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St. Croix River Crossing Cost Estimate Review

February 2006

Prepared by

Prepared for

St. Croix River Crossing Project – Cost Estimate Review

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Table of Contents Page

Section I COST ESTIMATE REVIEW SUMMARY 5 Section II COST ESTIMATE REVIEW PROCESS 9

2.1 PROJECT BACKGROUND 2.2 OBJECTIVE OF THE REVIEW 2.3 REVIEW TEAM 2.4 REVIEW CLARIFICATIONS / QUALIFICATIONS 2.5 METHODOLOGY

Section III FINDINGS AND RECOMMENDATIONS 13

3.1 RECOMMENDED ESTIMATE ADJUSTMENTS 3.2 REVIEW PROBABILITY ASSESSMENT

3.2.1 2004 Total Project Cost Estimate 3.2.2 2010 Total Project Cost Estimate 3.2.3 2004 Extradosed River Bridge Cost Estimate

3.3 REVIEW FINDINGS 3.4 REVIEW RECOMMENDATIONS

Section IV DETAILED PROJECT REVIEW /

PROBABILITY ANALYSIS 20

4.1 PART 1 TH 5 to Osgood (Minnesota Roadway) 22 4.1.1 Roadway (LWD Method) incl. Erosion Control 4.1.2 Loop Trail 4.1.3 Retaining Walls (modular block) 4.1.4 Signals 4.1.5 Risk 4.1.6 Aesthetics 4.1.7 Right-of-Way

4.2 PART 2 Minnesota Approach (Osgood - River Bridge) 28 4.2.1 Roadway (LWD Method) incl. Erosion Control 4.2.2 Bridge – Beach Road over TH 36 4.2.3 Bridge – Treatment Plant Access Road 4.2.4 TH 36 Bridges 4.2.5 Existing Bridge Removals


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Section IV DETAILED PROJECT REVIEW / PROBABILITY ANALYSIS (continued) Page 4.2.6 Loop Trail 4.2.7 Approach Panels 4.2.8 Retaining Walls (Cast-In-Place) 4.2.9 Contaminated Soils Cleanup Costs 4.2.10 Signals 4.2.11 Risk: All elements except Bridge 4.2.12 Risk: Bridge 4.2.13 Aesthetics, incl. Lift Bridge Modifications 4.2.14 Right-of-Way 4.2.15 Railroad Agreement Cost 4.2.16 Major Utility Relocation Cost

4.3 PART 3 Wisconsin Approach 39 (St. Croix River Bridge to East Project Terminus) 4.3.1 Roadway (LWD Method) incl. Erosion Control 4.3.2 Bridge – STH 35 and CTH E over STH 64 4.3.3 Bridge – County Road E over STH 64 4.3.4 Loop Trail 4.3.5 Approach Panels 4.3.6 Retaining Walls (Cast-In-Place) 4.3.7 Signals/Roundabouts 4.3.8 Risk 4.3.9 Aesthetics 4.3.10 Right-of-Way

4.4 PART 4 Extradosed St. Croix River Bridge 46 4.4.1 Risk: River Bridge 4.4.2 Aesthetics 4.4.3 Anti-Ice Bridge Deck Equipment 4.4.4 Right-of-Way

4.5 Other Project Elements 54 4.5.1 Mitigation (fixed) 4.5.2 Mitigation (variable) 4.5.3 Project Development/Design/Engineering /CEI 4.5.4 Inflation 4.5.5 Construction Contingency 4.5.6 Management Reserve 4.5.7 Project Delivery Method


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Appendices: Page Appendix A Estimate Summary Spreadsheets 62 Appendix B Estimate Review Summary Presentation 64 Appendix C Cost Estimate Review Agenda 86 Appendix D Cost Estimate Review Work Plan 88 Appendix E Cost Estimate Review Attendees 92 Daily Sign-in Sheets


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Section I - Cost Estimate Review Summary A project review team (Team) met in Minnesota to review the current estimated cost of construction for the St. Croix River Bridge, evaluate cost risks and probabilities associated with the project, and provide recommendations on reporting the estimated costs based on the results of the review.

