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General: Risk Management Tool for Managing the Planning / Environmental Phases of Prospective Major Projects

During the planning and environmental phases of projects, the project sponsor and FHWA incrementally begin to shape a project, narrowing down the range of alternatives, costs, timeframe, and other features of the project. The project sponsor and FHWA also interact and communicate with resource agencies, other stakeholders, and the public, building expectations and making commitments.

Thus, FHWA and project sponsors need to begin managing a prospective Major Project upstream, in planning/environmental phases, even though the specific alternative and many of its features will not be nailed down until the ROD and subsequent project design.

The FHWA Divisions should use a risk management approach during the planning/environmental phases, in close partnership with project sponsors, using the following list of Major Project questions for planning/environmental phases. This list is an updated and refined version of the "Checklist of Major Project Questions for DAs to Use during Planning/Environment Stages," which FHWA issued in January 2006 with its Major Project Guidance. Below is the updated list, with answers inserted, in italics, for a hypothetical project, the "Big Bridge Project."

For each prospective Major Project, Divisions should prepare an analysis similar to the following. It should be prepared close to the date of publication of a Notice of Intent for NEPA, in close consultation with the State DOT. The Division should update it, in consultation with the State DOT, at major points in the planning/environmental process (DEIS, FEIS, and MPO Plan updates or amendments).

Major Project Overview:

What is the overall problem the prospective Major Project would address?

The existing 4-lane "Big Bridge" over the Big River in Cavalier City is near the end of its design life, has safety deficiencies, and suffers from significant congestion during peak hours. Several alternatives have been identified, including a replacement of the existing bridge with a 6-lane bridge with new safety features.

Project Status:

What is the status of the prospective project viz a viz the planning and environmental process?

The project is in the Cavalier City long range plan with an estimated cost range of $1.1 to $1.5 billion. The State has sent the Division a project initiation notice and expects to initiate an EIS by publishing a NOI in the Federal Register in July 2007. The Governor publicly announced that the Big Bridge is her top transportation priority and has committed to breaking ground within 4 years.

Project Scoping Issues:

What planning and environmental issues could significantly affect the scope of the project?

Environmental baseline information from the planning process indicates that there are major environmental variables, which could significantly affect the ultimate scope, cost, and timeframe for the project. The following will be important environmental issues: wetlands permitting, 2 ESA species in the vicinity of the project, local officials interest in a "signature bridge," effects on the Cavalier City Historic District; environmental equity considerations relating to the declining viability of the historically black East Village; wetland impacts on the Perpetual Swamp; and concerns that expanded bridge capacity could contribute to growth in the Cavalier City exurbia area, with potential indirect impacts on both exurbia and the central city.

Multimodal needs, especially for transit and bicycling, are likely to affect project scope. If well designed, the Big Bridge Project could benefit bus transit, enabling more timely operations over the bridge. The Division will request that the State DOT meet with the transit operator to provide information and elicit suggestions for project features that would further benefit transit. A well-designed bridge could also improve bicycle access and safety, potentially affecting the scope of the project.

Project Schedule Issues:

What planning and environmental issues could significantly affect the schedule?

The State plans to begin the EIS process with a NOI in July 2007. The median time for completion of FHWA EISs nationally is 5 years; however, the State DOT is committed to a 3-1/2 year environmental review process to meet the Governor public commitment to a groundbreaking in 4 years. This is ambitious and will require significant schedule discipline and expedited work on the part of FHWA, the State, and participating agencies. To meet this ambitious schedule, The Division Administrator and State DOT Secretary will need to provide significant management oversight, in addition to the concentrated efforts of senior staff in the Division and State DOT. Significant time commitments of professional staff will also be required, potentially to the detriment of other state projects in the environmental pipeline.

Even with this level of management attention, the environmental variables cited above could add 1-3 years to the States goal of a 3-1/2 year environmental review process.

The Division will work with the State in creating the coordination plan and schedule for the environmental review process as called for in 23 U.S.C. 139. The plan and schedule will be coordinated with participating agencies and made available for public comment. The DA will personally meet with EPA, COE, and F&WS field executives to seek their support and prioritized attention of EPA and F&WS staff.

