain circumstances, full road closure can be less disruptive than attempting to maintain traffic through a construction area. • Use contractor incentives to accelerate construction. Success with the use of con- tractor incentives on emergency projects (e.g., MacArthur Maze reconstruction in San Jose, California, after a tanker fire and the I-35W bridge reconstruction after the structural failure of the existing bridge) have led DOTs to use contractor incen- tives for nonemergency, rapid renewal projects. These rapid renewal project examples clearly reflect more uncertainty (and risk) than traditional projects. Project acceleration makes schedules more volatile (e.g., any small delay can have significant impact on a highly compressed schedule). This uncer- tainty can affect the public’s opinion of DOTs and ultimately the performance of their transportation network. Formal and consistent risk management is prudent on any project, but it is essential on rapid renewal projects to ensure that DOTs meet their performance objectives and promises to their stakeholders. Background and Concepts of Rapid Renewal The Federal Highway Administration (FHWA), American Association of State High- way Transportation Officials (AASHTO), and the Transportation Research Board (TRB) have been actively developing the concepts underlying rapid renewal. FHWA and AASHTO have been at the forefront of the effort through their work on the Accelerated Construction Technology Transfer (ACTT) Program. Although construc- tion is in the ACTT title, the program addresses all phases of project delivery. Appen- dix A contains more information on ACTT. Unfortunately, however, there is still no single definition of a rapid renewal proj- ect. Rather, rapid renewal is typically referred to by project characteristics or the tech- niques implemented to compress the project schedule. A recent publication by TRB (2009), Special Report 296, defines several rapid renewal strategies. These strategies reflect general categories of approaches for meeting rapid renewal objectives, including completing on-roadway construction activities that affect traffic flow and the commu- nities and businesses that rely on the roadway for services. • Perform faster in situ construction by using a compressed schedule, which might require extended overtime shifts, mobilizing additional workers, employing inno- vative technologies, full road closures with detour, and strategic design. This strategy also typically involves the use of design–build project delivery, flexible performance specifications, and nondestructive testing. • Minimize field fabrication by establishing techniques that maximize prefabrication that can occur off-site. This can be achieved by prefabricating units of roadway or bridges, modular construction, and innovative installation strategies. Modular and prefabricated elements allow for accelerated schedules, improve quality con- trol and longevity, and enhance the overall level of performance of the project.

21 GUIDE FOR THE PROCESS OF MANAGING RISK ON RAPID RENEWAL PROJECTS • Perform faster construction inspection and monitoring by ensuring that renewal projects are inspected and accepted quickly (e.g., using nondestructive testing) so that they can be reopened to the public. This strategy may include intelligent com- paction and the use of contractor quality assurance/quality control techniques. • Facilitate an innovative and equitable contracting environment by making deci- sions and accepting them rapidly (e.g., streamlined environmental analyses and permitting processes, streamlined design approvals through colocation, privatized operations and maintenance, private financing, and alternative bonding). To effec- tively use this strategy, risk should be shared among project partners (e.g., DOTs, designers, private contractors, and partners), such as through incentives. Addition- ally, performance-based specifications can be used to provide the contractor with control over construction-related risks. • Improve customer relations by recognizing the role that utilities and railroads play in the project development and execution. To prevent conflicts, institutional and procedural changes must be made and a proactive strategy for dealing with conflicts must be established in the early phases of project development. Similarly, right-of- way (ROW) acquisition can be advanced and joint development encouraged. • Design and construct low-maintenance facilities so that the need for future re- habilitation is minimized. This may involve the use of innovative materials (e.g., composites) or construction in controlled environments (e.g., modularization and prefabrication). • Preserve facility life by investing in facilities that are in good working condition to reduce the frequency of renewal. These strategies, in turn, result in specific rapid renewal tactics or methods that can be employed for specific projects. Appendix A contains a rapid renewal inventory, or summary, of specific rapid renewal tactics and methods as identified through ACTT and TRB publications and interviews conducted with several state DOTs as part of the devel- opment of this guide. An example of a rapid renewal inventory is shown in Figure 3.1. PROCESS OF RAPID RENEWAL Objectives and Performance Measures for Rapid Renewal Projects For the purpose of this guide, the four key project performance objectives (and related measures, or the bases for defining, assessing, and managing risks) for evaluating rapid renewal projects are as follows: 1. Minimize cost to complete project delivery (e.g., in terms of year of expenditure costs). 2. Minimize time to complete project delivery (e.g., in terms of completion date). 3. Minimize disruption during project delivery (e.g., in terms of hours lost by the public).

