Effective Project Controls for Green Line Extension Program

1. Effective Implementation of Project Controls During Construction Green Line Extension Massachusetts Bay Transportation Authority John Dalton, Green Line Extension Program Manager FTA TRANSIT CONSTRUCTION WORKSHOP AUGUST 27 – 28, 2019 |SEATTLE, WASHINGTON 1

2. Agenda • General Scope and Project Background • Challenges • Approach • Lessons Learned • Do’s and Don’ts

3. General Scope • $2.3B Program • 4.7 miles of Green Line track in three cities • Six new stations and one relocated station • 24 new Light Rail Vehicles • New Green Line Maintenance Facility • 20% of local population presently within walking distance to rail transit. 80% to be so upon GLX completion • Anticipated daily ridership of approximately 49,000 boardings and alightings (by 2030) • Projected to improve local and regional air quality

4. Boston’s Central Artery/Tunnel Project

5. Logan International Airport

6. General Scope • Relocate 4.3 miles of existing Commuter Rail tracks • Construct new Medford Branch Green Line Tracks (3.5 miles) • Construct new Union Square Branch Green Line tracks (1 mile) • Bridge modifications (2 complete replacements, 5 modified)

7. CHALLENGES • Restarting a major Program that was shut-down • Previous CM/GC delivery method was not competitive to prevent very large cost over-run forecasts. • Maintaining public trust for prior MBTA and public works projects • From experience on some major Programs --- as the Program’s Controls are managed, so too goes the project’s health

8. CHALLENGES • Adding a major mega Project (and a Design-Build project) to an Owner/Agency that did not have prior experience • Staffing • Controls • Processing payments • Management systems • Risk Management • Ability to react quickly maintain schedule • Knowing the boundaries of Design-Build vs Design-Bid-Build

9. OTHER CONTROLS RELATED CHALLENGES • Making a massive redesign “stick” (internal and external pressures) • Managing interfaces with ourselves • PTC • Competing Operational Priorities • PMIS on enterprise level • Third-Party Utilities • Commuter Rail Operator - Outsourced • Keeping up with a large DB Contractor staff /speed 9

10. ORGANIZATION APPROACH • PM is a ‘Direct Report’ to the MBTA General Manager • GLX Program is mostly independent from the overall MBTA Capital Delivery Group (design, construction, controls) • Supplemented MBTA staff with experienced Consultant Support • Additional supplemental support MBTA staff hired • Colocation of DB Entity with MBTA

11. Controls Approach • Program Controls • Risks • Change Orders • Cost / Budget • Schedule • Reporting • Administration • Document Controls • Management Information System

12. APPROACHES & LESSONS • Risk management and Change Management (COs) are both managed within the GLX Project Controls group • Sharp focus (internally) is on evaluating and reacting to the most significant changes (potential or confirmed) very quickly • Options analysis to avoid schedule delays • Staff Independent Cost Estimate • Tiger Team’s developed for high-risk issues • Top 5 Weekly meeting (with the DB Entity Senior Staff) • Make sure the Contractor (DB) knows that the Owner (MBTA/MassDOT/FTA) has options to solve problems and execute change orders

13. APPROACHES & LESSONS • Risk management and Change Management (COs) are both managed within the GLX Project Controls group • Other internal Controls emphasis is put on: • knowing the Contract language better than the Contractor • presenting the strengths of the MBTA’s positions early… and also recognizing the weaknesses of our arguments, documentation or communications • seeking win-win solutions as issues start • generating multi-part change order settlement agreements to help with risk avoidance and justification

14. APPROACHES & LESSONS • Risk management and Change Management (COs) are both managed within the GLX Project Controls group • Other effective Controls related steps • Leveraging the Executive Level (MBTA and MassDOT leadership) to resist scope creep and/or unnecessary changes (must have exec ‘buy-in’ to publicly push back on changes) • Using cost estimating software and construction cost estimating methods the same way that the larger heavy/highway/transit constructors estimate lump sum contracts • Same for Scheduling Controls software (P6) --- and add Time/Logic diagrams for other planning and communications

15. APPROACHES & LESSONS • Risk management and Change Management (COs) are both under the GLX Project Controls group • Other effective Schedule Controls • Generated a strong schedule specification with control steps for basis of bid (cost and resources), communication obligations, risk management and change management --- also: • Baseline Schedule, 60 Day Schedule, Design Schedule, Monthly Project Schedule • Weekly Schedule Review meetings • Other weekly schedule meetings for hot-topics (i.e. critical bridge replacements, etc.)

