California Transportation Commission

Project Delivery Workshop

by Michael D. Keever

January 29, 2019

California Transportation Commission

Project Delivery Workshop

Apprenticeship & Pre-Apprenticeship and Small Business

Overview

by Janice Salais, Assistant Director

Office of Business and Economic Opportunity

1823 14th Street, Sacramento, CA 95811

(916) 324-0990

Sacramento, CA January 29, 2019

On-The-Job Training Supportive Services (OJT/SS)

� Provides training to increase the participation of women, minorities, and other disadvantaged individuals in skilled crafts on federal-aid highway construction contracts

� Apprenticeship Program

o Current OJT/SS contracts include:

�Field Ironworkers Apprenticeship Program

�Will train up to 80 new apprentices

�Including a nationwide women-only boot camp

3

On-The-Job Training

Supportive Services (OJT/SS)

� Pre-Apprenticeship Programs

o South Bay Workforce Investment Board – Southern California

o Ladders of Opportunity – Southern

California

4

Future Efforts to Increase Apprenticeship Participation

� For 2019, Caltrans will be working directly with Electricians Union of Northern California and the Operating Engineers Union of Southern California

5

Other Efforts to Increase Job Growth in

California

� Expanding Opportunities for disadvantaged

individuals

�Second Chance Initiative

�Caltrans Parolee Work Crew Program

�Caltrans Heavy Equipment Mechanics Apprenticeship Program

6

National Summer Transportation Institute (NSTI)

� NSTI

�A career awareness initiative designed to introduce disadvantaged secondary school students to all modes of transportation-related careers

�Encourages students to pursue transportation-related courses of study at the college/university level

7

Caltrans’ Small Business Program

SB

25% Overall Goal

State-Funded Contracts and Procurements

California Code of Regulations

DVBE

3% Overall Goal

State-Funded Contracts and Procurements

California Code of Regulations

DBE

17.6% Overall Goal

FHWA-Assisted Contracts and Procurements

Code of Federal Regulations

8

Caltrans’ SB, DVBE, and DBE Participation

SB Participation - 25% Goal

DVBE Participation –

3% Goal DBE Participation Overall Goal

FY SB Dollars % DVBE Dollars % DBE Dollars

% at

Commitment %

14/15 $349,378,944 28.4% $47,149,004 3.83% $275,730,549 12.40% 12.5%

15/16 $519,879,000 46.05% $57,190,818 5.07% $314,950,430 13.15% 12.5%

16/17 $408,919,922 28.86% $46,800,099 3.30% $264,592,759 12.08% 12.5%

17/18 $509,017,424 28.51% $87,857,147 4.92% $359,506,554 14.88% 12.5%

18/19 1st Qtr

$95,056,771 28.40% $11,010,727 3.3% $138,269,244 17.91% 17.6%

9

OBEO’s Training and Outreach Objectives

� Training, technical assistance, and advocacy services

� Training to help prepare small businesses to compete for Caltrans’ contracting and procurement opportunities

� Promote awareness of Caltrans’ contracting and procurement opportunities

� Develop comprehensive Senate Bill 1 and Senate Bill 103

10

New Initiatives To Increase Small Business Participation

� Contractor Boot Camp

� Meet the Primes

� Meet the Buyers

11

Disadvantaged Business Enterprise Supportive Services (DBE/SS)

� DBE program is guided by USDOT regulations (49 CFR Part 26)

Program Providers

� Northern Region - Humboldt State University -Sponsored Programs Foundation (Districts 1, 2, 3, and 4)

� Central Region - CSU Fresno Foundation (Districts 5, 6, 9, and 10)

� Southern Region - MiraCosta Community College District (Districts 7, 8, 11, and 12)

12

Industry Involvement

� Statewide Small Business Council

� Standing committees

� Ad hoc committees

� DBE Participation Committee

� Task groups

� Meetings with Industry Organizations

13

CTC Workshop

Project Construction Costs

and Bidding

by Michael D. Keever

January 29, 2019

Phases of Project Development

Planning Capital Outlay Support (COS) COS Closeout Program

Need & Priority

Identified

Hig h

PA&ED PID

PS&E (Design) Construction

Right of Way

Programming & Allocation

Allocation

Allocatio n

Pro

gra

mm

ed

PA

&ED

Com

ple

te

Cons

truc

tion

Com

ple

te

Design

Com

ple

te

Ris

k a

nd U

nce

rtain

ty

20% Known 80% Unknown

80% Known 20% Unknown

Clo

seout

Com

ple

te

Preliminary Engineering (15¢) Construction (85¢)

