Guidelines for Managing Geotechnical Risks in Design–Build Projects (2018)

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35 There is a need to align differences in perception of the geotechnical risk between owner and contractor to avoid overestimating or underestimating the risks by either party and reduce con­ flicts by effectively sharing the risk. This chapter will report the effective practices (tools) within the context of available strategies and methods for managing geotechnical risk for DB projects. 5.1 Geotechnical Issues and Available Risk Mitigation Strategies The major factors for which a risk mitigation strategy is needed to resolve common geo­ technical issues present in most DB projects are as follows. The list is not comprehensive but general enough to apply to most, if not all, DB project delivery environments. • Delays due to untimely actions by third party stakeholders. • Inefficiencies in the project delivery process due to failure to include salient geotechnical risk issues in the procurement process. • Lost opportunities to avoid difficult geotechnical conditions. • Claims due to DSC. • Delays due to utility coordination, existence, and location failures. • Poor quality post­award geotechnical investigations. The corresponding list of respective strategies to align differences in perception of the geo­ technical risk between owner and contractor and address the causes of geotechnical­related issues on DB projects is as follows: 1. Implement early contractor design involvement through encouraging geotechnical ATCs during procurement. 2. Use DB process to address other subsurface issues like utility company timeliness by involving third party stakeholders as early as practical in project development and delivery. 3. Raise the visibility of geotechnical issues in DB projects to ensure competing contractor teams understand the level of criticality on each project. 4. Avoid DSC claims through enhanced contract mechanisms designed specifically for address­ ing geotechnical risks. 5. Promote an atmosphere of life cycle–based design and construction decision making with respect to geotechnical risk on DB projects. 5.2 Methods for Implementing Tools A method is a “regular, systematic way of accomplishing something.” Thus, in the geotechni­ cal risk context, the method corresponds to the specific stage of project delivery in which the project is being considered. Each stage has regular, systematic procedures that constrain the C H A P T E R 5 Geotechnical Risk Management Strategies, Methods, and Tools

36 Guidelines for Managing Geotechnical Risks in Design–Build Projects ability of the project team’s use of the tools. Therefore, the appropriate methods for implement­ ing the tools are defined as follows: • Pre-advertising geotechnical risk management. This method consists of the typical activities undertaken during preliminary engineering to identify and quantify geotechnical risks for inclusion in a DB RFP. • Procurement geotechnical risk management. This method consists of activities undertaken to refine the DB project’s geotechnical risk profile during competitive DB proposal preparation. • Pre-construction geotechnical risk management. This method consists of activities undertaken after the award of the DB contract during the design phase of the project. • Construction geotechnical risk management. This method consists of activities undertaken after the award of the DB contract during the construction phase of the project. 5.3 Tools A set of tools is identified as effective practices implemented by DOTs across the nation. An effective practice is defined as “a practice found in the literature and validated as effective by agencies.” Considering that there is no unified approach toward managing the geotechnical risk in DB projects, this compilation of tools is made available for DOTs to implement and improve practices as necessary. Three of these tools (progressive DB, scope validation period, and multiple construction notices to proceed) are identified as potential solutions for achieving an aligned approach toward managing the geotechnical risks in DB projects. These tools are designed to get the construction contractor into the field as early as practical to uncover the subsurface condi­ tions and determine if there are indeed conditions that differ materially from those that would reasonably have been expected during price proposal preparation. The use of one of these tools shifts the geotechnical engineering from being design­centric to construction­centric and recognizes that even the most extensive geotechnical investigations can still miss DSCs. Therefore, the object of the post­award effort in this area is to expose those risks as quickly as practical at a point early enough in project execution that the cost impact of the remedies is minimized and any schedule impacts occur at a point where the maximum project float is available to mitigate any delays. This section identifies and describes the tools that can be implemented to manage geotechni­ cal risks in DB projects. Table 5.1 lists the tools. This section provides a brief description of each tool. More information is in Appendix C. 1. Flexible footprint for NEPA clearance. This tool depends on the agency selecting DB project delivery early enough to influence the final form of the NEPA clearance. In essence, this tool seeks to provide as much flexibility in the final permit as practical to avoid the potential that attractive geotechnical design solutions are not unintentionally disallowed by commitments made to obtain the permit in a timely manner. 2. Furnish geotechnical baseline report. Developed by the owner, who collects all the relevant data from similar previous projects and the test results for the current project and assembles the information into what will serve as the geotechnical baseline for bidders for decreasing geotechnical uncertainty during procurement, which can make proposals received more competitive. 3. Geotechnical conditions database. The advancement of computing power and the reduction in data storage costs have made it feasible for agencies to create corridor­level geotechni­ cal databases consisting of all the data gathered in past projects. The database can then be mined to furnish information on site conditions for upcoming projects.