REVIEW FINDINGS: The findings of the Review are summarized as follows: • It was confirmed that the project estimate is consistent with the current stage of project

development • The river bridge extradosed type, aesthetics, configuration and constructability are major

contributors to the risk associated with the project costs. • Some specific scope was not accounted for the in the base estimate • Estimate did not account for inflation to the project’s estimated mid-point of expenditure • Estimate did not account for Construction Contingencies that may be required due to unforeseen

conditions, changes in cost or time, etc. • Estimate did not account for other potential risk • Some enhanced components to the MnDOT “Length, Width and Depth” (LWD) conceptual cost

estimating system were recommended as follows: o The selection of multipliers should be documented o The LWD Process has limitations where major bridges are a part of the project and as such

should account for these conditions

RECOMMENDED ESTIMATE ADJUSTMENTS: The Team recommended the following changes to the project estimate based on the Review:

The above table demonstrates that the Team considered an additional $68 Million should be added to the 2004 cost estimate for the project. This additional amount is made up of $22 million of base costs for scope not included and $46 million of additional risk the Team considered should be included in the estimate at this time. The 2010 Programming estimate includes escalation to 2010, plus “Construction Contingency and Management Reserve” that the Team recommended to be added to the Programming estimate.


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REVIEW RECOMMENDATIONS: The Team presented the following recommendations at the completion of the Review: • The proposed extradosed bridge for the river spans has a relatively high cost risk. This risk

should be managed through: o Cost effective design decisions on the river bridge (aesthetics, configuration) o Focus on the constructability of the river bridge o Contractor involvement / options

• The Cost Estimate should be increased to account for the additional known scope not accounted for, the risks identified, inflation to mid-point of expenditure, and the construction contingencies.

• The Team recommended that a cost estimate range be utilized when publishing estimated costs for the project in lieu of a fixed cost estimate.

The Team provided the following cost estimate conclusions:

Description Current Project Estimate

Team Recommended Total Project

Estimate (with risk)

Delta (Team Recommendation – Current Estimate)

2004 Base $305 M $373 M $68 M 2010 Programming $484 M

“2004” TOTAL COST ESTIMATE REVIEW – PROBABILITY ASSESSMENT The probability analysis for the Base Estimate in 2004 resulted in the following curve:

This curve demonstrates the summary of the probabilities determined by the Team based on each of the individual project components. It demonstrates that if the project was bid today, the Team considers that there is a 10% probability the bid would be below $299 million, an 80% probability that the bid would be between $299 million and $334 million, and a 10% probability that the bid

90% Probability 10% Probability

Estimate Review without Risk = $317 M

Total Project Estimate Review 2004 with Risk ~ $373 M


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would be above $334 million. Also noted in the bottom of the chart is the Team’s recommended Estimate Review without risk of $317 million. The Team’s recommended Estimate including risk of $373 million (right of the chart) demonstrates that the Team considered there is sufficient contingency to cover the current project risks. “2010” TOTAL COST ESTIMATE REVIEW – PROBABILITY ASSESSMENT The probability analysis for the Base Estimate in 2010 resulted in the following curve:

This curve demonstrates the summary of the probabilities determined by the Team for each of the project components, including inflation, construction contingency and management reserve. It demonstrates the Team considers that there is a 10% probability the bid would be below $410 million, an 80% probability that the bid would be between $410 million and $453 million, and a 10% probability that the bid would be above $453 million. Also noted on the chart are the Team’s recommended Estimate Review without risk of $412 million (bottom of the chart) and the Team’s recommended Estimate including risk of $484 million (the 100% mark to the right of the chart). The recommended Range of the current Cost Estimate Probability in the mid-80% certainty level is noted as follows:

Estimate Range in the mid Total Project Estimate Estimate 80% probability (with risk) (with risk) 2004 Base $299 M to $334 M $373 M 2010 Programming $410 M to $453 M $484 M

Based on these summary conclusions the Team recommends that the project team continue to finalize the extradosed bridge design concept using cost effective design decisions in the process. This will result in further defining the project costs and possibly reducing the amount of cost risk to be included in future cost estimates.

60% Probability

from $400 to $430 M Current

Estimate = $484M

2010 Estimate Review without Risk = $412M


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��

St. Croix River Crossing Cost Estimate Review

Project Description:

• New crossing of the St. Croix river between Minnesota and Wisconsin

• Improvements on both Minnesota and Wisconsin sides of the crossing

• New recreation loop created with existing Lift Bridge

Project Benefits:

• Improved traffic flow between Wisconsin and Minnesota over the St. Croix river

• Replacement of aging existing bridge structure

• Recreation loop a benefit to communities

• Minimal environmental impact

Project Risks:

• Cost of extradosed bridge type • Complexity of cast-in-place

construction • Constructability of final bridge

concept • Inflation concerns • Resource availability at time of

construction (equipment / labor)

Schedule: Construction Range 2009 – 2014 (3 to 6 years for construction, dependent upon project funding)

