Presentation is loading. Please wait.

Presentation is loading. Please wait.

Mn/DOT’s Cradle to Grave Estimating Our Cost Estimating Journey Transportation Estimators Association Conference Omaha, NE Mike Ginnaty Director, Project.

Similar presentations


Presentation on theme: "Mn/DOT’s Cradle to Grave Estimating Our Cost Estimating Journey Transportation Estimators Association Conference Omaha, NE Mike Ginnaty Director, Project."— Presentation transcript:

1 Mn/DOT’s Cradle to Grave Estimating Our Cost Estimating Journey Transportation Estimators Association Conference Omaha, NE Mike Ginnaty Director, Project Scoping and Cost Management

2 Cost Estimation and Cost Management Cradle to Grave Estimating Why MN/DOT needed to change What: Cost Estimating Project Overview Implementation Issues MN/DOT faced in implementation Status of Implementation Items

3 Cost Estimation and Cost Management Why?

4 Cost Estimation and Cost Management Performance Measures Projects in 3 rd (4 TH ) Year of STIP are let on time –FY 2008 65% of projects –FY 2007 76% of projects Projects in 1 st Year of STIP are let in current year –FY 2007 92% of projects –FY 2008 82% of projects Percentage of projects let within +/- 10% of original 3 rd year STIP construction estimate –FY 2008 28% of projects –FY 2006 29% of projects

5 Cost Estimation and Cost Management Cost Estimating Issues/Concerns Emphasis on estimating Transparency Public Trust and Confidence Credibility Following Through on Commitments

6 Cost Estimation and Cost Management Cost Estimating Process Improvement and Organizational Integration Project Phase 1 Data Gathering Oct 06 – June 07 Phase 2 Desired Solutions & Implementation Plan July 07 – Dec 07 Phase 3 Reference Manual Jan 08 – Dec 08 Phase 4 Training June 08 – Dec 08

7 Cost Estimation and Cost Management

8

9 NCHRP Report 574 Cost Estimating and Cost Management Practices Make Estimating a priority by allocating time and staff resources Set project baseline cost early and manage throughout Communicate estimate meaning and uncertainty Protect estimators from internal and external pressures Complete every step in a structured estimating process Document estimate basis, assumptions, deviations Identify project uncertainties early and establish contingencies Perform estimate reviews and obtain management approvals

10 Cost Estimation and Cost Management Cost Estimation Process Improvement and Organization Integration Project Created CE/CM vision for Mn/DOT Developed Policies and procedures Created an implementation plan Developed a manual Developed a training course Completed this work December, 2008.

11 Cost Estimation and Cost Management Organization Change/Integration Vision Resources Accountability Skills Processes Communication Incentives Case for Change Action Plans Sustained Change Training

12 Cost Estimation and Cost Management Mn/DOT’s Vision for CE/CM Department-wide priority on estimating, managing and controlling costs Total Project Costs (including Engineering, R/W, Construction and other elements) Reliable and accurate estimates Statewide uniformity and consistency Improved communication and credibility with external stakeholders Clear accountability

13 Cost Estimation and Cost Management CE/CM Policies 1.Project Cost Estimation Policy Districts will have dedicated estimators Estimates will be Total Project Cost Estimates (TPCE) Management approval required at gates 2.Uncertainty, Risk, and Contingency Policy TPCE will identify risks and estimate contingencies There is no program contingency, all contingency will be at the project level Unused contingency will be returned to the program

14 Cost Estimation and Cost Management CE/CM Policies 3.Cost Estimate Communications Policy All projects will have a Project Summary Report (one-pager) MN/DOT is only committed to projects in the STIP Projects outside of STIP will be shown in ranges 4.Project Cost Management Policy Projects will be managed against a Baseline Cost Estimate Use of contingency requires approval of Program Manager

15 Cost Estimation and Cost Management CE/CM Policies 5.Program Management Policy Projects will be managed to the scope Scoping marks the end of discovery Change to Baseline Cost Estimate requires approval of Transportation Program Investment Committee (MN/DOT Division Directors) 6.Emerging Issues (Not a policy in TRM) Design-Build Projects Special Programs/Funding, i.e. Chapter 152, ARRA CE/CM during construction

16 Cost Estimation and Cost Management CE/CM Implementation Plan 1.Develop system to track and define TPCE elements 2.Performance Measures and incentives 3.Role and Responsibilities 4.Communication of CE/CM 5.Resources Requirements 6.Technical Support 7.Integration with Scoping initiative and others processes 8.Accurately identify inflation impacts 9.Identify and develop additional tools and databases 10.Short-term Implementation (FY 2010, 2011, 2012) 11.Reduce the use of Setasides in the SRC 12.Emerging areas to be addressed

