Applying Risk Analysis, Value Engineering, and Other Innovative Solutions for Project Delivery (2017) / Chapter Skim
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Chapter 1 - Value Management System Tool
Chapter 1 - Value Management System Tool
Pages 8-53
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From page 8... ...
The purpose of this tool is to assist project teams in enhancing the value of transportation projects as follows: • Improving internal and external team communications • Improving project-related decisions • Managing risk • Improving design quality • Enhancing innovation • Considering alternative delivery methods It includes several complementary techniques and processes that can be used independently, or collectively, depending on the needs of the users. The techniques and processes contained within this tool include the following: • Stakeholder Analysis • Decision Analysis • Risk Analysis C h a p t e r 1 Value Management System Tool
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From page 9... ...
. Included in this dashboard is the total estimated project cost, total estimated project duration, a pie chart showing Project Scope, Cost, and Schedule OFF Stakeholder Analysis OFF Decision Analysis OFF Risk Analysis OFF Constructability Review OFF Value Engineering OFF Delivery Method Selection OFF WARNING: Do not add or delete columns or rows to this workbook!
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From page 10... ...
1,606 Days MAJOR COST ELEMENTS TOTAL KEY PROJECT MILESTONES START DATE Support Costs $2,500,000 Project Start 01-Aug-16 Roadway $16,850,000 65% Design 09-Sep-16 Structures $35,540,000 95% Design 26-Jun-17 Right of Way $4,029,000 100% Design 19-Feb-18 Utilities $120,000 PS&E Certification 27-Jun-18 Escalation $3,900,000 Utility Relocation 10-Apr-17 0 $0 Right of Way 14-Nov-16 0 $0 Permits 10-Apr-17 0 $0 Advertise & Award 13-Oct-18 0 $0 Construction 01-Dec-17 0 $0 Environmental Mitigation 02-May-19 0 $0 Project Finish 24-Dec-20 0 $0 0 $0 0 $0 0 $0 0 $0 0 $0 0 $0 0 $0 Davis Road Bridge Replacement TOTAL ESTIMATED PROJECT DURATIONTOTAL ESTIMATED PROJECT COST $62,939,000 Support Costs 4% Roadway 27% Structures 56% Right of Way 6% Utilities 0% Escalation 6% PROJECT COSTS Figure 5. Project Dashboard.
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From page 11... ...
Stakeholder Analysis Stakeholder Analysis is a tool for clearly defining key stakeholders for a project, understanding where stakeholders stand, and developing cooperation and improved communication between the stakeholders and the project team. The following are the main objectives of stakeholder analysis: • Identify project stakeholders • Understand their interests and objectives • Analyze their relationship to the project • Identify and develop strategies to manage stakeholder communications and expectations • Define stakeholder roles and responsibilities relative to project activities and deliverables
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From page 12... ...
The approach to stakeholder analysis included in the Value Management System Tool is designed to do this. Stakeholder Dashboard The Stakeholder Dashboard tab provides an at-a-glance summary of key stakeholders, their organizations, and a Stakeholder Map (see Figure 6)
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From page 13... ...
. Stakeholder Information This Stakeholder Info tab provides a place to list all key project stakeholders.
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Using the example above, Monterey County and FORA fall into the "Champions" category. The recommendation is that the project team protect the interests of these stakeholders.
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From page 15... ...
It should be noted that the terminology used to describe stakeholder types are for descriptive purposes and are intended for internal project team use only. RACI Matrix The RACI Matrix tab provides another tool for project teams to use to consider the roles and responsibilities of stakeholders for various project phases, activities, or deliverables (see Figure 8)
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From page 16... ...
or organization that must be informed that a decision or action has been taken. PROJECT STAKEHOLDERS Davis Road Bridge Replacement R A C I MATRIX Using the Codes described below, enter the role for each of the key project stakeholders for each of the deliverables/activities listed along the left as applicable.
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In the Davis Road example, a Decision Analysis was performed to evaluate the VE Alternatives that were developed using this tool. In the Selected Alternatives section on the left side, you see the Baseline Concept and the four VE alternatives that were evaluated.
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In the Davis Road example, VE Alternative 4 shows the highest level of performance based on the results of the "Comparison of Alternative Performance" tab (which does not consider cost or time)
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In the Davis Road example, there are two requirements. The first is that all alternatives must have four lanes.
