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Joint DOT/FHWA Major Project Webinar (October 2014) - Transcript

October 28, 2014

FHWA Center for Innovative Finance Support

Presented by

Jim Sinnette
Center for Innovative Finance Support
FHWA

LaToya Johnson
Center for Innovative Finance Support
FHWA

Pete Stamnas
I-93 Project Manager
New Hampshire DOT

Ron Crickard
Chief, Project Management Section
New Hampshire DOT

Ovidiu Cretu
Cost Estimating & Risk Analysis Supervisor
Washington State DOT

Tracey Mitchell
Diversity Compliance Manager
New York State Thruway Authority

Christine Thorkildsen
Civil Rights Program Manager
FHWA - New York Division

Table of Contents

Introduction

Terry Regan: Ladies and gentlemen, thank you for standing by. Welcome to the joint DOT-FHWA Major Project Webinar. At this time all participants are in a listen-only mode. Later we will conduct a question and answer session. Instructions will be given at that time. If you should need assistance during the call, please press star, then zero. As a reminder this conference is being recorded. I would now like to turn the conference over to your host Victoria Farr. Please go ahead.

Victoria Farr: Thank you, Terry. And on behalf of the Federal Highway Administration's Center for Innovative Finance Support I'd like to welcome everyone to today's joint DOT-FHWA Major Project webinar. My name is Victoria Farr and I'm with the U.S. DOT's Volpe Center in Cambridge, Massachusetts. Today I will be facilitating our question and answer periods and providing technical assistance along with my colleague, Terry Regan. I will introduce Jim Sinnette, the project delivery team leader momentarily, but before he begins I'd like to point out a few key features of our webinar room. On the top left side of your screen you will find audio call-in information. If you are disconnected from our webinar at any time please use that call-in information to reconnect to our audio. Below the audio information is a list of attendees and below that is a box titled "Materials for download" where you may access a copy of today's presentation. Simply select the file, click "Download files" and follow the prompts on your screen. A new tab or window may open in your Internet browser to complete the download. In the lower left corner of your window is a chat box where you can submit questions to our presenters throughout the webinar. We will pause for questions at the end of each presentation and we may also take questions over the phone later on. Further instruction will be given at that time. If you experience any technical difficulties, please use the chat box to send a private message to myself, Victoria Farr. Our webinar is scheduled to run until 3:30 p.m. Eastern today and we're recording the webinar so that anyone unable to join us may review the material at a later time

Poll Questions

Victoria Farr: Finally, there are two quick poll questions we'd like to pose. First, what is your affiliation? Please note that this is a multiple-answer question, meaning you can select several options if you're co- locating with representatives from your partner organizations. Next we ask how many people are participating along with you. Please indicate whether you are participating alone or in a group of up to ten or more people. And we'll give everyone just a couple more seconds to respond to these polls. And I will go ahead and broadcast the results so you get a better sense for what colleagues here are joining us today. And I'll close out the polls. So it looks like the majority of participants are from FHWA division offices, followed by non-division offices and state DOTs. And then it looks like most people are participating either by themselves or in a conference room. So thank you, everyone, for joining us. At this point I will turn the presentation back open and turn the webinar over to Jim Sinnette. Jim?

Slide 2: Agenda

Jim Sinnette: Thank you, Victoria. I'd also like to welcome everyone here, not only the FHWA staff but our state DOT partners and also I express my appreciation for not only their attendance at the webinar, but participating by delivery in our three major project spotlights. And specifically they're New Hampshire, Washington State and New York State and they're going to talk about some pretty important issues that seem to come up an awful lot with major projects: environmental issues, cost and schedule risk-assessments, and DBE. And those are probably three of our most often complex issues that are associated with major projects. So with that I'll turn it over to Latoya Johnson, who's also on the project delivery team, and she'll continue with the webinar.

Latoya Johnson: Thanks, Jim. And welcome everyone. Thanks again for joining us for our second joint DOT-Federal Highway Major Project webinar. And I'm excited because following the lead of the first webinar; I think we have three great presentations and a great group of presenters to provide some really good information for you guys today. So I'm looking forward to the presentations. With that, we'll just jump right in. I know we have a lot to cover in less than a couple of hours. So I don't want to waste too much time with my thoughts.

Presentation 1: New Hampshire DOT

Latoya Johnson: So with that our first presentation will be from the New Hampshire Department of Transportation to talk about addressing environmental concerns on major projects. Our two presenters are Pete Stamnas and Ron Crickard from the DOT. Pete currently is in the position of project manager in the bureau of highway design for New Hampshire DOT. He's responsible for managing all aspects of the I-93 Salem to Manchester major project. This is New Hampshire DOT's first and only major project.

Pete's been in the bureau for - well, since 1986. And he was promoted to his current position in 2006. He manages six projects currently with an estimated project cost of over nine hundred million dollars.

Latoya Johnson: Joining Pete today is Ron. Ron serves as the chief of the private management section in New Hampshire DOT's Bureau of Environment and, prior to serving as section chief, Ron was the I-93 environmental coordinator for five years. He has over twenty-eight years of experience with the department and nineteen of those years are with the construction bureau, and the last nine years with the Bureau of Environment. Doing the presentation today, as I hope you gathered, they'll talk about some experiences and lessons learned in the development and delivery of the I-93 project and specifically some of the environmental issues related to water quality concerns. So with that I'll turn it-well, before I say that I just want to remind all the participants, if you have questions please feel free to enter them in the chat pod as we are going through the presentation and then at the end of the presentation Peter and Ron will be available for some Q and A. So with that I'll turn it over to Pete and Ron.

Slide 6: Scope of Work

Pete Stamnas: Thank you. Pete Stamnas here in New Hampshire DOT. I plan to provide a top-level review of the scope of the project, take a look at project duration through milestone review, look at wetland impact and the basic mitigation package, outline some of the major environmental concerns, and turn it over to Ron for a little more meat of the presentation, so to speak, getting into the water quality issues from a storm water management standpoint. I-93, for those who are not aware, is a major connector from southern New Hampshire to the greater Boston area, approximately ADT of 110,000 vehicles per day. The scope of work: we will widen twenty miles of the interstate from the Massachusetts state line. And the graphic at the bottom of the screen - at the left of the screen shows the Massachusetts' interstate line running north twenty miles to the I-290 split. It involves reconstruction and monetization of five exits. There's work on 45 bridges, three park-and-rides lots, expanded bus services, and a significant length of sound walls that are going to be constructed as part of the work effort.

Slide 7: Project Cost Estimate

Pete Stamnas: Again, this is our first major project - overall cost around 750 million dollars and, to put that into perspective, our annual obligation limit is around a 150 million per year. Next slide.

Slide 8: Project Milestones

Pete Stamnas: Some of the project milestones: public hearings are in the 2002 timeframe, record of decision was issued in June of 2005, and around 2006 there was a lawsuit filed in U.S. District Court against the project. We continued on, obtained permits and through 2007 and we did begin - we're able to begin some construction in 2007. The court decision came down in August of 2007 and they ordered a preparation of an FDIS. That was completed and published in May of 2010. SROD was issued later that year in 2010, and we are continuing on the construction effort currently.

Slide 9: Impacts/Mitigation

Pete Stamnas: The mitigation package itself, as a result of direct impact of 76 [sic] acres of wetlands-includes a thousand acres of conservation lands, 985 acres of preservation, 15 acres of creation. Private costs to acquire and create are around 22 million dollars. There was also three million dollars put for a strictly water protection program and three and a half million dollars to plan for future growth as the result of the project.

Slide 10: Environmental Concerns

Pete Stamnas: Major environmental concerns that came up through the NEPA process <break in recording> was driving a lot of the conversations. Alternative modes, environmental groups were pushing trains. We ended up including a standard bus service project. Water quality was at the forefront. Wetland impacts: We had four impaired streams for chlorides, which drove our incremental implementation of the selected alternative. Meaning, this eight-lane facility we would be paving and operating three lanes in each direction until we resolved the chloride impairment issues. We had permanent storm water management that was, again, pretty high order. We had a no net increase of total percent of solids, total nitrogen and total phosphorus, which in some areas required us to collect and treat over ninety-five percent of all rainfall hitting paved surfaces. Again, significant amount of cost involved in that. Nowhere in the list of environmental concerns coming out of the preliminary effort was construction storm water management real high on the list and that's what we're going to be focusing on today. And with that I'll turn it over to Ron and he'll get into the meat of the presentation.

Slide 11: Environmental Concerns

Ron Crickard: Thanks, Pete. For the rest of the presentation we're going to focus primarily on the Exit 2 and 3 area of the I-93 corridor, which is closer to that Massachusetts southern end of the project. As you can tell from Pete's previous slide there were a lot of environmental challenges, specifically in this area - and we'll get into that in just a little bit.

