Overview of WSDOT Capital Project Management

1
Overview of WSDOT Capital Project Management

• Preliminary Report
• Keenan Konopaski, JLARC Analyst
• Dan Estrada and Roberta Manshel, Gannett Fleming
• December 17, 2004

2
Scope of Review

• A pre-audit (overview of issues)
• Focused on management methods/structures used to
  deliver capital projects
• Limited to highway and ferry projects
• The beginning of the audit process, to help TPAB
  consider future audit steps
• Some initial management recommendations to WSDOT,
  when practical and supportable

3
Objectives of Review

• Describe procedures/processes
• Describe organizational structures
• Review reporting/information systems
• Review critical path management
• Review risk management
• Identify options for future TPAB audits and/or
  evaluations

4
Background on Capital Program

• 10 year cost of approximately 10 billion
• About 1,300 projects in 10 year plan
• Wide range in project sizes (100K to 500M)
• Multiple types of projects (highways, structures,
  vessels, ferry terminals, etc.)
• Several programmatic purposes (mobility, safety,
  preservation, etc.)
• New gas tax (Nickel fund) is designated by
  Legislature on line-item basis for specific
  projects

5
Challenge for Methodology

• How do we get substantive insight into specific
  project management techniques for this large,
  diverse capital program?
• Approach Select projects for detailed reviews
  with diversity in mind, and highlight differences
  between stronger and weaker practices
• Result Identify existing strengths and gaps for
  opportunities to extend practices or review more
• Caveat Findings from example projects represent
  diversity of practices in place

6
Criteria for Selecting Projects

• Half of selected projects faced challenges
• Projects past design and into construction
• Representation from multiple regions
• Diversity in size
• Diversity in type (interchange, ferry terminal,
  etc.)
• Diversity in project management tools and systems
  used
• Diversity in design approach (consultants vs
  staff)

7
Projects Reviewed by Consultant

• Shaw Island Slip Reconstruction
• SR 527 Widening - 164th to 132nd St SE
• I-5 196th (SR 524) Interchange
• Southworth/Fauntleroy Slip Reconstructions
• SR 16 HOV - Olympic Dr to Union Ave
• SR 161 - 234th to 204th St E
• SR 500 - NE 112th Interchange
• I-90 Build Lanes from Argonne to Sullivan

8
Projects Reviewed (contd)
9
Conclusions

• WSDOT has diversity in its project delivery
  practices.
• WSDOT is continuing to improve its practices with
  initiatives focused on project management
  principles and tools.
• While WSDOT encourages local innovation to help
  improve project delivery, some additional
  standardization of successful minimum
  requirements can provide benefits.

10
Conclusions (contd)

• Examples of exemplary practices are in place, but
  arent universally adopted because
• they are relatively new,
• implementation is slow due to the size and
  decentralization of WSDOT organization, or
• there are resource constraints.

11
Conclusions (contd)

• WSDOT has initiated efforts to shift its capital
  delivery orientation from a program-focused to a
  project-focused perspective.
• A lack of standardized definitions poses
  challenges to project reporting, communication,
  and clear expectations for accountability.
• Constraints in automated systems limit analysis
  and flexible reporting.

12
1. Describe Procedures/Process

• Capital program involves three inter-related
  processes

Project Delivery
13
All Projects Have Common Tasks
Finalize design work
14
2. Describe Organizational Structures

• Decentralized approach to project delivery
• HQ units provide standards, tools, technical
  assistance, oversight
• Regions/modes have responsibility for day-to-day
  management of individual projects
• Organizational approaches vary by region/mode
• Project teams use varieties of matrix
  management structures

15
Example of matrix structure
16
3. Review Reporting/IT Systems

• Numerous silo information systems support
  project delivery and house project data
• Systems are not well integrated or flexible
• Review identified examples of inconsistent
  information across reports
• Several reporting processes require significant
  manual intervention by staff
• Opportunities exist to improve efficiency and
  reliability of information with system linkages,
  though costs and benefits should be examined

17
4. Critical Path Management

• Consultant found varied application of scheduling
  practices for the example projects

18
5. Risk Management

• Consultant found varied application of risk
  management practices for the example projects

19
Cost/Schedule Performance

• Review focused on management methods, and not
  actual performance outcomes for project delivery
• However, JLARC revisited highway cost/schedule
  data analyzed in a 1998 performance audit
• Recent cost overruns on construction contracts
  decreased from prior audit (from 10 to 6)
• Proportion of contract change orders that were
  avoidable and no value add decreased (from
  38 to 29)
• Recent time overruns on construction contracts
  compared to initial awards increased (from 3 to
  8)

20
Cost/Schedule Performance (contd)

• Construction cost and time overruns are
  inevitable on capital projects
• Project budgets include contingency estimates,
  and historically these have covered overruns at
  WSDOT
• JLARC did not examine how WSDOT overruns
  currently compare to other jurisdictions

21
Management Recommendations

• Rec. 1 WSDOT should extend the application of
  existing principles and tools, and put management
  steps in place to confirm their adoption
• Managing Project Delivery (MPD)
• Project Delivery Information System (PDIS)
• Primavera Project Planner for the Enterprise (P3e)

22
Management Recommendations (contd)

• Rec. 2 WSDOT should develop a plan and timeline
  for implementing consultant recommendations,
  focused primarily on
• Using existing exemplary practices to develop
  minimum standards/templates for critical path and
  risk management techniques
• Improving project communication by documenting
  terms and definitions and
• Confirming the consistency and currency of
  reporting information.

23
Management Recommendations (contd)

• Rec. 3 WSDOT should conduct an assessment of the
  effectiveness of current information systems and
  options for addressing any deficiencies.

24
Management Recommendations (contd)

• Rec. 4 WSDOT should develop criteria for
  extending Cost Risk Estimating and Management
  (CREM) analyses to a wider universe of projects.

25
6. Options for Future Audits/Reviews

• Audit the effectiveness of Managing Project
  Delivery (MPD) and the Project Delivery
  Information System (PDIS) in improving project
  delivery (with delayed audit start time).
• Conduct an assessment of project delivery
  performance measures, comparing WSDOT results to
  similar programs at other states.
• Audit the practice of determining construction
  contractor pay estimates.
• Conduct an assessment of alternative contracting
  methods, such as alliance contracting.