22 GUIDE FOR THE PROCESS OF MANAGING RISK ON RAPID RENEWAL PROJECTS 4. Maximize longevity and minimize postconstruction problems: — Minimize cost and disruption of operations and maintenance. — Minimize cost and disruption for replacement and its frequency (e.g., ensure longevity in that the project meets or exceeds the design life according to the specifications and is designed for ease of maintenance and replacement). Additional performance objectives or measures for rapid renewal projects could include the following, depending on project circumstances: • Maximize the chance to secure adequate project funding (funding delays covered in schedule performance measure).Minimize environmental impacts throughout project life. • Minimize safety impacts during construction and throughout project life. Construction Structures Traffic Engineering/ Safety/ITS Innovative Contracting/ Financing Geotechnical Materials/ Advanced Testing • Closures • Preliminary Work/ Staging • Project Administration Streamlining • Construction Operations • Prefabrication • Component Reuse • High-Performance Materials • Integral Designs • Standardized Design • Construction Placement • Temporary Structures • Long-Life Structural Design • Advance Planning • Alternate Routes • Alternate Modes • Improved Physical Separation • Coordinated Emergency Response • Signage and Signalization • Closures • Work Zones • Alternative Financing • Project Delivery • Procurement • Contract Payment • Warranties • Alternative Insurance • Advance Contract Packaging • Bonding/ Performance Securities • Subsurface Exploration • Walls • Pavements • Alternative Materials • Intelligent Compaction • Material Testing Public Relations Environment Roadway/Geometric Design Right-of-Way/ Utilities/Railroad Coordination Long-Life Pavements/ Maintenance • Team Integration • Single-Point Communication • Additional Investment • Project Branding • Stakeholder Awareness • Performance Measurement • Master Planning • Context-Sensitive Solutions • Comprehensive Scoping • Advance Permitting • Alternate Access • Alternate Geometrics • Advance Roadwork • Advance Right-of- Way Planning • Early Utility Location • Common Utility Crossings • Early Railroad Coordination • Life-Cycle Design • Performance Indicators • Long-Life Materials • Maintenance Involvement Note: ITS = Intelligent Transportation Systems. Figure 3.1. Rapid renewal inventory (Appendix A).

23 GUIDE FOR THE PROCESS OF MANAGING RISK ON RAPID RENEWAL PROJECTS • Maximize quality for operations (separate from operations and maintenance and replacement). • Maximize stakeholder satisfaction with other project performance measures. • Maximize revenue during operations, if applicable. An overall project objective is to maximize satisfaction of the group of the above objectives, considering trade-offs among them. One logical way to accomplish this is to translate all objectives into common terms (e.g., equivalent cost) that can then be easily combined. For example, the value of changes in schedule, changes in disruption, and changes in longevity can be assessed in terms of how much the decision maker would be willing to pay (in dollars) to make desirable changes or to prevent undesir- able changes [e.g., cost per month of schedule change, regardless of the magnitude of change (linear) and regardless of changes in other measures (independent)]. Once translated into equivalent cost terms, the various objectives can simply be summed to determine an overall value to be (in this case) minimized. Different, expanded programmatic performance measures might also be defined for specific programs composed of individual projects (e.g., minimize overall program cost, optimize programmatic cash flow, minimize overall program schedule, minimize overall program disruption). Rapid Renewal Project Phases For the purposes of categorizing rapid renewal methods and their associated risks and risk management, it is convenient to characterize projects in terms of their various development phases” (or major activities, such as final design). In general terms, most projects progress through the phases presented in Table 3.1. The table also provides examples of rapid renewal strategies for each phase. The order in which these phases occur can depend on the project characteris- tics and the selected project delivery method. Two general (simplified) models for the sequencing of these project phases are shown in Figure 3.2. These models, although simplified, provide a framework for the risk management process and assist in devel- oping risk-based cost and schedule models. Figure 3.2a shows traditional, linear design–bid–build project delivery; Figure 3.2b depicts innovative approaches such as design–build in which construction and final design are completed concurrently by the builder to shorten project delivery schedules. Although many variations are possible, these two models can accommodate a variety of delivery strategies at a level that is appropriate for risk management efforts. Each box represents a phase, with the left side of the box representing the start and the right side representing the finish, and the top and bottom representing some point in between. Each arrow into a box represents a precedent requirement for that phase. Subsequent chapters present a formal process for identifying, assessing, and man- aging rapid renewal–related risks. A key part of this process is identifying the major project activities and their sequence (e.g., as shown in Figure 3.2), which is in turn based on the project’s scope, delivery strategy, conditions, and key assumptions.