Slide 12: Proposed Condition

Ron Crickard: But just to give everyone an idea of the magnitude of work, the Exit 2 to 3 area I think you see from this slide that we had a major shift from the northbound lane, which is in gray, over towards the existing southbound, which are going to be the two yellow barrels when final construction's complete. With some of the challenges that Pete elicited there are also two sensitive water bodies and we'll get into those a little bit more. You can see that at the very top center of the screen it's beginning one of our contaminated water bodies in the Exit 3 area and at the bottom left of the screen is a public drinking water supply in Canobie Lake. I created a little video just to kind of summarize the challenges of this whole corridor and with Pete as a star in this video. So Victoria, if you can play that, that'd be great.

Video: I-93 Challenges

Victoria Farr: Just give us one second here as the video loads.

Victoria Farr: Alright, doesn't seem to be loading, just give me one - oh, there we go.

Ron Crickard: There's some technical difficulty.

Victoria Farr: I think it needs to load first a couple seconds. As soon as it gets buffering a little bit.

Ron Crickard: Okay. I promise you won't be disappointed if this works.

Ron Crickard: I guess in the interest of time, people can download this whole presentation and hope they get the link to work. If we want to move forward, that's okay.

Victoria Farr: Yeah, I can also post - it seems like the video isn't loading. I can post the link in the chat pod for everyone and it seems like it's loading very, very slowly so we can always check back in a little bit to see if it's made any progress. [video link: https://www.youtube.com/watch?v=wlbxl-yqmYU]

Ron Crickard: Okay.

Victoria Farr: So we'll go back to the presentation. Sorry about that.

Ron Crickard: Just to give everybody a little bit of history of that video, if you are of my generation you remember the old show "Mission Impossible." We created a very creative video to heighten everybody's awareness of the issues down there. So if you get a chance to review it I would advise you do.

Slide 13: Permanent Stormwater BMP's

Ron Crickard: Moving along, some of the permanent storm water BMTs in the Exit 3 area, we were constructing 26 treatment structures, collecting 80 percent of the runoff in the Exit 2- Exit 3 area. Not only does it contain storm water, but hazardous spills as well. There's an idea of some net reduction in nutrients in the runoff as Pete had mentioned.

Slide 14: Permanent Stormwater BMP's

Ron Crickard: These are our goal numbers that we're trying to reach. We won't know for a few years if we're going to reach these or not. But these are our target numbers.

Slide 15: Sensitive Water Bodies

Ron Crickard: The two sets of water bodies that have been mentioned, Cobbetts Pond and Canobie Lake. Cobbetts Pond is a Class B water and these are some of the impairments for that water body. And Canobie Lake, as I mentioned, is a public drinking water supply, so some very tough challenges for a construction site.

Slide 16: NH Water Quality Standards

Ron Crickard: Class B waters in New Hampshire, these are our regulations: no more than 10 NTUs above naturally occurring NTUs. And Class A there's a zero tolerance in NTU increase during a storm event. So, again, some very high challenges.

Slide 17: Water Quality Samples

Ron Crickard: Just to give everybody a sample of what an NTU looks like, the jar sample is one NTU and you can see the middle one is 40. There's not a lot of difference between one and 40. So you can imagine one in 10 is even harder to achieve.

Slide 18: Major Storm Events = Change

Ron Crickard: We had some major storm events that kind of changed our philosophy on how we approach sediment or earth control on our projects. In 2008, when we began construction, we had a major ice storm in December of that year. It knocked out power in a lot of New England states and George Bush declared a state of emergency in New Hampshire. So it really - we had some major problems with the ice storm from that construction site.

Slide 19: Major Storm Events = Change

Ron Crickard: It led to some increased oversight from the regulatory folks. We ended up having better communication with the two Lake associations there. Canobie Lake and Cobbetts Pond, both have some prominent associations and they're very powerful and they're very vocal in their communities. So it led to a whole new DOT approach on storm water quality and management.

Slide 20: Temporary Erosion Control & Stormwater Management (New)

Ron Crickard: Our new philosophy, a quote from our commissioner at the time was "The earth control will be a top priority." It became a political battle as well. We now complete extension engineering prior to construction, something we hadn't done before 2008. We do a pretty good storm water analysis to figure out where storm water's coming from, where it's going to and how we can contain it. In 2008 that's what we were trying to achieve. And we looked to our contractors being better prepared so they can develop their storm water plans and have more detail to go from. We invited the stakeholders, the two lake associations into weekly meetings, to give them our perspective on our challenges and begin to understand what we were up against and how difficult it was to achieve our water quality standards in New Hampshire. It really was a good practice. In our new philosophy we focused on sediment control and developed some new strategies and tools. With all that, the earth control costs began to rise. And we'll talk about that towards the end of this presentation.

Slide 21: Temporary Erosion Control & Stormwater Management (New)

Ron Crickard: So our new focus was sediment control strategies. We developed water diversions projects down there, looked towards stabilization, sediment capture, storm water detention, and focused on cleaner storm water discharge.

Slide 22: March 2010 events

Ron Crickard: And everything was going great until March of 2010. This slide is maybe a little bit difficult to read, but we had three major events. It was the highest total at Logan Airport in quite some time. I think it might have been a record: three consecutive storms throughout March led to a lot of water in the Exit 2- Exit 3 area of 93, very difficult for us to maintain water quality standards.

Slide 23: Flooding Image

Ron Crickard: The only method we had to keep our detention ponds down was to pump it in trucks and haul it away. We had no approved method of treatment and we were running out of room on how to store this water. There was so much of it coming down in March.

Slide 24: Quotes After the Storm

Ron Crickard: These are just a couple of quotes after the storm just to give you the two perspectives from the public and the Department of Transportation. The top one is from Jay Levine, our construction supervisor for the corridor, "You know, we tried doing everything we could, but we just ran out of room." And the bottom quote is from one of the Lake association members. They thought we could do better without spending a whole lot more money. "We just need more capacity." The two different perspectives is part of our challenge.

Slide 25: Quotes After the Storm

Ron Crickard: It led to some new tools in 2010. We had so much water we had to get rid of it. We began to have conversations with the regulatory folks and we're beginning to be allowed to use polyacrylamides, or PAMs, as soil stabilizers. And we used those PAMs as well in our storm water treatment processes like flocculation and we're showing some slides on how all that works in a little bit. But we also were able to get the regulatory folks to grant us mixing zones, which allow us to discharge a higher NTU value than when it mixed for a period of time in the channel of the discharge area and then test further downstream for compliance rather than right at the pipe, which eased up the regulation a little bit for us.

Slide 26: Polyacrylamide as Soil Stabilizer

Ron Crickard: Some of the benefits of using PAMs as a soil stabilizer, you can see here it reduces soil loss by 94 percent. One of the arguments from the regulatory folks is that it wasn't safe, but we had lots of paperwork and lots of backup information that it was safe to use on construction sites and it reduced our sediment nutrient runoff substantially.

Slide 27: In-Ground Flocculant Treatment System

Ron Crickard: This is the first sample we had in the highlighted circle on the top of the screen. It was an in-ground system called a passive approach. We were just beginning. We didn't have a lot of experience with it. We had to hire a consultant who had just a little bit more experience than we did, but we began to see the benefits of using PAMs as a flocculant to help take out the sediment and discharge cleaner water.

Slide 28: In-Ground Flocculant Clarifier

Ron Crickard: This is the first in-ground flocculant clarifier. We would pump water into a basin, mix it up, add the material - the PAMs - and then discharge the water to a swale ditch with some jute matting and some check dams to catch all the pollutant-laden water. So that by the time it got to the end of this ditch it was reduced NTUs so we could discharge it.

Slide 29: Flocculant Dosing Tank System

Ron Crickard: Then we evolved after a lot of testing and a lot if requirements from the regulatory folks we were starting to demonstrate that this stuff was working. We advanced to a treatment train of three tanks. You can see the first tank towards the left of the screen there's a big green pipe in it where we pump water through and run it into the middle tank, which helps mix it up and then gravity feed to the third tank where all the sediment-laden water settles out to the bottom and we discharge cleaner water out that last tank.

Slide 30: Flocculant Dosing Tank System (Blocks)

Ron Crickard: This shows a picture of the blocks inside the pipe. It was effective, difficult to measure the dosing rate, which was a big concern for the regulatory folks. They want to know how much material we were adding to the water.

Slide 31: Current Flocculant Treatment Method

Ron Crickard: So we then evolved to a system here <breaks in recording> it's not shown very well, but three tanks in the background. We now add a powdered PAM material rather than a block. It breaks down easier, separates easier, and we can control the dosing rate much more accurately and measure it more effectively. So, again, we run it into the first tank, fill it into the middle tank, and discharge it out the third tank on the low point through a swale on the left of this detention pond. You can see the next slide will be up closer.

Slide 31: Current Flocculant Treatment Method

Ron Crickard: This has jute matting on the bottom of the swale, some check dams along the way. This helps catch the sediment-laden water, those heavy particles that have all flocculated together and we discharge cleaner water at the end of it.

