Transportation Estimators Association Conference Saratoga Springs, New York October 4, 2008 Procedures Guide for Right of Way Cost Estimation and Cost Management

Biloxi, Mississippi June 13, 2007 NCHRP Project (2) Stuart Anderson Texas A&M Cliff Schexnayder Del E. Webb School of Const., ASU Keith Molenaar Univ. Colorado

Outline Background Methodology Data Collection and Results Issues Procedure Guide Discussion

Background State highway agencies (SHAs) have identified cost escalation to be a consistent problem Phase I of NCHRP Project 8-49 –Focused on the larger issue of cost escalation relative to general project cost estimating –Produced Guidance, Report 574, which focused on strategies, methods, and tools Phase II of NCHRP 8-49 –Target specific area for elaboration – Right of Way

Research Objective Develop an all-inclusive set of right-of-way cost estimation and cost estimation management procedures based on literature and current practice, which integrates cost estimate and cost management steps documented in NCHRP Report 574 to support the right-of-way process.

Research Tasks Task 1. Update Literature Review Task 2. Examine and Document Successful Right-of- Way Estimating and Management Practices Task 3. Develop Methods and Tools for Right-of-Way Estimating and Management Task 4. Develop Procedures on Right-of-Way Cost Estimating and Management Task 5. Prepare Report and Right-of-Way Cost Estimating and Management Procedures

Methodology Framework Phase I implications –Project development phases –General project cost estimation and estimate management steps –Cost estimating and cost management flowcharts –Tool appendix approach

Methodology Framework Impact of Phase I approach on Phase II –Focus on creating a ROW Cost Estimating and Cost Management Procedures Guide – a “how to” –Create more detailed processes for cost estimating and cost management for ROW to support procedure guide –Use some Phase I tools but created a few additional tools focused on ROW using same format and structure

Methodology Data Collection Literature review On-site interviews –Interview Protocol 15 questions Six areas of interest which focused on different aspects of the cost estimation and estimate management process –Interview Process Who? –SHAs and other organizations that acquire ROW –Central Office and Region/District perspectives How? –Use the protocol as a roadmap during interviews –Ask each question relative to the development phase

Methodology Data Analysis Approach Review of Practices –Critical issues to ROW cost estimation –Successful practices and tools Flowchart technique –Data was subdivided into four categories: Inputs (primary and secondary) Process steps Outputs Decisions and loops (cycles within the process)

Data Collection Interview participants –7 State Highway Agencies (40 individuals) –2 Local Public Agencies (5 individuals) Interview process –Open discussion –Protocol as a checklist Documents collected –ROW manuals –Unique tools used in practice (i.e. cost estimating systems, estimate documents, spreadsheets) Early flowchart feedback

Limitations of the Research Small sample size Differences between agencies being interviewed: –Large verses small –Organizational make-up – centralized verses decentralized –Project development phases –Terminology and acronyms

Results Problem Areas Damages Condemnations Appreciation and other market conditions Risk analysis and contingency Early scope definition Estimating tools Estimator experience and knowledge

Right of Way Issues Current practices lack structure and organization. Communication between ROW personnel and project development team personnel needs to improve. The ROW cost estimation process is highly dependent on the level of scope definition.

Right of Way Issues (continued) Planning estimates do not typically involve ROW personnel. SHAs underutilize risk analysis and the application of contingency in all estimates. Cost estimation management and cost control are underutilized.

ROW Research Results Procedures Guide Development

Procedure Guide Outline Chapter 1 Introduction Chapter 2 Integrated Estimating Process Chapter 3 Agency Level Process Overview Chapter 4 Conceptual ROW Estimating Chapter 5 Baseline ROW Estimating Chapter 6 Update ROW Estimating Chapter 7 ROW Cost Management Chapter 8 Conclusions Appendix - Tools

Agency Level Process Flowchart

ROW Estimate Elements Land only Land and structures Other property improvements Damages Utility relocations

ROW Estimate Elements Relocation assistance program Administrative settlements Settlements or trails Support Costs Appreciation

Key ROW Estimate Inputs Requirements Values for land and structures Historical data Inflation/appreciation rates Condemnation rates Future highest and best use

Conceptual ROW Cost Estimating Planning Phase

Baseline ROW Cost Estimating

Update ROW Cost Estimating

ROW Cost Management - Final Design Phase

Cost Estimation/Cost Management Step –Introduction –Flowchart –Flowchart step Project complexity Phase inputs Process step description Tools (tied to tool appendix) Tips for success Outputs Procedure Guide “How to” Chapter Contents

Structured Approach Collaborative Atmosphere Key principles –Create an environment for success –Create procedures for establishing a Baseline ROW Cost Estimate –Create processes to identify risk and for setting appropriate contingency –Require ROW reviews –Create ROW cost control mechanisms –Support good communications practices Procedure Guide Conclusions

Questions, Answers, and Discussion!