Administering Lump Sum P/T Contracts via a Cost Loaded Schedule Tom Wiener, P.E. MnDOT Project Controls Engineer Matt Reid, P.E. HDR Engineering, Inc.

Background – Why?

Cost Loaded Schedule Allows for Breakdown of L.S. Cost Validate Costs of the L.S. Better Quality Control Better Progress Control and Monitoring Earned Value / Revenue Techniques Why us Cost loaded schedule to administer Payment Cost Breakdown Estimates still can be done internally on major qty and compared to the L.S. Bid Better Progress Control When payment becomes an integral element of the schedule the result is a schedule that is paid attention too – thus a more useful schedule Better Quality Control When payment is linked to a deliverable the result is BETTER SCOPE DILIGENCE & LESS REWORK

Cost Loaded Schedules Contractor Consultant Schedule of Values (Low Bid Contract) Lump Sum Bid items are Cost Accounts in P6 that align with Unit Rate bid items Coming to consensus on the Schedule of Values or LS Cost Centers is very important if you are going to be able to maintain a cost estimating basis of connecting this to your unit rate costs

Cost Loaded Schedules Contractor Consultant Challenges Faced Schedule of Values Contractor Consultant Challenges Faced We’ve Never Done This Before ($14.2M QBS) Office of Audit/Validation of Costs Creating Negotiated Work Packages from RFP Schedule Was a Learning Curve for Consultant

MN Earned Revenue Method Provides Method for Equity Control Allows for Schedule Risk to be Reduced Reduces Fears of Lump Sum Lump Sum Encourages Innovation Scope Diligence Streamlined Payment Administration OR Maybe Why not Lump Sum Transfer of Risk In large part I’m not here to argue the merits of a contract LS or Unit Rate Contract. I am here to demonstrate successful techniques for addressing some biggies of why not But what if we don’t want to dictate means and methods – say a DB contract More clear understanding of the scope Less scope creep Less cost growth

St. Croix Design Schedule

St. Croix Design Schedule Lump Sum Contract Requirement 1st Design Contract – Lump Sum CPM Use of MnDOT SWIFT Codes 1010 – Project Management 1250 – Misc. Engineering & Support 2824 – Special Studies ABUT DECK PIER Oracle Primavera P6

Types of Schedules Baseline Schedules – 1st plan for executing work and progress measured from Update Schedules – record of progress on a monthly basis; actual dates, remaining durations, actual cost, earned value. Revised Schedules – Re Baseline if necessary

St. Croix Baseline Development Schedule built locally Coordination with Functional Leads and MnDOT Baseline Acceptance Baseline Uploaded to MnDOT Hosted P6 Environment

St. Croix - Work Breakdown Structure (WBS)

MnDOT CPM Specifications Similar to MnDOT CPM Const Specs – 1803 Activity Durations 5-20 days Activity must have Predecessor/Successor No Lags/Leads Constraints Contract Time, Delays, Impacts, Failure to complete work on time Very similar to MnDOT standard spec for construction cpm.

St. Croix Scheduling Schedule Activities – 465 Logic Relationships – 750 Constraints – 14 Initially, 2 Afterward Critical Activities – 40, less than 10% of Project, no more than 30% per spec

Assigning Cost Accounts to Activities- Cost Loading SWIFT Codes Differentiate Subs – Multiple Entries Reporting

Schedule Updates – Earned Value Schedule Updated Monthly Purposes of CPM Coordination with Design Functional Leads Schedule Narrative Highlights Anticipated/Final Milestones Critical Coordination Activities Change in Schedule Logic Payment - Invoicing

Schedule Updates – Invoicing 17 page invoices vs. 80-100 page invoices for similar sized projects, including labor/expense backup.

Benefits of Design CPM on St. Croix Organization Define deliverables in an organized format Ensure all contracted deliverables are accounted for Activities have agreed upon budget Communication Relationship between disciplines and other parties Responsibility - activities are assigned to companies, DOT When deliverables are required logically Analysis On time – baseline comparison and float analysis On budget – Internal earned value/percent complete analysis Risk or Impact mitigation – All parties can identify and mitigate potential risks, allocate or shift resources

Consultant Contract Was it worth it? Yes Validated Scope of Work Consultant buy-in to the process Truly managed schedules (Earned Revenue Mngt) We needed this design done on time Streamlined Payment administration – Auditing History

Where Are We At/Going? Projects in Scoping and Design Phase Project In Construction Phase Contractor’s build schedule in our network 1/1/13 Piloting BIM and CTD schedules 3/1/13 Select Unit Rate project Resource and Cost Loaded 3/1/13 Role and Resource Loaded of CE&I staff 6/1/14 Projects in Scoping and Design Phase Programmed Projects Role and Resource Loaded 6/30/13 All planned projects Role loaded by June 30, 2014 Taxpayer Transportation Accountability Act Cost Loading Unit Rate projects – done this in the past -

Administering Lump Sum P/T Contracts via a Cost Loaded Schedule Q&A? Administering Lump Sum P/T Contracts via a Cost Loaded Schedule Tom Wiener, P.E. MnDOT Project Controls Engineer Matt Reid, P.E. HDR Engineering, Inc.