Slide 32: The Jar Test

Ron Crickard: This is a little jar test just to show you how effective this PAM material really is, especially in the powder form. We can reduce anywhere from 600 NTU water detention pond and over time discharge it down to 50 NTUs and have a chance at meeting water quality standards. So Victoria, there's a video here. Let's hope this one works. This one really tells the story.

Video: The Jar Test

Victoria Farr: Yeah, we'll see if this one works. And since it's a shorter video I'm hoping that it will. So let's just give it a second here.

Victoria Farr: Okay, it just does not seem to be cooperating this afternoon.

Pete Stamnas: That's a bummer.

Ron Crickard: Yeah, this one - again, if you download this presentation, those in the audience, I really recommend you check this one out. It takes about 47 seven seconds to really prove to you how effective - it's almost like magic. It's incredible. It gives us a fighting chance to meet water quality standards.

Victoria Farr: Alright, it looks like it was just about to begin working as I navigated away. Let's see if this works now.

Ron Crickard: Great. So he's added the magic dust - and shaken it up like we do in the first tank or two in the train system. And keep an eye on the clock, when he puts the jar down. It's ridiculous.

Ron Crickard: All right, I guess in the interests of time, we'll skip over this - well, maybe not.

Victoria Farr: Yeah, it seems to be loading just a few seconds at a time. Let me know whenever you want to move on. We'll see how much more it progresses, but it's up to you.

Ron Crickard: Yeah, let's move on. I've got two more slides I want to get to and we only have a few minutes left, so we'll keep going. But if you get a chance to watch this video I recommend you do.

Slide 34: Costs $$$$

Ron Crickard: Just to give a sample project cost with regard to erosion control and storm water management, in our original contract the column on the left was what the percent of the contract was in regards to erosion control, storm water management. Our first project down there in 2008, 1.6 percent of the contract, and we ended up spending 8.2 percent, the column on the right. So as you can see, the percent of the contract - we tried to raise it, we still kept exceeding it on the right side for the first few projects. We were starting to get a handle on it around the last project there listed, the D project in Salem. We were pretty close there.

Slide 35: Costs $$$$

We currently still have three projects ongoing in that area. We've now estimated in our contracts that 11.3 percent of the total contract will go towards storm water management and sediment control. To date we've spent 5.4 percent of that 11.3 on that Windham project. So we're - we've got a better handle on how much money this stuff is going to cost.

Slide 36: I-93 Temporary Erosion Control & Stormwater Management Lessons Learned

Just some of the lessons learned - we're just about ready to wrap up here - completing construction storm water assessment during design has been a major plus. It's identifies potential risky areas. It's allowed the - put items in the contract that - put the appropriate amount of money in ahead of time, so we don't have to go back and do extra work orders and it reduces the time for the contractors to prepare the SWPPP's - storm water plans - so they have more information to go off of.

Slide 37: I-93 Temporary Erosion Control & Stormwater Management Lessons Learned

Water diversion is critical. Construct your sediment basins as early as possible. That's really been helpful. And the site is always changing. You need to be vigilant. Weather forecasts are unpredictable. We seem to be getting larger and larger events these days. You need to be prepared and don't sit and wait for something to happen. Be proactive.

Slide 38: I-93 Temporary Erosion Control & Stormwater Management Lessons Learned

Ron Crickard: And then one of the final slides I have is PAMs are effective in reducing turbidity. We had a big battle with the regulatory folks about we - we do testing and sampling and reporting and demonstrated this stuff has worked. It's safe for the environment and it really is a critical tool for us to use on these major projects.

Slide 39: I-93 Temporary Erosion Control & Stormwater Management Lessons Learned

Ron Crickard: Anionic PAMs are safe for the environment. The other type of polyacrylamide is called catatonic. Those aren't so good for the environment so we're not allowed to use those in New Hampshire.

Slide 40: Contact Information and Questions

Ron Crickard: So that's it for our presentation, this is our contact information. If you have any questions I would recommend you go back and look at the videos if you can. They really are entertaining and helpful. Thank you very much.

Latoya Johnson: Thanks, Pete, and thanks, Ron. Great presentation. And I apologize again that those videos did not work. I would strongly, strongly, strongly encourage everyone to definitely visit the YouTube link that's in the chat pod where you can see Pete kind of act out some of the difficulty that Ron just conveyed in the presentation. And we'll also try to make our jar video accessible in the download chat pod in a moment. So, again, please, at your leisure, go back and watch those videos. They're fairly short, but very, very instructive. So with that I will give everyone a few seconds to post something in the chat pod. If you have questions for Pete and-or Ron, they are available to answer questions. As you can see they gained a lot of experience and a lot of lessons learned working through some of the environmental issues on the I-93 project. And so I'll pause for a second and give folks the chance to chime in. And since we have a little bit of time I think we can open up the phone lines, Victoria and Terry, if it's okay.

Victoria Farr: Sure, Terry, could you please give our participants instructions in how they can open the phone line to get in queue?

Terry Regan: Ladies and gentlemen, if you'd like to ask a question from the phone lines, you may press star, then zero on your touchtone phone. If you're using a speakerphone, please pick up the handset before pressing those numbers. Once again, it's star, zero, if you'd like to ask a question.

Victoria Farr: Thank you, Terry. Are there any questions at this time?

Terry Regan: I show no questions in queue.

Latoya Johnson: Okay, well, we will move right along and, again, I just want to say thank you to Pete and Ron. Feel free to continue to enter those into the chat pod and we will try to get you some follow-up responses from Pete and Ron. So, again, thanks again Pete and Ron. We really appreciate it.

Ron Crickard: You're welcome.

Presentation 2: WSDOT's Cost and Schedule Risk Assessment

Latoya Johnson: So our next presenter comes from Washington State to talk about Washington State's cost and schedule risk assessment and our presenter is Ovidiu Cretu. Ovidiu is a very close friend to the Major Project - Project Delivery Team. We worked with Ovidiu in the past as we have developed and updated our cost estimate review and, as many of you know, Washington State DOT is definitely a leader in conducting cost-estimating - costs and schedule risk assessment. I'm sure many of you are familiar or have heard of the CIVA process. So, very excited to have Ovidiu here today to talk about WSDOT's experiences with these processes and to find out a little bit more about what they've learned through the years as many of you start to implement risk management programs and costs and schedule assessment. Ovidiu has been employed by the Washington State DOT since 1992 and he currently holds the senior position on the WSDOT costs and schedule management team. He's held that position since 2005. Ovidiu didn't tell me to tell you this, but he's also an author. And a great reference book is "Risk Management for Design and Construction". I highly recommend it. It's a great reference book as far as risk management. So with that I will turn it over to Ovidiu. Thanks, Ovidiu.

Ovidiu Cretu: Thank you, Latoya, for giving me the opportunity of sharing the WSDOT experience in the field of risk management. I want to thanks to Pete and Ron for their awesome presentation. My presentation doesn't have the video, so I'm luckier on that. And most of all I want to express my appreciation to all professional watching this webinar. I hope you will find the next presentation instructive. At the same time, I must inform you that the presentation is quite abundant with information and the time allowed me is kind of short. So I'm going just to touch some topics. I'm planting a seed for a future discussion. Now I will start with the presentation with a brief - about the content. Uh-oh. Oh, just a second.

<off-topic conversation>

Slide 43: WSDOT's Cost and Schedule Risk Assessment

Ovidiu Cretu: A very brief WSDOT project risk management because risk management cannot be done without project management. Then short history of WSDOT process of risk assessment: an overview, definition, scalability, resources required, benefit.

Slide 44: WSDOT's Cost and Schedule Risk Assessment

Ovidiu Cretu: Lessons learned probably will take majority of the time. Develop in-house expertise regarding resources, tools. Risk reserve, risk treatment planning - something new we add in our process.

Slide 45: WSDOT's Cost and Schedule Risk Assessment

Ovidiu Cretu: And, finally, innovation, which we kind of proud of, combine value engineering with risk assessment, so-called VERA. Number of risks, market conditions, risk conditionality, dependent correlation, and risk severity. Okay.

Slide 46: WSDOT Project Management

Ovidiu Cretu: So WSDOT project management you could see those five phases and we adopted the PMI approach. And you could see on the top managed change give us a sensation of cyclical process. Okay, let's see. Risk management would be some - just presenting this kind of suggestion like assessment, risk treatment planning and monitoring. But a better visual of a risk management factor is going to be presented on this slide.

Slide 47: Risk Management Cycle

Ovidiu Cretu: Probably if you Google "risk management cycle" as an illustration you will find hundreds of illustration. This illustration actually, it's a little different from others by trying to emphasize on the fact that risk management cannot happen without organization support. So that's why we have organization policy here. And the same this illustration tries to emphasize the importance of communication and consultations that needs to happen all the time during the process of risk management and represents the heart of the process of risk management. Today I'm going to focus only on this yellow highlighted box, which is risk assessment only.