Project Cost Range (2010 Programming): • 10% Probability ~ $410 Million • 90% Probability ~ $453 Million • Current 2010 recommended programming ~

$484 million (based on risks of inflation and final bridge design)

Financial Assumptions: • Inflation estimate of 3% per year • Contingencies based on conceptual nature of

plans

Level of Low Medium High Project Design:

Current Estimate = $484M

Estimate Review without Risk = $412M



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Section II – Cost Estimate Review Process

2.1 PROJECT BACKGROUND: The St. Croix River Crossing Project includes reconstruction of Trunk Highway (TH 36) in Minnesota, a new river crossing, and new State Trunk Highway (STH) 64 construction in Wisconsin. The total length of this construction/reconstruction is approximately 6.0 miles. The new four lane river bridge crossing will cross the river at the present location of the Highway 36 / Highway 95 Interchange, crossing the river, and landing in Wisconsin, approximately 6,450 feet south of the existing Lift Bridge (refer to Project Location map below). The Federal Highway Administration (FHWA) Major Projects Unit assembled a Project Review Team (Team) consisting of FHWA, Minnesota Department of Transportation (MnDOT), Wisconsin Department of Transportation (WisDOT) and technical experts to review the cost estimates on the St. Croix River Crossing project. This Team met at the MnDOT Training Facility in Arden Hills, Minnesota, from August 8 - 12, 2005, to perform the review. This document summarizes and reports the results of this cost estimate review.


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2.2 OBJECTIVE OF THE REVIEW:

The objective of this review was to verify the accuracy and reasonableness of the current total cost estimate to complete the St. Croix River Crossing project and to develop a probability range for the cost estimate that represents the level of uncertainty remaining at the project’s current stage of design. The results of this probability analysis could then be used to determine if the risk/contingency factors in the estimate are reasonable based on the results of the probability. 2.3 REVIEW TEAM:

The project estimate review team (Team) was developed with the intent of having individuals with a strong knowledge of the project and/or of major project work and expertise in specific disciplines of the project, such as bridge structures, roadway, right-of-way acquisition, cost consulting, etc. This core Team stayed together throughout the week. In addition, project team members with specific expertise on various disciplines briefed the Team on the project’s cost estimate development process for their respective disciplines. The Team was then able to interview the discipline presenters to further understand and clarify the development of the project cost estimate quantities, unit prices, assumptions, opportunities and risks. The Team was comprised of the following members:

FHWA MnDOT WisDOT, and Consultant (PBS&J) staff

Appendix E includes a complete list of all the attendees as well as the Work Shop Sign-In sheets. 2.4 REVIEW CLARIFICATIONS / QUALIFICATIONS

Following are the basis, assumptions and qualifications of the Cost Estimate Review:

• Detailed verification of quantities and unit prices was not performed • Independent cost estimates were not developed • Review focused only on cost items with major impacts to cost • Detailed review of project schedule was not performed

2.5 METHODOLOGY:

The Cost Estimate Review methodology was developed to ensure team members understood the project scope and the associated current cost estimate (dated August 2005) of the Preferred Alternative Package (roadway approaches; bridges - river crossing, inland, and lift bridge; and, mitigation). A detailed Cost Estimate Review Agenda and Work Plan are included in Appendices C and D. The Team initially reviewed the project cost estimate at a summary level, and developed a list of items that required further clarifications during the review of the more detailed breakdown of the current cost estimate. A site visit of the project was performed on the evening of the second day of the review. This enabled the consultant Team members to get a better understanding of the site conditions on both sides of the river and the constructability issues.


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Following the initial summary review of the overall project cost, the Team reviewed the various project components in more detail. A Structures Focus Group was established comprising of technical members specializing in Bridge Structures. This Focus Group had a separate work session to focus on the elements of the various bridge structures particularly focusing on the bridge structure for the crossing and the extradosed main spans. The Focus Group discussed issues with significant cost impact such as constructability, design elements, availability of resources such as concrete, labor and equipment, etc. The Focus Group then presented their findings to the remainder of the Team. All categories of costs in the project estimate were reviewed during this time frame, including non-construction costs such as right-of-way, preliminary engineering, construction management, inflation and contingency. Based on the details of each project element, the Team assessed if the estimated costs adequately reflected the current scope and market conditions. At the conclusion of this component review, the Team had arrived at recommended adjustments to the current estimate.

