Transportation Estimators Association Conference

1. Transportation Estimators AssociationConference Procedures Guide for Right of Way Cost Estimation and Cost Management Saratoga Springs, New York October 4, 2008

2. NCHRP Project 8- 49 (2) Stuart Anderson Texas A&M Keith Molenaar Univ. Colorado Biloxi, Mississippi June 13, 2007 Cliff Schexnayder Del E. Webb School of Const., ASU

3. Outline • Background • Methodology • Data Collection and Results • Issues • Procedure Guide • Discussion

4. Background • State highway agencies (SHAs) have identified cost escalation to be a consistent problem • Phase I of NCHRP Project 8-49 • Focused on the larger issue of cost escalation relative to general project cost estimating • Produced Guidance, Report 574, which focused on strategies, methods, and tools • Phase II of NCHRP 8-49 • Target specific area for elaboration – Right of Way

5. Research Objective Develop an all-inclusive set of right-of-way cost estimation and cost estimation management procedures based on literature and current practice, which integrates cost estimate and cost management steps documented in NCHRP Report 574 to support the right-of-way process.

6. Research Tasks • Task 1. Update Literature Review • Task 2. Examine and Document Successful Right-of-Way Estimating and Management Practices • Task 3. Develop Methods and Tools for Right-of-Way Estimating and Management • Task 4. Develop Procedures on Right-of-Way Cost Estimating and Management • Task 5. Prepare Report and Right-of-Way Cost Estimating and Management Procedures

7. MethodologyFramework • Phase I implications • Project development phases • General project cost estimation and estimate management steps • Cost estimating and cost management flowcharts • Tool appendix approach

8. MethodologyFramework • Impact of Phase I approach on Phase II • Focus on creating a ROW Cost Estimating and Cost Management Procedures Guide – a “how to” • Create more detailed processes for cost estimating and cost management for ROW to support procedure guide • Use some Phase I tools but created a few additional tools focused on ROW using same format and structure

9. MethodologyData Collection • Literature review • On-site interviews • Interview Protocol • 15 questions • Six areas of interest which focused on different aspects of the cost estimation and estimate management process • Interview Process • Who? • SHAs and other organizations that acquire ROW • Central Office and Region/District perspectives • How? • Use the protocol as a roadmap during interviews • Ask each question relative to the development phase

10. MethodologyData Analysis Approach • Review of Practices • Critical issues to ROW cost estimation • Successful practices and tools • Flowchart technique • Data was subdivided into four categories: • Inputs (primary and secondary) • Process steps • Outputs • Decisions and loops (cycles within the process)

11. Data Collection • Interview participants • 7 State Highway Agencies (40 individuals) • 2 Local Public Agencies (5 individuals) • Interview process • Open discussion • Protocol as a checklist • Documents collected • ROW manuals • Unique tools used in practice (i.e. cost estimating systems, estimate documents, spreadsheets) • Early flowchart feedback

12. Limitations of the Research • Small sample size • Differences between agencies being interviewed: • Large verses small • Organizational make-up – centralized verses decentralized • Project development phases • Terminology and acronyms

13. ResultsProblem Areas • Damages • Condemnations • Appreciation and other market conditions • Risk analysis and contingency • Early scope definition • Estimating tools • Estimator experience and knowledge

14. Right of Way Issues • Current practices lack structure and organization. • Communication between ROW personnel and project development team personnel needs to improve. • The ROW cost estimation process is highly dependent on the level of scope definition.

15. Right of Way Issues (continued) • Planning estimates do not typically involve ROW personnel. • SHAs underutilize risk analysis and the application of contingency in all estimates. • Cost estimation management and cost control are underutilized.

16. ProceduresGuideDevelopment ROW Research Results

17. Procedure GuideOutline • Chapter 1 Introduction • Chapter 2 Integrated Estimating Process • Chapter 3 Agency Level Process Overview • Chapter 4 Conceptual ROW Estimating • Chapter 5 Baseline ROW Estimating • Chapter 6 Update ROW Estimating • Chapter 7 ROW Cost Management • Chapter 8 Conclusions • Appendix - Tools

18. Agency Level ProcessFlowchart

19. ROW Estimate Elements • Land only • Land and structures • Other property improvements • Damages • Utility relocations

20. ROW Estimate Elements • Relocation assistance program • Administrative settlements • Settlements or trails • Support Costs • Appreciation

21. Key ROW Estimate Inputs • Requirements • Values for land and structures • Historical data • Inflation/appreciation rates • Condemnation rates • Future highest and best use

22. Conceptual ROW Cost Estimating Planning Phase

23. Baseline ROW Cost Estimating

24. Update ROW Cost Estimating

25. ROW Cost Management - Final Design Phase

26. Procedure Guide“How to” Chapter Contents • Cost Estimation/Cost Management Step • Introduction • Flowchart • Flowchart step • Project complexity • Phase inputs • Process step description • Tools (tied to tool appendix) • Tips for success • Outputs

27. Procedure GuideConclusions • Structured Approach • Collaborative Atmosphere • Key principles • Create an environment for success • Create procedures for establishing a Baseline ROW Cost Estimate • Create processes to identify risk and for setting appropriate contingency • Require ROW reviews • Create ROW cost control mechanisms • Support good communications practices

28. Questions, Answers, and Discussion!