WSDOT Scoping and Cost Estimating for Highway Construction

WSDOT Scoping and Cost Estimating for Highway Construction Projects Proposed Final Report Joint Legislative Audit & Review Committee January 5, 2010 John Woolley, JLARC Staff

Key Question for JLARC Analysis of WSDOT Highway Construction? v Do the Washington State Department of Transportation’s (WSDOT) scoping and cost estimating policies and procedures align with industry guidelines? YES JLARC Analysis of WSDOT Scoping/Cost Estimating January 5, 2010 2

JLARC Developed 5 Key Questions From Literature to Test Alignment Does WSDOT have systematic, documented policies and procedures for: 1. Managing scope and scope change? YES 2. Managing the cost estimation process and changes to the cost estimate? YES 3. Keeping stakeholders informed? YES 4. Reviewing, quantifying, and mitigating risks? YES 5. Providing “checks and balances” to review and protect the cost estimate? YES Report Page 7 & Appendix 4 JLARC Analysis of WSDOT Scoping/Cost Estimating January 5, 2010 3

Also: In the Field, Do They Actually Follow These Policies and Procedures? Report Pages 7 -8 JLARC Analysis of WSDOT Scoping/Cost Estimating January 5, 2010 4

Looked at 8 Projects in the Field Northwest North Central Eastern Olympic Southwest South Central üPractices followed in these 8 case studies Report Pages 7 -8 & Appendix 5 JLARC Analysis of WSDOT Scoping/Cost Estimating January 5, 2010 5

2003/2005 Fuel Tax Increases (Nickel/TPA) Funded Many New Highway Projects Ø Since 2003 and 2005, many new policies and procedures put in place Ø WSDOT is now able to more accurately estimate costs than in 2003 and 2005 Ø Three issues to consider to make estimates more accurate: 1. Time 2. Resources 3. Communication Report Pages 10 -13 JLARC Analysis of WSDOT Scoping/Cost Estimating January 5, 2010 6

Literature: As More is Known, Estimates Should Become More Accurate Estimate Range ($ in millions) $300 million Planning Scoping Design Plans, Specification, Estimate 74% of Nickel/TPA project budgets established at 3% maturity $250 $200 Construction Complete $150 million 3% $110 million $150 Project Cost equals $100 Million $100 $50$50 million $0 2% Report Pages 10 -13 $95 million $70 million 10% 20% 30% 40% 50% 60% 70% 80% 90% Project Maturity – Percent of Design Completed 100% JLARC Analysis of WSDOT Scoping/Cost Estimating Source: JLARC analysis of Association for Advancement of Cost Estimating International (AACE); WSDOT guidelines, manuals, and budget reports. January 5, 2010 7

Time, Resources, and Communication and an Easy-to-Follow Budget Trail Ø WSDOT aligns with industry guidelines Ø Literature: importance of time, resources, and communication Ø JLARC found it hard to track estimate to what goes into budget request Ø Recommendation: Include in project record easy-to-follow trail between cost estimate number and budget request number WSDOT and OFM concur Report Page 14 JLARC Analysis of WSDOT Scoping/Cost Estimating January 5, 2010 8

Contact Information John Woolley. john@leg. wa. gov 360 -786 -5184 www. jlarc. leg. wa. gov JLARC Analysis of WSDOT Scoping/Cost Estimating January 5, 2010 9