A third phase of the review was the discussion on potential cost related risks and opportunities with each of the project elements. A computer generated probability analysis was then conducted based on input from the entire Team. The Team’s objective during the review was not to develop independent cost estimates, but to perform a scope review and a summary cost estimate review, assess risks and assign contingencies, and provide recommendations on possible modifications to the cost estimates. The Team reached a general consensus at the conclusion of the review and conducted a draft presentation to FHWA, MnDOT and WisDOT senior level management officials summarizing the review findings (Refer to Appendix B for a copy of the Presentation – note that the fixed mitigation costs in the presentation are based on the initial workshop data and have not been updated in the presentation).

The following aspects were covered in the scope of the review of the Preferred Alternative Cost Estimate:

• An understanding of the Minnesota DOT Metro Length, Width, and Depth (LWD) estimating

process of standardized cost estimates for Roadway elements (refer to section below) • Basis, Assumptions and Process in the development of the cost estimate • Scope included in the Preferred Alternative Package cost estimate • Understanding of the scope NOT accounted for in the current cost estimate • Technical Disciplines input (Roadway, Structures, ROW, Mitigation, etc.) • Basis of quantities and unit costs • Allowances, Mark-ups (contractor, design, etc.), and Contingencies • Validity of present day costs for Preferred Alternative Package • Review other similar bridge types – Example of Connecticut Bridge • Market Conditions, Price Fluctuations • Identification and accounting for Risks and Opportunities • Overview of Project Schedules and Inflation analysis • Establishment of Estimated Total Future costs


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Utilizing this methodology, the Team identified opportunities and risks within the cost estimate, established recommended current day values for the Preferred Alternative Package based on recommended adjustments to the current cost estimate, evaluated the impact of inflation and contingencies for changes during construction, and arrived at anticipated total project costs. MnDOT Metro Length, Width and Depth (LWD) Estimating System: Pursuant to the summary level review of the overall cost estimate, the MnDOT estimating staff presented to the Team the Minnesota DOT Length, Width and Depth (LWD) estimating system that was utilized to establish major elements of the cost estimates. The roadway elements of this cost estimate were primarily developed utilizing the MnDOT Length, Width and Depth (LWD) standardized system of cost estimating. The LWD system as pertaining to this project included the following factors and approach:

• LWD multiplier is based on previously awarded bid costs history (low accepted bids only) • LWD multiplier is arrived at based on analyzing recent similar projects, specific conditions

of the project being estimated, and estimator’s judgment. • LWD includes 11 Roadway elements and other project elements • Railroad relocation costs not included in current estimate. Possible $4-$5 M • Public relations costs not included in the current estimate. • Bridge current cost estimates include little to no risk for the bridge structures • Roadway includes 10% scope risk • Unknown contamination with existing fertilizer “terra” terminal building included • Erosion control costs need to be higher in estimate based on current requirements • Water Quality cost impacts could be higher • Aesthetics costs are limited to budgets based on cost participating percentages • Utility relocation costs include Sanitary Sewer relocation due to depression in road • Higher fill quantity on the Minnesota side and at grade construction largely in Wisconsin • No muck anticipated on the Project • Landscaping costs are included in Visual Quality costs • No noise walls requirement anticipated for the Project • $200,000 included for signalization per signalized intersection (possibility of round-about’s

was noted, but costs would be similar) • LWD Multipliers vary from project to project based on location, complexity, scope and other

factors. For example the multiplier is $80,000 for the Wisconsin scope, $90,000 for Minnesota Seg. I and $112,000 for the Minnesota Approach Spans.

• LWD Factor accounts for all “paved” areas including concrete and bituminous areas

The above review of the LWD factors and approach and the current estimate was very beneficial to the Team in preparing a strategy to assess the risks associated with the project and to complete the Review. The following sections describe the findings, recommendations, and the detailed probability analysis that was performed in this review.


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Section III – Findings and Recommendations

3.1 RECOMMENDED ESTIMATE ADJUSTMENTS: At the beginning of the study, the Team reviewed a current project estimate of $305 million in 2004 dollars. The following additional known scope items were identified but not included in the above cost estimate. ADDITIONAL COST DUE TO KNOWN SCOPE NOT ACCOUNTED FOR: The major known scope items that were not included in the Base Estimate are as follows:

Railroad Agreement $ 6.9 Erosion Control and High Performance Pavement $ 5.4 Anti-Ice Bridge Deck Equipment $ 3.8 Major Utility Relocation Cost $ 3.0 Adjusted Wisc. STH 35 Bridge cost per SF $ 0.7 Existing Bridge Removals $ 0.3 Contaminated Soil Removal $ 0.3 Retaining Walls – revised estimate $ 0.1 Revised Fixed Mitigation $5.3 Reduction in calculations for Aesthetics – revised estimate $-4.2