Geotechnical Risk Management Strategies, Methods, and Tools 37 4. Site conditions history from property owners during right-of-way acquisition. Property owners will often have knowledge of a given parcel’s history and may be able to provide information with regard to previous utilities and structures. Additionally, they may also have knowledge of the presence of buried material such as demolition materials from previous structures, as well as provide potential warning that contaminated material may be present. The tool merely adds these questions to the right­of­way or ROW acquisition process and may trigger the need to conduct sampling during preliminary engineering. 5. Prescriptive geotechnical design. DB project delivery is by definition performance­based in that the contract is awarded before the design is complete. However, since geotechnical issues are often on the critical path, this tool involves the agency prescribing a geotechnical design approach with which it is comfortable and stating in the DB RFP that no deviations will be permitted. The result saves time during initial design reviews of subsurface features of work, which potentially allows those design packages to be released for construction as early as practical if desired. 6. Performance specifications for post-construction performance (subsidence, etc.). To mitigate poten­ tial geotechnical­related failures in the operation phase of the project, an owner might include a requirement for specific geotechnical­related performance warranties by the contractor. 7. Include differing site conditions clause. Much of the geotechnical claim generally falls under changes due to DSC. The typical DSC clause provides broad relief to a contractor for site conditions that differ materially from what is expected according to the contract documents. The FHWA does not have a DSC mandate for DB projects. Nevertheless, many state DOTs use a DSC clause in their DB contracts. # Tool 1 Flexible footprint for National Environmental Policy Act of 1969 (NEPA) clearance 2 Develop and furnish GBR in RFP 3 Geotechnical conditions database 4 Site conditions history from property owners during right-of-way acquisition 5 Prescriptive geotechnical design 6 Performance specifications for post-construction performance (subsidence, etc.) 7 Include DSC clause 8 Progressive DB 9 Request of geotechnical and/or utilities ATCs 10 Define no-go zones for geotechnical ATCs 11 Competitor designated boring locations 12 Competitors permitted to conduct supplementary borings at own expense. 13 Unit prices for contaminated material, over-excavation, etc. 14 Weight geotechnical evaluation criteria 15 Include life cycle criteria in best value award scheme 16 Scope validation period 17 Multiple NTPs with one designated for geotechnical investigation, design, and a second specifically to commence excavations, utility work, etc. 18 Contractor produced GBR-C 19 Negotiated GBR interpretation 20 Differing site conditions allowance 21 Contaminated material allowance 22 Unforeseen utilities allowance 23 Assign design–builder responsibility for utility coordination 24 Validate proposed life cycle elements during design 25 Encourage life cycle related value engineering proposals from subcontractors Table 5.1. List of tools for managing and mitigating geotechnical risks.