24 GUIDE FOR THE PROCESS OF MANAGING RISK ON RAPID RENEWAL PROJECTS The project delivery selection process, as well as the accelerated construction method selection (and design in general) process, is beyond the scope of this guide, but there are various documents describing well-established processes for the selection of the project delivery method (e.g., by Canadian Provinces Ontario and British Colum- bia, as well as the UK Highways Agency’s Gateway Process) that consider a range of factors in a collective, qualitative, and quantitative manner. TABLE 3.1. TYPICAL PROJECT PHASES AND EXAMPLES OF ACTIVITIES AND RENEWAL STRATEGIES Project Phase Typical Activity Rapid Renewal Strategy Planning Determine purpose and need; consider environmental factors; facilitate public involvement and participation; consider interagency conditions. Conduct accelerated programmatic or portfolio planning; conduct accelerated internal coordination; conduct accelerated external planning. Scoping Determine design criteria and parameters; make preliminary plans such as alternative selections; assign geometry, project delivery strategy, and programming; obtain funding authorization. Conduct accelerated and comprehensive scoping; employ master planning and integrated project development process; use innovative project delivery (e.g., design–build, construction manager at risk). Environmental Conduct environmental analysis including discipline studies, National Environmental Policy Act of 1969 /State Environmental Policy Act, alternatives analysis, documentation, public hearings, permitting. Accelerate the environmental documentation process; seek streamlined environmental approval process and approvals; streamline mitigation planning and implementation. Design Develop plans (preliminary and final), specifications, estimates, traffic control plans. Accelerate design process; seek streamlined design approvals; hold early constructability reviews; use innovative and/or long-life designs. Right-of-way, utilities, and railroad Determine right-of-way impact; develop right-of-way approach; acquire right-of-way; determine utilities impacts; coordinate with utilities; develop railroad impact; coordinate with railroad. Accelerate right-of-way planning; accelerate right-of-way acquisition; conduct early utility planning and coordination of agreements; accelerate utility relocation; conduct early railroad planning and coordination of agreements. Procurement Prepare contract documents, advertise for bids or proposals; hold a prebid conference; receive and analyze bids or proposals. Use alternative contract packaging; employ advanced procurement. Construction Initiate contract; mobilize; conduct inspection and materials testing; administer contract; control traffic. Use prefabricated materials and construction techniques; use modular construction techniques; use full road closures or other innovative traffic management techniques. Operations Operate facility; monitor performance; provide services for customers. Consider privatized operations and maintenance. Replacement (or decommissioning) Plan for replacement; plan for design and construction or replacement; plan for decommissioning if appropriate. Accelerate planning for replacement or decommissioning.

25 GUIDE FOR THE PROCESS OF MANAGING RISK ON RAPID RENEWAL PROJECTS The scope of this guide is to present an appropriate approach to comprehensively evaluating and managing the risks associated with any rapid renewal project, which might include innovative project delivery methods and accelerated construction meth- ods—choices among project delivery methods and among accelerated construction methods can then be made, at least in part, on the basis of such evaluations of alterna- tives. Because the analysis of risks involves different models for different project deliv- ery methods, and many of the risks themselves are different for the different project delivery methods, specific project delivery methods (i.e., D-B or D-B-B) must be evalu- ated separately and then compared. However, risks for each delivery method, in the context of rapid renewal, are discussed in depth in Appendix B, which will help DOTs understand the risks involved with each project delivery method. Figure 3.2. Example sequencing of major project phases: (a) traditional design–bid–build (D-B-B) and (b) alternative design–build (D-B) delivery. 11 2014.01.08 R09 04 Guide Chapter 3_final for composition.docx2013.02.11 R09 04 Guide Chapter 3.docx Figure 3.2. Example sequencing of major project phases: (a) traditional design–bid–build (D-B- B) and (b) alternative design–build (D-B) delivery. Each box represents a phase, with the left side of the box representing the start and the right side representing the finish, and the top and bottom representing some point in between. Each arrow into a box represents a precedent requirement for that phase. Notes: 1,2,3 = funding 4 = project delivery 5 = replacement Enviro Proc = Environmental Process Util, RR = Utilities, Railroad Planning Scoping Enviro Proc, Prelim Design Final Design Procure- ment Construc- tion Opera- tions Replace- ment Enviro Permits ROW, Util, RR 4 5 2 31 Traditional Design/Bid/Build (D/B/B) <E> Time  Notes: <x> = lag E - lag (remaining) after finish of ROW Fund to finish of ROW/Utilities/RR A – lag (remaining) from finish of Environmental Permits to B - lag (remaining) to finish of Procurement C – lag (remaining) from