March 1 , 2012

1. Brent Spence Bridge Project Cincinnati, Ohio Cost Estimate Review Closeout Presentation March 1, 2012

2. Brent Spence Bridge Project Map

3. Cost Estimate ReviewObjective Conduct an unbiased risk-based review to verify the accuracy and reasonableness of the current total cost estimate to complete the Brent Spence Bridge Project and to develop a probability range for the cost estimate that represents the project’s current stage of design.

4. Review Agenda • MONDAY – February 27 • CER Introduction by FHWA • Project Overview by Project Personnel • Overview State Estimation Process • Define Contingency, Risk Template & Inflation • Roadway • Pavement • Lighting, Traffic Control, Traffic Surveillance and Signals • MOT • TUESDAY – February 28 • Structures • Retaining Walls • Noise Barriers • Right of way and Utilities • Erosion Control • Drainage • Miscellaneous Costs

5. Review Agenda • WEDNESDAY – February 29 • Enhancements • Environmental Mitigation Costs • Soft Costs • Begin Findings and Report Preparation • Findings and Report PreparationDraft Presentation • THURSDAY – March 1 • Closeout Presentation

6. Basis of Review Review based on estimates provided by the Project Team in advance with revisions made during the review Reviewed estimates to determine the reasonableness of assumptions used Reviewed project elements to identify and model risks Discussed project conditions to develop base variability, market conditions and inflation percentage Not an independent FHWA estimate Did not verify quantities and unit prices Goal is to verify accuracy and reasonableness of estimate Risk-based Probabilistic Approach

7. Review Participants FHWA Headquarters – Office of Innovative Program Delivery KY and OH Division Offices MO Division Office Ohio Department of Transportation Kentucky Transportation Cabinet Consultant PB

8. Review Methodology Verify Accuracy of Estimate Review major cost elements Review allowances and contingencies Adjust estimate as necessary Discuss / Model Base Variability Market Conditions & Inflation Key Schedule & Cost Risks Perform Monte Carlo simulation to generate a project estimate as forecast range Communicate Results

9. Documentation Provided Project Cost Estimate Project Schedule Project Website Ohio Inflation Forecast Estimate Coordination Documents Project Map and Location

10. Review Findings Estimate is comprehensive, covering entire construction scope of project Estimate includes all soft costs (design, CE, environmental mitigation) Estimate includes all ROW, Utility Relocation Estimate current as of February 2012 Found basis for pricing to be relevant and used similar project experience for the major bridge Found the Project team used good estimating practices in preparation of the cost estimate Good communication among Project Team to ensure estimate covered the entire project scope

11. Review Baseline Pre-CERProject Information • Total Cost (YOE): $2,346,444,533* • Total Cost (Current): $1,784,014,400* Project Completion Date: July 2022 * Includes $22M in previously incurred project development costs

14. Schedule Adjustments

15. Adjusted Baseline CER Adjusted Project Information • Total Cost (YOE): $2,454,958,862 † • Total Cost (Current): $1,874,440,020 † • Project Completion Date: November 2020 † - includes $90.4 M in adjusted costs

16. Base Estimate Contingency There was no contingency in the base estimate (Per FHWA definition) Estimate included design contingency per ODOT estimation procedure (Contingency = Allowances) After reviewing estimate for contingency/allowance, process added back in base variability, market conditions and risks to develop probability range of project costs

17. Base Variation Analyzed by Section of Project OH Section: +/- 10% KY Section: +/- 10%

18. Conceptual Overview of Inflation & Market Conditions Current Year YOE aba Worse As-Planned Market Conditions Better Inflation Base Estimate

19. Market Conditions Worse Than Planned (e.g. 15%) Better Than Planned (e.g. 20%) Base Estimate -10% +10%

20. Market Conditions - OH Assumptions Market Conditions remain as-planned: 50% Market Conditions better than planned: 20% Market Conditions worse than planned 30% Variation of better than planned from as-planned: 7% Variation of worse than planned from as-planned: 7%

21. Market Conditions - KY Assumptions Market Conditions remain as-planned: 45% Market Conditions better than planned: 20% Market Conditions worse than planned 35% Variation of better than planned from as-planned: 7% Variation of worse than planned from as-planned: 7%

22. Inflation Forecasts Based on January 2012 Construction Cost Outlook and Forecast (generated February 13, 2012) – ODOT Estimating 2012 Calendar Year: 4% 2013 Calendar Year: 4% 2014 Calendar Year: 5.5% 2015 Calendar Year: 5.5% 2016 Calendar Year: 4.5% After CY16:    4%

23. Significant Cost Threats Flooding along the Ohio River during construction Crescent Avenue Retaining Wall Construction Potential impacts to Crescent Avenue, hill side stability, and utilities. Addition of Project Enhancements MOT impacts on adjacent project schedules Structural steel repair on the BSB rehab may increase

24. Significant Cost Threats Total acquisition of Lexus dealership Potential need for underground drainage detention Lighting costs related to high mast vs. conventional because of public opposition to the high masts Alt 3 is selected rather than Alt 1 for the new BSB

25. Significant Cost Opportunities Potential reduction in the quantity of noise barriers.

26. Significant Schedule Threats Funding availability Duke Energy Sub-Station - Relocation of sub-station and transmission tower Flooding along the Ohio River during construction MOT impacts on adjacent project schedules Structural steel repair on the BSB rehab.

27. Significant Schedule Opportunities Design Build procurement on the KY-4 contract Design Build procurement for the BSB project

28. Risk Register Risks identified through discussions with SMEs Modeled significant risks (threats and opportunities) Cost Risk / Schedule Risk Project team did not quantify unidentified risks (discussed but not included)

29. Sample Risk Model Likelihood of Occurrence 75% Impact of Occurrence Triangular Distribution Most Likely - $14 M Minimum - $13 M Maximum - $30 M

30. CER Outputs Review findings/recommendations Adjustments made to estimate during review Project cost estimate at 70% level of confidence Risk Register – Threats/Opportunities

31. Total Project Cost with Risks (2012 Dollars)

32. Total Project Cost with Risks (YOE)

33. CER Outputs - Cost Forecast

34. OH Remaining Costs (YOE)

35. KY Remaining Costs (YOE)

36. OH Construction Costs (YOE)

37. KY Construction Costs (YOE)

38. Recommendations Secure funding to move project forward Include range of YOE forecast values in NEPA document Submit Major Project Initial Financial Plan with value equal to or greater than CER 70% results – prior to authorization of construction Develop a plan to manage threats and opportunities Continue to work towards procurement to take advantage of current market conditions Continue to monitor market conditions through procurement

39. Risk Management Process

40. CER Next Steps • FHWA will prepare a final report documenting review findings. • Draft report for review within 30 days • Draft report will be e-mailed to Division Office • Division Office will review the draft and forward it to the State Project Team • Final report issued within 30 days after receipt of comments • Final report forwarded to the Division Office for distribution to the State Project Team • FHWA uses the report for the review of the Initial Financial Plan • Estimate review is a snapshot of the current estimate

41. Brent Spence Bridge Project Questions?