St Croix Cost Est Review Report Final_1.pdf

8/10/2019 St Croix Cost Est Review Report Final_1.pdf

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St. Croix River Crossing

Cost Estimate Review

February 2006

Prepared by

Prepared for


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St. Croix River Crossing Project Cost Estimate Review

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Table of Contents

PageSection I COST ESTIMATE REVIEW SUMMARY 5

Section II COST ESTIMATE REVIEW PROCESS 9

2.1 PROJECT BACKGROUND2.2 OBJECTIVE OF THE REVIEW2.3 REVIEW TEAM2.4 REVIEW CLARIFICATIONS / QUALIFICATIONS2.5 METHODOLOGY

Section III FINDINGS AND RECOMMENDATIONS 13

3.1 RECOMMENDED ESTIMATE ADJUSTMENTS3.2 REVIEW PROBABILITY ASSESSMENT

3.2.1 2004 Total Project Cost Estimate3.2.2 2010 Total Project Cost Estimate3.2.3 2004 Extradosed River Bridge Cost Estimate

3.3 REVIEW FINDINGS3.4 REVIEW RECOMMENDATIONS

Section IV DETAILED PROJECT REVIEW /

PROBABILITY ANALYSIS 20

4.1 PART 1 TH 5 to Osgood (Minnesota Roadway) 224.1.1 Roadway (LWD Method) incl. Erosion Control4.1.2 Loop Trail4.1.3 Retaining Walls (modular block)4.1.4 Signals4.1.5 Risk4.1.6 Aesthetics4.1.7 Right-of-Way

4.2 PART 2 Minnesota Approach (Osgood - River Bridge)284.2.1 Roadway (LWD Method) incl. Erosion Control4.2.2 Bridge Beach Road over TH 364.2.3 Bridge Treatment Plant Access Road4.2.4 TH 36 Bridges4.2.5 Existing Bridge Removals


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Section IV DETAILED PROJECT REVIEW /PROBABILITY ANALYSIS (continued) Page4.2.6 Loop Trail4.2.7 Approach Panels4.2.8 Retaining Walls (Cast-In-Place)4.2.9 Contaminated Soils Cleanup Costs4.2.10Signals4.2.11Risk: All elements except Bridge4.2.12Risk: Bridge4.2.13Aesthetics, incl. Lift Bridge Modifications4.2.14Right-of-Way4.2.15Railroad Agreement Cost4.2.16Major Utility Relocation Cost

4.3 PART 3 Wisconsin Approach 39(St. Croix River Bridge to East Project Terminus)4.3.1 Roadway (LWD Method) incl. Erosion Control4.3.2 Bridge STH 35 and CTH E over STH 644.3.3 Bridge County Road E over STH 644.3.4 Loop Trail4.3.5 Approach Panels4.3.6 Retaining Walls (Cast-In-Place)4.3.7 Signals/Roundabouts4.3.8 Risk4.3.9 Aesthetics4.3.10Right-of-Way

4.4 PART 4 Extradosed St. Croix River Bridge 464.4.1 Risk: River Bridge4.4.2 Aesthetics4.4.3 Anti-Ice Bridge Deck Equipment4.4.4 Right-of-Way

4.5 Other Project Elements 544.5.1 Mitigation (fixed)4.5.2 Mitigation (variable)4.5.3 Project Development/Design/Engineering /CEI4.5.4 Inflation4.5.5 Construction Contingency4.5.6 Management Reserve4.5.7 Project Delivery Method


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Appendices:Page

Appendix A Estimate Summary Spreadsheets 62

Appendix B Estimate Review Summary Presentation 64

Appendix C Cost Estimate Review Agenda 86

Appendix D Cost Estimate Review Work Plan 88

Appendix E Cost Estimate Review Attendees 92Daily Sign-in Sheets


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Section I - Cost Estimate Review Summary

A project review team (Team) met in Minnesota to review the current estimated cost of constructionfor the St. Croix River Bridge, evaluate cost risks and probabilities associated with the project, andprovide recommendations on reporting the estimated costs based on the results of the review.

REVIEW FINDINGS:The findings of the Review are summarized as follows:

It was confirmed that the project estimate is consistent with the current stage of projectdevelopment

The river bridge extradosed type, aesthetics, configuration and constructability are majorcontributors to the risk associated with the project costs.

Some specific scope was not accounted for the in the base estimate

Estimate did not account for inflation to the projects estimated mid-point of expenditure

Estimate did not account for Construction Contingencies that may be required due to unforeseen

conditions, changes in cost or time, etc. Estimate did not account for other potential risk

Some enhanced components to the MnDOT Length, Width and Depth (LWD) conceptual costestimating system were recommended as follows:o The selection of multipliers should be documentedo The LWD Process has limitations where major bridges are a part of the project and as such

should account for these conditions

RECOMMENDED ESTIMATE ADJUSTMENTS:The Team recommended the following changes to the projectestimate based on the Review:

The above table demonstrates that the Team considered an additional $68 Million should beadded to the 2004 cost estimate for the project. This additional amount is made up of $22million of base costs for scope not included and $46 million of additional risk the Teamconsidered should be included in the estimate at this time. The 2010 Programming estimateincludes escalation to 2010, plus Construction Contingency and Management Reserve that theTeam recommended to be added to the Programming estimate.


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would be above $334 million. Also noted in the bottom of the chart is the Teams recommendedEstimate Review without risk of $317 million. The Teams recommended Estimate including risk of$373 million (right of the chart) demonstrates that the Team considered there is sufficientcontingency to cover the current project risks.

2010 TOTAL COST ESTIMATE REVIEW PROBABILITY ASSESSMENTThe probability analysis for the Base Estimate in 2010 resulted in the following curve:

This curve demonstrates the summary of the probabilities determined by the Team for each of theproject components, including inflation, construction contingency and management reserve. Itdemonstrates the Team considers that there is a 10% probability the bid would be below $410million, an 80% probability that the bid would be between $410 million and $453 million, and a10% probability that the bid would be above $453 million. Also noted on the chart are the Teamsrecommended Estimate Review without risk of $412 million (bottom of the chart) and the Teamsrecommended Estimate including risk of $484 million (the 100% mark to the right of the chart).

The recommended Range of the current Cost Estimate Probability in the mid-80% certainty level is

noted as follows: Estimate Range in the mid Total Project EstimateEstimate 80% probability (with risk) (with risk)2004 Base $299 M to $334 M $373 M2010 Programming $410 M to $453 M $484 M

Based on these summary conclusions the Team recommends that the project team continue tofinalize the extradosed bridge design concept using cost effective design decisions in the process.This will result in further defining the project costs and possibly reducing the amount of cost risk tobe included in future cost estimates.

60%Probability

from $400 to$430 M CurrentEstimate= $484M

2010 Estimate Review without Risk = $412M

10% Probability 90% Probability


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St. Croix River CrossingCost Estimate Review

Project Description:

New crossing of the St. Croixriver between Minnesota andWisconsin

Improvements on bothMinnesota and Wisconsinsides of the crossing

New recreation loop createdwith existing Lift Bridge

Project Benefits:

Improved traffic flow betweenWisconsin and Minnesota overthe St. Croix river

Replacement of aging existingbridge structure

Recreation loop a benefit tocommunities

Minimal environmental impact

Project Risks:

Cost of extradosed bridge type Complexity of cast-in-place

construction Constructability of final bridge

concept Inflation concerns

Resource availability at time ofconstruction (equipment /labor)

Schedule:

Construction Range 2009 2014

(3 to 6 years for construction, dependent uponproject funding)

Project Cost Range (2010 Programming):

10% Probability ~ $410 Million 90% Probability ~ $453 Million Current 2010 recommended programming ~

$484 million (based on risks of inflation andfinal bridge design)

Financial Assumptions:

Inflation estimate of 3% per year Contingencies based on conceptual nature of

plans

Level of Low Medium HighProject Design:

CurrentEstimate

= $484M

Estimate Review without Risk = $412M



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Section II Cost Estimate Review Process

2.1 PROJECT BACKGROUND:

The St. Croix River Crossing Project includes reconstruction of Trunk Highway (TH 36) in

Minnesota, a new river crossing, and new State Trunk Highway (STH) 64 construction inWisconsin. The total length of this construction/reconstruction is approximately 6.0 miles. The newfour lane river bridge crossing will cross the river at the present location of the Highway 36 /Highway 95 Interchange, crossing the river, and landing in Wisconsin, approximately 6,450 feetsouth of the existing Lift Bridge (refer to Project Location map below). The Federal HighwayAdministration (FHWA) Major Projects Unit assembled a Project Review Team (Team) consistingof FHWA, Minnesota Department of Transportation (MnDOT), Wisconsin Department ofTransportation (WisDOT) and technical expertsto review the cost estimates on the St. Croix RiverCrossingproject. This Team met at the MnDOT Training Facility in Arden Hills, Minnesota, fromAugust 8 - 12, 2005, to perform the review. This document summarizes and reports the results ofthis cost estimate review.


