Survey Responses for Construction Contract Administration Cost Trends Survey

1. Survey Responses for Construction Contract Administration Cost Trends Survey AASHTO Subcommittee on Construction Contract Administration Section July 2009 Prepared by . . . . John A. Perry, FHWA-ID Craig McDaniel, WA DOT William Hanson, FHWA-KY

2. DC Ontario Ministry of Transportation NY State Bridge Authority Puerto Rico Survey Data Representation • Survey responses from 32 states

3. Question 1 - Does your state have a formal lessons learned process to review cost trends?

4. Formal Lessons Learned Process to Monitor Cost Trends - Benefits • Improved PS&E packages & estimates • Focused communications w/project development • Fewer field problems • Trend reviews yield performance improvements • Identification of recurring cost overrun problems • Distributing findings helps minimize problems • Helps focus revisions to procedures

5. Formal Lessons Learned Process to Monitor Cost Trends - Problems • Data collected may not represent current problems • Problems are mostly cultural in nature • Project Delivery Systems • Requires resources to maintain formal process

6. Question 2 - Does your state have an informal lessons learned process to review cost trends?

7. Informal Lessons Learned Process to Monitor Cost Trends - Benefits • Improved communications, performance & consistency • Timely feedback to designers • Easier to identify key focus areas & solutions • Creation of different tools and solutions • Effective specification & procedure changes • Cost savings and timely feedback • Annual Post Construction Reviews • Efficiencies gained through use of technology

8. Informal Lessons Learned Process to Monitor Cost Trends - Problems • Scheduling / attendance at meetings • Cost of travel • Misinterpretation of specifications • Changing culture • Design-bid-build vs. Alternative project delivery system • Getting PM’s to implement policy changes • Follow through on assigned review items

9. Question 3 – If a formal lessons learned process were made available would you designate the resources to use it?

10. Reasons for not designating resources to implement and maintain a formal process • Lack of resources (human, funding etc.) • New staff required to maintain system • Shifting of resources • Cost of new technologies • May not fit existing business practices • Level of effort needed to implement is too big • Current system has minimal data • Barely meet current demands • Lack of time

11. Question 4 – Do you review Contract Administration cost trends on a recurring basis?

12. CA cost trends tracked by states – Construction Management • Bid vs Final CA costs • Construction Engineering (CE) & Inspection costs • (Direct vs Indirect costs) / (CE vs PE costs) • Time card data, manpower costs/contract • Inspection costs vs contract value • Cost management by % overrun & work type • Contract changes by entitlement & payment type • Construction payouts vs CN oversight costs • CE and Materials Testing costs

13. CA cost trends tracked by states – Unit Bid Pricing • Change orders • Overruns & underruns • Contract time • Unclassified & common excavation • Crushed materials • Paving and Structural Concrete • Asphalt • Structural & Reinforcing Steel • Plant mix incentives / disincentives • Fuel adjustments

14. Question 5 – Do you review project specific bid data to identify trends as part of the award process?

15. Project Specific Bid Data Items Reviewed • Clearing & Grubbing • Crushed Base • Asphalt, Steel & Cement • Plant mix • Barricades • Fuel • Mobilization • Top 52 pay items • All standard bid items

16. Question 6 – Do you define mathematically and/or materially unbalanced bids and how are they responsive?

17. How are bids determined to be responsive • Define definition of a balanced bids • BAMS Reports help identify unbalanced bids • Bid Review Committee identifies • Left to engineering judgment • Items >25% of EE and Average of Bids • 23 CFR 635.102 – definitions provided • 23 CFR 635.114 (c, d, e) – process provided

18. Question 7 – How do you Document, distribute, and utilize the results of your bid data reviews? • Database • Meeting Minutes • AASHTOWare • Trns-port • Monthly, quarterly, and Annual Reports • Microsoft Products

19. Question 7 – How do you document, Distribute, and utilize the results of your bid data reviews? • Published electronically • Post on-line (Internal Use Only) • Estimators • Project Managers • CA Engineer • Internal Management Team • FHWA

20. Question 7 – How do you document, distribute, and Utilizethe results of your bid data reviews? • Improve cost estimating on future EE’s • To update the Estimating Data Base • Pre-Award Meetings w/Senior Staff • To award proposals

21. Question 7a – Do you have a process for sharing lessons learned through disputes? • Publish on-line • Revise Specifications • Pre Award Meetings • Hold Dispute Solution Meetings • Weekly Construction Roundtable • Distribute to District Construction Engineers

22. Question 7b – Do you have an end of project review requirement? • Feedback loop to design staff • Design Recommendations Memo • Report to Preconstruction Personnel • Formal Post Construction Reviews • Projects with large numbers of change orders • Project Assessments Completed and Shared

23. Question 8 – Does your state carry out performance evaluations on the contractor?

24. Question 8a - What are the consequences for a poor contractor performance evaluation rating? • Placed on probation, suspended, sanctioned or debarred • Changes in Prequalification Status • Bid on Low Cost Contracts Only • Not allowed to bid on State projects • Awarded fewer projects • Deceased Bond Rating • Plan of Action to improve rating

25. Question 8b – Do you track performance evaluation ratings and tell the contractor how to stay on the qualifications list? • Of the 21 States that do Performance Evaluations

26. Question 8c – What methods help to improve the contractors performance rating? • Evaluation System • Separate Prime & Sub Evaluations • Improved Communications & Feedback • Annual Rating Reviews & Training • Share poor ratings with contractor • Notice of Limited prequalification • Performance Improvement Plans • Specification Incentives

27. Question 9 – Does the contractor get an opportunity to provide feedback on the quality of contract documents? • AGC / Industry Meetings • On-line Surveys & Questionnaires • Joint completion of Design Rating Forms • Post Construction Reviews >$10 Million • Formal QA Forum • Difficult to do with low staffing levels

28. Question 10 – Is the contractor allowed to provide feedback on the performance of the construction engineering and inspection forces?

29. Question 10a - How is this information used to improve Contract Administration processes and the contractor’s performance? • All comments evaluated on a case-by-case basis • One on one feedback is provided to staff • Information is summarized / distributed annually • Specification and Contract Modifications are made

30. Question 10b - What were the results POSITIVE RESULTS OF CONTRACTOR FEEDBACK • Survey improves staff behavior and partnering • Generally favorable, some issues corrected • Some specifications and procedures adjusted • Identified training opportunities for staff • Improved communication lead to program improvements LIMITATIONS ON CONTRACTOR FEEDBACK • Non Specific / General Feedback • Limited Forms Returned • Reluctance to Provide Negative Feedback