1. Indian Reservation Roads Construction Costs Update June 24, 2008 Rapid City, South Dakota

2. Outline Introduction Cost Data Transformation Cost Update Process Data Management Issues Review of Cost Updates

3. Relative Need Distribution Formula 50% Cost-to-Construct 30% Vehicles Miles Traveled 20% Population

4. Importance of Costs Cost to Construct (CTC) factor contributes to fifty percent CTC is driven significantly by what it costs to construct one mile of road Costs X Miles on a reservation = CTC Tribes benefit from timely and accurate updates while outdated and inaccurate cost data have the opposite impact.

5. Current Cost Data System The Final Rule does not adequately address the existing Construction Cost Data system, now we need to: –Understand the system –Identify the deficiencies –Improve the current system

6. What are Costs? What are Construction Costs? Cost Accounting System Job Cost Accounting - Accumulated by part number or contract - Dependent on historical and recorded data Construction Costs Unit Costs – The cost to build one-mile of roadway. Unit Cost = $ / mile

7. What are Costs? What are Construction Costs? Costs vary due to Geo-Political Region (GPR) –Geographical location –Total (61) Functional classification of the road –Classification –Terrain ( Flat, Rolling, Mountainous ) –Roadway Width

8. How are the construction costs developed? Cost data is developed by the Regional Offices from –Bid tabulations and/or Engineer Estimates of projects constructed –P.L. 93-638 contracts –Competitive contracts –BIA force account

9. How are the construction costs developed? The unit bid costs used are the initial costs as submitted by the successful low bidder. The unit bid list is broken down into four categories and : Incidental construction F3113 Grade & Drain construction F3109 Gravel construction F3110 Pavement construction F3111

10. How are the construction costs developed? Each unit bid item is placed in its appropriate category. Each categories sum is computed and divided by the length of roadway being constructed and this equals the cost to construct a mile of roadway. Unit Cost = $ / mile

11. Construction Costs Total Number of IRR Costs 19 - Adequate Design Standards 61 – Geo-Political Regions (GPR) 4 – Construction Categories 4636 Individual Costs in the IRR Program

12. Costs related to the RNDF Inventory Data needed to locate costs –Inventory location identifier (Region,Agency,Res.) –State Code –Class Code –Terrain

13. Costs in RIFDS RIFDS Navigation Screen Cost Module Screen (In use only) Costs Tables Controls Tab (Route Summary) QA Detail Report for Roads Geo Political Region Report

14. Cost Data Transformation

15. Final Rule established a new funding formula –Road Classifications were changed. –Existing Cost Data became incompatible and conversion of cost data was necessary.

16. 2004 Cost Conversion In June 2005, discrepancies were identified with the cost tables due to the initial cost conversion. Where a number of cost cells had values much lower than were previously listed severely impacting a tribes annual allocation amount. Proposed to redo the conversion and only populate the zeroes.

17. 2005 Cost Conversion Existing Cost Data (2003 cost data file) – Estimated costs – Actual costs – No costs (zero values) – Blanks (no cost & embedded cost) – The zero values were Cost cells that were never populated or may have been ignored. Because many zero values were not considered in the formula calculations because many road classifications do not exist in those states/GPRs

18. Steps in Cost Conversion 1.Accounted for the existing costs by utilizing those costs –Used historical data files to identify existing costs 2.Consolidated costs in correlation with Cost Tables Conversion. –Used the upper limit (existing) to satisfy conversion 3.Identified the zero values in the cost values 4.Verified the zeroes by a search for hidden/embedded values 5.In accordance with 25CFR Part 170, first used the state values to fill empty cells 6.Completed filling empty cells with national average values.

19. Cost Update Process

20. RIFDS allows the BIADOT to input the cost data in the new format. However the data entry and validation process of the cost updates still exist in paper form, external to the computer program. BIADOT manually reviews the submittals for completeness and acceptability

21. Cost Update Process Regional office submits the cost data to BIADOT in accordance with the Chief of Transportations memo issued March, 2001, Process to Standardize the Cost to Construct Factors Within the Indian Reservation Roads (IRR) Program.