17 Cost Estimation and Cost Management Technical Reference Manual Outline SECTION I INTRODUCTION (Vision for CE/CM) SECTION II: ESSENTIALS (Foundation for CE/CM) –Interaction of Project Development and CE/CM Processes –Policy statements –CE/CM Process – Key information Total Project Cost, Risk and Contingency, Roles/Responsibilities SECTION III: Practice –Overview of Cost Estimating and Risk Methodologies –Cost Estimating/Cost Management procedures for Planning, Scoping, Design and Letting SECTION IV: Appendix (Terms, Estimating Tools and Tips)

18 Cost Estimation and Cost Management CE/CM Training Cost Estimating is 2 days Cost Management is 1 day Contract with University of Minnesota who is working with Stu Anderson, Jennifer Shane and Keith Molenaar as the instructors Held first session August 17-19 Scheduled to complete the initial training by Summer, 2010 Session on September 28-30, 2009 will be taped and sessions will be posted on our website

19 Cost Estimation and Cost Management CE/CM Training Attendees Training is for estimators and others who provide information to estimators and project managers –Estimators –Managers –Functional managers –Project Managers Estimated need to train 400 people in the department

20 Cost Estimation and Cost Management Cost Estimating Training Agenda Module 1 Cost Estimating: Why, When, Who, What, Where, and How Module 2 Project Development and Cost Estimating and Cost Management Module 3 Cost Estimating Overview Module 4 Key Cost Estimating Tools Module 5 Determine Estimate Basis Module 6 Prepare Base Estimate Module 7 Determine Risk and Set Contingency Module 8 Review and Approve Estimate Module 9 Determine Cost Estimate Communications Module 10 Cost Estimating Training Summary

21 Cost Estimation and Cost Management Cost Management Training Agenda Module 1 Cost Management: Why, When, Who, What, Where, and How Module 2Project Development and Cost Estimating and Cost Management Module 3Cost Management Overview Module 4Key Cost Management Tools Module 5Cost Management Based on Updating Cost Estimates Module 6Cost Management Based on Individual Changes Module 7Cost Management Training Summary

22 Cost Estimation and Cost Management CE/CM Training Comments We didn’t emphasize letting estimates We had a mix of people at the training from estimators to managers Performance measures need to be developed Need to hear from top staff the reason for change, why we are changing We need to Minnesotaize the tools Tie training slides to the manual 3 days is a big commitment of time This is not how we have done this We don’t have the resources for this

23 Cost Estimation and Cost Management Scoping Process Vision for New Scoping Process –Early –Comprehensive –Documented –Includes a Scoping Change Process Definition of Scoping: What’s In and What’s Out of a Project

24 Cost Estimation and Cost Management Scoping Implementation Scoping Process was developed by Preconstruction Managers Group (PCMG) –Developed a process –Developed a manual –Provided training ahead of implementation Implementation was for FY 2012 projects in the 09-12 STIP All projects to be scoped using the new scoping process Measured results, 95% of projects in 2012 had an approved scoping document

25 Cost Estimation and Cost Management Scoping Process Flowchart Baseline Cost Estimate Baseline Change Process

26 Cost Estimation and Cost Management Scoping Implementation – Remaining Challenges Focusing on earlier coordination, especially with external stakeholders Need for Risk Management Plans Shifting resources to earlier in Project Development Ensuring change is sustained through continued training and resources

27 Cost Estimation and Cost Management Mn/DOT Scoping and Cost Estimating website www.dot.state.mn.us/cost-estimating Operational Fall, 2008 Includes the Manual, Tools and other information for Scoping and CE/CM

28 Cost Estimation and Cost Management Project Scoping and Cost Management Office Created July, 2008 Created from the work on the Cost Estimating Project Heighten exposure of the CE/CM effort Currently have 4 positions filled, Director, Scoping Section Director, Bundle Steward, TTAA (Taxpayer Accountability Act)

29 Cost Estimation and Cost Management CE/CM Implementation Requirements Directive by Commissioner in October, 2008 Chapter 152 Projects (10 Year Program) –Legislative program in Spring, 2008 –Scopes and TPCE’s completed by Dec 1, 2008 –One-pagers completed by Dec 15, 2008 10-13 STIP Projects –Scopes and TPCE’s completed by April 24, 2009 –One-pagers completed by May 1, 2009

30 Cost Estimation and Cost Management Implementation Issues We did not have –TRM (Technical Reference Manual) –Training –Limited formal experience with risk assessment –No estimate tracking system (limited tracking in PPMS) We did have –Experience with cost estimating (we are good at estimating what we know) –Generally are later estimates are very good

31 Cost Estimation and Cost Management Implementation Kit Developed Implement Kit including –TPCE Spreadsheet –One Pager format and example –Risk Fact Sheet –Risk/Contingency Guidance –Risk Register –Contingency Chart

