Overview of WSDOT Capital Project Management Preliminary Report Keenan Konopaski, JLARC Analyst Dan...

Overview of WSDOT Overview of WSDOT Capital Project Capital Project ManagementManagement

Preliminary ReportPreliminary Report

Keenan Konopaski, JLARC AnalystKeenan Konopaski, JLARC Analyst

Dan Estrada and Roberta Manshel, Dan Estrada and Roberta Manshel, Gannett FlemingGannett Fleming

December 17, 2004December 17, 2004

22December 17, 2004December 17, 2004 JLARC Review of WSDOT Capital Project MgmtJLARC Review of WSDOT Capital Project Mgmt

Scope of ReviewScope of Review

A A pre-auditpre-audit (overview of issues) (overview of issues)

Focused on Focused on management methods/structuresmanagement methods/structures used to deliver capital projectsused to deliver capital projects

Limited to Limited to highway and ferryhighway and ferry projects projects

The The beginningbeginning of the audit process, to help TPAB of the audit process, to help TPAB consider future audit stepsconsider future audit steps

Some Some initial management recommendationsinitial management recommendations to to WSDOT, when practical and supportableWSDOT, when practical and supportable


Objectives of ReviewObjectives of Review

1.1. Describe procedures/processes Describe procedures/processes

2.2. Describe organizational structuresDescribe organizational structures

3.3. Review reporting/information systemsReview reporting/information systems

4.4. Review critical path managementReview critical path management

5.5. Review risk managementReview risk management

6.6. Identify options for future TPAB audits Identify options for future TPAB audits and/or evaluationsand/or evaluations


Background on Capital ProgramBackground on Capital Program

10 year cost of approximately $10 billion10 year cost of approximately $10 billion About 1,300 projects in 10 year planAbout 1,300 projects in 10 year plan Wide range in project sizes Wide range in project sizes ($100K to $500M)($100K to $500M) Multiple types of projects Multiple types of projects (highways, structures, (highways, structures,

vessels, ferry terminals, etc.)vessels, ferry terminals, etc.) Several programmatic purposes Several programmatic purposes (mobility, safety, (mobility, safety,

preservation, etc.)preservation, etc.)

New gas tax (Nickel fund) is designated by New gas tax (Nickel fund) is designated by Legislature on line-item basis for specific projects Legislature on line-item basis for specific projects


Challenge for MethodologyChallenge for Methodology

How do we get substantive insight into specific How do we get substantive insight into specific project management techniques for this large, project management techniques for this large, diverse capital program?diverse capital program?

ApproachApproach: Select projects for detailed reviews with : Select projects for detailed reviews with diversity in mind, and highlight differences between diversity in mind, and highlight differences between stronger and weaker practicesstronger and weaker practices

ResultResult: Identify existing strengths and gaps for : Identify existing strengths and gaps for opportunities to extend practices or review moreopportunities to extend practices or review more

CaveatCaveat: Findings from example projects represent : Findings from example projects represent diversity of practices in placediversity of practices in place


Criteria for Selecting ProjectsCriteria for Selecting Projects Half of selected projects faced challengesHalf of selected projects faced challenges Projects past design and into constructionProjects past design and into construction Representation from multiple regionsRepresentation from multiple regions Diversity in sizeDiversity in size Diversity in type (interchange, ferry terminal, etc.)Diversity in type (interchange, ferry terminal, etc.) Diversity in project management tools and systems Diversity in project management tools and systems

usedused Diversity in design approach (consultants vs staff)Diversity in design approach (consultants vs staff)


Projects Reviewed by ConsultantProjects Reviewed by Consultant

1.1. Shaw Island Slip ReconstructionShaw Island Slip Reconstruction

2.2. SR 527 Widening - 164SR 527 Widening - 164thth to 132 to 132ndnd St SE St SE

3.3. I-5 196I-5 196thth (SR 524) Interchange (SR 524) Interchange

4.4. Southworth/Fauntleroy Slip ReconstructionsSouthworth/Fauntleroy Slip Reconstructions

5.5. SR 16 HOV - Olympic Dr to Union AveSR 16 HOV - Olympic Dr to Union Ave

6.6. SR 161 - 234SR 161 - 234thth to 204 to 204thth St E St E

7.7. SR 500 - NE 112SR 500 - NE 112thth Interchange Interchange

8.8. I-90 Build Lanes from Argonne to SullivanI-90 Build Lanes from Argonne to Sullivan


Projects Reviewed Projects Reviewed (cont’d)(cont’d)

4444

33

55

66

77

88

22

11

Northwest Region

Southwest Region

CentralRegion

Olympic Region

EasternRegion

South Central Region


ConclusionsConclusions

WSDOT has diversity in its project delivery WSDOT has diversity in its project delivery practices.practices.