Project Cost Issues:

What FHWA reviews have been and will be completed on the cost estimate? What planning and environmental issues could significantly affect the cost?

At this early stage, the Division has not evaluated the Big Bridge project cost estimate. Environmental avoidance, minimization and mitigation for ESA and wetlands could significantly increase costs, as could local officials demands for a "signature bridge" design.

Just prior to publication of the DEIS, the Division will conduct a cost reasonableness review of the alternatives identified in the DEIS.

Prior to the FEIS, when FHWA requires a reliable cost estimate in the FEIS for the project, FHWA will ensure that a careful independent analysis will be completed for the cost of the preferred alternative.

At the DEIS and FEIS stage, FHWA will ensure that the cost estimates are in year-of- expenditure dollars and that the cost estimates include realistic right-of-way and utility costs. FHWA will also evaluate the states cost estimating methodology, and consider who has developed and reviewed the estimates.

In addition, the Division will do a preliminary review of the predicted cost range as part of the next fiscal constraint determination for an amendment to the Cavalier City LRP in January 2007.

Meanwhile, the Division notes that cost estimation for large projects is often difficult and there are pressures to keep the estimate low, which may affect the reliability of the estimate.

Project Finance Issues:

For the STIP, TIP, and Metro Plan that contain the project, have the State and MPO met FHWA/FTA fiscal constraint requirements for Planning? (To meet Planning fiscal constraint requirements, the Division must review STIPs, TIPs, and Metro Plans carefully to ensure that costs and revenues are adequately documented not only for the Major Project, but also for all other Federal and regionally significant capital projects and for operating and maintaining the existing highway and transit system.)

The Big Bridge Project is in the 2003-2028 LRP for the Cavalier MPO, at an estimated cost of $1.1 to $1.5 billion, with an open-to-traffic year of 2016. EIS work for the Big Bridge Project is in the TIP and STIP at an estimated $1 million in FY07, $8 million in FY08, and $6 million in FY09. The Division previously determined the LRTP, TIP, and STIP to be fiscally constrained - - but this was based on a very limited review by the Division. The Division will conduct a more complete fiscal constraint analysis for the next TIP, STIP, and LRTP, to ensure that cost and revenue estimates are reasonable and realistic.

In addition to the Big Bridge Project, the 2003-2028 LRP contains 2 other Major Projects (highway) plus a $1.8 billion transit New Start project. Also, the transit operator has publicly identified a $55 million gap in transit funding for transit operating costs in FY07 and beyond. Considering all these costs, the State will be hard-pressed to have sufficient revenues to break ground on the Big Bridge Project in 2011, as the Governor intends.

The Cavalier LRP assumes the Big Bridge will be priced, with variable tolls. Toll pricing has mixed support in the legislature and among the public. The LRP also assumes the State gas tax will increase from 20 to 25 cents per gallon in FY2010, but there is significant opposition in the state legislature. The Division has put the State and MPO on notice that the Division will conduct a close review of the fiscal reasonableness of the Cavalier LRP in conjunction with a major LRP amendment expected in January 2007.

Public Involvement and Awareness (Project Communication Approach):

Has the State developed a well-thought-out, effective strategy to educate and involve the public during planning and the environmental process? Has the State developed a media strategy? How will context sensitive solutions principles of public engagement been incorporated into this project?

The State is in the early stages of developing, with the assistance of a consultant, a media strategy and communications campaign, which will include an intensive public involvement plan. The Division will provide the State with contact information in state XYZ, which conducted an extremely successful media/public outreach effort for a comparable project last year.

The State will work with the EIS consultant to ensure that the same message on the project is being provided.

Consistent with the States policy on context sensitive solutions, the public involvement plan focuses on soliciting extensive public input on identifying resources to be protected, understanding citizen perspectives on the nature of the transportation problem, and creating solutions that address the problem in a reasonable way.