16. APPROACHES & LESSONS • Risk management and Change Management (COs) are both under the GLX Project Controls group • Other effective Controls related steps • Always preparing for Dispute Resolution Board (DRB) and auditor type questions on justifications • Working closely with Construction, Legal, Design, and Administration for the best steps to navigate through the most pressing risks and changes

17. APPROACHES & LESSONS • Supporting Informed and Timely Business Decisions Always think about the weakness of your augment When weak … be quick to help by providing a confirmed CO When strong … be quick to point out how poor the Contractor’s argument is and think of ways to help them Be poised to go to escalate disputes (DRB or and beyond) – but, always way your risk and exposures Be conscious of media headlines

18. APPROACHES & LESSONS • Proactive Acceleration when warranted / justified • Example Vehicle Maintenance Facility path incurred 33 days delay • Proactive steps by owner neutralized owner impact EXAMPLE

19. APPROACHES & LESSONS • Proactive Change Management and CO Negotiation – Top 12 Issues for FY19 Resolved • Resolved Over $60 M in Exposure for less than $11M • Resolved Over 30 Months of Schedule Exposure for No Time (delay) EXAMPLE

20. APPROACHES & LESSONS • Program Management Information System (Administration) Available to the FTA and the Owners Rep (oversight) for reporting Custom work-flows for processing and ball-in court – visibility Secure sections for MBTA Management Team only Joint process management site for MBTA and DB Entity

21. APPROACHES & LESSONS • Program Management Information System (Administration) • Correspondence (incoming and outgoing) • Submittals, RFIs, DCNs, NCRs • Change Orders • Budget Controls – Monthly update • Schedule Reviews • Cost Estimates • Risk / Issues Updates

22. Other Do’s and Don'ts • DO spend extra effort on page-turns during the finalization of your bid documents (including the question and answers integration into the Contract) • DO spend extra time and $ on geotechnical/sub-surface and utility excavation – Require test-pits be performed as part of the earliest activities • DO define what the bidders should expect for weather days and limitations of operations • DO insert strong Contract Notice provisions in the Contract (to help the owner deal with changes) • For Design Build Contracts --- During procurement, DO use site walks, Alternative Technical Concepts, stipends, and One-on-One sessions to assist bid and optimize risk sharing

23. Other Do’s and Don'ts • DO specify how many Controls Staff (Schedulers) that the Contractor (DB) must have “on-site” / full-time with qualifications. • DO specify how many meetings the Contractor/DB staff will need to attend – who the key staff is … and the details of the monthly reporting requirements. • DO insist on a fully detailed cost and resource loaded schedule. To be updated monthly – with corresponding activity IDs in the weekly look-ahead schedule. • DO start the safety, commissioning and testing process in the design phase – not in the construction phase. • Don’t use the same Schedule-requirements specification that the Agency has used for many years.

24. Other Do’s and Don'ts • DON’T underestimate the value of the FTA Risks Assessment and Cost Estimate Review during the design development stage – Adequate levels of Contingency are a must for a mega project to be successful • DON’T assign the responsibility of meeting minutes to the Contractor (DB Entity) • DON’T underestimate the value of the cost and time it takes to have a good PMIS system. Staff it accordingly.