38 Guidelines for Managing Geotechnical Risks in Design–Build Projects 8. Progressive design–build. Progressive design–build’s attraction to the geotechnical risk manage­ ment realm is the ability to negotiate the geotechnical risk after award and after the geotech­ nical investigation has been completed rather than depending on the DSC clause to allocate the subsurface risk. With progressive design–build, the first design and construction pack­ age released for construction could begin the subsurface investigation and conduct selected excavation on the project site to identify where the geotechnical issues will be encountered and their magnitude. Thus, a fair and equitable amount for the realized subsurface risk can be established. This eliminates the need for adding unnecessary contingencies in the price because the uncertainty of the subsurface conditions is eliminated early in the project. 9. Request of geotechnical/utility-related alternative technical concepts (ATCs). ATCs allow pro­ posers to submit alternative solutions to potential subsurface problems before the contract is awarded; request ATCs (which the agency will hold confidential and preapprove if appli­ cable) to identify geotechnical issues and enhance innovation in geotechnical design and subsurface construction means and methods. 10. Define no-go zones for geotechnical ATCs. ATC no­go zones are those areas of the geotechnical baseline design that may not be proposed for change during the DB procurement. 11. Competitor designated boring locations. Reduce geotechnical risk by conducting subsurface explorations (borings) at strategic locations to provide reasonable geotechnical parameters to the bidders. Additional borings are made available to all competitors but sometimes the agency performs more borings to avoid giving away the location requested by a proposer so the competitive advantage is retained. An important element for the success of the project during the procurement phase is to have sufficient geotechnical information that allows competitors to price the project without excessive contingencies. 12. Competitors permitted to conduct supplementary borings at own expense. Allow competing design–builders to conduct their own pre­bid geotechnical investigations before devel­ oping their proposals to reduce geotechnical uncertainty; an important element for the success of the project during the procurement phase is to have sufficient geotechnical information that allows competitors to price the project without excessive contingencies. 13. Unit prices for contaminated material, over-excavation, etc. A formalized geotechnical risk allocation technique to draft the contract provision that uses selective unit pricing, which provides an effective means for managing geotechnical quantity uncertainty. 14. Weight geotechnical evaluation criteria. Tailor relative geotechnical weight for the contractor selection process in each DB project. 15. Include life cycle criteria in best value award scheme. Because design is where the quality standards for construction are established, it is important that agency expectations for post­ construction life cycle performance be articulated in the solicitation and used to identify successful approaches for managing geotechnical risks across the DB project’s life cycle. It is also important to discuss those practices that did not adequately address the geotechnical requirements and caused the agency to hold geotechnical liabilities that it had hope to shed. 16. Scope validation period. A period incorporated into the contract to allow the contractor to discover any site conditions that differ from owner­furnished information early in the project. After the end of the scope validation period, the design–builder’s claim rights are waived for items not previously raised. This approach allows for an early resolution of geotechnical­related issues and establishes a limit for the owner’s liability by assigning a specific timeframe for DSC claims. 17. Multiple notices to proceed. Using multiple NTPs allows the owner to reduce the risk of DSC by issuing an NTP only for the contractor’s subsurface exploration and underground work before releasing the entire scope of work. This way there is a prioritization in removing the uncertainty of the subsurface conditions early in the project so any differing site condition is addressed before advancing to the next stages of the project. 18. Contractor produced geotechnical baseline report for construction (GBR-C). Developed for baselining geotechnical conditions for a project to allocate geotechnical risk encountered

Geotechnical Risk Management Strategies, Methods, and Tools 39 during construction; the owner collects all the relevant data from similar previous projects and the test results for the current project (geotechnical data report). On the basis of the data collected and test results the owner prepares a GBR for Bidding (GBR­B). The bidder uses the GBR­B and augments it with its approach and design to develop a new version: the GBR for Construction (GBR­C). It will incorporate the contractors’ interpretation and approach and the proposed means and methods. The owner should review the GBR­Cs prepared by bidders and seek clarification on any issues as needed. On the basis of this review, the owner will have the opportunity to seek adjustment of contract price if appropriate. After the bidder has been selected, the bidder’s GBR­C will be incorporated into the DB contract documents and forms the basis for risk allocation during the design–construction phase. 19. Negotiated GBR interpretation. This tool generally involves the use of a GBR­C as described above and a GBR­B (the owner’s GBR used during bidding). After award of the DB contract and the subsequent completion of the GBR­C, the owner and the design–builder compare the two GBRs and agree on how to interpret a final GBR (GBR­F) during construction with respect to the contract’s DSC clause. The aim is to mutually agree on what constitutes a “material difference” and in doing so share the DSC risk on a project specific basis. 20. Differing site conditions allowance. Including a specified dollar amount (allowance) in the RFP agreement for DSC to mitigate this commonly misallocated geotechnical risk. 21. Contaminated material allowance. Including a specified dollar amount (allowance) in the RFP agreement for testing and handling of hazardous materials to mitigate this commonly misallocated geotechnical risk. 22. Unforeseen utilities allowance. Including a specified dollar amount (allowance) in the RFP agreement for addressing utilities discovered during construction to mitigate this commonly misallocated geotechnical risk. 23. Assign design–builder responsibility for utility coordination. Transfer of utility coordination activities from in­house personnel to contractor to enhance collaboration and early contrac­ tor involvement. 24. Validate proposed life cycle elements during design. DB procurements often include both design and evaluation criteria that seek to encourage life cycle design decision making by the competing proposers. This tool consists of conducting the subsequent life cycle cost analysis to validate that the winning proposal’s betterments indeed reduce the project’s projected life cycle cost from that of the baseline design. 25. Encourage life cycle related value engineering proposals from subcontractors. Subcontractors are technical specialists in their particular areas of expertise. This is particularly true in areas like jet grouting, seismic retrofits, soil nails, and other geotechnical specialties. As such, they are normally up to date with the state of technology and should be asked to review their scopes of work for potential improvements that would reduce life cycle cost. 5.4 Strategies, Methods, and Tools for Risk Mitigation The tools can be implemented by using the specific methods for executing the five risk mitiga­ tion strategies, as presented in Tables 5.2 through 5.6. In summary, aligning differences in perception of the geotechnical risk between owner and contractor can potentially help an agency avoid geotechnical risk issues, such as unnecessary contingencies and DSC claims. The goal is to mitigate the geotechnical risks by encouraging col­ laboration between the parties in a DB contract. Implementing effective practices (tools) within the context of available strategies and methods for managing geotechnical risk for DB projects can facilitate the process.