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In the Davis Road example, five performance attributes were selected to evaluate the VE alternatives. These include the following: • Local Operations • Environmental Impacts • Construction Impacts • Maintainability • Hydrological Impacts Let's review the information for one of these attributes in detail.
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From page 21... ...
Davis Road Bridge Replacement No significant change compared to Baseline Concept. No significant change compared to Baseline Concept.
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The facilitator should ask each participant which attribute is more important and by how much. In the Davis Road example, all the participants felt that Local Operations was more important than Environmental Impacts; however, the degree of importance varied significantly between them.
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Make sure to perform the comparison until all steps containing attributes are complete, then CLICK NEXT TAB! Davis Road Bridge Replacement Weight Weight ParticipantWeight Participant Participant Attribute Comparison Attribute Comparison Attribute Comparison Participant Weight ParticipantWeight Participant Weight Participant Attribute Comparison Attribute Comparison Attribute Comparison Weight ParticipantWeight ParticipantWeight Next TabMain Menu ATTRIBUTE PRIORITIZATION Figure 12.
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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Local Operations Environmental Impacts Construction Impacts Maintainability Hydrological Impacts Performance Priorities - All Participants Figure 14. Performance priorities chart.
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For the Davis Road example, the sum of the costs for all alternatives is $287,585,938. To derive the base cost score for each alternative, divide the alternative cost by the total sum to arrive at the normalized value.
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A Guide to the Project Management Body of Knowledge®, project risk is defined as "an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objective such as scope, schedule, cost, or quality." Risk Management, therefore, involves the management of the various uncertainties that face all projects. Project Risk Management includes the following steps: • Risk Planning • Risk Identification • Risk Analysis • Risk Response Planning • Risk Monitoring and Control The RA tools included in the workbook touch on these steps and are designed to help project teams think critically about what risks could happen, their potential impacts, and how the risks will be proactively managed.
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From page 27... ...
This chart displays the aggregate values for the performance, cost, and schedule impacts of all risks. Total Risks 6 Total Value of Cost Risks: Active Risks 6 Highest Schedule Risk: Dormant Risks 0 Total Value of Cost Risks: Retired Risks 0 Highest Schedule Risk: PRE-RESPONSE RISK VALUES POST-RESPONSE RISK VALUES $6,668,101 $5,252,150 Davis Road Bridge Replacement RISK ANALYSIS DASHBOARD 5 Months 3 Months -0.2 -0.1 0 0.1 0.2 0.3 0.4 0.5 4 - Frontage Rd.
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From page 28... ...
Simply select "YES" for each category to include it on the Risk Register. Risk Scales The Risk Scales tab allows users to establish cost and schedule impacts for different levels of probability and impact (see Figure 19)
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Risk Scales.
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Davis Road Bridge Replacement RISK REGISTER Risk # Risk Category Threat / Opportunity Risk Status Risk Event Name S.M.A.R.T. Risk Description (Specific, Measurable, Attributable, Relevant, and Time Bound)
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If the Risk Response Strategies tabs in this workbook were used, then the information developed within these should be transferred here. • Fallback Action Plan -- This section details what fallback actions should be taken if the primary plan does not work.
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Response Strategies -- Brainstorming This tab is designed to help project teams leverage VE techniques to develop more robust risk response strategies. The tool transfers information from the Risk Register for the first 50 risks.
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From page 33... ...
Soil Conditions Very High $635,226 5.03 RISK RESPONSE STRATEGIES Team Brainstorming EV Cost EV Schedule Function Ideas Ra tin g Assigned toRiskID Risk Name Risk Type Description Object of Risk Probability Figure 23. Risk response brainstorming and evaluation.
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From page 34... ...
A simple pie chart is included to graphically represent the status of CR issues. Constructability Review Checklist This tab is designed to allow users to systematically review a transportation project from many different perspectives.
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YES Is there a temporary erosion and sedimentation control plan? YES Davis Road Bridge Replacement STANDARD CONSTRUCTABILITY CHECKLIST This checklist includes standard CR issues and requirements.
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Until it is resolved, this CR issue should be treated as a project risk. EIR/EIS Davis Road Bridge Replacement CONSTRUCTABILITY REVIEW COMMENT Project Document: Date: Reviewer Email: Reviewer Phone: Reviewer Name: Severity: Status: Risk?
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From page 37... ...