Slide 48: Twelve Years of Risk Assessment

Ovidiu Cretu: Regarding our history, as you can see on the title, we have twelve years of risk assessment. And I'm presenting a few clips from different newspapers to show the enthusiasm, the excitement in 2002 when we started this process. And I want to emphasize the fact in order to be successful was necessary a strong support from high-level executives and, in our case, actually it was a support from legislators.

Slide 49: Twelve Years of Risk Assessment

Ovidiu Cretu: During those twelve years of risk assessment at WSDOT we improve our methods of delivery of process risk assessment. We started with Cost Estimating Validation Process in 2002, which applied for projects above 100 million, requires external subject matter experts or expertise.

Slide 50: Twelve Years of Risk Assessment

Ovidiu Cretu: Then in 2003 we extended the process by adding cost risk assessment, which applied to lower value projects and may be done only with WSDOT participants, not require external expertise.

Slide 51: Twelve Years of Risk Assessment

Ovidiu Cretu: And, finally, in 2005 we developed so-called VERA, combined value engineering and risk assessment. At this time we applied this process for project over 25 million and bridges over 20 million. Of course, any other project can benefit from VERA, require external subject matter experts.

Slide 52: Twelve Years of Risk Assessment

Ovidiu Cretu: Whichever view about how we deliver those workshops during the years, you have this, I would say, graph. On value engineering you have VERA: cost risk assessment, CVEP - Cost Estimating Validation Process. Of course, the number of workshop varies along the year; it depends on specific needs.

Slide 53: Twelve Years of Risk Assessment

Ovidiu Cretu: And now I like to present a quote Martin Luther King, Jr., "The time is always right to do the right thing." We feel that creating and developing a risk culture at WSDOT, it was the right thing to do. We have gained experience and knowledge for today implementation of the new paradigm shift towards performance-based planning and engineering. Known by practical design, risk-based planning practical solution, and probably other names.

Slide 54: Risk Assessment - Process Overview

Ovidiu Cretu: On second part, process overview, a short definition: It is a systematic cost and schedule review that incorporates the effect of uncertainty upon project objectives. Project objectives will be scope, budget and schedule. And probably very important or characteristic to us is the risk assessment must provide actionable data that may optimize project objectives. We feel that it is very important attribute of our process of risk assessment. We need to provide data to the project team in order for team to work with that information and to optimize the delivery of the project.

Slide 56: Risk Assessment - Process Overview

Ovidiu Cretu: Scalability: The level of effort varies depending from project magnitude and complexity. And I think that is not unique to us, because if I recall Caltrans has the risk management manual has a sub-title, "A Scalable Process". We cannot agree more with that.

Slide 57: Risk Assessment - Process Overview

Ovidiu Cretu: Resource required: We are lucky we managed to develop the process in-house and using consultant. So it is a wide minimum when the workshop is produced in-house and tens of thousands of dollar when consultants are involved. That doesn't mean we talk down consultant. We are very much appreciate the consultant working with us. And we learn from them and we work with them. And I believe without consultant contribution our program couldn't be developed.

Slide 58: Risk Assessment - Process Overview

Ovidiu Cretu: Benefits: There are many benefits. I will present just three of them. Better understanding of project objective: That is kind of staff benefit. Minimizes surprises: makes sense, I think, to everybody. Even if you cannot avoid those surprises, it's good to know what the future has in store for that project. And, probably the most important, provide the data to optimizing the project's objectives like I presented before.

Slide 59: Risk Assessment - Lessons Learned

Ovidiu Cretu: Regarding develop in-house expertise: We managed to have a dedicated team that should have a passion. We think we have a passion towards understanding and enhancing the process of risk assess - management. In one way, you don't have to rely only on consultant; you need to develop your own expertise in-house.

Slide 60: Risk Assessment - Lessons Learned

Ovidiu Cretu: Probably you need to develop tools that are applicable towards department needs, like we develop our simulation tool, RBES, Risk Based Estimating Self-Modeling. And communication tools: They are quite very important in order to communicate the assessment results.

Slide 61: Risk Assessment - Lessons Learned

Ovidiu Cretu: And, finally, I want to stress, again: collaborate a consultant.

Slide 62: Lessons Learned - Risk Reserve

Ovidiu Cretu: Another problem we try to solve and we didn't solve one hundred percent is about how we use contingency, in this case, risk reserve. At this time we have two different kinds of budgets. One budget is called legislative budget and another one is called the operational budget. The difference between these two budgets is called risk reserve. It's on top of the screen. At this time we use the project risk profile in order to define those budgets and in talking we have 30 percent down and 60 percent out of the risk profile. I cannot spend too much time on that. If you need more information please send me an email.

Slide 63: Risk Management Cycle

Ovidiu Cretu: Another one regarding "Lessons Learned", it is a fact before we done what is in this box-just a second - in yellow highlighted box and when we have this red star, we consider our job was done. When we send the information to the project team and they are doing whatever they were planning to do. Now we decided to extend the process of risk assessment by including the risk treatment planning in that process. So we provide to the project team only raw data and the project team takes action on that information and after that we are going to run the simulation in order to develop the risk reserve.

Slide 64: Risk Assessment - Lessons Learned

Ovidiu Cretu: It is - the advantage is of including risk treatment planning it allows the project team to digest the information obtained from the risk workshop and to decide on risk treatments strategies. It provides better raw data (cost, schedule and risk) for risk analysis. And the cost risk profile is more accurate. And finally it initiates the implementation of risk treatment strategies. Actually, it initiates the work in order to optimize the project objectives.

Slide 68: Risk Assessment - Innovations

Ovidiu Cretu: Another innovation we are very proud of is defining combined value engineering and risk assessment, VERA, which in my mind represents the most efficient process of risk assessment. It was used for projects ranging from less than 10 million to over one billion.

Slide 69: Value Engineering (VE) with Risk Assessment (RA)

Ovidiu Cretu: And here you can see the flow chart for these combined value engineering and risk assessment. On the top of the broken line, you see "Value Engineering Full Workshop Setting" with those six phases. And then below of the broken line you see "Implement Approved Value Engineering Recommendation and Risk Treatment Planning." Actually, that in my opinion, represents the seventh phase that FHWA included in their value engineering process.

Slide 70: Risk Assessment - Innovations

Ovidiu Cretu: Another innovation regarding number of risk, we recommend the assessment of only significant risk. In our definition a significant risk is a risk that makes a difference in project objective and in order to deal with that will require supplement and intervention. The project cannot absorb that risk by its own budget.

Slide 71: Risk Assessment - Innovations

Ovidiu Cretu: Another innovation: market condition. We found that market condition may be the most important driver of the construction costs. Market condition is driven by the expecting number of bidders on the project.

Slide 72: Market Conditions

Ovidiu Cretu: And we can back up with information from Caltrans and from WSDOT. You could see here some variation of low bid versus engineer estimate with the number of bidders. You could see once the number of bidder increases the low bid will decrease. In one way, you have better than planned market condition. And I believe that it's extremely powerful for defining the project risk profile for project will be deliver many years in advance.

Slide 73: Risk Assessment - Innovations

Ovidiu Cretu: Risk conditionality: It is another issue. We tried to make clear distinction between risk dependency and risk correlation. We met many professional that use "correlation", meaning "dependency". We learned that dependency must be evaluated for every risk and defined the relationship between risks. Why correlation must be justified and documented? Correlation, in our opinion, is a powerful way of increasing the cost distribution range and sometimes we notice it's abused. So we are watching on this element's risk assessment.

Slide 74: Risk Assessment - Innovations

Ovidiu Cretu: And we defined some tools in order to present the risk environment for the project. We-as an innovation comprehensive visual representation of project risk, that so-called risk map, here you have - uh-oh.

Slide 76: Risks Map

Ovidiu Cretu: It doesn't show up, but that's on the other diagrams so I skip it. Right here, this risk map is trying to present the uncertainty of the project. It didn't show very well because there are a little different colors. But in essence it's trying to present the fact that very low probability risk and very high impact are more important - are very important in cost risk assessment. And we defined this ellipsis to suggest that the probability is not so - it's a little less important than the impact. There is a lot to talk about. If you need a little more detail please let me know.

Slide 77: WSDOT's Risk Assessment Conclusions

Ovidiu Cretu: I'll move to the conclusions. WSDOT has over twelve years' experience in the field of project risk assessment; uses a scalable approach of risk of risk management; has developed the VERA process; and has improved the risk assessment based on its research and lessons learned. So please address the question to my email or give me a call. Thank you for your time then. I know it's gone long.

Latoya Johnson: Thank you. Thank you, Ovidiu. We really appreciate that great presentation. Great overview of not only the risk assessment process, but really the lessons learned about WSDOT over the past twelve years.