22. Cost Update Process The memo provides: Standardized list of categorized items – Based on FP-96 Defines Scope and Source of data – 5 years of previous construction cost data Consistency by an input format – Methods – Calculations Quality assurance –Organize existing Data & Data Collection Procedures

23. COST TO CONSTRUCT CATEGORYFP-96 BID ITEM Incidental Construction Costs Mobilization Construction staking Erosion control measures Rip-rap Removals Construction surveying Construction inspection Materials testing Guardrail Permanent traffic control devices Striping Signage Concrete barriers Obstruction removal Pavement removal Temporary construction traffic control Sidewalks Curb & gutter Fencing Landscaping Structural concrete Traffic signals Utilities Manhole Adjustments Topsoil

24. Grade & Drain Construction Clearing and Grubbing Roadway excavation All drainage structures and appurtenances Gravel Construction Aggregate bases Aggregate surfacing Pavement Construction Hot Mix Asphalt pavements Surface Treatments - Prime coats, tack coats Aggregates and Asphalt Materials - Chip Seals Concrete pavements

25. Example of Report Form

26. The review criteria identified at BIADOT are: The project from which the costs are derived is relative to the cost of a road construction project. The classification of the road, based on information provided from the Plan title and typical sheet, must correspond to the appropriate Adequate Design Standard being proposed which is in accordance to Table 1 Appendix C. The bid items from a given initial bid schedule or negotiated bid schedule are appropriately separated into the four construction types and formatted for review. On the formatted breakout sheet, the sums of each four construction types are divided by the total project length.

27. Cost Update Process An annual deadline date for submission of cost data has not been established under the New Rule. The former deadline coincided with the annual IRR inventory update deadline (June 1st of each year). Presently BIADOT is considering June 15th as the deadline for cost update submissions.

28. Data Management Issues Cost Input Data Source Data Elements

29. Cost Input So costs may remain as high as possible Requests to update a specific cost cell when replacement across the four construction types would result in lower costs of other costs cells are permissible. Undesired costs are blocked out in the submittal package to signify its hold back. Has been implemented when existing/actual costs are considered.

30. Cost Input Populating multiple cost cells with one set of data, which covers more than one Adequate Design Standard. Where the ADSs are within the same functional classification. –Mountainous used for Rolling costs. –Rolling used for Flat costs. Historically there is no evidence of this practice and has not been implemented.

31. Cost Input Three sources of data are required to justify costs exceeding the $1,000,000 per mile level of any of the four construction types. Previously, projects had been accepted that were unreasonably high, so in order to contain these anomalies this method was implemented.

32. Data Source The PS&E requirement as supporting documentation needs endorsement. –Its primary purpose is to support the Bid Tab amounts –and correlate the cost data with the physical geometry of the roadway. –The verification of the functional classification and confirmation of the standard unit of measure (English/Metric) are derived from the title and typical section sheets.

33. Data Source Obtaining construction cost data from state transportation departments has been the concern of IRR Regional offices. The obstacle relates to the difficulties in obtaining the PS&E as supporting documents to the cost data. Although this is an identified problem it is important to the approval process.

34. Data Source In addition previously mentioned data source (State DOTs) past practice has required the Regional office to convert the state bid item descriptions to the FP-96 bid item descriptions. Regional offices have requested this task be performed at the BEO headquarters.

35. Data Source State DOT data is commonly used for estimating construction costs for upcoming projects. The data is typically compiled from numerous road projects that are not separated by road classifications. Additionally the units provided by the states are average bid item costs as opposed to the units (cost per mile) used in the TAP calculations. Consider applying one standard project type in order to utilize these data such as; 12 ft. wide lanes, 2 miles in length, with specific depth of base materials and standard number of Incidental items, etc.

36. Data Elements Project Types The following types of projects do not adequately reflect the costs relative to road construction, therefore are not acceptable as data. Bridge Projects Traffic Signal Installations Landscaping/Enhancements Safety Improvements

37. Data Elements Modifications –The original contract bid amount is required for the breakdown of the bid items. –The total of the bid items must equal the original bid amount. –Contract modification amounts are not considered part of the road construction costs and are not part of the cost calculations.

38. Data Elements Project Length –The length of a project has significant impacts on the cost data. –The unit of construction cost is dollars per mile ($/mi.), –So the shorter the project length (< one mile), the cost increases inversely. –Road construction projects with project lengths less than one mile have generated over-inflated costs.

39. Data Elements Lump Sum Bid Items –There are Regions that prefer to divide these costs among the four construction categories. –This is not customary and does not benefit the cost amounts. –Because incidental costs are primarily the first costs to be generated in the formula, sometimes never generating gravel and pavement costs.

40. Data Elements Phased Construction –Two or three phases are compiled into one cost data package. Is there one project or a series of projects? 1.This method increases the costs of lump sum items significantly. (Mobilization: 2X, 3X) 2.Example: –Excavation & Rock, Phase I; –Grade and Drain, Phase II; –Paving, Phase III. (includes chip seal) –Acceptable if all work is within one contract.

41. Review of Cost Updates FY Summaries

42. Review of Cost Updates FY 2000 – FY2008 Updates FY Summaries

43. Contact Robert Frazier Highway Engineer BIADOT, Branch of Engineering & Operations 1001 Indian School Rd., Suite 249A Albuquerque, NM 87104 (505) 563-3319