2008 FHWA Environmental Conference

1. 2008 FHWA Environmental Conference Planning/Fiscal Constraint Thursday, June 19 – 8:00 am Major Projects Team – Jim Sinnette

2. FHWA Major Project Requirements • Financial Plans and Annual Updates • Cost Estimate Reviews by FHWA • Project Management Plans • Internet • http://www.fhwa.dot.gov/programadmin/mega/index.cfm • StaffNet • http://intra.fhwa.dot.gov/programadmin/index.cfm

5. Cost Estimate ReviewFinancial Plans (SAFETEA-LU) • Threshold (All costs, PE, CN, R/W, UT, CE, etc.) • $500 Million – Major Project – Required concurrence from HQ prior to CN or R/W authorization • $100 to $500 Million – Required, however review is at each Division’s discretion • “Cost to complete estimates based on reasonable assumptions as determined by the Secretary.” • Secretary = FHWA • Reasonable assumptions = Risk based analysis

6. Cost Estimate ReviewNEPA (FHWA Major Project PMP Guidance) • Recommend cost review prior to final NEPA Document (FEIS, EA, CE) • No later than prior to ROD or FONSI • Why? – STIP/TIP/Plan conformity

7. Cost Estimate Review ToolRisk-Based Probabilistic Estimating • Any stage of design (Planning – NEPA - Final) • Identify cost estimate Threats and Opportunities for all cost elements • Determine cost impact and probabilities of individual threats and opportunities • Apply probability assumption curves to Crystal Ball software program (Excel) • Perform a Monte Carlo simulation with 10,000+ simulations to generate a project estimate forecast as a range with associated probabilities

8. US 101 Sample Cost Estimate Threats • Environmental - Biology • Biological Assessment has not been submitted – 6 month delay. Delay in obtaining approvals (e.g. Biological Opinion) may impact NEPA approval and overall schedule • BO may impact scope (e.g. size of drainage structures) • Seasonal constraints for structure work • Red-legged frog mitigation has not been agreed to • Wetland replacement ratio may change • No studies have been completed for endangered plants (e.g. Pickleweed) • Cost of tree, fish, and riparian mitigation is unknown • Environmental - Cultural • 6 known sites of Native American burials – Adverse Effect from SHPO. The MOA has not been completed. • Environmental - Other • Soundwall locations may be added

9. US 101 Sample Cost Estimate Opportunities • Partnering with other agencies regarding tree mitigation • Conservative estimating for aesthetic treatments • Use the same mitigation for riparian and fish impacts

10. US 101 – Sample Environmental Mitigation Cost Assumption Curve

11. US 101 – Sample Escalation Rate Assumption Curve

12. US 101 – Sample Midpoint of Construction Assumption Curve

13. US 101 Sample Forecast CurveTotal Project Cost (YOE) 60% probability from $740 to $760 M

14. Sample Sensitivity Chart 60% probability from $740 to $760 M

15. Advantages of risk-based probabilistic estimating • Identify cost estimate threats and opportunities • Estimate is a range with associated probabilities • Prioritize risks • Monitor specific costs to identify trends • Collaborative process • Scalable • Any stage of design (Planning – NEPA - Final) • Beginning of a risk management process