Q&A: WSDOT's Risk Assessment

With that, again, I encourage everyone to enter any questions that you may <break in recording> and I see that we have one question from Alaska. Alex asks, "Does Washington select the low bidder on design-build projects?" And Ovidiu, your response to that?

Ovidiu Cretu: Usually, we select the low bidder, but that is not a strict rule. Sometimes we need to select other consideration in order to award the project. For example, the largest project, the largest tunnel in Seattle, Alaskan Way Viaduct - Alaskan Way Tunnel, wasn't awarded to the lower bidder. It was to the second low bid. Actually, we have just two bidders, because we evaluate the technical capability and what they could provide us. So it was a little more complex evaluation of bidders.

Latoya Johnson: Thanks, Ovidiu. And Ovidiu, we have a question here in the room with me. Ian Cavanaugh has a question for you.

Ovidiu Cretu: Or you could call me. Okay?

Ian Cavanaugh: I was just curious. I saw that your comparison of the low bid versus the estimate based on the number of bidders, the slide where you were just kind of showing market conditions with the number of bidders, and I know Caltrans, I think it was around 15,000 projects were compared or something of that magnitude. Do you know how many were used for this graph for Washington?

Ovidiu Cretu: We used many. Probably hundreds.

Ian Cavanaugh: Okay, I was just curious about how many projects--

Ovidiu Cretu: Yeah, we use all the information we have in our database.

Ian Cavanaugh: And do you know over what time period was used for the database? Was it just your entire database?

Ovidiu Cretu: If I'm not mistaken, it's more than ten years.

Ian Cavanaugh: Okay.

Ovidiu Cretu: And right now we are doing some research because we found the fact we - to make a comparison between the project that went through process of risk assessment and the project that didn't went through that process to have some kind of comparison. And we have some data - I'm not ready to publicize yet, because we need to digest better the information we got.

Ian Cavanaugh: Were the ones that were presented in this graph were those just ones that had risk assessments done on them or--

Ovidiu Cretu: Not that presenting that graph is all projects.

Ian Cavanaugh: Okay, gotcha.

Latoya Johnson: Thanks, Ovidiu. And with that we have a little bit of time so I'm going to go to the operator and, operator, if you could give us instructions to open up the line for questions.

Terry Regan: Thank you. And once again if you do have a question from the phone lines, please press star, then zero.

Terry Regan: And I'm showing no questions in queue.

Latoya Johnson: Alright well thank you so much, and I don't see anyone typing so we will continue on. And, again, we will have the opportunity at the end of the webinar to ask any follow-up questions. So Ovidiu, again, thank you so much for that presentation. A great overview of what WSDOT's been up to for the past twelve years.

Ovidiu Cretu: Thank you. I appreciate it.

Presentation 3: Disadvantaged Business Enterprise (DBE) Goals for Major Projects

Latoya Johnson: All right. So we'll turn to our last presentation, which is going to come to us from New York. I'm excited that we have Tracey Mitchell from the NY State Thruway Authority and Christine Thorkildsen from the New York division of Federal Highway to talk to us about experiences with DBE goals for major projects. Specifically, some of the experiences and lessons learned that they have encountered on the Tappan Zee-New NY Bridge project. And so with that let me give you a little bit of background about our next presenters. The first, again, is Tracey Mitchell. Tracey is the diversity compliance manager for the New NY Bridge. Tracey has over 20 years of experience working to help others with regards to employment and training for underserved populations as well as helping small businesses grow. She's worked on various positions in local governments, including as director of the Yonkers Workforce Investment Board and as director for Equal Employment Opportunity Affirmative Action for Westchester County. Currently, as I mentioned she is the New York State Thruway diversity and compliance manager for the New NY Bridge, which is the largest infrastructure bridge in the history of New York State. And joining Tracey today is Christine. Christine is the Civil Rights program manager for the New York division. She's worked at Federal Highway or with Federal Highway for over 25 years performing a multitude of tests, including activities to support transportation initiatives in areas such as design, construction oversight, research, technology. She transfers [sic] safety and civil rights. She's worked in New York, California and New Jersey and currently she provide stewardship for oversight to assure that understanding and compliance with federal laws, regulations and policy is conveyed to the highway - our partners, Federal Highway partners in the highway transportation industry. So with that, I will turn it over to Tracey and Christine.

Slide 85: Agenda

Tracey Mitchell: Okay, thank you. Thank you, Latoya, and good afternoon everyone. My name is Tracey Mitchell as Latoya said. I'm going to be speaking first and, Christine, I'm going to allow you just to chime in whenever you feel free to, okay?

Christine Thorkildsen: Absolutely.

Tracey Mitchell: Okay, great. So today's presentation agenda that we're going to cover, we're going to give you some background on the project, our goals, our goal development, what is the New York State Thruway, how we oversee the DBE project and the compliance program. Most important, we're going to talk about the collaboration of the stakeholders. This is not a one-person or one-entity oversight team. It's comprised of many stakeholders in this project. And then we're going to talk about the management tools that we have to develop in order to provide the oversight necessary for a project of this magnitude. And then we'll take some questions and answers at the end.

Slide 86: New NY Bridge Background

So this project replaces an existing bridge, the Tappan Zee Bridge. I don't know how it got its name the New NY Bridge. I guess that went through, like, the communications department and stuff. But it's called the New NY Bridge. This was a presidential initiative project. The project is 3.14 billion dollars and we have a ten percent goal for DBEs, which equates to 314 million dollars. So that's a large DBE goal to meet and I'm going to talk about some of the ways in which we are trying to make sure that goal is met. It's the largest TIFIA loan in U.S. Department of Transportation history. It equates to - I think it's 1.6 billion dollars--

Christine Thorkildsen: Yes.

Tracey Mitchell: --in a loan from United States Department of Transportation. Largest design-build ever in the State of New York and the largest DBE goal for FHWA projects.

Slide 87: Thruway Partners & Compliance Team

When I talked about the many stakeholders and partners, this is our team. And I'm just going to go through quickly some of the partners that are on there in the team and tell you what they do. So, of course, with the New NY Bridge; New York State Thruway is the recipient of the funds for this project. Federal Highway is a part of our partners. We have under the New NY Bridge and the New York State Thruway, we have a sub-consultant, EnTech, who provides all of our commercially useful function interviews. I'm sorry that's EnTech who provides my deputy manager. DACK provides all of our commercially useful function interviews. We have New York State Department of Labor that is a part of this project and they review all of our certified payrolls. That's a partnership that's on the project and as you know - anyone in compliance - that's a major task to undertake, of reviewing all the certified payrolls. And we're happy to have New York State Department of Labor on here. U.S. Department of Labor - they work with us on the workforce utilization on this project. We have 22.6 for minority participation and 6.9 are female. Under U.S. DOL they have created a diversity committee and we all look at the utilization of minorities and females and hopefully find ways to increase participation from both. We have a close relationship with the New York State Inspector General and the U.S. Inspector General. And you know, in a project of this magnitude, the potential problems for waste, fraud and abuse when it comes to DBEs is there. And so I'm glad to have them a part of this project. And we have monthly calls when there's any suspicion of waste, fraud and abuse. And then, of course, we have much buy-in and support from the governor's office. And they sit regularly at most of our meetings.

Slide 88: TZC Team Including Compliance Consultants

TZC - TZC is made up of a consortium of partners: Fluor, Granite, American Bridge and Traylor. Fluor is kind of the lead in that consortium arrangement. Their design team, HDR, Buckland & Taylor, URS, and GZA, they have consultants. Joe Consultant - Joe Hernandez, who is their DBE liaison for the project; Armand Resource Group, who provides reviews of sub-contractors before they mobilize; and then they have McKissack, who provides supportive services for DBEs.

Slide 89: Project Status

So just where we're at in the project: This project is approximately five years 2.5 months, to be exact, and we are on schedule on that. Our completion date is July 2018 and, like I mentioned before, the contract cost is 3.14 billion dollars. So I'm going to turn it over to Christine to talk about FHWA's involvement.