TOTAL KNOWN SCOPE ADDITION CHANGE ~ $22 M

In addition, the Team analyzed the risks associated with several elements of the cost estimate and identified the following additional costs to account for those risks. ADDITIONAL COST DUE TO IDENTIFIED RISKS:

The major elements making up the $46 million dollar variance in the Risk Estimate are as follows:

Extradosed Bridge Risk (30%) $ 30 Minn. Approach Spans to River Bridge Risk (20%) $ 4 Right-of-Way Risk

o Minnesota ROW (10%) $ 1 o Wisconsin ROW (50%) $ 2

Associated Engineering/CEI (25%) $ 9 TOTAL RISK IMPACT CHANGE ~ $ 46 M Thus the combined assessment of the Team added approximately $68 million dollars ($22 million due to additional scope on the base costs and $46 million in risk contingencies) to the 2004 Project Cost Estimate, increasing it from a $305 million dollar base to a $373 million dollar base, which amounts to an increase of approximately 22%.


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The review of the estimate resulted in the following recommendations: • Add $22 million due to known scope not previously accounted for • Add $46 million in risk based on a risk assessment the Team performed on the current estimate

of the project • Recommended 2004 Total Project Costs of $373 million including the above two additions

(Refer to Appendix A for a detailed breakdown of the $373 Million cost estimate) • Apply a 3% yearly Inflation rate to escalate the 2004 estimate to the projected estimated

midpoint of expenditures of 2010 • Add 7.5% Construction Contingency (allowance for changes during construction) • Add 1% Management Reserve (allowance for third party changes during construction) • Recommended 2010 Total Project Costs of $484 million based on the above changes Based on the Review of the project cost estimate, the Team recommended the following changes to the project estimate:

Following the results of the estimate review and based on the revised cost estimate, the Team then analyzed the probabilities with the estimate values to help determine an estimate range. The following pages describe the probability analysis for the overall 2004 and 2010 project cost estimates as well as the 2004 estimate of the extradosed bridge structure. Section IV describes in detail the procedures and findings of the probability analysis for all other line items in the cost estimate.


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3.2 REVIEW PROBABILITY ASSESSMENT: The following sections describe the probability assessment analysis for the 2004, 2010 and the Extradosed Bridge cost estimates. 3.2.1 2004 TOTAL COST ESTIMATE REVIEW: The Team studied the probability assessment for the 2004 estimate. The probability analysis for the Base Estimate in 2004 resulted in the following curve:

This curve demonstrates the summary of the probabilities determined by the Team for each of the project components. It demonstrates that if the project was bid today, the Team considers that there is a 10% probability the bid would be below $299 million, an 80% probability that the bid would be between $299 million and $334 million, and a 10% probability that the bid would be above $334 million. Also noted in the bottom of the chart is the Team’s recommended Estimate Review without risk of $317 million. The Team’s recommended Estimate including risk of $373 million (right of the chart) demonstrates that the Team considered there is sufficient contingency to cover the current project risks.

The Estimate Review (without risk) identifies the need for risk to be included in the published estimate for the project. This curve also provides information to set an estimated range for the project costs, instead of a fixed amount.





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3.2.2. 2010 TOTAL COST ESTIMATE REVIEW:

The probability analysis for the Total Project Estimate in 2010 resulted in the following curve: This curve demonstrates the summary of the probabilities determined by the Team for each of the project components, including inflation, construction contingency and management reserve. It demonstrates the Team considers that there is a 10% probability the bid would be below $410 million, an 80% probability that the bid would be between $410 million and $453 million, and a 10% probability that the bid would be above $453 million. Also noted on the chart are the Team’s recommended Estimate Review without risk of $412 million (bottom of the chart) and the Team’s recommended Estimate including risk of $484 million (the 100% mark to the right of the chart).

The Estimate Review (without risk) demonstrates the need for risk to be included in the published estimate for the project, as the number without risk is close to the 10% probability level range that a bid would be below the Estimate Review Without Risk. The above curve also provides a range of estimated costs for planning purposes that can be utilized instead of a fixed estimate value.