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2.2 OBJECTIVE OF THE REVIEW:

The objective of this review was to verify the accuracy and reasonableness of the current total costestimate to complete the St. Croix River Crossing project and to develop a probability range for thecost estimate that represents the level of uncertainty remaining at the projects current stage ofdesign. The results of this probability analysis could then be used to determine if therisk/contingency factors in the estimate are reasonable based on the results of the probability.

2.3 REVIEW TEAM:

The project estimate review team (Team) was developed with the intent of having individuals with astrong knowledge of the project and/or of major project work and expertise in specific disciplines ofthe project, such as bridge structures, roadway, right-of-way acquisition, cost consulting, etc. Thiscore Team stayed together throughout the week. In addition, project team members with specificexpertise on various disciplines briefed the Team on the projects cost estimate development processfor their respective disciplines. The Team was then able to interview the discipline presenters tofurther understand and clarify the development of the project cost estimate quantities, unit prices,

assumptions, opportunities and risks. The Team was comprised of the following members:

FHWA MnDOT WisDOT, and Consultant (PBS&J) staff

Appendix E includes a complete list of all the attendees as well as the Work Shop Sign-In sheets.

2.4 REVIEW CLARIFICATIONS / QUALIFICATIONS

Following are the basis, assumptions and qualifications of the Cost Estimate Review:

Detailed verification of quantities and unit prices was not performed Independent cost estimates were not developed Review focused only on cost items with major impacts to cost Detailed review of project schedule was not performed

2.5 METHODOLOGY:

The Cost Estimate Review methodology was developed to ensure team members understood theproject scope and the associated current cost estimate (dated August 2005) of the Preferred

Alternative Package (roadway approaches; bridges - river crossing, inland, and lift bridge; and,mitigation). A detailed Cost Estimate Review Agenda and Work Plan are included in Appendices Cand D.

The Team initially reviewed the project cost estimate at a summary level, and developed a list ofitems that required further clarifications during the review of the more detailed breakdown of thecurrent cost estimate. A site visit of the project was performed on the evening of the second day ofthe review. This enabled the consultant Team members to get a better understanding of the siteconditions on both sides of the river and the constructability issues.


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Following the initial summary review of the overall project cost, the Team reviewed the variousproject components in more detail. A Structures Focus Group was established comprising oftechnical members specializing in Bridge Structures. This Focus Group had a separate work sessionto focus on the elements of the various bridge structures particularly focusing on the bridge structurefor the crossing and the extradosed main spans. The Focus Group discussed issues with significant

cost impact such as constructability, design elements, availability of resources such as concrete,labor and equipment, etc. The Focus Group then presented their findings to the remainder of theTeam.

All categories of costs in the project estimate were reviewed during this time frame, including non-construction costs such as right-of-way, preliminary engineering, construction management, inflationand contingency. Based on the details of each project element, the Team assessed if the estimatedcosts adequately reflected the current scope and market conditions. At the conclusion of thiscomponent review, the Team had arrived at recommended adjustments to the current estimate.

A third phase of the review was the discussion on potential cost related risks and opportunities with

each of the project elements. A computer generated probability analysis was then conducted basedon input from the entire Team.

The Teams objective during the review was not to develop independent cost estimates, but toperform a scope review and a summary cost estimate review, assess risks and assign contingencies,and provide recommendations on possible modifications to the cost estimates.

The Team reached a general consensus at the conclusion of the review and conducted a draftpresentation to FHWA, MnDOT and WisDOT senior level management officialssummarizing thereview findings (Refer to Appendix B for a copy of the Presentation note that thefixed mitigationcosts in the presentation are based on the initial workshop data and have not been updated in thepresentation).

The following aspects were covered in the scope of the review of the Preferred Alternative CostEstimate:

An understanding of the Minnesota DOTMetroLength, Width, and Depth(LWD) estimatingprocess of standardized cost estimates for Roadway elements (refer to section below)

Basis, Assumptions and Process in the development of the cost estimate

Scope included in the Preferred Alternative Package cost estimate

Understanding of the scope NOT accounted for in the current cost estimate

Technical Disciplines input (Roadway, Structures, ROW, Mitigation, etc.)

Basis of quantities and unit costs Allowances, Mark-ups (contractor, design, etc.), and Contingencies

Validity of present day costs for Preferred Alternative Package

Review other similar bridge types Example of Connecticut Bridge

Market Conditions, Price Fluctuations

Identification and accountingfor Risks and Opportunities

Overview ofProject Schedules and Inflation analysis

Establishment of Estimated Total Future costs


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Utilizing this methodology, the Team identified opportunities and risks within the cost estimate,established recommended current day values for the Preferred Alternative Packagebased onrecommended adjustments to the current cost estimate, evaluated the impact of inflation andcontingencies for changes during construction, and arrived at anticipated total project costs.

MnDOT MetroLength, Width and Depth(LWD) Estimating System:Pursuant to the summary level review of the overall cost estimate, the MnDOT estimating staffpresented to the Team the Minnesota DOTLength, Width and Depth (LWD)estimating system thatwas utilized to establish major elements of the cost estimates.

The roadway elements of this cost estimate were primarily developed utilizing the MnDOT Length,Width and Depth(LWD) standardized system of cost estimating. The LWD system as pertaining tothis projectincluded the following factors and approach:

LWD multiplier is based on previously awarded bid costs history (low accepted bids only) LWD multiplier is arrived at based on analyzing recent similar projects, specific conditions

of the project being estimated, and estimators judgment. LWD includes 11 Roadway elements and other project elements Railroad relocation costs not included in current estimate. Possible $4-$5 M Public relations costs not included in the current estimate. Bridge current cost estimates include little to norisk for the bridge structures Roadway includes 10% scope risk Unknown contamination with existing fertilizer terra terminal building included Erosion control costs need to be higher in estimate based on current requirements Water Quality cost impacts could be higher Aesthetics costs are limited to budgets based on cost participating percentages Utility relocation costs include Sanitary Sewer relocation due to depression in road Higher fill quantity on the Minnesota side and at grade construction largely in Wisconsin No muck anticipated on the Project Landscaping costs are included in Visual Quality costs No noise walls requirement anticipated for the Project $200,000 included for signalization per signalized intersection (possibility of round-abouts

was noted, but costs would be similar) LWD Multipliers vary from project to project based on location, complexity, scope and other

factors. For example the multiplier is $80,000 for the Wisconsin scope, $90,000 forMinnesota Seg. I and $112,000 for the Minnesota Approach Spans.

LWD Factor accounts for all paved areas including concrete and bituminous areas

The above review of the LWD factors and approach and the current estimate was very beneficial tothe Team in preparing a strategyto assess the risks associated with the project and to complete theReview.

The following sections describe the findings, recommendations, and the detailed probability analysisthat was performed in this review.


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Section III Findings and Recommendations

3.1 RECOMMENDED ESTIMATE ADJUSTMENTS:

At the beginning of the study, the Team reviewed a current project estimate of $305 million in 2004dollars. The following additional known scope items were identified but not included in the abovecost estimate.

