Alternate Delivery Methods and Sharing Contract Risk APTA - Business Member Board of Governors APTA...
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Transcript of Alternate Delivery Methods and Sharing Contract Risk APTA - Business Member Board of Governors APTA...
Alternate Delivery Methods Alternate Delivery Methods and Sharing Contract Riskand Sharing Contract Risk
APTA - Business Member Board of GovernorsAPTA - Business Member Board of Governors
Mike RobertsonMike RobertsonFrontlines 2015 Program Management GroupFrontlines 2015 Program Management Group
Utah Transit AuthorityUtah Transit Authority
January 11, 2008
Sharing Contract Risk
• Why do we contract?– Establish a relationship with others to
accomplish work we cannot do ourselves
• Who do we contract with?– Multiple entities who share a common
language but have a different culture
Sharing Contract Risk
• Honest Self Assessment
• Box the Risk
• Gathering the Right People
Order of Im
portance
A Good Start Goes a Long Ways
• Honest Self Assessment– How do we want to work with our contractors?– What do we expect to accomplish?– What do we do best?– Where do we need help?– What problems can get in our way?
• Box the Risk – define the problem and create the mitigation plan
– Perform enough investigation/design/evaluation to understand the nature and size of the risk?
– Who has the most to gain when the problem is solved?– Who can solve the problem at the least cost and time?
• The Right People – Appropriate Delivery Method to acquire external needs
(tailor this to your needs-not a set recipe)– Creative, Build Solution Oriented Relationships, Trusting,
Experienced
What is it
How big is it
Who can best
solve it
Self Assessment
• Why am I Using a Creative Approach?– It’s a mandate!!! (malicious obedience)
– Process/Schedule/Budget – Dictates a change
– We want to do more - Great things are accomplished by a group of people working together at what they do best. Maybe there is a better way!! (Gerber’s Strained Peas or Pumpkin Pie?)
Form of Motivation
Must
Should
Will
Potential for
Success
Self Assessment
• What are our objectives?– Positive Relationships w/Contractors and Stakeholders– Avoid Litigation and Costly Changes– Manage Risk - Coordinated effort– Value Engineering– Resolve Technical Complexity– Early Fixed Price- Increased knowledge at an earlier date– Shortened Schedule– Reduced Internal Staffing– Funding Assistance– Meet Political Ambitions
Box the Risk
• Risk Assessment Exercises - Facilitated exercise with a broad group
– Probability and Impact – Low, Medium and High– Start in the concept phase, End
when the contract closes out, Refresh often
Gather Information• Internal
– Business and Project Managers– Designers– Contractors– Real Estate, Legal, Finance– Utility & Permits– Operations and Maintenance– Legislative Liaison
IMP
AC
T
PROBABILITY
• External– DOTs– FTA– Business Community– Cities/Counties– Utility Owners– AGC
Box the Risk
• Assign Risk - Think like a business– Mutually agree on who can best solve the issue and has the
most incentive to do so.– Create incentives where valuable
• D-B-B provides incentive to contractor to increase scope and costs
• Public Involvement on the University Line• Port of Long Beach - $6.8M instead of $600K• Access Roads w/UP – Quick solution w/low current and
future costs• Flagging Costs – Lowest cost and partnered approach to
mitigate probability of event
Appropriate Delivery MethodologyObjective - Creation of the Appropriate Relationships with all
Parties
Establish Critical Factors for Success1. Complete Self Assessment2. Establish goals, objectives, interests, obstacles, etc3. Define Contractor and Major Stakeholders objectives4. Set criteria to measure success
Evaluation of Options5. Brainstorm “Best Fit” Process - incentivises all parties6. Is that approach legal? Can it become legal?7. Have others tried it? Can I alter a known approach?8. Will the approach succeed?
The Right People
Managing Risk - Relationships and Contracts
“You can’t be bulletproof – Live in a safer neighborhood”
• May be a culture shock to existing staff. Manage the change effectively
• Pick the right contractor who can appreciate the owners interests • Work to help the other parties meet their objectives.• Corporate Identities Dissolve• Contract codifies the approach – use as a tool not a weapon
Share and Build Synergy
Common Success Stories• Business Improvements
– Problem solving (Access Roads and Fencing costs)• Recognize the problems early• Define Responsibility and Authority• Regular events to address issues• Whole team works to solve or avoid all problems
– Value Engineering (Ogden Bridge)• Weekly Event• Systematic Process• Share in Returns
– Allow Time to set Cost and Schedule– Developed Cost and Schedule “envelope”
• Establish goals towards the low end• Help everyone meet their objectives if you can “beat the target” – incentives
– Attract the interest of the contracting community• Pay on time• Evaluate bonding requirements• Incentive programs
Common Success Stories
• Build Synergy – Shared goals (University Line and the CCT)
• Incentives may help
– Co-Locate• Constant Communication• Owner/Contractor/Designer/Stakeholders in one location• Water cooler talk
– Build each other up• Have some fun together• Celebrate Success• Awards
– Access the Team• Work to provide new opportunities for growth• Everyone may not like Pumpkin Pie
Key Points
• Figure out what you do best, Find the rest, and don’t settle for Second Best
• Bring the right people to the project• Golden rule with all (no second class
citizens)• Communicate constantly• Avoid/Solve problems effectively• Select the appropriate contracting
methodology – Tailor it to fit your needs