Slide 90: FHWA Initial Involvement

Christine: Okay, thanks, Tracey. As Tracey has said, this project was tapped as a presidential initiative, which meant that it was a high priority project that was expected to create jobs and business opportunities. So we knew this job would get a lot of scrutiny. The project was then approved for, as Tracey said, 1.6 billion dollar Transportation Infrastructure Finance and Innovation Act credit assistance, otherwise known as TIFIA project, which federalized the project, which meant that we had to follow federal laws and procedures, which meant, of course, that we would have to come up with a DBE goal for the project. And, you know, just some of the history here: There was a lot of confusion in the beginning of if there could also be an MWBE goal, the MWBE program being the state's program. And there could not. Because it's federalized, we could only have a DBE goal, but we did in the language of the RFP put in that, you know, the utilization of MWBEs was encouraged. So now that we knew we had to have a DBE goal we created a team to calculate that goal. And the team consisted of expertise in the - from Civil Rights as well as design and construction engineers, from the Thruway we had members, we had members from the New York State DOT and then we also used a lot of resources such as we - I did call Latoya looking for historical data on DBE participation on other major projects around the country. We also looked a lot though right here in New York of what major projects - our biggest bridge projects and how they were sub-contracting and who was getting work, how much work they were able to do. And from there we also looked at the bridge itself. You know, the bridge did not have - looking at it from the engineer's point of view, as Tracey was saying, this is three-mile bridge over three miles of water. There's a lot of complexity to this bridge and there were certain portions that were just not sub- contractible to small disadvantaged businesses due to hazardous work conditions and the necessity of specialized equipment. So, because of that, we kind of broke the bridge up into pieces looking at design, looking at approaches, looking at the center span and calculated through this historical data and the availability of DBEs to do this work and we came up with the ten percent goal. So as Tracey has said, the ten percent equates to 314 million dollars of opportunity to the small businesses. This is unprecedented. We - this is - you know, a fraction of this goal is what we do on a normal year in DBE commitment and attainment. So this was a real challenge. And, you know, to address this challenge what we also looked at is our DBE plan, which historically the DBE plan to work in the State of New York you had to be certified as a DBE in New York under New York's UCP. But we felt that the amount of - the number of firms that would want to come to New York on this project would create a huge burden on our very limited resources in our certification partners. We have four certifying partners in New York, but still there's not enough staff or time to get these firms onboard quickly because, once again, this was an expedited project because it was presidential initiative. So what we created was a variance to our DBE plan and to allow any firm certified as a DBE in any state of the country - meaning, that firm is in their UCP - can be utilized towards the goal. So this gave a lot of flexibility to the design-builder, to TZC, to reach out to other states and to have more opportunity to possibly to fulfill that ten percent goal.

Okay?

Slide 91: FHWA Risk Assessment for the New NY Bridge DBE Program

So the FHWA risk assessment. Due to the high dollar value and high profile of the project New York office embarked on a risk assessment of the Civil Right requirements to assure we were focusing our very limited resources on those areas of high risk. So we needed to come up with mitigation strategies to address those risks. All aspects of the design-build project were assessed. And we looked at their likelihood of happening to their - what the likelihood of happening to their impact. And we would score and rank them from one to five. The DBE program came up as a pretty high risk on our initial assessment. And just as we said, due to the high dollar value, the number of firms this could possibly be broken down to, this was a high risk and, you know, the DBE program is very high on the agendas of the Thruway, on New York State DOT as well as the governor's office that, you know, we wanted to see this program be successful. So we crafted statements that what would happen - like "if-then" statements that if the Thruway did not have proper oversight of the program, what is the likelihood of possibly waste, fraud and abuse? So we came up with these if-then statements and then we created strategies to address those risks. So some of our initial strategies as I said was like being involved in the language of the request for proposals, the RFP. Setting the right goal for the project, that was really key. Approving the variance to allow DBEs to be certified. Any DBEs certified in any state of the country to participate towards the goal. We did a lot of training on waste, fraud and abuse. Tracey has said from the OSIG's involvement, the FBI's involvement, New York State Attorney General's Office. And then we talked about the consequences for all oversight agencies and the design-builder if, you know, they did suspect waste, fraud and abuse. Those were our initial strategies, but then as the project progressed we refocused. We re-looked at our mitigation and then our - and came up with some new strategies. We had regular scheduled opportunities for the design-builder to meet with DBEs. We have regular schedule of status meetings to tract good faith efforts. We also have charts and monitoring towards the progress of the commitment and attainment of the goal, that we work on continuously, actually, to assure we're on the track of meeting ten percent or that, you know, we're on good track to assure we are the design-builder is dedicated to the good faith efforts. But to get all this accomplished and I think it's interesting from the waste, fraud and - or not - the risk assessment point of view is that none of this really works without collaboration, transparency, and a solid partnership. And I think that's something we have really strived for from the beginning on this project and hope to say when we're finished that will be shown as a best practice.

Tracey Mitchell: You mean that we're still talking?

Christine Thorkildsen: That we're still talking and we're all still friends.

<laughter>

Tracey Mitchell: Oh, okay.

Slide 92: FHWA DBE Program Risk Assessment Heat Diagram

Christine Thorkildsen: <laughs> Which is good. With our office we - this is the New York division. We have really spent a lot of time on risk and what we've done with those mitigation strategies - we've plotted them on these heat diagrams, which is used to do an analysis of how high a risk is and if the strategies are working. So we start out - we have these two diagrams. We define what the risk is and as I said, DBE program is one of the higher risks, but we've done this for more than 50 areas of the project. Our office, the governor's office, the Thruway - because we all place such a high importance on this program to assure small businesses are given an equitable opportunity to participate on the project we monitor these risks very closely. The likelihood is on the Y-axis. No - the likelihood is on the Y-axis and if you get a score of five that means it's very likely that it's going to happen. And then the impact is on the X-axis, and a severe impact would be another score of five. So if you're in the red area that is something we definitely want mitigation strategies to address to bring down that risk. And this is what we monitor about every six months. The bottom line is that the current environment with almost all agencies is, you know, how do you best use your very limited human and financial resources to mitigate your highest risk. And the Civil Rights program, the DBE program, is certainly one of our high risks on this project.

Slide 93: Mitigating Risk Through Collaboration

All the assessments and heat diagrams don't mean much unless there is buy-in or collaboration amongst the team to focus on these risks. Federal Highway certainly can't do this on our own. We did a great job of determining risk from Federal Highway's perspective; without agreement or understanding by the Thruway and the Tappan Zee Constructors we probably wouldn't be able to make much progress.

They - so in ways to convince, you know, our partners that they too should have these risks on their agenda we shared a lot of best practices from other projects. Maybe we saw some places where they were challenged or maybe some other states who were having a lot of difficulty with their DBE program, you know, to convince them that these strategies would maybe work for us. We did a lot of training on good faith effort, what exactly it means, what we would be looking for. We meet frequently and we discuss these risks at regular meetings. We assist the Thruway on in-depth reviews of the Tappan Zee's DBE plans. We had a lot of input and expertise from our headquarters office, and then we also continually have scrutiny from the governor's office and our outside agencies. So a way to - we have used these - you know, how we have documented risks in these strategies as a way to convey to others how we are overseeing this project and I think it's worked very well. We've also had a lot of support from those agencies with help, of course, with moving forward as the project progresses. Today we all agree the major focus of our collaboration is on good faith efforts and commercially useful function.

These are two topics that consume our thoughts lately as the project gets moving into, you know, finishing up its second year. We have a lot of initiatives under way to monitor these two issues. We hope to come back maybe and speak to you again in, like, six months to let you know or a year of how things are going. But once again these monitoring plans and processes will only be successful if we work together through partnership and collaboration. And Tracey's going to speak now on some of the specifics of this collaboration and oversight.

Slide 94: Thruway Management Approach Compliance Programs

Tracey Mitchell: Thanks, Chris. I put this slide in just even though we're talking about DBE and DBE compliance; I want to just demonstrate everything that our office looks at. And we're looking at - this project is, of course, is a PLA, which means it's a project-labor agreement and so most of the workforce will come from the unions. We look at EEO, prompt payments, good faith efforts, processing and resolving complaints. These are just all of the - some of the things that the office looks at. But for this presentation I'm going to focus on the DBE compliance.

Tracey Mitchell: Um, to the next slide, thank you.

Slide 95: Environment to Collaborate

Tracey Mitchell: And I'm going to now get into the meat of the presentation and it has to do with the additional management tools and the collaboration needed to kind of wrap our hands around a project of this magnitude. Of course, FHWA oversees the Thruway, the Thruway oversees Tappan Zee. So it's those three entities, but when you go into a project like this, either you're going to go in and you're going to say, "You're not doing this, you're not doing that," you write them up - you do that constantly.

Or you can forge a partnership so that at the end of the day everyone becomes successful in a project like this. Most importantly, DBEs get contracts. Next slide.

Slide 96: TZC DBE Plan

So when Tappan Zee Constructors receive their NTP, their "Notice To Proceed", they had a commitment that they were going to make their DBE goal of 314 million dollars. That's like saying, "I'm going to get to California and I'm going to take a plane there, but that's it." But you don't have any direction in which you're going to go. We did not understand how they were going to meet that goal. So what they came back with was a more detailed plan so that we can wrap our hands around how do we oversee such a project like this.