ADDITIONAL COST DUE TO KNOWN SCOPE NOT ACCOUNTED FOR:

The major known scope items that were not included in the Base Estimate are as follows:

Railroad Agreement $ 6.9 Erosion Control and High Performance Pavement $ 5.4 Anti-Ice Bridge Deck Equipment $ 3.8 Major Utility Relocation Cost $ 3.0 Adjusted Wisc. STH 35 Bridge cost per SF $ 0.7 Existing Bridge Removals $ 0.3 Contaminated Soil Removal $ 0.3 Retaining Walls revised estimate $ 0.1 Revised Fixed Mitigation $5.3 Reduction in calculations forAesthetics revised estimate $-4.2TOTAL KNOWN SCOPE ADDITION CHANGE ~ $22 M

In addition, the Team analyzed the risks associated with several elements of the cost estimate andidentified the following additional costs to account for those risks.

ADDITIONAL COST DUE TO IDENTIFIED RISKS:

The major elements making up the $46 million dollar variance in the Risk Estimate are as follows:

Extradosed Bridge Risk (30%) $ 30 Minn. Approach Spans to River Bridge Risk (20%) $ 4 Right-of-Way Risk

o Minnesota ROW (10%) $ 1o Wisconsin ROW (50%) $ 2

Associated Engineering/CEI (25%) $ 9

TOTAL RISK IMPACT CHANGE ~ $ 46 M

Thus the combined assessment of the Team added approximately $68 million dollars ($22 milliondue to additional scope on the base costs and $46 million in risk contingencies) to the 2004 ProjectCost Estimate, increasing it from a $305 million dollar base to a $373 million dollar base, whichamounts to an increase of approximately 22%.


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The review of the estimate resulted in the following recommendations:

Add $22 million due to known scope not previously accounted for

Add $46 million in risk based on a risk assessment the Team performed on the current estimateof the project

Recommended 2004 Total Project Costs of $373 million including the above two additions(Refer to Appendix A for a detailed breakdown of the $373 Million cost estimate)

Apply a 3% yearly Inflation rate to escalate the 2004 estimate to the projected estimatedmidpoint of expenditures of 2010

Add 7.5% Construction Contingency (allowance for changes during construction)

Add 1% Management Reserve (allowance for third party changes during construction)

Recommended 2010 Total Project Costs of $484 million based on the above changes

Based on the Review of the project cost estimate, the Team recommended the following changes tothe projectestimate:

Following the results of the estimate review and based on the revised cost estimate, the Team thenanalyzed the probabilities with the estimate values to help determine an estimate range. Thefollowing pages describe the probability analysis for the overall 2004 and 2010 project cost

estimates as well as the 2004 estimate of the extradosed bridge structure. Section IV describes indetail the procedures and findings of the probability analysis for all other line items in the costestimate.


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3.2 REVIEW PROBABILITY ASSESSMENT:

The following sections describe the probability assessment analysis for the 2004, 2010 and theExtradosed Bridge cost estimates.

3.2.1 2004 TOTAL COST ESTIMATE REVIEW:

The Team studied the probability assessment for the 2004 estimate. The probability analysis for theBase Estimate in 2004 resulted in the following curve:

This curve demonstrates the summary of the probabilities determined by the Team for each of theproject components. It demonstrates that if the project was bid today, the Team considers that thereis a 10% probability the bid would be below $299 million, an 80% probability that the bid would bebetween $299 million and $334 million, and a 10% probability that the bid would be above $334million. Also noted in the bottom of the chart is the Teams recommended Estimate Review withoutrisk of $317 million. The Teams recommended Estimate including risk of $373 million (right of thechart) demonstrates that the Team considered there is sufficient contingency to cover the current

project risks.

The Estimate Review (without risk) identifies the need for risk to be included in the publishedestimate for the project. This curve also provides information to set an estimated range for theproject costs, instead of a fixed amount.

90% Probability10% Probability

Estimate Review without Risk = $317 M

Total

ProjectEstimateReview 2004with Risk ~$373 M


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3.2.2. 2010 TOTAL COST ESTIMATE REVIEW:

The probability analysis for the Total Project Estimate in 2010 resulted in the following curve:

This curve demonstrates the summary of the probabilities determined by the Team for each of the

project components, including inflation, construction contingency and management reserve. Itdemonstrates the Team considers that there is a 10% probability the bid would be below $410million, an 80% probability that the bid would be between $410 million and $453 million, and a10% probability that the bid would be above $453 million. Also noted on the chart are the Teamsrecommended Estimate Review without risk of $412 million (bottom of the chart) and the Teamsrecommended Estimate including risk of $484 million (the 100% mark to the right of the chart).

The Estimate Review (without risk) demonstrates the need for risk to be included in the publishedestimate for the project, as the number without risk is close to the 10% probability level range that abid would be below the Estimate Review Without Risk. The above curve also provides a range ofestimated costs for planning purposes that can be utilized instead of a fixed estimate value.



TotalProjectEstimateReview 2010with Risk ~$484 M


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3.2.3 EXTRADOSED RIVER BRIDGE COST ESTIMATE REVIEW (2004):

The probability analysis for the Extradosed River Bridge Spans resulted in the following curve:

The above curve demonstrates a summary of the probabilities determined by the Team for Part 4

of the project estimate, which includes the main span of the Extradosed River Bridge. Itdemonstrates that if Part 4 of the project was bid today, the Team considers that there is a 10%probability the bid would be below $92 million, an 80% probability that the bid would be between$92 million and $118 million, and a 10% probability that the bid would be above $118 million. Alsonoted on the chart are the Teams recommended Estimate Review Base without risk of $105 million(bottom of the chart) and the Teams recommended 2004 Estimate including risk of $135 million (tothe right side of the chart).

This curve demonstrates the Teams concern with the current risk on the River Crossing portion ofthe project, where design decisions, resource costs and constraints, constructability andenvironmental factors could increase the bids on this portion of the project. The Team anticipates

that as design progresses, a more detailed cost estimate can be determined and the risk amountshould decrease.

Total EDRiver BridgeSpan 2004Estimate ~$135 M


Estimate Review Base without Risk = $105 M


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3.3 REVIEW FINDINGS:

The findings of the Review are summarized as follows:

It was confirmed that the project estimate is consistent with the current stage of project

development The river bridge extradosed type, aesthetics, configuration and constructability are major

contributors to the risk associated with the project costs.

Some specific scope was not accounted for the in the base estimate

Estimate did not account for inflation to the projects estimated mid-point of expenditure

Estimate did not account for Construction Contingencies that may be required due tounforeseen conditions, changes in cost or time, etc.

Estimate did not account for other potential risk

Some enhanced components to the MnDOT Length, Width and Depth (LWD) conceptualcost estimating system were recommended as follows:o The selection of multipliers should be documentedo The LWD Process has limitations where major bridges are a part of the project and as

such should account for these conditions

3.4 REVIEW RECOMMENDATIONS:

The Team presented the following recommendations at the completion of the Review:

The proposed extradosed bridge for the river spans has a relatively high cost risk. The riskshould be managed through:

o Cost effective design decisions on the river bridge (aesthetics, configuration)o Focus on the constructability of the river bridgeo Contractor involvement / options

The Cost Estimate should be increased to account for the additional known scope notaccounted for, the risks identified, inflation to mid-point of expenditure, and the constructioncontingencies.

The Team recommended that a cost estimate rangebe utilized when publishing estimatedcosts for the project in lieu of a fixed cost estimate

The recommended Range of the current Cost Estimate Probability in the mid-80% certainty level isnoted as follows:

Estimate Range in the mid Total Project EstimateEstimate 80% probability (with risk) (with risk)2004 Base $299 M to $334 M $373 M2010 Programming $410 M to $453 M $484 M

Based on these summary conclusions the Team recommends that the project team continue tofinalize the extradosed bridge design concept using cost effective design decisions in the process.This will result in further defining the project costs and possibly reducing the amount of cost risk tobe included in future cost estimates.


