Project Quantity Quality Control: TRB/AASHTO/State

AASHTO. A State Department of Transportation's (DOT) ability to successfully manage and deliver its program is largely dependent on an ability to develop realistic estimates of project cost. Cost estimating involves not only the collection of relevant factors relating to the scope of a project and the cost of resources, but it also requires anticipating cost impacts that may occur due to changes in project scope, available resources, and national and global market conditions. This publication provides “practical” guidance that serves those charged with the development of DOT cost estimates and with the management of the estimating process. This guidebook has two parts. Part I focuses on key cost-estimate techniques and Part II focuses on cost management activities. Hard copy in ODOT Library.

Welde, Dahl. This paper presents a study of cost escalation in unit price road construction contracts. The aim is to investigate why the final cost of contracts differs from the agreed contract cost following tendering, both to identify causes of observed discrepancies and to suggest measures that could improve the planning and delivery of future projects. Road projects often consist of several contracts and as they account for the biggest costs of the projects, cost escalation in the contracts may increase the risk of project cost overrun. Even if contract cost performance is an important indicator of project success, it may be too simplistic to equate this with project success. It is quite possible to deliver a project within budget even if contract costs escalate, as long as the project cost contingency is adequate to cover such escalations. However, escalations in contracts increase the risk of project overrun and may lead to other problems such as conflicts and delays. The results show that most of the studied contracts experienced cost escalation. The main cause of the escalation was change orders to the scope that were not covered by the original contract. In addition, the results indicate that complexity represented by contract size, duration, and urban location increases the risk and size of cost overrun. Based on these findings, the paper presents some recommendations on how contract delivery can be improved as well as some implications for future research. Can be downloaded from ODOT computers

Kermanshachi, Anderson. Transportation agencies have significantly improved many aspects of project delivery, yet they continue to be challenged by cost increases and time delays that occur after a project is programmed and funded. An increase or a change in the scope of a project to improve facility performance is a common source of such cost increases and schedule delays. Therefore, this study focused on improvement in the project scoping process (PSP) to achieve on-time and on-budget delivery of highway projects. The thrust of this research was to develop a framework that could help transportation agencies improve their scope development processes and practices. A key effort in this study was to assess current project scoping practices. After a literature review, the research team developed a survey protocol, distributed questionnaires, collected survey data, and performed data analysis. Forty responses were received that represented 23 state transportation agencies (STAs). On the basis of the survey responses, six STAs were selected for face-to-face interviews. The intent of the interviews was to confirm survey results and delve into topics not covered in the survey. As a result of these tasks, the research team identified considerable variation in scope development processes across the agencies with respect to the definition of a PSP, formality of the process, timing of the PSP, and project maturity when a project is programmed. On the basis of what was learned from the literature review, surveys, and follow-up interviews, the research team developed a PSP definition and framework. This PSP framework contains three major actions, namely, to select the project, to analyze the project, and to advance the preferred alternative. Can be downloaded from ODOT computers.

Rueda, Gransberg. The suitability analysis presented in this paper was conducted during the development of an Indefinite Delivery/Indefinite Quantity (IDIQ) implementation guide for the Minnesota Department of Transportation (MnDOT) in an effort to find a fair and equitable approach to adjust unit prices in multi-year, single award, IDIQ contracts. However, this analysis is not restricted to contracts executed using IDIQ alone. This study compares the ability of several composite Construction Cost Indexes (CCIs) to reasonably estimate actual overall cost changes in MnDOT highway construction projects. The paper presents a qualitative analysis of general principles and assumptions associated with the development, maintenance, and use of CCIs. This analysis highlights the mismatch and lack of proportionality between CCI components and actual project activities as factors that hinder the efficient use of CCIs. The paper also presents a statistical analysis of twelve different composite indexes, including one published and maintained by MnDOT. All indexes were applied to four different types of projects over a five- year period. The paper concludes that MnDOT should develop an alternative price escalation method since all CCIs yielded values significantly different to those observed in MnDOT historical bid data. Paper can be provided by ODOT Library