40 Guidelines for Managing Geotechnical Risks in Design–Build Projects Method Tool Pre-advertising • Include GBR-C provision • Provide a mechanism to conduct competing team requested additional borings, i.e., permits, rights of access, etc. • Collect potential contaminated material information during ROW acquisition Procurement • Request geotechnical ATCs on DB projects • Define no-go zones for geotechnical ATCs • Competitor designated boring locations • Competitors permitted to conduct supplementary borings at own expense • Progressive DB • Unit prices for contaminated material, over-excavation, etc. Pre-construction • Scope validation period • Multiple NTPs with one designated for geotechnical investigation, design, and a second specifically to commence excavations, utility work, etc. • Contractor produced GBR-C • Negotiated GBR interpretation Construction • Not applicable Table 5.2. Risk Mitigation Strategy 1: Implement early contractor design involvement. Method Tool Pre-advertising • Flexible footprint for NEPA clearance • Utility conferences • Site conditions history from property owners during ROW acquisition Procurement • Request of utility-related ATCs Pre-construction • Assign design–builder responsibility for utility coordination • Multiple NTPs with one designated for geotechnical investigation, design, and a second specifically to commence excavations, utility work, etc. Construction • Multiple NTPs with one designated for geotechnical investigation, design, and a second specifically to commence excavations, utility work, etc. Table 5.3. Risk Mitigation Strategy 2: Involve third party stakeholders as early as practical. Method Tool Pre-advertising • Geotechnical conditions database • Furnish GBR • Include GBR-C provision • Provide a mechanism to conduct competing team requested additional borings, i.e., permits, rights of access, etc. • Flexible footprint for NEPA clearance • Utility conferences • Site conditions history from property owners during ROW acquisition • Performance specifications for post-construction performance (subsidence, etc.) Procurement • Include DSC clause • Request of geotechnical ATCs • Define no-go zones for geotechnical ATCs • Competitor designated boring locations • Competitors permitted to conduct supplementary borings at own expense. • Progressive DB • Unit prices for contaminated material, over-excavation, etc. • Weight geotechnical evaluation criteria Pre-construction • Assign design–builder responsibility for utility coordination • Scope validation period • Multiple NTPs with one designated for geotechnical investigation, design, and a second specifically to commence excavations, utility work, etc. • Contractor produced GBR-C • Negotiated GBR interpretation Construction • Requesting of utility-related ATCs • Differing site conditions allowance • Contaminated material allowance • Unforeseen utilities allowance Table 5.4. Risk Mitigation Strategy 3: Raise the visibility of geotechnical issues.

Geotechnical Risk Management Strategies, Methods, and Tools 41 Method Tool Pre-advertising • Geotechnical conditions database • Furnish GBR • Include GBR-C provision • Prescriptive geotechnical design • Performance specifications for post-construction performance (subsidence, etc.) Procurement • Request of geotechnical ATCs • Define no-go zones for geotechnical ATCs • Competitor designated boring locations • Competitors permitted to conduct supplementary borings at own expense. • Unit prices for contaminated material, over-excavation, etc. Pre-construction • Assign design-builder responsibility for utility coordination • Contractor produced GBR-C • Negotiated GBR interpretation Construction • DSC allowance • Contaminated material allowance • Unforeseen utilities allowance Table 5.5. Risk Mitigation Strategy 4: Enhanced DB geotechnical contract mechanisms. Method Tool Pre-advertising • Geotechnical conditions database • Flexible footprint for NEPA clearance • Utility conferences • Site conditions history from property owners during ROW acquisition. • Performance specifications for post-construction performance (subsidence, etc.) Procurement • Request of geotechnical ATCs • Include life cycle criteria in best value award scheme Pre-construction • Assign contractor responsibility for utility coordination • Validate proposed life cycle elements during design Construction • Encourage life cycle related value engineering proposals from subcontractors Table 5.6. Risk Mitigation Strategy 5: Life cycle–based design and construction decision making.