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Due to the recent national disasters related to Hurricanes Katrina, Rita and Wilma, there is widespread speculation that the construction industry will be impacted with increasing prices, shortage ofmaterial, labor and equipment and also increasing bonding and insurance costs. It is recommendedthat for this project, the construction market be closely monitored to capture any such impacts as

they relate to the project budget. In addition, due to the unique nature of the proposed extradosedbridge, since the New Haven Harbor Crossing Pearl Harbor Memorial Bridge (Q-Bridge) is verysimilar in nature to the proposed bridge; the eventual bid costs of the Q-Bridge (after letting/award)should be utilized to update the proposed budgets for the St. Croix River Crossing project.


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Section IV DETAILED PROJECT REVIEW /PROBABILITY ANALYSIS

PROBABILITY ANALYSIS

Utilizing a probability analysis software program (Crystal Ball), the Team was able to identify aprobability curve for each element of the estimate. The curve for each element is based on theprobability that the element, if bid today, could be bid in a range that varies from a reasonable lowvalue to a reasonable high value, with the highest probability value being at the peak of theprobability curve. A sample probability curve is as follows:

The preceding sample probability chart demonstrates that the selector of this curve consideredthat the highest probability for a bid amount for this item is in the range of $16,000,000 to$17,000,000 (this highest range is typically the current cost estimate for the item). The selectoralso considers that there is a chance the low bid could come in quite low (see minimal range ofprobability between $6,000,000 and $12,000,000), but a lower possibility that a high bid wouldbe significantly high (see highest range is close to $20,000,000). Probability curves like this oneare typically selected based on the risks and opportunities identified with each item. In this case,the Team selecting the probability curve had confidence that a bid would be submitted for theitem in the current estimate range of $16 million to $17 million, and that it was more likely that alower bid would be received, demonstrating the Teams confidence that there were good

opportunities for a lower bid, and there were no risks identified that would result in asignificantly higher bid than the current cost estimate.

Once the probability curves are selected, the software program generates random numbers basedon the curve (if run thousands of times the results would closely approximate the curve). Theserandom numbers are then added at bottom line forecast totals, and a forecast curve is thengenerated creating a combined probability curve for the sub-total and totals of a group ofnumbers.


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During the Review, the Team examined the cost elements making up the preferred alternative.Each of the elements were reviewed, with sufficient time allowed for all team members topresent scope information, ask questions and discuss issues. The risks and opportunities werethen analyzed element-by-element and recommended cost elements were modified and acontingency amount was assigned for each element within the Project. Following the completion

of this analysis, a recommended project cost was calculated utilizing the results of this review.

The probability curves generated for each of the line items in the estimate are shown in thefollowing sections. The type of curve and the reasoning for the selection of each curve isprovided at the bottom of each curve. These sections also provide the detail on the Teamsanalysis and conclusions related to each of these items broken down by the elements in theProject Estimate.


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4.1TH 5 to Osgood (Part 1 of 4)

Scope of Part 1: In Minnesota, TH 36, the TH 36 frontage roads, and cross streets (OakgreenAvenue/Greeley Street and Osgood Avenue) will be reconstructed 1,050 feet from east of

Washington/Norell Avenues to Osgood Avenue. The intersections of TH 36 and local streetswill remain as at-grade intersections. No improvements will be constructed at NorellAvenue/Washington Avenue. Frontage roads at Oakgreen Avenue/Greeley Street will be pulledback away from TH 36; frontage roads at Osgood Avenue will remain in place.

Note: Aesthetics calculation in the above table excludes the Loop Trail costs

Summary Probability Curve for Part 1 (TH 5 to Osgood):


Current 2004 Estimate with Risks ~ $26 M

2004 Estimate


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Probability Curve Assumptions for the elements of Part 1 (TH 5 toOsgood):

4.1.1 Roadway (LWD Method) including Erosion Control (5%)

A review of the roadway elements for this section of the project showed that the LWD multiplierutilized appeared to be reasonable for the scope, noting that this portion would have a higher fillquantity than the Wisconsin approach. An additional 5% was added to this item for thecontractors costs to meet environmental regulations such as erosion control requirements. Anadditional 1.25% was also added to the multiplier to cover the costs of high performancepavement. Based on the MnDOT history on the price per square foot, the $94,500 utilized isconsidered conservative for this work.

Curve: Minimum Extreme Distribution- Lower risk of bid greatly exceeding estimate. Bidcould fall somewhat below the estimate as a result of the conservatively high unit price utilizedas a multiplier in the LWD system.


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4.1.2 Loop TrailA review of the trail elements showed that the Team felt the $80,000 per mile unit price wasreasonable for this work effort. The Team did not see any significant risk in this item.

Curve: Students t distribution - Low probability of bid being significantly higher or lowerthan estimate for the trail.

4.1.3 Retaining Walls (Modular Brick)The modular brick retaining walls unit price was based on similar walls. The $20 per square foot

was considered reasonable by the team.

Curve: Normal distribution - Medium risk bid could fall higher or lower than estimate


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4.1.4 Signals

Signal costs were estimated at $200,000 per intersection based on similar recent projects. TheTeam considered this as a reasonable estimate that had relatively low cost risk.

Curve: Students t distribution- Low risk on bid being significantly higher or lower thanestimate.

4.1.5 Risk (10%)

The MnDOT LWD system estimate had included a risk factor of 10% for this Part I of theProject. Based on the Teams assessment of risk, the 10% factor was considered a reasonableamount for this scope of work.


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4.1.6 Aesthetics (7.5%)

The cost foraesthetic enhancementshas been included in the estimate and cappedat a mitigationpackage negotiation maximumlevel of 7.5% of the construction costs. As the aesthetics becomefurther defined, it will be required to ensure that the costs will be within the 7.5% limit.

Curve: Minimum Extreme Distribution - Lower risk of bid greatly exceeding estimate. Bidcould fall somewhat below the estimate as a result of the conservatively high unit price


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4.1.7 Right of Way

The review of right-of-way cost estimates demonstrated that the parcels have been identified andthe MnDOT right-of-way staff had estimated all of the costs considered to be associated withsecuring the right-of-way for the project. The Review Team agreed to add an additional 10%

contingency on the estimates for this section of the Project.

Curve: Gamma Distribution - Probability is high that costs will exceed the estimate, whileconsidered low that prices will fall below the estimate. Increasing land and housing prices havebeen considered in this probability.


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4.2 Minnesota Approach (Part 2 of 4) (Osgood toRiver Bridge)

Scope of Part 2: East of Osgood Avenue, TH 36 will be reconstructed and a new TH 36/95

diamond interchange will be constructed along with corresponding improvements to TH 95.

Note: Aesthetics calculation in the above table excludes the bridges and trail costs

Summary Probability Curve for Part 2 (Minnesota Approach):


Current 2004 Estimate with Risk ~ $82 M

2004 Estimate


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Probability Curve Assumptions for the elements of Part 2(Minnesota Approach):

4.2.1 Roadway (LWD Method) includes Erosion Control (5%)

A review of the roadway elements for this section of the project showed that the LWD multiplierutilized appeared to be reasonable for the scope, noting that this portion would also have a higherfill quantity than the Wisconsin approach. This section included an interchange and ramps thatmade the estimate higher on a cost per square foot basis. An additional 5% was added to thisitem for the contractors costs to meet environmental regulations such as erosion controlrequirements. An additional 1.25% was also added to the multiplier to cover the costs of highperformance pavement. Based on the MnDOT history on the price per square foot, the $117,600utilized is considered conservatively high for this work.

Curve: Minimum Extreme Distribution - Lower probability of bid greatly exceedingestimate. Bid could fall somewhat below the estimate as a result of the conservatively high unitprice utilized in the LWD multiplier.


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4.2.2 Bridge Beach Road over TH 36

The estimated bridge cost, for an assumed curved steel structure of $125 per square foot forBeach Road over Trunk Highway (TH) 36 was discussed by the bridge structure focus group andfound to be reasonable. The bid results from previous projects and current industry knowledge

were utilized to arrive at this value.

Curve: Maximum Extreme Distribution - The Team considered a high probability of the bidexceeding the estimate for this bridge. Low probability of the bid coming in significantly belowthe estimate.