WSDOT is continuing to improve its practices with WSDOT is continuing to improve its practices with initiatives focused on project management initiatives focused on project management principles and tools.principles and tools.

While WSDOT encourages local innovation to While WSDOT encourages local innovation to help improve project delivery, some additional help improve project delivery, some additional standardization of successful minimum standardization of successful minimum requirements can provide benefits.requirements can provide benefits.


Conclusions Conclusions (cont’d)(cont’d)

Examples of exemplary practices are in place, but Examples of exemplary practices are in place, but aren’t universally adopted because:aren’t universally adopted because:

they are relatively new,they are relatively new,

implementation is slow due to the size and implementation is slow due to the size and decentralization of WSDOT organization, ordecentralization of WSDOT organization, or

there are resource constraints. there are resource constraints.


Conclusions Conclusions (cont’d)(cont’d)

WSDOT has initiated efforts to shift its capital WSDOT has initiated efforts to shift its capital delivery orientation from a program-focused to a delivery orientation from a program-focused to a project-focused perspective.project-focused perspective.

A lack of standardized definitions poses A lack of standardized definitions poses challenges to project reporting, communication, challenges to project reporting, communication, and clear expectations for accountability.and clear expectations for accountability.

Constraints in automated systems limit analysis Constraints in automated systems limit analysis and flexible reporting.and flexible reporting.


1. Describe Procedures/Process1. Describe Procedures/Process

Capital program involves three inter-Capital program involves three inter-related processesrelated processes

Planning andProgram

Development

Authorization and

Funding

Project DeliveryProject Delivery


All Projects Have Common TasksAll Projects Have Common Tasks

Prepare environmental

documentation and submit applications

Begin coordination with utilities/local

government

Determine right of way requirements and make offers

Construction

Open to traffic/user

AdvertisePS&Ecompleted

Finalize design work

Permits approved

Settlement/ adjudication

reached

Agreement/ plans secured

Project definition complete

Begin design


2. Describe Organizational Structures2. Describe Organizational Structures

Decentralized approach to project delivery:Decentralized approach to project delivery: HQ units provide standards, tools, technical HQ units provide standards, tools, technical

assistance, oversightassistance, oversight Regions/modes have responsibility for day-to-Regions/modes have responsibility for day-to-

day management of individual projectsday management of individual projects Organizational approaches vary by Organizational approaches vary by

region/moderegion/mode Project teams use varieties of “matrix” Project teams use varieties of “matrix”

management structuresmanagement structures


Example of matrix structureExample of matrix structure

REGIONAL MANAGERS

PROJECTENGINEER

PROJECT

ENGINEERING

OFFICE RESOURCES

INSPECTORS

DESIGNERS

ADMINISTRATIVE

SUPPORT

PROJECTENGINEERING

OFFICE RESOURCES

INSPECTORS

DESIGNERS

ADMINISTRATIVESUPPORT

REGIONAL

RESOURCES

REAL ESTATE

ENVIRONMENTAL

DOCUMENTATION

ENGINEER

REGIONAL

RESOURCES

REAL ESTATE

ENVIRONMENTAL

DOCUMENTATIONENGINEER


3. Review Reporting/IT Systems3. Review Reporting/IT Systems

Numerous “silo” information systems support Numerous “silo” information systems support project delivery and house project dataproject delivery and house project data

Systems are not well integrated or flexibleSystems are not well integrated or flexible

Review identified examples of inconsistent Review identified examples of inconsistent information across reportsinformation across reports

Several reporting processes require significant Several reporting processes require significant manual intervention by staffmanual intervention by staff Opportunities exist to improve efficiency and Opportunities exist to improve efficiency and

reliability of information with system linkages, reliability of information with system linkages, though costs and benefits should be examinedthough costs and benefits should be examined


4. Critical Path Management4. Critical Path ManagementConsultant found varied application of scheduling Consultant found varied application of scheduling practices practices for the example projectsfor the example projects

Project Project FeatureFeature

Comprehensive Comprehensive IntegratedIntegrated Continuous Continuous Critical PathCritical Path

MeasurableMeasurable ScalableScalable

SR 16 SR 16 √ √ √ √

SR161SR161 √

SR500SR500 √ √

I-90I-90 √ √ √ √

I-5I-5

SR 527SR 527 √

ShawShaw √ √ √ √ √

Southworth/Southworth/

FauntleroyFauntleroy√ √ √ √


Comprehensive Comprehensive IntegratedIntegrated Continuous Continuous Critical PathCritical Path

MeasurableMeasurable ScalableScalable

SR 16 SR 16 √ √ √ √

SR161SR161 √

SR500SR500 √ √

I-90I-90 √ √ √ √

I-5I-5

SR 527SR 527 √



FauntleroyFauntleroy√ √ √ √


5. Risk Management5. Risk ManagementConsultant found varied application of risk Consultant found varied application of risk management practices management practices for the example projectsfor the example projects


