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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Question 7 – How do you document, distribute, and Utilize the 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

Question 7a – Do you have a process for sharing lessons learned through disputes? Yes 25 No 7 Publish on-line Revise Specifications Pre Award Meetings Hold Dispute Solution Meetings Weekly Construction Roundtable Distribute to District Construction Engineers

Question 7b – Do you have an end of project review requirement? Yes 26 No 6 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

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

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

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

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

Question 9 – Does the contractor get an opportunity to provide feedback on the quality of contract documents? Yes 18 No 14 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

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

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

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