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3.2.3 EXTRADOSED RIVER BRIDGE COST ESTIMATE REVIEW (2004):

The probability analysis for the Extradosed River Bridge Spans resulted in the following curve:

The above curve demonstrates a summary of the probabilities determined by the Team for “Part 4” of the project estimate, which includes the main span of the Extradosed River Bridge. It demonstrates that if Part 4 of the project was bid today, the Team considers that there is a 10% probability the bid would be below $92 million, an 80% probability that the bid would be between $92 million and $118 million, and a 10% probability that the bid would be above $118 million. Also noted on the chart are the Team’s recommended Estimate Review Base without risk of $105 million (bottom of the chart) and the Team’s recommended 2004 Estimate including risk of $135 million (to the right side of the chart).

This curve demonstrates the Team’s concern with the current risk on the River Crossing portion of the project, where design decisions, resource costs and constraints, constructability and environmental factors could increase the bids on this portion of the project. The Team anticipates that as design progresses, a more detailed cost estimate can be determined and the risk amount should decrease.

Total ED River Bridge Span 2004 Estimate ~ $135 M


Estimate Review Base without Risk = $105 M


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3.3 REVIEW FINDINGS:

The findings of the Review are summarized as follows:

• It was confirmed that the project estimate is consistent with the current stage of project development

• The river bridge extradosed type, aesthetics, configuration and constructability are major contributors to the risk associated with the project costs.

• Some specific scope was not accounted for the in the base estimate • Estimate did not account for inflation to the project’s estimated mid-point of expenditure • Estimate did not account for Construction Contingencies that may be required due to

unforeseen conditions, changes in cost or time, etc. • Estimate did not account for other potential risk • Some enhanced components to the MnDOT “Length, Width and Depth” (LWD) conceptual

cost estimating system were recommended as follows: o The selection of multipliers should be documented o The LWD Process has limitations where major bridges are a part of the project and as

such should account for these conditions

3.4 REVIEW RECOMMENDATIONS:

The Team presented the following recommendations at the completion of the Review:

• The proposed extradosed bridge for the river spans has a relatively high cost risk. The risk

should be managed through: o Cost effective design decisions on the river bridge (aesthetics, configuration) o Focus on the constructability of the river bridge o Contractor involvement / options

• The Cost Estimate should be increased to account for the additional known scope not accounted for, the risks identified, inflation to mid-point of expenditure, and the construction contingencies.

• The Team recommended that a cost estimate range be utilized when publishing estimated costs for the project in lieu of a fixed cost estimate

The recommended Range of the current Cost Estimate Probability in the mid-80% certainty level is noted as follows:

Estimate Range in the mid Total Project Estimate Estimate 80% probability (with risk) (with risk) 2004 Base $299 M to $334 M $373 M 2010 Programming $410 M to $453 M $484 M

Based on these summary conclusions the Team recommends that the project team continue to finalize the extradosed bridge design concept using cost effective design decisions in the process. This will result in further defining the project costs and possibly reducing the amount of cost risk to be included in future cost estimates.


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Due to the recent national disasters related to Hurricanes Katrina, Rita and Wilma, there is wide spread speculation that the construction industry will be impacted with increasing prices, shortage of material, labor and equipment and also increasing bonding and insurance costs. It is recommended that for this project, the construction market be closely monitored to capture any such impacts as they relate to the project budget. In addition, due to the unique nature of the proposed extradosed bridge, since the New Haven Harbor Crossing Pearl Harbor Memorial Bridge (Q-Bridge) is very similar in nature to the proposed bridge; the eventual bid costs of the Q-Bridge (after letting/award) should be utilized to update the proposed budgets for the St. Croix River Crossing project.


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Section IV – DETAILED PROJECT REVIEW / PROBABILITY ANALYSIS

PROBABILITY ANALYSIS

Utilizing a probability analysis software program (“Crystal Ball™”), the Team was able to identify a probability curve for each element of the estimate. The curve for each element is based on the probability that the element, if bid today, could be bid in a range that varies from a reasonable low value to a reasonable high value, with the highest probability value being at the peak of the probability curve. A sample probability curve is as follows:

The preceding sample probability chart demonstrates that the selector of this curve considered that the highest probability for a bid amount for this item is in the range of $16,000,000 to $17,000,000 (this highest range is typically the current cost estimate for the item). The selector also considers that there is a chance the low bid could come in quite low (see minimal range of probability between $6,000,000 and $12,000,000), but a lower possibility that a high bid would be significantly high (see highest range is close to $20,000,000). Probability curves like this one are typically selected based on the risks and opportunities identified with each item. In this case, the Team selecting the probability curve had confidence that a bid would be submitted for the item in the current estimate range of $16 million to $17 million, and that it was more likely that a lower bid would be received, demonstrating the Team’s confidence that there were good opportunities for a lower bid, and there were no risks identified that would result in a significantly higher bid than the current cost estimate. Once the probability curves are selected, the software program generates random numbers based on the curve (if run thousands of times the results would closely approximate the curve). These random numbers are then added at bottom line “forecast” totals, and a forecast curve is then generated creating a combined probability curve for the sub-total and totals of a group of numbers.