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4.2.3 Bridge Treatment Plant Access Rd

The estimated cost of $130 per square foot for the bridge at the Treatment Plant Access Roadwas discussed by the bridge structure focus group and found to be reasonable. The concept of asteel beam structure was the basis for the unit price. The bid results from previous projects and

current industry knowledge were utilized to arrive at this value.

Curve: Maximum Extreme Distribution- The Team considered a high probability of bidexceeding estimate for this bridge, and a low probability of the bid coming in significantly belowthe estimate.


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4.2.4 TH 36 BridgesThe estimated cost of $180 per square foot for the Trunk Highway (TH) 36 Bridges wasdiscussed by the bridge structure focus group and found to be reasonable. Although the finalconcept for these bridges has not been finalized, they will be the approach spans to theextradosed main spans of the River Bridge. These approach spans will be designed to fit

functionally and aesthetically with the main spans. They will also be constructed in a sensitiveenvironmental area, thus increasing the cost of construction. The Teams knowledge of the areaand of recent projects was utilized in arriving at this price. The Team did see significant costrisk with this project element due to environmental considerations and design complexity.

Curve: Maximum Extreme Distribution - High probability of bid exceeding estimate. Lowprobability of the bid coming in significantly below the estimate.

4.2.5 Existing Bridge RemovalsThe removal of two existing bridges will be required during the construction of this part of theProject. The MnDOT Team member provided an estimate of $100,000 per bridge, and the Teamconsidered that this is a reasonable estimate for this scope of work.

Curve: Logistic Distribution- Reasonable probability that the bid will fall within the range ofthe estimate for the existing bridge removals.


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4.2.6 Loop Trail

A review of the Loop Trail elements showed that the Team felt the $80,000 per mile unit pricewas reasonable for this work effort. The Team did not see any significant risk in this item.

Curve: Normal Distribution- Average probability that the bid will fall within the range of theestimate with equal chance of being above or below the estimate.

4.2.7 Approach PanelsBridge approach panels were estimated based on recent MnDOT pricing. The bid results fromprevious projects were utilized to arrive at this value. The Team considered the price of $20,000

per panel as a reasonable current estimate for this work.



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4.2.8 Retaining Walls (Cast-in-place)

A relative low quantity of cast-in-place (CIP) retaining walls has been estimated for this part ofthe Project. The Team agreed with the MnDOT estimate of $75 per square foot of wall area as areasonable price for this element.

Curve: Normal Distribution -Average probability that the bid will fall within the range of theestimate with equal chance of being above or below the estimate.

4.2.9 Contaminated Soils Cleanup CostsAn allowance of $200,000 was utilized for contaminated soils cleanup. This is based on thoseareas that have been identified where it is likely that this could occur. The environmental teammembers knowledge of the corridor provided the impression to the Team that this was areasonable allowance without a huge risk.

Curve: Maximum Extreme Distribution- High probability of bid exceeding estimate. Lowprobability of the bid coming in significantly below the estimate.


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4.2.10 SignalsSignal costs were estimated at $200,000 per intersection based on similar recent projects. TheTeam considered this as a reasonable estimate that had relatively low cost risk.

Curve: Students t distribution - Low probability on bid being significantly higher or lowerthan estimate.

4.2.11 Risk: All elements except Bridge (10%)

The MnDOT LWD system estimate had included a risk factor of 10% for this Part 2 of theProject. Based on the Teams assessment of risk, the 10% was considered a reasonable amountfor this scope of work, excluding the bridge approach spans to the main span of the River Bridge.

The Team considered that the LWD multiplier for this item was conservatively high.

4.2.12 Risk: Bridge (20%)

The risk on the approach spans to the extradosed main span was analyzed separately by thestructural focus group assembled during the Review. The Team concluded that once the designis further formalized, the risk could possibly be reduced. The risk was arrived at by analyzingthe elements of the bridge structure and coming up with a composite risk as shown in thefollowing table:

CATEGORY a). Percentage ofConstruction Cost b). Risk /Contingency c). = a x b; CompositeRisk FactorDeck 65% 25% 16.3%

Cables N/A 0.0%

Pylons / Piers 10% 50% 5.0%

Foundations 20% 10% 2.0%

Other / Miscellaneous 5% 20% 1.0%

Total 100% 24.3%


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Based on the calculated risk at 24.3%, the Team elected to utilize a 20% contingency at this timefor the estimate. Design decisions made in the near future on the extradosed main spans willsomewhat determine what the final risk factor will be on these approach spans. This bridgeconsists of 6 extradosed spans plus 2 back spans.

4.2.13 Aesthetics, including Lift Bridge Modifications (7.5%)

Aesthetic elements were included in the estimate at 7.5% of the non-bridge elements (assumingthat bridge aesthetics are adequately accounted for in the bridge unit price). However, a portionof this aesthetics amount is included for aesthetic modifications to the existing lift bridge, whichin the preferred alternative package is to become a part of the Loop Trail system.

Curve: Minimum Extreme Distribution- Lower risk of bid greatly exceeding estimate. Bidcould fall somewhat below the estimate as a result of the conservatively high unit price


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4.2.14 Right of Way

The majority of the right-of-way for this portion of the project was purchased in the past. Thereview of right-of-way cost estimates demonstrated that the parcels have been identified and theMnDOT right-of-way staff had estimated all of the costs considered to be associated with

securing the right-of-way for the project. The Review Team agreed to add an additional 10%contingency on the estimates for this section of the Project.



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4.2.15 Railroad Agreement CostA railroad agreement will be required for railroad relocation and coordination during theconstruction of this section of the project. An estimate of $5 million dollars was provided by theMnDOT Team members based on current scope and estimates.

Curve: Normal Distribution - Average probability that the agreement costs will fall within therange of the estimate with equal chance of being above or below the estimate.

4.2.16 Major Utility Relocation CostMnDOT provided detailed costs on the major utility relocation anticipated for this portion of theproject. Unit prices were reviewed and considered adequate based on present day pricing.

Curve: Maximum Extreme Distribution- High probability of bid exceeding estimate. Lowprobability of the bid coming in significantly below the estimate. The Team considered that theutility unit prices did not include a lot of risk factors.


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4.3 Wisconsin Approach (Part 3 of 4): (St. CroixRiver Bridge to East Project Terminus)

Scope of Part 3: Wisconsin Highway 35 will be relocated to the east of its present alignment toprovide an interchange with relocated St. Croix County Highway E. Wisconsin Highway 64 willbe constructed from the St. Croix River through the new interchange to the 150

thAvenue

overpass in the Town of St. Joseph.

Note: Aesthetics calculation in the above table excludes the trail costs

Summary Probability Curve for Part 3 (Wisconsin Approach):


Current 2004 Estimate with Risk ~ $39 M

2004 Estimate


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Probability Curve Assumptions for the elements of Part 3(Wisconsin Approach):

4.3.1 Roadway (LWD Method) including Erosion Control (5%)

A review of the roadway elements for this Wisconsin approach section of the project showed thatthe LWD multiplier utilized appeared to be reasonable for the scope, noting that this portion hadminor fill quantities. The Wisconsin DOT also reviewed the multiplier and found it reasonablefor the scope of the Wisconsin approach. An additional 5% was added to this item for thecontractors costs to meet environmental regulations such as erosion control requirements. Anadditional 1.25% was also added to the multiplier to cover the costs of high performancepavement.

Curve: Minimum Extreme Distribution - Lower probability of bid greatly exceedingestimate. Bid could fall somewhat below the estimate as a result of the conservatively high unitprice utilized in the LWD multiplier.


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4.3.2 Bridge STH 35 and CTH E over STH 64A unit price of $125 per SF of bridge deck was considered reasonable, considering that the Teamfelt it would be a steel bridge in lieu of a standard concrete beam bridge.

Curve: Maximum Extreme Distribution- High probability of bid exceeding estimate. Lowprobability of the bid coming in significantly below the estimate.

4.3.3 Bridge County Road E over STH 64

The Team considered a unit price of $75 per square foot of bridge deck was reasonable for thisbridge, with a concept of a standard concrete beam bridge considered.