Shrestha, Pradhananga, Mani. Design-bid-build (DBB) projects are procured by government agencies typically through the competitive bidding process. The decision of the contracting authorities regarding which projects proceed to the bidding stage depends, in part, upon the early estimates of probable cost. Efforts are made to make this estimate as realistic as possible. Irrespective of the estimate of probable cost, the actual project cost is established by the amount of the winning bid and the cost of change orders during construction phase. The change order costs generally are known during the construction phase of the projects. However, the bid cost of projects can be estimated by analyzing the bid data of historical projects. This study will develop a method to predict the future projects’ bid cost of unit price items based on quantities of items. The regression models for various unit price items will be developed by analyzing historical bid data of 151 DBB road projects undertaken by the Clark County Department of Public Works in southern Nevada from 1991 through 2008. The total value of construction was equivalent to $841 million when converted into a June, 2011 base cost. Statistical models were developed to improve the methodologies for estimating bid-item unit pricing and to reduce variances that result in large discrepancies between engineers’ estimates and actual bid-award amounts. These regression models can be used to predict the actual bid cost of the unit price items based on quantity of the unit items. Paper can be provided by the ODOT Library.

Molenaar, Anderson, Schexnayder. This guidebook provides guidance to state departments of transportation for using specific, practical, and risk-related management practices and analysis tools for managing and controlling transportation project costs. Containing a toolbox for agencies to use in selecting the appropriate strategies, methods and tools to apply in meeting their cost-estimation and cost-control objectives, this guidebook should be of immediate use to practitioners that are accountable for the accuracy and reliability of cost estimates during planning, priority programming and preconstruction. Report can be downloaded from link.

Chou, Peng, et al. The preliminary cost estimate heavily influences the fate of a transportation project, yet it can be up to an order of magnitude off the final bid amount. Poor prediction of costs in state departments of transportation can lead to less-than-optimal project selection at the front end and delays later when funding is not adequate to cover planned projects. A demonstration is made of the potential to separate quantity uncertainty from price uncertainty. If item quantities can be predicted early, then readily available unit prices can be applied to create a semidetailed preliminary estimate. Compared with the typical practice of applying a gross cost per lane mile, the proposed approach provides a more detailed basis for tracking the effects of changes during project development. This methodology is being tested for implementation by the Texas Department of Transportation. Can be downloaded from ODOT computers

Ou, Swarthout. The Forest Service, U.S. Department of Agriculture, is required to perform accurate and comprehensive road cost estimates to carry out the legislative intent of Congress in the programming, allocation, and use of funds. This study utilizes multiple regression analysis to develop unit-price equations and total project cost equations for cost estimation. A sample consisting of 26 projects from the western United States is used for preliminary model development. The equations developed are applied to a second sample with six projects located in the same area. The results indicate that the model has potential for determining reliable preliminary road cost estimates. Because of its simplicity, this model could reduce the resources spent on this task and lead to the reduction of transportation cost. Full-text

Aziz. Improving the way that the Washington State Department of Transportation (WSDOT) performs business is an important objective to pursue. The objectives of this research were to develop tools that will monitor the contractor’s performance during construction in order to detect any unsatisfactory progress, and to develop tools that will improve the time and cost prediction of highway projects in order to reduce time and cost overruns. To achieve the first objective, the research surveyed other state departments of transportation (DOTs) about how they measure and evaluate work progress and contractor performance. The survey showed that a formal progress measurement and performance evaluation process is lacking in many states, and that there is an apparent lack of progress charts for measuring contractor performance. By using WSDOT historical project data on actual payment estimates and the elapsed working days of each estimate in each project, the current research developed minimum performance bounds and average performance bounds for a set of successfully completed projects using regression analysis. Performance bounds were developed for all projects and for clusters of projects grouped in categories based on quantities of asphalt concrete pavement/hot mix asphalt (ACP/HMA), contract value, project duration, and project miles. Time and cost prediction models were developed through the application of general multiple regression analysis, ridge regression analysis, and nonlinear partial least-square regression analysis on WSDOT historical project data. The models were developed on the basis of a number of major variables in pavement projects, including project duration (working days), final contract value (paid-to-contractor dollars), ACP/HMA quantity (tons), grading (tons, cy), surfacing (ton), and the number of project highway miles.

Kyte. In May 2002, Virginia’s Commonwealth Transportation Commissioner tasked his Chief of Technology, Research & Innovation with leading an effort to develop a definitive, consistent, and well-documented approach for estimating the cost of delivering construction projects. The task group found that a VDOT district had been using an estimation worksheet for several years that produced consistent and reliable results for certain types of roadway and bridge construction. The assembled task group determined that no other method examined had the specificity and potential of this tool. The project team expanded the tool by collecting extensive project data and obtaining evaluations of VDOT project management personnel statewide to develop it further. The existing Excel worksheet with roadway and bridge estimates. Report can be downloaded.