For more information on VE, visit the following websites: • SAVE International® at: http://www.value-eng.org/ • Miles Value Foundation at: http://valuefoundation.org/ • AASHTO Technical Committee on VE at: http://design.transportation.org/Pages/Value Engineering.aspx • FHWA Value Engineering Program: https://www.fhwa.dot.gov/ve/ Value Engineering Dashboard The VE Dashboard provides information on the status of VE activities relative to the number of VE alternatives; creative ideas generated; and total potential initial cost, life-cycle, and schedule savings. Project Issues This tab is used to capture project issues and any site visit observations made by the project team.
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From page 38... ...
The items selected "Yes" for inclusion on the Random Function Identification will be pre-populated along with the project elements and associated costs from the Cost Model. To begin the analysis, it is recommended that the Random Function Identification table be consulted and that each element's associated functions be highlighted first to assist the team with this exercise.
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From page 39... ...
Permit Recovery Shoulders are part of the clear zone and allow space for errant vehicles to recover Create Refuge Shoulders can be used as a vehicle pull-out Maintain Traffic Shoulders of sufficient width so all traffic operations can be maintained Bypass Obstructions Shoulders can be designed to allow for the diversion of traffic Increase Width The manner in which existing shoulders may be improved Reduce Width The manner in which existing shoulders may be degraded (i.e., in order to add an extra lane within an existing cross-section) LIST OF COMMON FUNCTIONS FOR TRANSPORTATION PROJECTS Transportation Project Elements Figure 28.
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From page 40... ...
Se pa ra te Gr ad es M ai nt ai n Co nv ey an ce Co nv ey Tr af fic Co nv ey Bi cy cle s Bu ffe r T ra ffi c Tr an sfe r L oa d Re sis t F or ce s Ac co m m od at e De br is En ha nc e Ae st he tic s Percent of Resource Allocation PROJECT ELEMENT ELEMENT COST TOTAL 11,267,008 3 ,909,400 10 ,250,873 574,279 2 ,048,988 4 ,620,200 4 ,620,200 1 ,421,600 710,800 100% Bridge 35,540,000$ 35,540,000$ 25% 11% 12% 1% 3% 13% 13% 4% 2% 100% Structural Section 6,944,630$ 6,944,630$ 67% 11% 100% Right-of-Way 4,391,405$ 4,391,405$ 100% Earthwork 2,977,510$ 2,977,510$ 80% 100% Contingency 2,021,898$ 2,021,898$ 100% Traffic Items 1,478,000$ 1,478,000$ 100% Roadway Mobilization 673,970$ 673,970$ 67% 11% 11% 100% Roadway Additions 673,966$ 673,966$ 67% 11% 11% 100% Minor Items 641,872$ 641,872$ 67% 11% 11% 100% Landscaping 500,000$ 500,000$ 100% Type "D" Dike 441,300$ 441,300$ 100% Drainage 250,000$ 250,000$ 100% Specialty Items 146,000$ 146,000$ 100% Perm. Erosion Control 100,000$ 100,000$ RESOURCE TOTALS 56,780,551$ 56,780,551$ 11,267,008 3 ,909,400 10 ,250,873 574,279 2 ,048,988 4 ,620,200 4 ,620,200 1 ,421,600 710,800 FUNCTION - PERCENTAGE: 100% 19.84% 6.89% 18.05% 1.01% 3.61% 8.14% 8.14% 2.50% 1.25% Separate Grades 20.0% Maintain Conveyance 6.9% Convey Traffic 18.2% Convey Bicycles 1.0% Buffer Traffic 3.6% Transfer Load 8.2% Resist Forces 8.2% Accommodate Debris 2.5% Enhance Aesthetics 1.3% Accommodate Footprint 7.8% Accommodate Risk 3.6% Capture Runoff 0.4% Convey Runoff 1.6% Mitigate Impacts 1.1% Control Traffic 2.0% Create Refuge 6.9% Stage Construction 6.9% Distribution of Project Cost by Function Figure 29.
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From page 41... ...
Providing a tutorial on FAST Diagramming is beyond the scope of this tool; however, an example has been provided to demonstrate function logic for the Davis Road Bridge Replacement Project. Function Prioritization This tab is designed to help users determine which functions to focus on during the Creative Phase.
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From page 42... ...
