October 14, 2020

TxDOT’s Focus on Pre-Procurement ActivitiesShort Course 2020Presented by Randall Grones, PFD Project Manger and Adam R. Ramirez, PFD Deputy Project Manager

October 14, 2020

October 14, 2020

Table of contents

2

4-9

10-11

12

13

3DB 5-Year Project Plan

Project Readiness

Risk Allocation

Benefits of Pre-Procurement Activities

Questions

1

2

3

4

5

October 14, 2020

DB 5-YEAR PROJECT PLAN

Reduced to 50-75 Projects based on District feedback

250-300 Projects after filtering

using 13 classifications and

$100M+ construction cost

~50 Projects sequenced through

Decision Lens

5-YEAR DB PLANNING TABLOID

PM-D

IS P

RO

JEC

TSPr

ojec

ts le

t with

in s

peci

fied

FY

Sept – Oct Oct – Nov

TXDOT CONNECT using

13 project classifications and $100M minimum construction cost

Decision Lens with Project Strategic

Need Criteria:SafetyPreservationCongestionConnectivityEnvironmentEconomic

Development

District review of Portfolios

Decision Lens with Project Strategic

Need Criteria (10%) and

Readiness Criteria (90%)

2,500-3,000 Projects available

over $100M construction cost

Tabloid with DB Projects allocated

per fiscal year

District status of Project Readiness

Criteria:EnvironmentalDesignROWUtilityGeotechFunding

Filter Applied

Resulting Portfolios

Nov – Dec Dec - Feb

ADS Tool Analysisand

DB 5-Year Plan Review

Reduced to ~50 Projects based on

add’l District feedback and

Project grouping

October 14, 2020

PROJECT READINESS

October 14, 2020

Project Readiness - Purpose

Project readiness involves a systematic process to identify, assess, respond to and monitor risk to have better scope, schedule and cost certainty prior to initiating a TxDOT alternative delivery project procurement.

5

PROJECT

SCHEDULE

October 14, 2020

Project Readiness – Collaboration between District and PFD-SCM

Project readiness includes an effective and engaging risk management process early during pre-procurement across all levels of TxDOT’s organizational structure (District, PFD-SCM, Senior Leadership).

Increased collaboration between the District and PFD-SCM during pre-procurement.

6

District

PFD-SCM ADM

TxDOT Design-Build Project Phase Pre-procurement Procurement

Project Development

Responsibilities

THEN District District / PFD-SCM

NOW District / PFD-SCM District / PFD-SCM

October 14, 2020

Project Readiness – Early Risk Management

The District and PFD-SCM will collaborate to develop successful strategies to identify and manage risk early during project development.– The District and PFD-SCM will identify a project

team risk “champion”– Promotes a risk culture and awareness of risk

within the project team– Implements an integrated QA/QC process

7

October 14, 2020

Project Readiness Assessment Categories and Risk Priorities

The project team performs quarterly project readiness assessments

A risk priority is provided to evaluate readiness

8

No. Assessment Category Risk

Priority

1 Environmental Approval 1

2 Final Schematic 3

3 Obtain Stakeholder/Third Party/Railroad Agreements 2

4 ROW Acquisition 3

5 Utility Investigations Complete 2

6 Geotechnical Investigations Complete 2

7 Funding Availability 2

8 High Priority Risk Mitigation 1

9 Other RID Development 2

October 14, 2020

Project Readiness Assessment

Tier I Risk Assessment

(Project team level)

Tier II Risk Assessment

(Senior Leadership)

9

The project team performs a Tier I risk assessment to assess whether a project should be recommended for a Tier II assessment.

Senior leadership assesses the risk of initiating a procurement and the need to re-sequence projects in the 5-year DB Program.

October 14, 2020

Risk Allocation

Higher amounts of risks are placed on DB Contractor in DB projects than traditional DBB

This approach often results in high risk pricing TxDOT coordinated with the Industry to identify risks that could be mitigated

by TxDOT Programmatic DB Contract language to shift the risk allocation to the party

best positioned to manage those risks Better partnering atmosphere and reduced overall project costs

10

October 14, 2020

Risk Allocation – Then and Now

11

Risk Item Previous Risk Assignment

New Risk Assignment Details

Right of Way – Eminent Domain Delays DB Contractor Shared Schedule and overhead relief if the Critical Path is

impacted after an initial specified time period

Railroad Coordination –Railroad Agreement Delays

DB Contractor Shared TxDOT to obtain C&M Agreement Schedule and overhead relief if the Critical Path is

impacted after an initial specified time periodRailroad Coordination –Changes to Railroad Documents

DB Contractor TxDOT Potential cost, schedule, and overhead relief for

changes to the Railroad Documents made after the Proposal Due Date

Utility Delays DB Contractor Shared Schedule and overhead relief for Uncooperative Utility

Delays, Utility Owner Delays and Public Utility Owner Delays (subject to risk sharing thresholds)

October 14, 2020

Benefits of Pre-Procurement Activities

Reduces uncertainty and risk before initiating a TxDOT alternative delivery procurement

Increased due-diligence activities during pre-procurement will provide better price and schedule certainty during a procurement

Minimizes risk to proposers resulting in better competition TxDOT and industry are better able to anticipate and allocate resources

12

October 14, 2020

Questions

13

Randall Grones, P.E.

Project Finance, Debt and Strategic Contracts, TxDOT

Randall.Grones@txdot.gov

Adam R. Ramirez, P.E.

Project Finance, Debt and Strategic Contracts, TxDOT

Adam.Ramirez@txdot.gov