IdentifiedIdentified FormalFormal

Assessment Assessment ConductedConducted

QuantifiedQuantified Response Response Strategy Strategy

Developed Developed

Tracked Tracked in in

RegisterRegister

SR 16 SR 16 √ √ √ √ √

SR161SR161

SR500SR500 √ √

I-90I-90 √

I-5I-5 √

SR 527SR 527 √ √ √



FauntleroyFauntleroy√ √


IdentifiedIdentified FormalFormal

Assessment Assessment ConductedConducted

QuantifiedQuantified Response Response Strategy Strategy

Developed Developed

Tracked Tracked in in

RegisterRegister

SR 16 SR 16 √ √ √ √ √

SR161SR161

SR500SR500 √ √

I-90I-90 √

I-5I-5 √

SR 527SR 527 √ √ √



FauntleroyFauntleroy√ √


Cost/Schedule PerformanceCost/Schedule PerformanceReview focused on management methods, and not actual Review focused on management methods, and not actual performance outcomes for project deliveryperformance outcomes for project delivery

However, JLARC revisited highway cost/schedule data However, JLARC revisited highway cost/schedule data analyzed in a 1998 performance auditanalyzed in a 1998 performance audit Recent cost overruns on construction contracts Recent cost overruns on construction contracts decreaseddecreased

from prior audit (from 10% to 6%)from prior audit (from 10% to 6%)

Proportion of contract change orders that were “avoidable” Proportion of contract change orders that were “avoidable” and “no value add” and “no value add” decreaseddecreased (from 38% to 29%) (from 38% to 29%)

Recent time overruns on construction contracts compared Recent time overruns on construction contracts compared to initial awards to initial awards increasedincreased (from 3% to 8%) (from 3% to 8%)


Cost/Schedule Performance Cost/Schedule Performance (cont’d)(cont’d)

Construction cost and time overruns are inevitable Construction cost and time overruns are inevitable on capital projectson capital projects

Project budgets include contingency estimates, and Project budgets include contingency estimates, and historically these have covered overruns at WSDOThistorically these have covered overruns at WSDOT

JLARC did not examine how WSDOT overruns JLARC did not examine how WSDOT overruns currently compare to other jurisdictionscurrently compare to other jurisdictions


Management RecommendationsManagement Recommendations

Rec. 1Rec. 1: : WSDOT should extend the application WSDOT should extend the application of existing principles and tools, and put of existing principles and tools, and put management steps in place to confirm their management steps in place to confirm their adoption:adoption: Managing Project Delivery (MPD)Managing Project Delivery (MPD) Project Delivery Information System (PDIS)Project Delivery Information System (PDIS) Primavera Project Planner for the Enterprise (P3e)Primavera Project Planner for the Enterprise (P3e)


Management Recommendations Management Recommendations (cont’d)(cont’d)

Rec. 2Rec. 2: : WSDOT should develop a plan and WSDOT should develop a plan and timeline for implementing consultant timeline for implementing consultant recommendations, focused primarily on:recommendations, focused primarily on: Using existing exemplary practices to develop Using existing exemplary practices to develop

minimum standards/templates for critical path and minimum standards/templates for critical path and risk management techniques;risk management techniques;

Improving project communication by documenting Improving project communication by documenting terms and definitions; andterms and definitions; and

Confirming the consistency and currency of Confirming the consistency and currency of reporting informationreporting information..



Rec. 3Rec. 3: : WSDOT should conduct an WSDOT should conduct an assessment of the effectiveness of current assessment of the effectiveness of current information systems and options for information systems and options for addressing any deficiencies.addressing any deficiencies.



Rec. 4Rec. 4: : WSDOT should develop criteria for WSDOT should develop criteria for extending Cost Risk Estimating and extending Cost Risk Estimating and Management (CREM) analyses to a wider Management (CREM) analyses to a wider universe of projects.universe of projects.


6. Options for Future Audits/Reviews6. Options for Future Audits/Reviews

A.A. Audit the effectiveness of Managing Project Delivery Audit the effectiveness of Managing Project Delivery (MPD) and the Project Delivery Information System (MPD) and the Project Delivery Information System (PDIS) in improving project delivery (with delayed (PDIS) in improving project delivery (with delayed audit start time)audit start time)..

B.B. Conduct an assessment of project delivery Conduct an assessment of project delivery performance measures, comparing WSDOT results performance measures, comparing WSDOT results to similar programs at other states.to similar programs at other states.

C.C. Audit the practice of determining construction Audit the practice of determining construction contractor pay estimates.contractor pay estimates.

D.D. Conduct an assessment of alternative contracting Conduct an assessment of alternative contracting methods, such as alliance contracting.methods, such as alliance contracting.

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