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FHWA Major Projects and SAFETEA-LU Jim Sinnette FHWA Major Projects Team

FHWA Major Projects and SAFETEA-LU Jim Sinnette FHWA Major Projects Team 2006 Annual TEA Conference. SAFETEA-LU. Section 1904. Stewardship and Oversight (h) MAJOR PROJECTS –

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FHWA Major Projects and SAFETEA-LU Jim Sinnette FHWA Major Projects Team

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  1. FHWA Major Projects and SAFETEA-LU Jim Sinnette FHWA Major Projects Team 2006 Annual TEA Conference

  2. SAFETEA-LU • Section 1904. Stewardship and Oversight • (h) MAJOR PROJECTS – • (1) IN GENERAL. – Not withstanding any other provision of this section, a recipient of Federal financial assistance for a project under this title with an estimated total cost of $500,000,000 or more, and recipients for such other projects as may be identified by the Secretary, . . .

  3. Major Project Definition • Federal financial assistance • Title 23 funding • TIFIA loans • Total cost includes all costs in $YOE • Engineering, R/W, UT, etc. • NEPA-defined project (with exceptions) • Operationally independent • Non-concurrent phases of construction

  4. SAFETEA-LU • Section 1904. Stewardship and Oversight • (3) FINANCIAL PLAN. – A financial plan shall- • (A) be based on detailed estimates of the cost to complete the project; and • (B) provide for the annual submission of updates the Secretary that are based on reasonable assumptions, as determined by the Secretary, of future increases in the cost to complete the project.

  5. Financial Plan and Annual Updates • FHWA Guidance – Financial Plans • Cost Estimate • Implementation Plan (Schedule) • Financing and Revenues (Not “pay as you go”) • Cash Flow • Risk Identification and Mitigation Factors • Potential Litigation • Permits Issues • Cost Containment Strategies • FHWA Guidance - Annual Updates • Identify History and Trends • Summarize significant cost increases and reductions

  6. Financial Plan and Annual Updates • Initial Financial Plan is required prior to the first federal construction authorization for D/B/B • Initial Financial Plan is required prior to Request for Proposals for other types • Must be accepted by the Division office with concurrence from FHWA HQ

  7. Cost Estimate Validation • FHWA Interim Major Project Guidance and Oversight Framework – January 27,2006 memo from FHWA Administrator Capka • Cost Estimate Validations • Required prior to release of FEIS • Required prior to Initial Financial Plan • Required when cost increases by 5% in one year • Required when scheduled completion date slips by 6 months

  8. Why Validate? • A financial plan shall– ``(A) be based on detailed estimates of the cost to complete the project; and ``(B) provide for the annual submission of updates to the Secretary that are based on reasonable assumptions, as determined by the Secretary, of future increases in the cost to complete the project.

  9. Verification by the FHWA Division • Assurance that the State validation was unbiased and FHWA agrees with its findings. • Ultimate goal is a reasonable and complete cost for the project. • Risks • $YOE • All costs included

  10. SAFETEA-LU • Section 1904. Stewardship and Oversight • (i) OTHER PROJECTS. – A recipient of Federal financial assistance for a project under this title with an estimated total cost of $100,000,000 or more that is not covered by subsection (h) shall prepare an annual financial plan. Annual financial plans prepared under this subsection shall be made available to the Secretary for review upon the request of the Secretary.”.

  11. $100 to $500 Million Financial Plans • Total cost includes all costs • Same guidance as Major Project Financial Plans • Consider a programmatic approach • Preparation • Oversight

  12. SAFETEA-LU • Section 1904. Stewarship and Oversight • (g) OVERSIGHT PROGRAM • (1) ESTABLISHMENT • (B) PROJECT COSTS. – The Secretary shall develop minimum standards for estimating project costs and shall periodically evaluate the practices of States for estimating project costs, awarding contracts, and reducing project costs.

  13. Project Cost Minimum Standards • Rule making vs. guidance • Schedule • Content: • Include all costs • Year of expenditure costs • Risk based assessments for uncertainties and unknowns • Consider programmatic assessments • Periodic evaluation of State practices regarding estimates, contract awards, and cost control

  14. SAFETEA-LU • Section 1904. Stewardship and Oversight • (3) MAJOR PROJECTS. – The Secretary may require more than 1 [value engineering] analysis described in paragraph (2) for a major project described in subsection (h) • At this time, no FHWA guidance or policy for major projects.

  15. NHI Course • Look for an NHI Cost Estimating Course within the next year • Awareness • Probabilistic • Deterministic • Emphasis on estimating unknowns and uncertainties

  16. Questions? • Major Project Definition • Major Project Financial Plans • Cost Estimate Validations • $100 to $500 Million Financial Plans • Minimum Cost Estimating Standards • Value Engineering for Major Projects • NHI Cost Estimating Course

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