+ + – 3 Tr affi c O pe ra tio n M ai nt ai na bi lit y O pe ra tio na l R el ia bi lit y En vi ro nm en ta l I m pa ct s Davis Road Bridge Replacement IDEA EVALUATION Assigned To Function Idea No. Idea Performance Attributes Legend Co st Sc he du le Select Participant from Drop-Down ListRi sk Ra tin g This action will have to be considered with any alternative (including the baseline design)
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Competition and Contractor Experience Participant evaluation of the three project delivery methods will apply these criteria using the AHP methodology previously outlined in the Decision Analysis activity. CDOT recommends the following approach be used to evaluate project delivery methods: Stage 1 • List Project Attributes • Review Project Goals • Identify Project Constraints • Discuss Project Risks Stage 2 • Assess Primary Evaluation Factors • Perform Risk Assessment for all Methods
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Design-Bid-Build CMGC Design-Build 8.9 4.0 3.9 Davis Road Bridge Replacement PROJECT DELIVERY METHOD SELECTION DASHBOARD Final Ranking (Score out of 10) 0 1 2 3 4 5 6 7 8 9 10 Design-Bid-Build Construction Manager / General Contractor Design-Build Rating of Project Delivery Methods Project Complexity & Innovation Project Delivery Schedule Project Cost Considerations Level of Design Level of Risk Staff Experience / Availability Level of Oversight and Control Competition & Contractor Experience Figure 31.
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From page 45... ...
Considerations Rating Rationale • Agency's control of design of complex projects • Agency and consultant expertise can select innovation independently of contractor abilities • Opportunities for value engineering studies during design, more time for design solutions • Aids in consistency and maintainability • Full control in selection of design expertise • Complex design can be resolved and competitively bid • Innovations can add cost or time and restrain contractor's benefits • No contractor input to optimize costs • Limited flexibility for integrated design and construction solutions (limited to constructability) • Difficult to assess construction time and cost due to innovation • Highly innovative process through 3-party collaboration • Allows for agency control of a designer/contractor process for developing innovative solutions • Allows for an independent selection of the best qualified designer and best qualified contractor • VE inherent in process and enhanced constructability • Risk of innovation can be better defined and minimized and allocated • Can take to market for bidding as contingency • Can develop means and methods to the strengths of a single contractor partner throughout preconstruction • Process depends on designer/CM relationship • No contractual relationship between designer/CM • Innovations can add or reduce cost or time • Management of scope additions • Designer and contractor collaborate to optimize means and methods and enhance innovation • Opportunity for innovation through competitiveness of ATC process • Can use best-value procurement to select design-builder with best qualifications • Constructability and VE inherent in process • Early team integration • Requires desired solutions to complex designs to be well defined through technical requirements • Qualitative designs can be difficult to define if not done early in design (example: aesthetics)
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In the Davis Road example, the Design-Bid-Build method is clearly the most suitable approach for this project based on an assessment of the eight evaluation criteria. Example Project The example project used in this document is summarized in this section for reference purposes.
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• Project Information – Project Scope b All User Defined Fields may be edited – Participant Information b Columns may be added to capture additional fields • Stakeholder Analysis – Stakeholder Information b Columns may be added to capture additional fields • Decision Analysis – Performance Ratings b All User Defined Fields may be edited b All attribute definitions may be edited b All rating scale definitions may be edited
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48 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery Figure 33. Davis Road Bridge Replacement Project vicinity map.
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Value Management System tool 49 Figure 34. Davis Road Bridge Replacement Project location map.
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Figure 35. Davis Road Bridge Replacement general bridge plan.
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Davis Road Bridge Replacement: Preferred Alternative -- Design Variation. • Risk Analysis – Risk Breakdown Structure b All User Defined Fields may be edited – Risk Scales b The "most likely" probability values in cells D9:D13 may be edited b The risk priority values in cells C18:C20 may be edited b The index percentage values in cells H18:I22 may be edited b The index percentage values in cells M18:N22 may be edited b The performance descriptions in cells R9:R13 may be edited
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52 applying risk analysis, Value engineering, and Other Innovative Solutions for project Delivery Figure 38. Davis Road Bridge Replacement Project lane configurations.
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From page 53... ...
Changes to the Initial Cost Estimates and Life-Cycle Cost Estimates should be made with caution. • Project Delivery Method Selection – Rate Performance b The considerations (identified by CDOT)
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