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During the Review, the Team examined the cost elements making up the preferred alternative. Each of the elements were reviewed, with sufficient time allowed for all team members to present scope information, ask questions and discuss issues. The risks and opportunities were then analyzed element-by-element and recommended cost elements were modified and a contingency amount was assigned for each element within the Project. Following the completion of this analysis, a recommended project cost was calculated utilizing the results of this review. The probability curves generated for each of the line items in the estimate are shown in the following sections. The type of curve and the reasoning for the selection of each curve is provided at the bottom of each curve. These sections also provide the detail on the Team’s analysis and conclusions related to each of these items broken down by the elements in the Project Estimate.


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4.1 TH 5 to Osgood (Part 1 of 4) Scope of Part 1: In Minnesota, TH 36, the TH 36 frontage roads, and cross streets (Oakgreen Avenue/Greeley Street and Osgood Avenue) will be reconstructed 1,050 feet from east of Washington/Norell Avenues to Osgood Avenue. The intersections of TH 36 and local streets will remain as at-grade intersections. No improvements will be constructed at Norell Avenue/Washington Avenue. Frontage roads at Oakgreen Avenue/Greeley Street will be pulled back away from TH 36; frontage roads at Osgood Avenue will remain in place. Note: Aesthetics calculation in the above table excludes the Loop Trail costs Summary Probability Curve for Part 1 (TH 5 to Osgood):


Current 2004 Estimate with Risks ~ $26 M

2004 Estimate


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Probability Curve Assumptions for the elements of Part 1 (TH 5 to Osgood): 4.1.1 Roadway (LWD Method) including Erosion Control (5%) A review of the roadway elements for this section of the project showed that the LWD multiplier utilized appeared to be reasonable for the scope, noting that this portion would have a higher fill quantity than the Wisconsin approach. An additional 5% was added to this item for the contractor’s costs to meet environmental regulations such as erosion control requirements. An additional 1.25% was also added to the multiplier to cover the costs of high performance pavement. Based on the MnDOT history on the price per square foot, the $94,500 utilized is considered conservative for this work. Curve: Minimum Extreme Distribution - Lower risk of bid greatly exceeding estimate. Bid could fall somewhat below the estimate as a result of the conservatively high unit price utilized as a multiplier in the LWD system.


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4.1.2 Loop Trail A review of the trail elements showed that the Team felt the $80,000 per mile unit price was reasonable for this work effort. The Team did not see any significant risk in this item. Curve: Student’s “t” distribution - Low probability of bid being significantly higher or lower than estimate for the trail. 4.1.3 Retaining Walls (Modular Brick) The modular brick retaining walls unit price was based on similar walls. The $20 per square foot was considered reasonable by the team. Curve: Normal distribution - Medium risk bid could fall higher or lower than estimate


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4.1.4 Signals Signal costs were estimated at $200,000 per intersection based on similar recent projects. The Team considered this as a reasonable estimate that had relatively low cost risk. Curve: Student’s “t” distribution - Low risk on bid being significantly higher or lower than estimate. 4.1.5 Risk (10%) The MnDOT LWD system estimate had included a risk factor of 10% for this Part I of the Project. Based on the Team’s assessment of risk, the 10% factor was considered a reasonable amount for this scope of work.


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4.1.6 Aesthetics (7.5%) The cost for aesthetic enhancements has been included in the estimate and capped at a mitigation package negotiation maximum level of 7.5% of the construction costs. As the aesthetics become further defined, it will be required to ensure that the costs will be within the 7.5% limit. Curve: Minimum Extreme Distribution - Lower risk of bid greatly exceeding estimate. Bid could fall somewhat below the estimate as a result of the conservatively high unit price


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4.1.7 Right of Way The review of right-of-way cost estimates demonstrated that the parcels have been identified and the MnDOT right-of-way staff had estimated all of the costs considered to be associated with securing the right-of-way for the project. The Review Team agreed to add an additional 10% contingency on the estimates for this section of the Project. Curve: Gamma Distribution - Probability is high that costs will exceed the estimate, while considered low that prices will fall below the estimate. Increasing land and housing prices have been considered in this probability.