The Cavalier City Mayor and State DOT CEO have differences over the "signature bridge" issue, including contentious public statements reported in the news media. The DA will advise the DOT CEO that this is counterproductive and will encourage the CEO to tone down public statements and use the environmental process to evaluate the pros and cons of a signature bridge and get public input. To address the key issue of affordability of a signature bridge, the DA will offer to convene a meeting of the CEO, Mayor, and MPO Director to present the Division analysis of costs and fiscal concerns.

Staff Capability:

Do the Division and the State have the staff capability to manage the Planning and Environmental phases of the Major Project? If not, what steps do the State and Division need to take to provide adequate staff capability? What measures will be taken to ensure that the appropriate inter-disciplinary team will be used on this project?

The State has not had a FHWA major project this complicated before, so it will be a learning experience. The leadership of the Division and the State have expressed a significant interest in the project and will be involved in closely monitoring the project and providing the executive leadership needed.

The State has a small and relatively inexperienced NEPA staff that has managed very few large EIS documents, and has historically relied on consultants to manage NEPA at the State level. Consultant support has been supported by significant review and oversight by the FHWA Division environmental staff. The Division Administrator will encourage the State to increase its capability to manage the Big Bridge Project NEPA process, along with the other Major Project that will be in the NEPA pipeline during the same timeframe. The DA will also emphasize the importance of selecting a highly qualified NEPA consultant, with expertise in ESA in particular. The DA will raise issues about the availability of training and offer the support of FHWA.

The Division has adequate experience in NEPA, but will probably not be able to manage all the NEPA project work, including the Big Bridge Project, on the timetable identified by the State. The DA will need to designate a Major Project Oversight Manager (MPOM) whose responsibilities will be focused solely on the Big Bridge Project and also the other Major Project that will be starting NEPA shortly. The DA or other senior leadership at the Division level will need to provide the leadership required to raise and resolve issues regarding the Major Projects with the State, resource agencies, and MPO. The DA and MPOM will meet with the State and strongly encourage the DOT to set priorities and adjust its timetable to reflect available resources in the State, the participating agencies and the Division. This will be reflected in the project coordination plan and schedule.

The State will need to rely heavily on consultant assistance to field the right interdisciplinary team. Areas of expertise that will need special attention include expertise in land development effects of transportation improvements and environmental justice/community impact assessment. It would be helpful to have someone on the team who has an established working relationship with community leaders in Old Town and East Village.

Relationships and Coordination:

Do the Division and State have good, trusting relationships with other key players, both at the personal and the organizational level? If not, how can relationships and communication procedures be put in place as early as possible with other key players?

As part of developing the coordination plan, the Division and the State will identify and invite the appropriate agencies to be participating agencies for the project. The State and Division need to improve their relationships with F&WS, which has deteriorated due to several Biological Assessments by the State/FHWA that were not acceptable to FWS. This has led to delays associated with ensuing F&WS requests for additional information. In this district, the F&WS workload far exceeds staffing levels, creating backlogs and delays.

The EPA and COE have a track record of insisting on high levels of cumulative impacts analysis for wetlands permitting, plus high levels of mitigation.

The DA and the MPOM will meet individually with their counterparts at F&WS, EPA, and COE immediately after the publication of the NOI for the project EIS to discuss the importance of the project, FHWA's commitment to providing high quality environmental review, the information they will require, the schedule, and an elevation process for any disputes that arise during the course of the project. The Division will ask all three agencies to agree early on as to the parameters for cumulative impacts analysis and to adhere to that agreement. The DA will also meet with the state DOT CEO and encourage the CEO to establish and communicate with the Division and the resource agencies clear priorities among the projects which require NEPA work by the Division, F&WS, EPA, and COE.

Also, as noted earlier, the State DOT CEO and Cavalier City Mayor have publicly sparred over the issue of a signature bridge, undermining their relationship. This will require some fence-mending and agreement on a process and criteria for resolving the issue, which the Division will facilitate as a third-party.

Multimodal Issues:

How will other modes be affected? What opportunities are there to incorporate multimodal benefits into the Major Project? Does the state have a plan to coordinate and consult with other modal players early and frequently in the planning and environment stages?