Slide 97: TZC DBE Goal Management Plan

So you can see this chart here. What they said - and this had to have a lot of thought process. They - in order for us to break this project up in smaller pieces where DBEs could participate in, they broke the project down into seventeen work areas. And each one of the work areas had outlined DBE opportunities that at the end of the day added up to 314 million dollars. Now I'm going to say this that it's a plan. So the continued oversight and monitoring of it - and I'm going to tell you how we further broke it down, is going to tell you whether or not it's working or not. If you're not monitoring it, you won't be able to tell whether that plan is working or not, right? So in their work area they had their overall budget, the DBE goal, what were current commitments, what were pending commitments, what were remaining. And we do have a Civil Rights tool that we use that at any given point we can look at how much are in commitments, how much are in attainments, and we look at the correlation, because we hope that commitments would add to - would equal to attainments. More importantly, that when you're looking at something like this to monitor, you want to look at end dates, because you want to be able to see if somebody made a commitment and then a year down the road when their contract is about to end, how much of that commitment is still left and is it feasible that commitment is going to equal to attainment? So it's real important to get end dates, too.

Slide 98: Monthly Business Orientation Meeting

Christine Thorkildsen: And this is Chris speaking, but I think one of the best practices of this is part of the contract requirements. They had to submit a plan to the Thruway authority detailing how they were committed to meet that goal. So that is certainly a best practice. If it's not in your RFP, you want to put that in there to assure that they submit a detailed plan of their commitment to that goal.

Tracey Mitchell: Mm-hm. Thank you, Chris. One of the things-these are some of the outreach activities that they provide. They - and we're looking at that now to see if it's going to continue to work. They have monthly business orientation meetings where they invite DBEs and businesses alike to meetings to hear about the project, hear about upcoming procurements. And it's a chance to kind of chat and meet with Tappan Zee Constructors. And there have been relationships that have developed out of that. Some of the meetings have focused on special procurement like we had - we were looking for trucking firms. So with all trucking firms that were invited and met the procurement team at TZC was responsible for that. We had an electrical focus meeting where a large contractor got about 187 million dollar bid and then they had a ten percent goal for DBEs, 37 [sic]. So in order for him to kind of achieve

that goal they had a focus meeting just for electrical companies to come and meet this contractor. And, hopefully, that's how relationships are built. So and I think it's working. And I think that everybody's heard about the bridge being built now. So I think that they're more focusing just on the specialty meetings right now.

Christine Thorkildsen: Mm-hm. Next slide.

Slide 99: Monthly E-Blast

Tracey Mitchell: They do monthly e-blasts where they update the public. And let me just talk - I'll get into the - a little bit about the database. And this goes to their database and I'll tell you the make-up of that later, but it goes out to everyone in their database. It updates them on what the DBEs' participation is, what were - who got awards recently. And this was interesting because, for example, there was a company that provided fuel to trucks onsite and stuff. They may not have been a direct contractor with Tappan Zee Constructors, but they wanted to know if the companies got awarded so that they can promote their business to those companies. So this is a good way of advertising people that got awards that other businesses can actually kind of promote their services to them. They would put out there their 90-day procurement look ahead and then they would fill out questionnaires if they were interested in doing business with the Tappan Zee Constructors. Now the numbers on the side there we're still at about 187 trade contractors and professional services on the job. And right now we're up to 92 million that have been committed. And so those 177, that's okay. Could be multiple contracts for one particular - they can have multiple contracts, the contractor can.

Slide 100: TZC Vendor Database

So I was talking about the database. As Chris mentioned earlier, just to have New York State DBEs and the many different projects that are going on in New York State. This project got a waiver to allow any certified DBE in any state to work on this project. So what Tappan Zee Constructors did was they made this database and it has 10,000 firms in it and it includes every DBE from New York, Maryland, New Jersey, surrounding states, and they dumped them into this database. And out of the 10,000, 6,000 of them are DBEs. So when any type of procurement comes about this is how they outreach to that database. And if anyone calls that's not a DBE, or a DBE and they want to do business on this project, the first thing that they would do is to register with the Tappan Zee Constructors.

Slide 101: Management Tools: Work Breakdown Structure

This is an interesting tool that we needed to have in place. This project allows for tiering and right now I think we have maybe about three that are fourth level tiers. Now I am no brainiac when it comes to this and I could not remember which sub came from which sub-contractor. So I had TZC develop this grid and as you can see the first column is the prime, that's TZC, then the first tier would be - that was that design team, HDR. An then HDR subbed out with the second tier sub and if you look midway down and you see GZA, who subbed out to a Warren George, who was third tier, and then a fourth tier who was Layout. The colors help me to know the reds are all DBEs. So this grid shows me what tier they are and if they are not a DBEs or if they are. Most importantly this becomes important when I'm looking at a payment. Because when you have a DBE, let's say that's subbed out to a non-DBE, who then subbed out to a DBE, well, they're only going to get credit for the attainment of the DBE. So without this chart I would never be able to manage and decipher attainment on this project for DBEs. And the Civil Rights tool that we have was not set up for tiering. So we have to develop something that would allow us to make sure that we can be able to see how these tierings are taking place.

Slide 102: Management Tools: Work Breakdown Structure

Okay. And, just to show you how complicated it can get sometimes, this was a contractor, the one encircled - that was a supplier and they were contracted for some furniture. Well, he got the furniture as a supplier. He got the furniture, then he had to do some installation and he subbed out 57,000 of that money that was to do the installation. Now, so now you're only looking at the balance of 103,000 as a supplier and taking 60 percent of that towards credit as a supplier. So the DBE credit was 62,000. So, you know, it's not about, "Okay, here's a supplier." You have to actually look at what they're doing, how much they're subbing out to - in order to get an accurate attainment level of how much to give credit for that work. So it can become kind of complicated, but these tools help us to provide the necessary oversight that's needed for a project of this size.

Slide 103: Management Tools: DBE Participation Schedule

Now here's - when I talked previously about the 17 work areas that they broke the project down into, this is their curved chart of how for the life of this project where they're supposed to be or would like to be or in their mind would say that they are. In the blue are actually signed commitments and that's what I count. You know, if Tappan Zee Constructors were here right now they would say, "Well, in our minds, Tracey, we're right about 173,000 because we've got some pending contracts to be awarded." But if pending comes to fruition and becomes commitments, that's great. If it doesn't, what I'm looking at is the blue level. So as you can see on this, this is a little bit shy of where they said they are going to be.

But the "pending" in that chart there, there are some firms that, like I said, that 372 for the electrical work was awarded to a contractor who has a 37 million goal. So these are contracts that are pending that are going to come to fruition in TZC's mind and I hope that they do. Right? Yes, yeah. Right.

Christine Thorkildsen: <agrees>

Slide 104: Management Tools: DBE Participation Schedule

Tracey Mitchell: So Thruway's review: What I did was when they send me the participation schedule-and it was by work areas, the 17 work areas that I mentioned before, in that chart - and you can go to the next slide because I think it describes it a little bit better. Yeah. So in that chart, they labeled out all the DBE opportunities for each work area. In that chart they also had a commitment date, DBE commitment dates, the RFP dates. So I went through each one of the work areas and listed up the amount of DBE commitment date per month. And in some people's mind they may say that might be a little micro-managing of a project like this, but this is the only way that you're going to see if that system works or not, if their schedule works or not. So when I look at May's forecast - and this could be over the 17 work areas - but these are all the May dates that they said will take place for the month of May. When I get their monthly reports in I look to see did those procurements take place and where they feel short, where are they going to make it up, and then at some point you're going to say to yourself, "Well, is it working? Is it not working? Do they need to revise their participation schedule?" That's the only way that you can make the assessment is if you are looking at it so closely to see if it's not working. And the great thing about that is that because you can ask your prime contractors to submit a new one until it does work. Because if you wait till the end, you're going to be like, "Well, I didn't know that this was not working and so know what do I do?" It's a working document. The plan is not set in stone once they submit it. But if you don't give the proper oversight on that, then you won't know where to make changes. And then we always just keep that - I'm so glad you just pulled that in there - what the goal is, what the remaining goal that they have to make and if they made it this month what the attainment would be for that month. So that's how we do it per month. I think that the collaboration and the cooperation from Tappan Zee Constructors as well as the assistance that we received from FHWA have lent a lot of knowledge.

Slide 105: Contact Information

This has been a learning curve. I've only been on the project for about a year, but I think that we've come a long way. And I think that we're on a road to success as far as oversight and helping them achieve to meet their goal. Would you agree with that?

Christine Thorkildsen: I totally agree. We have a lot great oversight and monitoring plans in place. And I think now we are really, really diving into as if they're working. Right.

Tracey Mitchell: Right. And don't be afraid to change! I mean - but you're not going to be able to know if it's working if you're not monitoring it. It can't be something that someone gives you and then say, "Okay, well, they got a plan," and let them run with it.

Christine Thorkildsen: No.

Tracey Mitchell: You gotta tell them when it's not working because they're maybe not going to tell you. But unless you're monitoring this and breaking it down so that you can wrap your hands around it, it won't work. So I think we're done. Right?

Christine Thorkildsen: We're good.

Tracey Mitchell: And we'll take any questions and answers anyone may have.

Questions & Input

Latoya Johnson: Thank you, Tracey. Thank you, Christine. Great presentation. And you're even getting kudos from Teresa Banks in Federal Highway Resource Center. She said, "Great!"

