1. O h i o D e p a r t m e n t o f T r a n s p o r t a t i o n Cost Estimate Reviews for Ohio’s Major Projects Presented by Jason P. Spilak, PE Technical Programs Team Lead Ohio Division – FHWA ODOT Planning Conference July 16, 2014

2. O h i o D e p a r t m e n t o f T r a n s p o r t a t i o n Let’s Blame Boston  The Boston “Big Dig” Project  Modern-day poster child for Construction Cost Estimate gone bad  Mid-1980’s Estimate for project was just over $2 billion  Final costs exceeded $17 billion  A Lesson learned for Planning Estimators –  1st estimate of a project cost will never be forgotten  We must address Risk

3. O h i o D e p a r t m e n t o f T r a n s p o r t a t i o n Addressing Risk  Planning Estimates prepare us to fund projects  Present day costs alone is not enough for a planning estimate  will not adequately fund a project  adding blanket “contingency” costs are dangerous  We must thoughtfully identify risk, contingency, inflation  must be included so there is a higher confidence in the funds needed to build the project

4. O h i o D e p a r t m e n t o f T r a n s p o r t a t i o n FHWA vs Ohio DOT Cost Estimate Review (CER)  CER’s are conducted to bring higher confidence to Planning Estimates  FHWA performs mandatory CER’s on Projects larger than $500 million  Ohio will conduct CER’s on projects of interest less than $500 million  We believe much can be gained by extending the CER process beyond that required by FHWA

5. O h i o D e p a r t m e n t o f T r a n s p o r t a t i o n Expected results  Affording better communication among planners  Identify risks present in project development  Quantifying the effect of that risk  Discuss way to mitigate risk  Ultimately provide a more reliable planning Estimate of cost

6. O h i o D e p a r t m e n t o f T r a n s p o r t a t i o n The Process  Follows FHWA CER very closely  Assemble Review Team  ODOT personnel  District -owns the CER for their project  Central Office –facilitates the CER  FHWA, Local Division –technical expertise and guidance  Subject Matter Experts (SME’s)  From ODOT  Consultant community

7. O h i o D e p a r t m e n t o f T r a n s p o r t a t i o n How does the process work?  Review accuracy & reasonableness of estimate  Using ODOT and/or consultant estimators  Identify threats and opportunities and how they impact the final cost  Use technical experts from appropriate areas  Identify the probability of threats and opportunities

8. O h i o D e p a r t m e n t o f T r a n s p o r t a t i o n The Results  Model the impact on cost and schedule  Present day Estimate  Provided by the estimate  70% Confidence (present day) estimate  Using Oracle Crystal Ball software to perform Monte Carlo simulations  70% Year of Expenditure Estimate  Incorporating inflation forecasts to year of expenditure

9. O h i o D e p a r t m e n t o f T r a n s p o r t a t i o n Results (cont.)  CER Team produces a Final Report  Executive Summary Highlights significant results  Present day and Confidence Level Estimates  Identified Threats  Identified Opportunities  Recommendations – next steps  List of Participants  Close-out Presentation for Upper Management

10. O h i o D e p a r t m e n t o f T r a n s p o r t a t i o n Where We Stand  Last year completed a CER for Cleveland’s Opportunity Corridor  Next planned CER will be for an I-75 project in District 2 in the fall of this year  Looking at other candidate projects for winter/spring

11. O h i o D e p a r t m e n t o f T r a n s p o r t a t i o n Questions?