Curve: Minimum Extreme Distribution - Lower probability of bid greatly exceedingestimate. Bid could fall somewhat below the estimate as a result of the conservatively high unitprice utilized in the estimate.


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4.3.4 Loop TrailA review of the trail costs showed that the $80,000 per mile unit price was reasonable. TheTeam did not see any significant risk in this item. (Note: The Trail only covers that portion to bebuilt on existing STH 64 from the east end of the existing lift bridge up the hill to existing STH35. The other portions will be along a new STH 64 from the river to 35/E interchange).


4.3.5 Approach PanelsBridge approach panels were estimated based on recent MnDOT pricing. The bid results fromprevious projects were utilized to arrive at this value. The Team considered the price of $20,000per panel as a reasonable current estimate for this work.

Curve: Logistic Distribution- Reasonable probability that the bid will fall within the range ofthe estimate.


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4.3.6 Retaining Walls (Cast-in-Place)A price of $85 per square foot of retaining wall was agreed to by the Team, confirming thecurrent estimate.

Curve: Logistic Distribution- Reasonable probability that the bid will fall within the range ofthe estimate

4.3.7 Signals/RoundaboutsSignal costs were estimated at $200,000 per intersection based on similar recent projects. TheTeam considered this as a reasonable estimate that had relatively low cost risk. Roundaboutsmay be considered in lieu of signals at the intersections in Wisconsin, and the Team consideredthat the costs of each would be reasonably close.

Curve: Students t distribution- Low risk on bid being significantly higher or lower thanestimate, considering that signal costs are relatively consistent for an intersection


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4.3.8 Risk (10%)

The MnDOT LWD system estimate had included a risk factor of 10% for this Part of the Project.Based on the Teams assessment of risk, the 10% was considered a reasonable amount for thisscope of work.

4.3.9 Aesthetics (7.5%)

The cost of aesthetics has been included in the estimate at a mitigation package negotiationmaximumlevel of 7.5% of the construction costs. As the aesthetics become further defined, theproject team will be required to ensure that the associated estimated costs would be within the7.5% limit.

Curve: Minimum Extreme Distribution- Lower probability of bid greatly exceedingestimate. Bid could fall somewhat below the estimate as a result of the conservatively high unitprice utilized in the LWD multiplier.


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4.3.10 Risk: Right of Way (50%)

The right-of-way on the Wisconsin side of the project was considered to be at high risk due tothe volatility in land prices at this time. A significant acreage is to be purchased in Wisconsin,with the prices having increased significantly recently. For this reason, the Team agreed toinclude a risk factor of 50% on the right-of-way costs on the Wisconsin portion of the project.



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4.4 St. Croix River Bridge (Part 4 of 4):

Scope of Part 4: The new four lane bridge will cross the river at the present location of theHighway 36/Highway 95 Interchange, approximately 7,550 feet south of the Lift Bridge alongthe Minnesota shoreline, crossing the St. Croix River perpendicular to its centerline and landingapproximately 6,450 feet south of the Lift Bridge along the Wisconsin shoreline.

Note: Aesthetics in the above table is a set allowance for the river bridge.

4.3 River Bridge Extradosed

The price of $280 per square foot cost of bridge deck for the extradosed structure was developedby MnDOT and the project team based on information from other somewhat similar bridgeconstruction in the United States. Estimated costs of the upcoming extradosed bridge inConnecticut were also considered. The Team felt that this price was on the low end of where theprice could be, and determined that there was significant risk in this price being met as theproject develops. The Team did agree to utilize the $280 per square foot cost as a conclusion ofthis review, but recommended a high-risk amount to be included.

Summary Probability Curve for Part 4 (River Bridge):

90% Probability10% Probability

Estimate Review Base without Risk = $105 M

Total EDRiver BridgeSpan 2004Estimate ~$135 M

2004 Estimate


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Probability Curve Assumptions for the elements of Part 4 (RiverBridge):

4.4.1 Risk: River Bridge (30%)

The Team determined that there was significant risk in the extradosed main span portion of thisproject. Some of the major risks noted include the following:

Contractors difficult access to the construction site

Subsurface Conditions

Aesthetic considerations in the design

Anti-icing system

Long term maintenance / inspection system design

Environmental requirements

Cast-in-place vs. precast construction

Material availability and price volatility Constructability

Code requirements Impact loads

A structural evaluation breakout group met during the study to more closely evaluate the bridgestructure. Many of the noted risks had significant discussion, with the key elements summarizedas follows:

Contractors difficult access to the construction site

Much of the project will need to be accessed from the river. With the high slopes on oppositebanks, staging for the approaches will need to be high on the banks. Other considerations will berequired for the river work. Site condition will not allow haul roads or temporary roads to theriver piers. Bluff land disruption will also not be allowed for river access.

A staging area will need to be identified early to provide the contractor the best possible accessto this difficult site arrangement. Access considerations include the need to move the larger pre-cast elements for easier delivery, and to minimize the impact on local traffic and existinginfrastructure

Subsurface Conditions

Indications are the bridge will be supported on a limestone stratum. It was assumed thatprefabricated cofferdams would be used during the construction of the foundations. Drilledshafts may be considered as they require less earthwork and fill material than other types offoundations, reduce the amount of hauling material, and may have less impact on theenvironment as a result of less noise.

Considerations must be made for the water crossing, such as precast cofferdam, drilled shaft, orcylinder piles. Also, alternate foundation types and load testing could be considered, including


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self consolidating concrete for drilled shafts, micro-piles that are faster and can use smallerequipment for installation.

It was recommended that design load testing needs to be completed as soon as possible todetermine the size of the foundation required for the Extradosed Bridge.

Aesthetic considerations in the design

The Team discussed that the pylon shape, based on the conceptual drawings presented during theworkshop, appears to have significant cost impact, with both special casting due to changes inthe cross section and possible special anchoring to the main girders. The difficulty inconstructing the pylons based on the final approved design is one of the highest risk factors onthe project.

Anti-icing system

An allowance was made for this system. Concerns are that this allowance must be closelymonitored as the design progresses for this element of the bridge structure.

Long term maintenance / inspection system design

The need for a built-in system for long-term maintenance was discussed, with requirements forease of ongoing periodic inspection of the entire bridge. The need to adequately address thecosts for this system was considered important as the design progresses.

Environmental requirements

The Team considered the need to meet all environmental requirements prior to and duringconstruction of the project as a potential cost risk. Inadequately addressing and preparing forrequirements could have significant impact on the duration of the project, thus impacting costs.

Cast-in-place vs. precast construction

This item was one of the most significantly discussed during the Review. The cost impact ofutilizing cast-in-place or precast members on the bridge was seen as providing a wide variance inconstruction costs for a number of reasons. The risk of the design being constructable onlyutilizing cast-in-place was considered a large cost impact to the project. Some of the potentialadvantages to being able to utilize precast construction included the following:

Most of the work associated with pre-cast construction is done in the pre-castingoperation, which minimizes the time that the construction impacts the site

Pre-cast construction elements are highly durable (high performance concrete),with lower life-cycle cost

Can improve construction zone safety with less work on-site

Based on the total width of the structure, if two Segmental concrete box girdersare be proposed at this location, the Precast concept will result in an increasedspeed of construction as a result of ease of handling and erection.


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Because of the short construction season the contractor may elect to perform asmuch of the construction activity as possible using conventional precastsegmental technology

The Precast segments can reduce the erection time, the casting and erection canoccur simultaneously but independently. This parallel (production-line) method

provides maximum scheduling flexibility and construction time This project is considered a large project; a standard shape of the superstructure

box girder will result in a significant cost saving as a result of increase speed oferection.

The nature of segmental bridge requires that the protection of the deck beparamount since the decks are not readily replaceable. To this end, overlaysshould be considered for Extradosed bridge and also the approach bridge. Basedon the AASHTO LRFD Bridge Design Specifications, overlay is encouraged.Additional cost should be added to the cost of the superstructure.

Material availability and price volatility

The Team discussed that local availability of materials at the time of construction could havesignificant impact on costs of the project. This risk could be alleviated somewhat by ensuringthat material availability and price volatility trends are closely tracked as the design progresses.