Christine Thorkildsen: Oh, good. Thanks, Theresa.

Latoya Johnson: There are some great tools that other DOTs or other transportation agencies will be able to use as they try to implement and manage their DBE program.

<overlapping conversation>

Latoya Johnson: --over to the chat pod and again I encourage all of our participants to input questions into the chat pod. And it looks like we have one from Colorado. Mark says, "What is your process to deal with poor performing DBE contractors?"

Tracey Mitchell: Well, first of all, if they're poor performing - I mean, there's a process in place that the - whoever - Tappan Zee Constructors is, in this case, the prime. If they're looking to get rid of a contractor or decrease their scope there's a process, of course, as you know, when removing a DBE. And then the Thruway, myself, would review what was the poor performance of that contractor? Did they have an opportunity to correct it? And if not, then we would either agree or disagree with the contractor. Most of the times, you know, certainly, we're building a bridge and so if somebody is not performing to the best of their ability we gotta go over that bridge. So we want to make sure that everyone is performing to the best of their capabilities. <laughs>

Christine Thorkildsen: There are some supportive services in place, too. It depends what the poor performance is. If they needed maybe some assistance with understanding how to do certified payrolls or maybe equitable business opportune - or website, or web-based Civil Rights tool that we use to collect data. It depends what the poor performance is. We certainly would encourage, you know, assistance to that firm to be able to keep them on the project, but if we - if there's anything that - any indication waste, fraud and abuse though, that's a whole different issue that would be addressed differently.

Tracey Mitchell: And I'd say continued performance. I mean, we've had contractors who, you know, maybe missed something on their certified payrolls--

Christine Thorkildsen: Mm-hm.

Tracey Mitchell: --and that's the great thing about Depart of Labor: They will actually contact that contractor, tell what they need to do, and they respond. This is a partnership and, if nothing else, they will learn how to correctly submit the certified payrolls.

Christine Thorkildsen: We want to keep them--

Tracey Mitchell: Yeah.

Christine Thorkildsen: I mean, we want them to learn-

Tracey Mitchell: Definitely.

Christine Thorkildsen: --and to grow from this project certainly, but we - so anyway, it depends what the poor performance is.

Tracey Mitchell: Mm-hm.

Latoya Johnson: Thanks, ladies. Okay, I don't see any other questions in the chat pod right now. So I'll go to the operator real quick and we can open up the lines and see if anybody has a question over the phone.

Terry Regan: Thank you. And once again if you'd like to ask a question from the phone line, please press star, then zero on your touchtone phone.

Terry Regan: And at this time I'm showing no questions in queue.

Conclusion and Evaluation

Latoya Johnson: All right, thank you. So I'm not seeing any other questions. We'll wrap back around in a few minutes after we go through the next couple of slides, but again I just want to thank all of our presenters: Ron and Pete from New Hampshire DOT, and again we've uploaded their videos to the materials for download chat pod as well as added the link in the chat pod to their YouTube video and I'm telling you they're really great videos. So, please, they're fairly short, so very quick to look at, but please go and view those and as well as the video created from the Washington DOT talking to us about their costs and schedule risk assessment; and Tracey Mitchell from New York State Thruway Authority and Christine Thorkildsen from New York Federal Highway division office talking about DBE goals on the New NY Bridge project. So, again, I want to thank all of our presenters. Great job. We were really grateful that you were able to provide us with so many great lessons learned and experiences as you deliver and develop major projects.

Slide 108: Financial Plan Updates

With that I want to quickly roll over into just a couple of short major project announcements from our team that we thought would be of interest to the group. The first one, I was hoping that today I'd be able to come to this webinar and let everyone know that the new updated financial plan guidance that incorporates from Map 21 is approved and issued and available. However, <laughs> in, I think, Federal Highway's quest to really be cognizant and sensitive to comments from DOTs and transportation agencies throughout the country, it's been delayed a little bit longer. I do think that we are in our final leg of approval and so hopefully within the next couple of weeks we will be able to issue the financial plan guidance. And we have tentatively scheduled to hold webinars in December to introduce that guidance. So we will be holding and scheduling webinars to roll out the new guidance and answer questions both from our division offices as well as our DOT partners throughout the country that are developing major projects' financial plan guidance. In addition to that, I did want to mention very quickly that when we roll out that guidance we are also hoping to roll out an updated version of the major project timeline. I know a lot of you guys have seen that timeline that we originally issued in 2008 and we've had discussions over the year to update it and we think that it is appropriate timing with the financial planning guidance to roll out the timeline that will now not only talk about design-build projects, but will also talk about the major project requirements and relationship to design-build and P3 projects.

Slide 109: P3 Training Course Availability

Latoya Johnson: And next I want to introduce Mr. Patrick DeCorla-Souza, who is the Federal Highway public-private partnership program manager who will talk a little bit about an opportunity, a training opportunity that Federal Highway has. Patrick?

Patrick DeCorla-Souza: Thanks, Latoya. So as you see on the screen we have developed a series of P3 training courses right now the courses focus on P3 evaluation. And we have developed a tool called P3- VALUE. It's an educational tool that helps understand the process that you can use to do financial analysis for P3s, in particular value for money analysis and assessment of risk in P3s. So there are several modules in this training and it's about five different modules. One of them involves hands-on computer training, which can take as long as one day just for the hands-on. And the rest are modules, which you can mix and match.

Slide 110: P3 Training Course Availability (cont.)

Patrick DeCorla-Souza: And I believe the next slide has the various modules. You have an overview module, a risk assessment module, value for money analysis module, financial viability module. And then the case study is where we use the computer hands-on training using P3 value. So this course is offered free of charge to states. There is a maximum size of 40 students, there's no minimum, but we like to have at least five people in the class. The cost is free and the sponsoring agency needs to provide the classroom facilities and if they want the hands-on training they would need to provide their own computers. So the rest of the slide shows where you can get more information or you can call me or send me an email. With that I turn it over to Latoya.

Latoya Johnson: Thank you, Patrick. Great course and I would strongly encourage you guys, if your DOTs are interested, please contact Patrick because, like I said, it's really a good course and it provides a lot of good information to your DOT if you are doing or if you are considering doing P3 projects.

Slide 112: Upcoming Webinars

Latoya Johnson: Lastly, I just want to point out our next webinar, our next joint DOT-Federal Highway webinar will be in May. May 5th, is the tentative date right now. We'll talk a little bit more about this in a second, but we are always looking for presenters. So if you are doing something or you know of a state or a local - a transportation agency that's doing something great as far as major projects and you want to hear more about it or you want to share your experiences, please, please, please, please contact me or your local Federal Highway division offices and let us know. Again, we're always looking for great topics and we really want this webinar to be for you so that you can hear about the issues that you are dealing with on your major project. So, again, I strongly encourage you to let me know if you have topic ideas and to participate in our next joint webinar, May 5th. For Federal Highway folks, we are planning our quarterly webinar on February 3rd and, same case, if you have ideas for topics that you want to talk about just amongst Federal Highway folks, feel free to shoot me an email or give me a call and let me know what they are and we can definitely arrange those topics to be discussed.

Slides 113-114: Contact Information

Latoya Johnson: So, lastly, this is Jim Sinnette, our team leader. If you have questions about anything you've seen today or you want to follow up on anything you've heard today feel free to give Jim or myself a call or shoot us an email and we will definitely try to be as responsive as possible to you guys. And if there's any additional information that you need about the webinar or information provided specifically about the webinar or other outreach or training opportunities from the Center for Innovative Finance Support I would encourage you to reach out to Dana Williams. With that I'm going to open it up for any last questions. The chat pod is open. And, Victoria, can you pull up the poll?

Evaluation

Latoya Johnson: So these are just a few polls that we will leave open as we close out the webinar. Just to get some feedback from you guys - if the webinar was what you expected, things that you would like to see in the future, suggestions for topics. And with that I will look at the chat pod one last time and I will ask the operator to open up the phone line one last time to see if you have any last questions about anything that you heard today during the webinar

Terry Regan: Thank you and again if you do have a question from the phone lines, please press *0.

Terry Regan: And I'm showing no questions in queue.

Latoya Johnson: Alright, well, I just want to say thank you again to all of our presenters. We had some really great presentations. We will try to make this recording available, so be looking for your Federal Highway partners to be sending out that information on the recording for the webinar. Again, feel free to e-mail and reach out to any of the presenters you heard from today. You heard a lot of great experiences and lessons learned and as you saw they're definitely willing to share. And if you have any questions for our team, the FHWA Major Projects Delivery Team, feel free to reach out to myself or Jim or anybody else on our team. I just want to say thank you again for participating and thanks again to all our presenters. We will see you at the next Major Projects Webinar. Have a great day!

Terry Regan: And ladies and gentlemen that does conclude your conference call for today. Thank you for using AT&T executive teleconference service. You may now disconnect.

Updated: 05/04/2023
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