A Synthesis of Highway Practice

1. David C. Wilson, P.Eng., CVS 2004 Government VM Conference Montreal, QC A Synthesis of Highway Practice Value Engineering Applications in Transportation Preliminary Results Presentation

2. This Presentation… • Five Aspects: • VE in Transportation – History Lesson • Study Objectives • Survey Approach and Literature Review • Key Observations • Future Directions and Needs

3. History Lesson • 1940’s – VE development in manufacturing • 1950’s – US Government (Bureau of Ships) • 1960’s – Incentives in construction contracts • 1970’s • 1970, Federal-aid Highway Act required VE • 1973, FHWA appointed VE Coordinator; encourages VE • 1975, FHWA/NHI VE training program initiated • 1980’s – AASHTO recognizes VE; Guidelines

4. History Lesson • 1990’s • 1991, ISTEA permitted FHWA to revisit VE requirement (encourage vs. require) • 1993, OMB Circular A-131 VE requirement • 1995, National Highway Designation Act • $25M threshold on federal-aid NHS projects • 1997, FHWA Regulation 23 CFR Part 627 response • 1999, AASHTO Guidelines revised • 2000’s • 2002, Final ruling on D/B VE requirements

5. History Lesson • NCHRP 78 (1981) • VE primarily on standards and specifications • Few DOT’s active at the time • DOT VE Pioneers • California – 1969 • Idaho and Virginia – 1973 • Minnesota – 1975 • Florida – 1976 • New Mexico – 1977 • Oregon and Pennsylvania - 1979

6. NCHRP 35-04 Study Objectives/Approach • Summarize current practices/programs • Focus • Policies, guidelines, project selection • Education and awareness • Applications • Implementation • Monitoring • Future Needs • Approach • Extensive DOT survey • Literature Review

7. Survey • 46 question survey developed • Distribution • NCHRP sent survey to 52 DOTs in United States • TAC sent survey to Canadian DOTs and Cities • Toll Authorities not included • Federal Lands recently received survey • Response • 37 US DOTs; 4 Canadian DOT’s • 3 Cities (New York; Ottawa; Winnipeg)

8. Did not respond to survey Note: Puerto Rico did not respond (not shown) Survey US DOT Responses Still Required

9. The Top Ten – 5 Year Summary Source: FHWA

10. Literature Review • Scope • North America • Primary Sources • AASHTO • FHWA • Miles Foundation • Conference Proceedings • Journals • Universities

11. Key Observations • Developing policy and guidelines • FHWA VE Regulation serves as basis in US • No common federal requirement in Canada • Selected DOTs • Developed specific guidelines • Developed manuals • Separate manuals • Chapters within Design Manuals

12. Key Observations • Selecting Projects • Generally US DOTs use $25M threshold • Some variation examples • Nevada - $10M (if policy enacted) • Pennsylvania, Ohio - $20M • New Hampshire - $50M • Virginia, Alaska, Ontario - $10M • Rarely on small projects • Build stakeholders consensus • Validate project scope or resolve issues • “Because we have to!”

13. Key Observations • Comparative benchmarks • 1981 (NCHRP Synthesis 78) • Primarily on standards and specifications • Rarely projects • 2004 (NCHRP Synthesis - New) • Rarely standards and specifications • Primarily on projects

14. Key Observations • Team Leaders • Majority require CVS as Team Leader • AVS and VMP generally not permitted • Most require a PE as a leader • Job Plans • Generally similar to SAVE Job Plan • Variations generally expand basic steps • Caltrans has 13 step job plan

15. Key Observations • Education and Awareness • Training • FHWA/NHI; Consultants; SAVE Conference • 70% of DOTs do not have a formal program • 19 DOT’s with training programs in place (5-10 yrs) • California – 1,200 staff • Virginia – 2,300 (1,500 still with VDOT) • Washington, New Jersey, Ontario – 350 each • Michigan, North Carolina, Arizona - < 20 each • Budget constraints have impacted training

16. Key Observations • VE Related Tools • Most Popular • Cost models • FAST diagrams • Evaluation matrices • Emerging • Project Performance Measures • Risk registers • Cause-Effect (Wishbone diagram) • Choosing By Advantages (long term opportunity)

17. Key Observations • Study Duration • Typically 3-5 days; sometimes split workshops • DOT Motivation • Staff availability • VE study costs • Pressures on VE Team • Selecting ideas • Evaluating ideas • Results/quality may be affected if not enough time allocated to workshop

18. Key Observations • Evaluating/Shortlisting Ideas - Criteria • Project cost • Constructability • Road safety • Traffic staging • Schedule impacts • Right-of-way • Environmental

19. Key Observations • Emerging Evaluation Approaches • User delay • During construction • Post-construction • Road safety • Explicit consideration of crash costs • Human factors reviews • Reaching consensus • 60% of DOTs use open discussions to reach agreement

20. Key Observations • Acceptance of VE Proposals • ± 60% of DOTs have form of implementation strategy or meeting in place • Michigan, Ontario, California have meetings • New York permits Regional Offices to decide on VE proposals • VE Organization Reporting Relationship • Primarily part of Design Branch • Some report to Financial Branch • New York City • Virginia

21. Key Observations • Monitoring VE Performance • FHWA reporting requirements typically govern • Focused on ROI • Construction costs • Study costs • Savings (design or construction – VECP) • Performance Improvement • California • Florida • Virginia • New Mexico • Washington

22. Key Observations FHWA Program Report Top 10 States – VE Expenditures Source: FHWA

23. Key Observations Source: WSDOT

24. Threats and Opportunities • Education • Refresh knowledgeable workforce • DOT staff attrition or promotion • Consultant demographics • SAVE Module I and II • Training courses need to evolve • Permit more diverse VE-related tools • NHI Courses • Maintain access to DOTs

25. Threats and Opportunities • Project Scope and Selection • Opportunities to expand VE • Smaller projects (lower thresholds) • Non-NHS federal-aid projects (non-mandated) • Standards and specifications • Measuring Performance • Consider project performance improvement • Project performance measures • Tracking database (racing forms)

26. Threats and Opportunities • Stakeholder Involvement • Value planning • Value-based design charettes • VE Acceptance • Defining implementation process • Detailed responses • Due Diligence • Declaring a “Champion” • Managing the VE proposals • Managing the decision-making system

27. Research Needs/Challenges • Key Challenges • How can we improve the readiness of the VE community? • How can safety, risk, user delay and other user costs be effectively considered? • What is the most appropriate method to measure project performance? • What role will emerging evaluation techniques play in future decision-making? • How can links be forged with other assessment tools?

28. Summary… • Five Aspects: • VE in Transportation – History Lesson • Study Objectives • Survey Approach and Literature Review • Key Observations • Future Directions and Needs

29. David C. Wilson, P.Eng., CVS 2004 Government VM Conference Montreal, QC A Synthesis of Highway Practice Value Engineering Applications in Transportation Preliminary Results Presentation

30. Contact David C. Wilson, P.Eng., CVS Vice President NCE Limited 2800 Fourteenth Avenue, Suite 206 Markham, ON, L3R 0E4 T (905) 943-4443 F (905) 943-4449 david.wilson@nceltd.com