Constructability

Ease of constructability is considered a significant risk by the Team. Considerations of havingthe contractor community involved in providing input during the design phase was seen as a wayof mitigating this risk and arriving at an efficient construction method.

Code requirements

Potential changes to local codes prior to the design being completed for the project was seen as apotential risk by the team.

Impact loads

The design of the bridge foundations / piers to withstand the impact of ships or floating objectswas considered a cost risk to the project.

Other considerations the Team determined to minimize the potential time delay during design

and construction included the following:

Use accelerated testing technology to address material acceptance.

Conduct a formal bridge type study for the Extradosed Bridge and the balancedcantilever construction

Review the impact of longer spans on the construction time and cost

Standardize structure types and shape for both the Extradosed Bridge spans andthe approach spans


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Simplify complex framing. Work to arrive at a design concept with simplifieddesign and detail

Optimize substructures and foundations

Work towards Constant depth and constant shape for the entire length of the mainstructure

The type of project delivery and procurement method was also discussed. Some of the majoritems discussed included the following:

Design-build delivery system could result in a shorter construction time and shiftsthe responsibility and risk to the design-build team. Stipends were also discussedas a possibility. Concern with design-build is the amount of risk the contractorwill include for the extradosed bridge type.

Partial design/build (Best Value selection) was discussed as an alternative.

Design/bid/build; Traditional alternative could provide more price competition.Risk is not having contracting community involved through the design phase and

bidding a less than optimal construction price. Construction manager at risk (guaranteed maximum price); This system has good

contractor input through design, but no price competition.

Cost + time bidding; include incentives for schedule

Contracting techniques-incentive/disincentive

Partnering agreements

These major risks and factors provide an opportunity for the design selection team to manage theconcepts to result in alternatives that will allow a competitive market for efficient constructionsolutions, thus minimizing the cost risks. Based on these risks the structural team evaluated eachcategory on the bridge and arrived at a composite risk factor for this portion of the project as

shown in the following table:

CATEGORY a). Percentage ofConstruction Cost

b). Risk /Contingency

c). = a x b; CompositeRisk Factor

Deck 35% 20% 7.0%

Cables 10% 15% 1.5%

Pylons / Piers 15% 100% 15.0%

Foundations 35% 25% 8.8%

Other / Miscellaneous 5% 20% 1.0%

Total 100% 33.3%

After discussing the risk with the Team, the decision was made to utilize a 30% risk factor at thistime. This 30% factor was then included in the estimate and considered to cover much of therisk associated with the risk items noted for this bridge.


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The following is the probability assumption curve selected for the main spans of the bridge,based on the previous evaluation of the risk assessment for this portion of the project.

Curve: Maximum Extreme Distribution- There is a high probability of bid exceedingestimate. Low probability of the bid coming in significantly below the estimate. This is themost significant item on the project, and demonstrates the risk the Team considered with theextradosed bridge structure. The range of the extreme distribution goes to amounts over 50%

higher than the base estimate.


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4.4.2 Aesthetics (Allowance)

MnDOT discussed that, according to cost participation policy, an allowance of $3 million dollarswould be utilized for aesthetics on the St. Croix River Crossing. This includes the extradosedriver spans plus the main approach spans. The Team did not review this allowance.

Curve: Uniform Distribution- Fixed allowance for this aesthetics item resulted in the Teamrecommending a uniform probability distribution.


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4.4.3 Anti-Ice Bridge Deck Equipment

Based on other comparable projects, an allowance of $3 million dollars was included in theestimate for anti-icing equipment to be installed on the bridge. The Team considered thisallowance reasonable for this stage of the project.

Curve: Logistic Distribution- Reasonable probability that the bid will fall within the range ofthe estimate for this bridge equipment. Team felt comfortable with information from recentprojects.

4.4.4 Right of Way

No right-of-way is required for this portion of the project crossing the river.


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4.5 Other Project Elements:

Scope of other project elements:

MitigationFixed: Mitigation items that have a set amount allocated as a limit.These costs have been set as fixed for this estimate and study.

Variable: Mitigation items that are estimates at this time and could vary asthe design develops.

Project Development, Design/Engineering and CEIPercentage allowance for developing the project preliminary design, finalizing the designand procurement of the project, and providing construction engineering and inspection(CE&I) during the construction phase of the project.

InflationEstimate of the inflation (escalation) of the cost of design and construction costs as theproject progresses.

Construction ContingencyContingency set aside for changes and unforeseen conditions during construction basedon the typical changes on other major structure projects throughout the country.

Management ReserveReserve set aside for the cost of approved requests for changes from outside parties suchas local municipalities and other public agencies/entities during construction.

Inflation Impact per additional monthEstimate of the cost impact to the project budget based on a month of delay during thepre-construction phase.


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4.5.2 Mitigation (Variable)

Curve: Logistic Distribution- Reasonable probability that the bid will fall within the range ofthe estimate for these variable mitigation items.


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4.5.3 Project Development, Design/Engineering, and Construction,Engineering and Inspection (CEI)

The team reviewed each of these items and the associated estimates in detail. An independentevaluation was performed that arrived at close to the previously estimated 25% allowance forthese items. Based on this review, the Team considered this a reasonable estimate at this time.There were multiple risk factors identified for this line item, including:

Limited pool of qualified consultants, designers, contractors could result in higher costs Risk of increased costs due to delays Risk of depth of knowledge/experience on this type of project Risk of increased costs due to multiple contracts and multiple delivery methods Funding availability could result in extended project duration increasing inflation costs

Curve: Maximum Extreme Distribution- High probability of bid exceeding estimate. Lowprobability of the bid coming in significantly below the estimate. Although the Team consideredthat the 25% factor covered all of these items, there was some concern that additional labor maybe required for the completion of the design stage, the construction stage, and the other projectdevelopment costs such as public involvement.


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4.5.4 Inflation

Both MnDOT and WisDOT contacted their financial management team for information onrecent inflation. Both States considered that a 3% factor for inflation would be sufficient. TheTeam did see significant risk in utilizing this amount, however, agreed to utilize this amount in

calculating inflation to the estimated midpoint of project expenditures in approximately 2010.

Curve: Normal Distribution- Average probability that the bid will fall within the range of the

estimate with equal chance of being above or below the estimate. This is based on the Minnesotaand Wisconsin DOTs agreeing that a 3% inflation factor is considered appropriate at this time.Although a normal distribution was utilized, this is a major unknown that could play a significantpart in the bid costs when the project is bid.


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4.5.5 Construction Contingency

Based on FHWA major projects having changes during construction in the range of 5% to 10%,and WisDOT experiencing similar change values on their major projects, the Team agreed toutilize a 7.5% construction contingency for unknowns during this project. This contingency is

intended to cover unforeseen conditions, scope changes and other impacts where contractuallythe contractor is owed additional funds beyond the contract amount.

Curve: Normal Distribution- Average probability that the bid will fall within the range of theestimate with equal chance of being above or below the estimate. Unknowns due to weather,resource availability, site conditions and other events could impact this cost item.


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4.5.6 Management Reserve

The Team discussed a management reserve to account for third party changes duringconstruction that have not been anticipated in the design. Although the Team did not considerthis a significant risk at this time, a 1% allowance was included in the estimate for the

management reserve.

This item is only an allowance and was not calculated in the bottom line probability distribution.However, the 1% for management reserve is included in the final estimate based on the Teamsreview.

4.5.7 Project Delivery Method

Although not a specific line item in the estimate, the risks associated with different types of

project delivery methods were discussed by the Team. Some of the risks and opportunitiesassociated with utilizing Design-Build in lieu of the Design-Bid-Build method were identified asthe following:

Risks by utilizing Design-Build:

WisDOT cannot utilize DB without Legislative Approval Potential for higher bids in DB due to best value method Potential of successful low bid DBB contractor being unqualified Learning curve/lack of experience could result in the preparation of a more extensive

Design-Criteria

Risk of having to complete ROW acquisition Limited creativity opportunity with DB process Potential for extensive review process during design resulting in delayed construction,

delay claims

Opportunities by utilizing Design-Build:

D-B could result in accelerated schedule for the project D-B could result in shift of risk/responsibility on to DB Best Value D-B could provide better opportunities to attract qualified designers.