32 Cost Estimation and Cost Management Total Project Cost Estimate

33 Cost Estimation and Cost Management One-Pagers

34 Cost Estimation and Cost Management Risk Management Training Conducted Cost Risk Assessment Value Engineering (CRAVE) Workshops –Conducted on 13 Major bridge projects with cost ranges $50-700M –Projects were from across the state (District 2, District 6, District 7, Metro) –Participants were from various districts

35 Cost Estimation and Cost Management Implementation Results Chapter 152 Projects –Districts delivered 100% of projects having scoping documents, TPCE and one-pagers FY 10-13 STIP Projects –Districts delivered 94% of projects having scoping documents, TPCE and one-pagers

36 Cost Estimation and Cost Management Organization Change/Integration Vision Resources Accountability Skills Processes Communication Incentives Case for Change Action Plans Sustained Change Training

37 Cost Estimation and Cost Management Enabling Change Vision Resources Accountability Training Processes Communication Incentives Case for Change Action Plans Resistance Skills

38 Cost Estimation and Cost Management Enabling Change Vision Resources Accountability Training Processes Communication Incentives Case for Change Action Plans Fragmented Skills

39 Cost Estimation and Cost Management Enabling Change Vision Resources Accountability Training Processes Communication Incentives Case for Change Action Plans Anxiety Skills

40 Cost Estimation and Cost Management Enabling Change Vision Resources Accountability Training Processes Communication Incentives Case for Change Action Plans Frustration Skills

41 Cost Estimation and Cost Management Enabling Change Vision Resources Accountability Training Processes Communication Incentives Case for Change Action Plans Confusion Skills

42 Cost Estimation and Cost Management Enabling Change Vision Resources Accountability Training Processes Communication Incentives Case for Change Action Plans Unsustained Skills

43 Cost Estimation and Cost Management Issues/Concerns Project Summary Reports (One-Pagers), where to store Tool Development, Minnesotaize the tools TPCE Tracking System Risk and Contingency Training Management wants the “Right estimate”, what is “Right”?

44 Cost Estimation and Cost Management Keys to Mn/DOT’s Success We need to become a Risk Management Organization Emphasis on scoping Need to increase our effort on scoping projects The end of scoping is the end of discovery. Management is looking for “Right Estimate”, need to define “Right” Retirement of Contingency

45 Cost Estimation and Cost Management CE/CM Implementation Progress 1.Develop system to track and communicate TPCE Define TPCE elements (needs more work) Group TPCE elements (TPCE Spreadsheet) Define and develop tracking system (Project Summary Report) R/W Estimating process Engineering Estimating process (PET, TTAA position) Tracking of estimates, comparing estimates to actual expenditures (Bundle Project) 2.Performance Measures and Incentives Developing performance measures (Fall, 2009, CTS Transition Contract) Tracking who needs training and who has completed

46 Cost Estimation and Cost Management CE/CM Implementation Progress 3.Roles and Responsibilities Define role of Office (CTS Transition contract) Define the role of districts responsibility (somewhat defined in policies) 4.Communication of CE/CM Communication plan (updating as part of CTS Transition contract) Part of the CE/CM training Role of Office Presentation at meetings (functional areas, management, TEA) 5.Resources Requirements Partially in role Office District Estimators Earned Value Management (Resource loaded schedules)

47 Cost Estimation and Cost Management CE/CM Implementation Progress 6.Technical Support CE/CM Training (starting) Project Management Peer Review 7.Integration with Scoping Initiative and other processes Completed Scoping Process integration Fall, 2008 Other processes include utilities, Program development R/W Estimate 8.Accurately Identify Inflation Impacts Identified process for applying inflation working with Office of Investment Management

48 Cost Estimation and Cost Management CE/CM Implementation Progress 9.Identify and develop additional Tools and Databases Project Summary Report (one-pagers) Risk Management Accelerated projects, working with D-B, major bridges scoping efforts 10.Short-term Implementation (FY 2010, 2011, 2012) This was the actual implementation 11.Reduce the use of Setasides in the SRC Identifying projects earlier in STIP Still work to be done

49 Cost Estimation and Cost Management CE/CM Implementation Progress 12.Emerging areas to be addressed Design-Build projects Special programs (ie Chapter 152) Scope reviews CE/CM during construction

50 Cost Estimation and Cost Management Mn/DOT Scoping and Cost Estimating website www.dot.state.mn.us/cost-estimating

51 Cost Estimation and Cost Management Thank you! I appreciate your interest in learning about our Cost Estimating/Cost Management Journey Michael Ginnaty, P.E. Director, Project Scope and Cost Management Office Email: mike.ginnaty@state.mn.usmike.ginnaty@state.mn.us Phone: 218-846-3604


Download ppt "Mn/DOT’s Cradle to Grave Estimating Our Cost Estimating Journey Transportation Estimators Association Conference Omaha, NE Mike Ginnaty Director, Project."

Similar presentations


Ads by Google