finish of Environmental Permits to D - lag (remaining) to finish of ROW/Util/RR G - lag (non-overlap) after start of Final Design to start of Construction and H - lag (remaining) after finish of Final Design to finish of Construction I - lag (remaining) after finish of ROW/Util/RR to finish of Construction J – lag (remaining) from finish of ROW/Util/RR to K - lag (remaining) to finish of Procurement <D> Planning Scoping Enviro Proc, Prelim Design D/B Final Design Procure- ment D/B Con- struction Opera- tions Replace- ment Enviro Permits ROW, Util, RR 4 5 2 3 1 Design/Build (D/B) <E> <F> <K> <J> <I> <H><G><A><C> <B>Time  Notes: 1,2,3 = funding 4 = project delivery 5 = replacement Enviro Proc = Environm ntal Process Util, RR = Utilities, Railroad Notes: <x> = lag E - lag (remaining) after finish of ROW Fund to finish of ROW/Utilities/RR F - lag (overlap) from finish of ROW/ Util/RR to start of Construction 11 2014.01.08 R09 04 Guide Chapter 3_final for c mposition.docx2013.02.11 R09 04 Guide Chapter 3.docx Figure 3.2. Example sequencing of major project phases: (a) traditional design–bid–build (D-B- B) and (b) alternative design–build (D-B) delivery. Each box r presen s a phase, with the left side o th box representing the start and the right side repre e ting the finish, and the top and bottom r pres nting some point in between. Each arrow into a box represents a precedent requirement for that phase. Notes: 1,2,3 = funding 4 = project delivery 5 = replacement Enviro Proc = Environmental Process Util, RR = Utilities, Railroad Planning Scoping Enviro Proc, Prelim Design Final Design Procure- ment Construc- tion Opera- tions Replace- ment Enviro Permits ROW, Util, RR 4 5 2 31 Traditional Design/Bid/Build (D/B/B) <E> Time  Notes: <x> = lag E - lag (remaining) after finish of ROW Fund to finish of ROW/Utilities/RR A – lag (remaining) from finish of Environmental Permits to B - lag (remaining) to finish of Procurement C – lag (remaining) from finish of Environmental Permits to D - lag (remaining) to finish of ROW/Util/RR G - lag (non-overlap) after start of Final Design to start of Construction and H - lag (remaining) after finish of Final Design to finish of Construction I - lag (remaining) after finish of ROW/Util/RR to finish of Construction J – lag (remaining) from finish of ROW/Util/RR to K - lag (remaining) to finish of Procurement <D> Planning Scoping Enviro Proc, Prelim Design D/B Final Design Procure- ment D/B Con- struction Opera- tions Replace- ment Enviro Permits ROW, Util, RR 4 5 2 3 1 Design/Build (D/B) <E> <F> <K> <J> <I> <H><G><A><C> <B>Time  Notes: 1,2,3 = funding 4 = project delivery 5 = replacement Enviro Proc = Environmental Process Util, RR = Utilities, Railroad Notes: <x> = lag E - lag (remaining) after finish of ROW Fund to finish of ROW/Utilities/RR F - lag (overlap) from finish of ROW/ Util/RR to start of Construction a) b)

26 GUIDE FOR THE PROCESS OF MANAGING RISK ON RAPID RENEWAL PROJECTS CONCLUSIONS ON RAPID RENEWAL With the increasing challenges posed by aging infrastructure and reduced funding, rapid renewal strategies and tactics will be increasingly required to deliver long-lasting projects quickly, cost-effectively, and with minimal disruption. However, such rapid renewal strategies and techniques are, in many cases, somewhat innovative and thus might perform in unexpected ways. This uncertainty, especially in high-visibility proj- ects that serve as critical transportation links, can affect the public’s opinion of our highway DOTs and ultimately the performance of our transportation network. Formal and consistent risk management, as presented in this guide, will be required to ensure that DOTs meet their objectives for rapid renewal projects. Example The hypothetical QDOT case study (see Appendix D), which is used throughout this guide to illustrate the various steps of the risk management process, and a risk man- agement plan (RMP; Appendix E), consist of several rapid renewal elements as dis- cussed in this chapter and summarized below. QDOT is planning to reconstruct and expand segments of two existing (intersecting) highways, US-555 and SH-111, through a rapidly developing suburban area. The existing highways are nearly 40 years old, have increasingly inadequate capacity, and are expensive to maintain. These facilities are the only viable east-west (US-555) and north-south (SH-111) routes for commercial traffic for several miles in either direc- tion. Therefore, it is imperative that the necessary improvements be made quickly and with minimal disruption. QDOT would also like to minimize construction costs and future repair cycles and maintenance requirements, as well as eventual replace- ment issues. To help achieve these objectives, QDOT plans to encourage contractor innovation through the use of performance-based specifications and incentives, and to procure with an innovative project delivery method (i.e., design–build). It is expected that accelerated bridge construction techniques, minimally disruptive maintenance of traffic (e.g., detour or realignment or full temporary closure), and innovative pavement design, among other rapid renewal elements (as described in Appendix A), will be considered for this project. As described in this chapter, it is important that the project be adequately understood (and documented) before starting the risk management pro- cess. The project is described in Appendix E, RMP Section 2.