However this method may not result in the lowest bid.

Potential for initiating early industry review prior to formal acquisition process Opportunity to identify economical design alternatives


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APPENDICES


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APPENDIX A

Estimate Summary Spreadsheet

and

Summary of Mitigation Items


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APPENDIX B

Estimate Review Summary Presentation

* Note that this presentation was from theWorkshop/Review and does not include a later

change to the fixed mitigation value


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St. Croix River Crossing PrCost Estimate ReviewCost Estimate Review

Augus


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St. Croix River Crossing Cost Estimate Review

Objective

Verify the accuracy and reasonabof the current total cost estimate complete the St. Croix River Crossproject and to develop a probabilirange for the cost estimate thatrepresents the projects stage of d


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Workshop Team Members

FHWA Staff MnDOT Staff

WisDOT Staff

PBS&J (Consultant)


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PBS&J Team Members

Multidiscipline A/E Firm ~ 3,700 employees

60+ offices nationwide

David Carter Team Leader VP, National Business Sector Manager

Construction Consulting

Praveen Ommi Cost Estimator

VP, Division Manager Construction Con

Morad Ghali, P.E. Structural Engineer Chief Structural Engineer


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Agenda Monday, Aug. 8

Understanding of Project Scope, Current Cost Estim Review Roadway Estimates and LWD Estimating Pro

Tuesday, Aug. 9 Review Structures Estimates Review Non-Construction Costs (PE, CEI, CM, Inflat Review Right-of-Way Cost Estimates

Wednesday, Aug. 10 Finalize Base Cost Estimates Discussion on potential risks and opportunities Risk Analysis

Thursday, Aug. 11

Finalize review of project costs Analyze risks and develop cost estimate probability

Friday, Aug. 12 Presentation of findings and recommendations


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Methodology Project Scope Review

Current cost estimate overview for Preferred Al


Scope included in the 4 parts - Minn.(2), W Understanding of the LWD Process

Identified Scope not accounted for in the cuestimate

Technical Disciplines input (Roadway, StrucMitigation, etc.)

Structures Task Force Assembled Assessment of Bridge Types Example of Conne


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Methodology

Contractual Delivery Methods, Market Condition

Risks and Opportunities Analysis

Inflation to anticipated mid-point of constructio

3% per year to 2010

Post Bid Costs

Construction Contingency

Management Reserve

Establish Total Future estimated costs for prog

purposes


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Cost Estimate ReviewSummary of Review Findings

Confirmed that the project estimate is consistent of project development

LWD Estimating System

Need for Documentation of multipliers selection

LWD Process has limitations on unique project req

The river bridge type, configuration and construc

major contributors to the risk associated with the


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Review Results

Total Project Costs 2010

Construction Contingency (7.5%)and Management Reserve (1%)

Subtotal 2010 Costs

Inflation at 3% per year to 2010

$305Subtotal 2004 Costs

$10Risk Estimate (scope, designvariances - construction and ROW)

$295Base Estimate (incl. construction,mitigation, ROW, engr., cei)

RR

ProjectEstimate

(costs in millions)


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Review Results

Total Project Costs 2010

Construction Contingency (7.5%) andManagement Reserve (1%)

Subtotal 2010 Costs

Inflation at 3% per year to 2010

Subtotal 2004 Costs

Risk Estimate (scope, design variances -construction and ROW)

Base Estimate (incl. construction,mitigation, ROW, engr., cei)

(costs in millions)

$305

$10

$295

ProjectEstimate

ReRe


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Review Results

Additional Scope / Revised Estimates Identified in Revi

Railroad Agreement $ 6.9 Erosion Control and High Perf. Pavement $ 5.4

Anti-Ice Bridge Deck Equipment $ 3.8 Major Utility Relocation Cost $ 3.0 Adjusted Wisc. STH 35 Bridge Cost per SF $ 0.7 Bridge Removals $ 0.3 Contaminated Soil Removal $ 0.3 Retaining Walls revised estimate $ 0.1 Reduction in Aesthetics revised estimate $-4.2

TOTAL ESTIMATE CHANGE ~ $16 M

Note: Changes include risk and engineering factors


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Review Results

Additional Risk Impacts ($ in Million

Extradosed Bridge Risk (30%) Minn. Approach Spans to River Bridge Risk (20% Right-of-Way Risk

Minnesota ROW (10%) Wisconsin ROW (50%)

Associated Engr/CEI (25%)

TOTAL ADDITIONAL RISK IMPACT ~

Above Values rounded to nearest million dollars


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Review Results

Risk Simulation Impact of delay:

Total Estimated Impact for one year

~ $13 million


78/98

78

Cost Estimate Review - Risk

60% Certaintyfrom $306 to$332 M

60% Certaintyfrom $400 to$430 M

60% Probabilityfrom $100 to$120 M

Roadway Approaches Minimum Extreme Dis

Signals StudenRiver Bridge Maximum Extreme Distr ibutionEstimEstimated Cost

Estimated Cost

Frequency

Freq

uency

Frequency


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79


Risk Analysis

60% Probabilityfrom $306 to

$332 M

Tot

Rew


Total Project Estimate Review - 200


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80


Risk Analysis

60% Probabilityfrom $400 to

$430 M

Estimate Review without risk = $403 M

TotCosts

an2010

Total Project Estimate Review - 2010


81/98


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82

Cost Estimate ReviewRecommendations

Consider review results

Reporting current estimated costs range

Reporting risk for entire project

Considering programming estimated costs

Consider Packaging Project to atthigh level of competition

Innovative contract administration option


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Cost Estimate ReviewRecommendations

Focus effort on River Bridge configur

affects the degree of environmental impacts aconstruction duration

has impact on approach spans

presents the opportunity to manage the risk

Constructability

Competition precast vs. cast-in-place option

Materials availability

HAS LARGEST IMPACT ON PROJEC~ 60% of the project estimated cos

~ 80% of the risk on the total proj


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84

Cost Estimate ReviewConclusions

Current Concept has a relatively high

Cost risk can be managed through:

Cost effective design decisions on river br

Focus on river bridge constructability

Contractor involvement / options

Range of Probability in mid-60% certa

Estimate 20%

2004 Base $306 M

2010 Programming $400 M


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85

St. Croix River Crossing Cost Estimate Review

Questions?


86/98


86

APPENDIX C

Review Agenda


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WORKSHOP AGENDA

DATE TIME ACTIVITY .8/8 - 8/12 7:30 am Continental Breakfast

8/9 - 8/11 12:0012:30 Lunch (8/8 and 8/12 working lunches)

8/8 Mon 8-11 Introductions, review project scope, status, cost estimates

8/8 11-12 Review Roadway cost estimates

8/8 12-1 Senior Management briefing Working Lunch

8/8 1 4:30 (Continue) Review Roadway cost estimates

8/9 Tue 89 Review Structures Cost Estimates/Structures general discussion

9-9:45 Connecticut Project Presentation Steve Stroh, URS

9:45-10:30 Continue Structures Costs discussion/Struc. Task Force identified

10:30-12:00 Structures Task Force Breakout

8/9 10:30-12:00 Review other non-construction costs

8/9 12:302:30 Review Structures Task Force discussion results

8/9 2:30-4:30 (Continue) Review other non-construction costs

8/10 Wed 8-10:30 Review ROW / Aesthetics / Signals / Ret. Walls / Other

8/10 10:3012 Finalize Roadway and Bridge cost reviews

8/10 12:304:30 Identify cost and schedule risks for the project

8/11 Thu 812 Finalize review and risk analysis / discuss delivery methods

8/11 12:304:30 Finalize review and begin preparation of presentation

8/12 Fri 8 11:30 Finalize and practice presentation

8/12 12 2 Presentati

St Croix Cost Est Review Report Final_1.pdf

Documents

Transcript of St Croix Cost Est Review Report Final_1.pdf