1. Mutual Gains Negotiations and the PennDOT Staff Hour Estimating Guide APC Fall Seminar November 2010

2. Background ► PennDOT Paid Out $365 Million to Consultants in 2009 ► Consultants Critical Component to Deliver $1.8+ Billion Letting Program ► Significant Time/Energy Spent Negotiating Contracts ► Some Negotiations Create Tension and Mistrust and Cost Time ► Modeled After FDOT Mutual Gains Process

3. Mutual Gains Negotiations ► Fair & Reasonable Agreements ► Establish a Range of Effort for Engineering/ Environmental Tasks ► Range Agreed Upon by PennDOT and Consultant Task Force ► Fosters a Sense of True Partnership ► Mutual Understanding of Scope, Deliverables, Schedule, Range of Hours, Project Complexity

4. Benefits ► Significant Reduction in Negotiation Time ► Mutual Focus Upon Project Delivery ► Consistent Negotiations Statewide ► Mutual Appreciation of Each Other’s Business ► Fair Compensation for Project Delivery

5. Current Process Issues ► Divergence of Opinion on Level of Effort ► Time to Get Under Agreement ► Reduces Project Partnering ► Time and Money Lost to Construction ► Does Not Capture Knowledge on Staff Hour Estimating (Institutional Memory Loss)

6. Cycle Time Trends Agreement Cycle Time: Selection– Execution Year 62 77 38 96 23 7 175 95 Number Agreements Days

7. Proposed New Process ► Founded on Mutual Gains Principles ► Provides Foundation of Agreement for 80% of Projects and Tasks ► Reduces Time From Selection to Execution ► Fosters Partnering ► Team Approach to Project Delivery

8. Applicability of Staff Hour Guide

9. Expected Outcomes ► Formal Scope Clarification Upon Award of Job ► Mutual Agreement on Technical Proposal ► Mutual Agreement on Scope, Deliverables and Schedule ► Guide Captures Institutional Memory ► Promotes Project Partnering

10. Mutual Gains Activities ► Preliminary Engineering 95-100% √ ► Teams Received MGN Training √ ► Teams Developed Estimates √ ► Task Force Reviewed Estimates √ ► Statewide Outreach Program (FTP/Website) ► Pilot Project and Implementation

11. Project Team Co-Chairs ► Highway Team A: ► Highway Team B: ► Structures Team: ► Traffic Team: ► Environmental Team A: ► Environmental Team B: William Gross; HDR Karen Michael; D2-0 Vince Greenland; D9-0 Eric Veydt; GF Ralph DeStefano; D9-0 Joseph Pegnetter; ORA Paul Archibald; MT Glenn Rowe; BHSTE Mark Lombard; EQAD Richard Shannon; MT Sandy Baseshore; S&L Pat Remy; D12-0

12. Staff Hour Estimating Guide Progress P.E. – 100% Complete P.E. – 95% Complete BridgeRoadwayGeotechnicalSurveyEnvironmentalTraffic

13. Proposed Timeline TASKS TIME NOV 2010 DEC 2010 JAN 2011 FEB 2011 MARCH 2011 APRIL 2011 MAY 2011 JUN 2011 JUL 2011 AUG 2011 SEPT 2011 Pilot Project D-11 Co-Chairs Finalize Work on P.E. Co-Chairs Finalize Work on P.E. Statewide Rollout (P.E.) of MGN and SHEG Statewide Rollout (P.E.) of MGN and SHEG Rollout SHEG for Final Design Rollout SHEG for Final Design D-11 / Consultant Feedback D-11 / Consultant Feedback FTP/Website Training Module Metrics NOV 2011 OCT 2011 Co-Chairs Develop SHEG for F.D. Co-Chairs Develop SHEG for F.D. DEC 2011 Update SHEG / MGN / Training

14. Metrics ► Before/After Survey ► Time to Get Under Agreement ► Number of Supplements ► Time for Project Delivery ► Additional Input From ADEs Design and Consultants

15. Next Steps ► ► Long Term Commitment By PennDOT and Consultant Community ► ► On-Going Improvement to Mutual Gains Process, Training and Metrics ► ► Biennial Updates to Staff Hour Estimating Guide

16. Questions ? ► ► Gary R. Kleist PE gkleist@state.pa.usgkleist@state.pa.us ► ► Steven B. Bolt PE sbolt@orth-rodgers.comsbolt@orth-rodgers.com