25. Other Do’s and Don'ts • DON’T assume a Contractor will cooperate with a specification to upload and use the PMIS you (the Owner) has. DO insist on specifying that the Contractor (DB Entity) be fully integrated with the PMIS you specify --- and spell out (in detail) what that will take for them to support it in the bid documents. • DON’T underestimate the value or ability to hire qualified Controls Staff. Plan that staff early and build in some reserve for the likely possibility that they will be offered more $ and leave your project. They are not inexpensive and the good ones are not readily available. • DON’T overcomplicate Risk Updates after the bid phase. Keep it simple, involve the project team, think or true priorities, plan ahead, do your homework, and make informed and timely business decisions.

26. Celebrate Successes • Resolved all of the top disputes from FY18 and FY19 • Avoided program shut-down • Secured additional funding ($157M + $75M – unprecedented) • Improved agency organization capacity • Supportive engagement from FTA throughout • Rapid deployment of PMIS • Rapid procurement of staff augmentation (PM/CM) • Co-location of program team • Early Works helped to make way for the DB Contractor • Managing to the Contract Milestones Complete Dates 26

27. Effective Implementation of Project Controls During Construction QUESTIONS & ANSWERS 27

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29. Risk Assessments Prepare independent assessments of both cost and schedule Factor in other on-going issues Factor in who is best positioned to manage the risk (Contractor, Designer, Owner, Design Consultant, Follow-on Contractor, Utility Company) 29

30. Example (Summer 2018) Site Risk Areas 5.) Scope Creep – Adjacent Lechmere Viaduct Project Scope 1.) RR Protection (Flaggers) 2.) VMF Site work (PCBs) 8.) DSC – AT&T Ductbank 4.) Rock under 66” Pipe 7) ‘Other’ Drainage 3.) Viaduct Soil Mixing Boulder Field 6.) ‘Other’ Potential DSC

31. Confidential Prepared Under Attorney Client Privilege 2 VMF Site work (PCBs) Upcoming (Summer 2018) Site Risk Areas TIMING CONSIDERATIONS MITIGATION WORK PLAN SUMMARY • Disputed work relates to scope for PCB removal, support of EPA coordination/approval and final close-out of hot-spots indicated in the Contract. • Processing disputed scope of work through the GLX Change Order evaluation process • Proceeding with multiple Directive Letters to advance with critical sampling of soils at the site (for PCBs) – accelerated • Taking on the formal EPA communication effort – utilizing MBTA LSP (not DB Entity) --- possibly fill over and cap … or remove PCBs soon • Meeting internally to be well informed to present to EPA • Considering keeping concrete slab and breaking it up for drainage • Getting DB to DB Entity to speed up plans/submittals that will be necessary to explain to the EPA (means-and-methods) • Exploring each of the PCB removal options (internally) as overlaid with the DB’s approach to the work (fill site) • Readying for next Directive letter to have the PCBs removed after EPA meeting • Have future ability to increase float at a later date ---- both with schedule logic and acceleration. • Evaluating what other related aspects of EPA coordination are impacted • Critical to keep advancing before work start in late August (on the VMF site) • Not much float on this related path • Will need to consider going to the DRB with this issue – if no resolution BUDGET CONSIDERATIONS • Most of the larger aspects of this disputed scope of this work appears to be a cost that would have already been covered in a PCO for a DSC (certainly the new PCBs found in soils below the existing building that is being demolished) • Cost of having the MBTA LSP be the formal communication with EPA appears to be small --- but needs to be budgeted for • Cost of having the DB provide the samples and to provide the multiple support for the progression of the EPA reporting appears to be important to keep pushing for • Possible credit for not having the formal LSP responsibilities seems unlikely. NEXT STEPS • Ongoing --- multiple meetings and field progress

32. TOPICS TO COVER • When do you start planning for project controls? • How do you track key project milestones to ensure the project remains on track? • How do you document decisions to make changes to the project? • What methodology is used for Cost and Schedule Risk Analysis to determine completion forecast dates? • How do you establish key performance indicators that will be used to assess a project's success? • How do you track work progress to make sure the project goes towards right direction? • How frequent do you update the schedule with the actual task performance data? What is your schedule recovery process? • When do you update remaining costs, and update the cost estimates with actual costs incurred during a selected period? • When do you take corrective actions to eliminate performance issues? • What are your effective project acceleration strategy? Boston