The Big Bridge Project could benefit bus transit, enabling more timely operations over the bridge. The Division will request that the state DOT meet with the transit operator to provide information and elicit suggestions for project features that would further benefit transit. A significant number of bicyclists use the existing Big Bridge, and a well designed project could improve bicycling access and safety. Also, during construction, bicycle trails adjacent to the bridge will be impacted; the Division will ensure that the State meets with the Cavalier City Bicycle Association early and periodically, to provide information and elicit suggestions.

Documentation Procedures:

Do the State and Division have adequate procedures to document each step in the project and build a project file, so as to withstand future litigation?

It is the responsibility of the State and FHWA to maintain the project file. A designated email address will be established for the project. All electronic correspondence will need to include the project email address so that it will serve as a repository where all project related emails and other project related information will be kept.

National conservation and environmental organizations have criticized any highway capacity expansion in Cavalier City, and there are also local organizations which oppose capacity expansion. As a result, the Division Office, along with HCC staff, will be providing training to the State DOT and consultants in procedures for compiling a comprehensive project file and creating the administrative record. The MPOM will be monitoring the development of the project file for this Major Project. The administrative record must support the conclusions and decisions made in the NEPA process.

FEIS

Does the Major Project FEIS meet all NEPA requirements? Does the FEIS contain a credible cost estimate, vetted by FHWA? Are the preferred alternative and the cost estimate in the FEIS consistent with the Project shown in any contemporaneous TIP, STIP, and plan?

The Division will consult HCC at many points prior to the development of the FEIS. Prior to the DA signing the FEIS, the Division will submit it to HCC attorneys for legal sufficiency review. This review requires a minimum of 30 days. Legal sufficiency review will determine that all applicable requirements and legal standards have been satisfied. Additionally, the Division agrees that this project has significant controversial issues that warrant it being a "prior concurrence project" for NEPA purposes, and the Division will therefore request prior concurrence by HEPE prior to the DA signing the FEIS.

Lessons Learned from Recent Major Projects:

What lessons learned either from within the State or from other geographic areas should be factored into the management of this project?

On several major projects, substantial delays resulted from the need to amend consultant contracts because the original scope of work did not adequately contemplate services that later became apparent. These included public involvement, 3-D and 4-D visualization, and analysis of indirect effects and cumulative effects.

Environmental agencies have expressed concern about environmental commitment compliance, especially on the States Flatwater Freeway. These concerns are likely to influence their reviews of the Big Bridge Project.

Cost escalation on the Flatwater Freeway received major negative press coverage. It also resulted in the construction schedule being stretched out 5 years longer than originally anticipated. The late public discussion of tolls did not go anywhere and gave the appearance of disorganization within the State DOT.

Summary Table:

Based on lessons learned and other assessments of risk, what are the greatest areas of risk on the Big Bridge Project and what strategies are contemplated to avoid, minimize, or accept these risks?

The following table lists known risks and possible risk management actions:
RiskRisk Management Actions
Schedule slippage
  • -Build enough money into the budget to quickly handle unforeseen tasks
  • -Have a flexible consultant scope of work
  • -Establish a realistic schedule and provide high visibility to tracking progress
Cost Escalation
  • -Use cost ranges rather than point estimates
  • -Use a risk based cost estimating method
  • -Build cost cushion into estimates to deal with market place and scope changes
  • -Manage expectation by carefully caveating cost estimates
Upcoming State and local election
  • -Brainstorm ways to de-politicize the project
Probable River Guardian NGO opposition to the Big Bridge
  • -Early, intensive engagement to understand River Guardian interests and views
  • -Possible inclusion of river enhancements into the project objectives
History of late-in-the-process interagency disagreements
  • -Use 3rd party neutral
  • -Enhance the scoping process, especially with respect to issues of methodology
  • -Meet with agency leaders to build awareness and support
Uncertainty about mitigation costs
  • -Identify likely mitigation measures early
  • -Create partnership so that agencies feel ownership of the cost reasonableness
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