15

Low

Project Cost Risk Management

CTC

Supplemental Funding and

Greater Than 20%

Allocation Requests

Watch List

95-99% of

Projects

Caltrans District - Project

Change Management

Caltrans HQ - Project

Change Management

16

Data set is 476 projectsawarded in the FY 17/18FY

17

More Bidders Equals Lower

Costs

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Ave

rag

e N

umb

er

of

Bid

ders

per

Pro

ject

Year

Average Number of Bidders per Project Low Bidder Above or Below Estimate

vs. Number of Bidders

20%

10%

0%

-10%

-20%

-30%

-40%

-50% A

vera

ge P

erc

enta

ge L

ow

Bid

der

was

Above o

r Belo

w E

ngin

eer’s

Est

ima

te-60%

-70%

0 5 10 15 20

Average

Numb

Bidde

er of

rs per

Project is 5.8

Low Bid

equals

Engineer's

Estimate

Number of Bidders per Project

(Projects Bid Opened from July 2004 to December 2017)

18

Bidding Environment

Construction Cost Index ( 2002 through 2018)

20

40

60

80

100

120

140

160

180

200 2018 quarter to quarter

comparison, shows steep

growth in CCI.

Rolling 12 month

comparison of 2017 Q3

and 2018 Q3 shows

tempering.

2002 2004 2006 2008 2010 2012 2014 2016 2018

19

Bidding Environment

Low Bid vs. Engineer's Estimate

10%

-15%

-10%

-5%

0%

5%

11/12 12/13 13/14 14/15 15/16 16/17 17/18 18/19

Perc

ent

age of

Low

Bid

vs. E

ngin

eer's

Estim

ate

18/19 data through October 2018

18/19 data through December 2018

-20% Fiscal Year

20

Bidding Environment

Low Bid vs Engineer's Estimate (Cumulative Tracking FY 18/19)

20%

2%

4%

6%

8%

10%

12%

14%

16%

18%

0% Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18

21

Factors Potentially Influencing

Construction Costs

� General inflation

� Market conditions

� Material shortage

� Labor costs

� Highway construction spending

� Unforeseen events

� Insufficient bid competition

22

Industry Engagement

Ongoing Caltrans/Industry Working Groups

• Enhanced 12 Month Look Ahead

• Specification Modifications

• Changes in Business Practices

23

What We are Doing to

Improve Cost Estimating?

24

Cost Estimating Improvement Initiative

� Improved Estimating Tools

� Identification of Best Practices

� Quantification of Risk

� Training

� Business Intelligence

� Construction Cost Escalation Study

25

Construction Cost Escalation Study

� Research and assess Caltrans’ construction cost escalation

practices and existing forecast methodology

� Generate risk-adjusted forecasts for the California

Highway Construction Cost index (CHCCI)

� Develop regional factors to account for different price

dynamics across the State

26

Price Trends Forecast

27

CTC Workshop

Resource Agency Influence on

Project Delivery

by Michael D. Keever, Jeremy Ketchum, Jeff Wiley

January 29, 2019

Environmental Laws

CA Coastal Act

Resource Conservation and

Recovery Act

Section 4(f)

Fish and Game Code

29

Environmental Costs

� Determinable

� Support

� Specific Capital expenses

� Right-of-way

� Undetermined

� Design decisions

� Environmental Avoidance

30

Environmental Documents

SHOPP Projects

� Categorical Exemptions – Over 90%

� Initial Studies/Negative Declarations – Almost 9%

� Environmental Impact Reports – 0.5%

STIP Projects

� Categorical Exemptions – 33%

� Initial Studies/Negative Declarations – 41%

� Environmental Impact Reports – 26%

31

SHOPP: Environmental Cost vs Total Cost

SHOPP Projects Environmental vs Total Project Costs

Data set = 434 SHOPP Projects that achieved Construction Completion in FYs 14/15, 15/16, or 16/17

Env. Support Costs

0.98%

Non-Env Project Mitigation and Bid Items Cost Costs Permit Fees 0.88%

97.92% 0.22%

Environmental

2.08% Other

32

Distribution of Environmental Cost/Total

Project Cost for SHOPP

Number of Projects by Environmental Cost/Total Project Cost (%)

606

104

25

10

Under 2%

2% to 5%

5% to 10%

Over 10%

Data set = 745 SHOPP Projects that achieved Construction Completion in FYs 14/15, 15/16, or 16/17 33

Efficiencies

� NEPA Assignment

� Advance Mitigation

� AB 1282 – Transportation Permitting Task Force

34

NEPA Assignment

� Reduces reviews

� Time-savings for projects

� Requires waiver of immunity

35

Advance Mitigation

Accelerate Improve Enhance Ensure the

transportation environmental communication Program

project delivery outcomes with stakeholders account is

self-sustaining

Advance Mitigation Projects

Purchase or Create Mitigation

36

AB 1282

Establishes Permitting Task Force the Transportation

Statutory Goals:

� Early engagement

� Reasonable deadlines

� Greater certainty of permit approval requirements

37

Questions?

38