33. GLX • GLX is one Program that has evolved from CM/GC Delivery. • Decision was latermade (in 2016) for one large DB to: • Stay within commitments the Full Funding Grant Agreement (with FTA) • Maintain most of the benefit of the Design that had been completed to-date • Make large scale cost & schedule changes • Avoid costly interfaces with multiple projects • Promote innovation (with ATCs and one-on-ones) • Provide “Price Certainty * ” sooner, with one large bid and “affordability limit” How did your agency define evaluation parameters of work related to each contract? * Notably, not “Cost certainty”

34. What are some of the best strategies in managing risk in the contracting process? • Promote Innovation before locking in on a bid Price, scope and contract • Require Preliminary Designer to: • Bottom-Up Construction Cost Estimate (as a Contractor does) • Contract Time Determination Study (planning schedule – like GC) • Constructability review • Claims avoidance review • Formal Risk Assessment (as FTA requires) • Including incorporating results of OP40c (from FTA/PMOC) • Contingency management (design phase, construction phase, program and unallocated) 34

35. What are some of the best strategies in managing risk in the contracting process? • Independent Cost Estimate (ICE) • Strong Contract Notice provisions (to help the owner deal with changes) • Detailed Construction Schedule specifications • Unit Price Payment items for risk sharing (certain contacts) • Strengthen the Owner’s Organization Capacity • Industry Partnering meetings • Insert a VECPclause into the Construction Contract 35

36. What are some of the best strategies in managing risk in the contracting process? • Extensive Geotechnical Investigation Plan – • Borings at all major foundations • ‘Test Pits, Test Pits, and more Test Pits’ • Subsurface Utility Investigation • Insert DRB process into the Construction Contract • Start Testing and Commissioning Planning in Design Phase • Allow for a ‘part-one’ contract modification to speed up approvals • Lesson Learned 36

37. Provide your agency’s specific example(s) of Effective Contract Packaging and Management: • Specific Example – Approach and “Best Strategies” (continued) • GLX maximized the benefits of Design-Build Delivery with one-large Contract • Healthy Stipend – for the DB Proposer • getting more out of procurement design • and require certain deliverables that can be provided • sign off of that … to avoid bid protest • Alternative Technical Concepts (ATCs) • One-on-One Meetings – (deep dialogue – confidential exchanges – monitored by Legal staff) • Promote Innovation • Site walks • Early Release Submittal 37

38. Provide your agency’s specific example(s) of Effective Contract Packaging and Management: • Specific Example – Approach (continued) • Maximize the benefits of Design-Build • Affordability Limit – (with confidential / confirmation before final Price) • Risk Management – steering priorities, changes in specs/T&Cs, and assigning risk to the party best suited to deal • ‘Page-turns’ for Specs, Terms and Conditions • Don’t push all risk onto the DB Proposer • Early utility relocations • Provide Owner furnished items • Partner with FTA 38

39. Risk allocation: What risk is allocated to contractor? What is retained by owner etc.? GENERAL – each risk should be evaluated, early in the planning process, for who is best positioned to manage that particular risk. Contract terms need to be drafted to be clear about the details of who is expected to do what. Examples: Shared Owner Contractor Differing Site Conditions * Utility Investigation * Utility Coordination * Public Outreach * Working in winter * Managing Sub-Contractors * Working in tidal water * Permitting during Construction * Stakeholder Involvement during planning * Permitting during design * Managing the preliminary design * 39

40. Lessons Learned (Dos and Don’ts) Do • Promote innovation • Devote expertise and time to planning the work’ • Develop contingency plans Don’t • Underestimate the importance of organization capacity • Dwell on critical decision making • Fear making mistakes 40