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4.2 Minnesota Approach (Part 2 of 4) (Osgood to River Bridge) Scope of Part 2: East of Osgood Avenue, TH 36 will be reconstructed and a new TH 36/95 diamond interchange will be constructed along with corresponding improvements to TH 95. Note: Aesthetics calculation in the above table excludes the bridges and trail costs Summary Probability Curve for Part 2 (Minnesota Approach):


Current 2004 Estimate with Risk ~ $82 M

2004 Estimate


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Probability Curve Assumptions for the elements of Part 2 (Minnesota Approach): 4.2.1 Roadway (LWD Method) includes Erosion Control (5%) A review of the roadway elements for this section of the project showed that the LWD multiplier utilized appeared to be reasonable for the scope, noting that this portion would also have a higher fill quantity than the Wisconsin approach. This section included an interchange and ramps that made the estimate higher on a cost per square foot basis. An additional 5% was added to this item for the contractor’s costs to meet environmental regulations such as erosion control requirements. An additional 1.25% was also added to the multiplier to cover the costs of high performance pavement. Based on the MnDOT history on the price per square foot, the $117,600 utilized is considered conservatively high for this work. Curve: Minimum Extreme Distribution - Lower probability of bid greatly exceeding estimate. Bid could fall somewhat below the estimate as a result of the conservatively high unit price utilized in the LWD multiplier.


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4.2.2 Bridge – Beach Road over TH 36 The estimated bridge cost, for an assumed curved steel structure of $125 per square foot for Beach Road over Trunk Highway (TH) 36 was discussed by the bridge structure focus group and found to be reasonable. The bid results from previous projects and current industry knowledge were utilized to arrive at this value. Curve: Maximum Extreme Distribution - The Team considered a high probability of the bid exceeding the estimate for this bridge. Low probability of the bid coming in significantly below the estimate.


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4.2.3 Bridge – Treatment Plant Access Rd The estimated cost of $130 per square foot for the bridge at the Treatment Plant Access Road was discussed by the bridge structure focus group and found to be reasonable. The concept of a steel beam structure was the basis for the unit price. The bid results from previous projects and current industry knowledge were utilized to arrive at this value. Curve: Maximum Extreme Distribution - The Team considered a high probability of bid exceeding estimate for this bridge, and a low probability of the bid coming in significantly below the estimate.


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4.2.4 TH 36 Bridges The estimated cost of $180 per square foot for the Trunk Highway (TH) 36 Bridges was discussed by the bridge structure focus group and found to be reasonable. Although the final concept for these bridges has not been finalized, they will be the approach spans to the extradosed main spans of the River Bridge. These approach spans will be designed to fit functionally and aesthetically with the main spans. They will also be constructed in a sensitive environmental area, thus increasing the cost of construction. The Team’s knowledge of the area and of recent projects was utilized in arriving at this price. The Team did see significant cost risk with this project element due to environmental considerations and design complexity. Curve: Maximum Extreme Distribution - High probability of bid exceeding estimate. Low probability of the bid coming in significantly below the estimate. 4.2.5 Existing Bridge Removals The removal of two existing bridges will be required during the construction of this part of the Project. The MnDOT Team member provided an estimate of $100,000 per bridge, and the Team considered that this is a reasonable estimate for this scope of work. Curve: Logistic Distribution- Reasonable probability that the bid will fall within the range of the estimate for the existing bridge removals.


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4.2.6 Loop Trail A review of the Loop Trail elements showed that the Team felt the $80,000 per mile unit price was reasonable for this work effort. The Team did not see any significant risk in this item. Curve: Normal Distribution- Average probability that the bid will fall within the range of the estimate with equal chance of being above or below the estimate. 4.2.7 Approach Panels Bridge approach panels were estimated based on recent MnDOT pricing. The bid results from previous projects were utilized to arrive at this value. The Team considered the price of $20,000 per panel as a reasonable current estimate for this work. Curve: Normal Distribution - Average probability that the bid will fall within the range of the estimate with equal chance of being above or below the estimate.


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4.2.8 Retaining Walls (Cast-in-place) A relative low quantity of cast-in-place (CIP) retaining walls has been estimated for this part of the Project. The Team agreed with the MnDOT estimate of $75 per square foot of wall area as a reasonable price for this element. Curve: Normal Distribution - Average probability that the bid will fall within the range of the estimate with equal chance of being above or below the estimate. 4.2.9 Contaminated Soils Cleanup Costs An allowance of $200,000 was utilized for contaminated soils cleanup. This is based on those areas that have been identified where it is likely that this could occur. The environmental team member’s knowledge of the corridor provided the impression to the Team that this was a reasonable allowance without a huge risk. Curve: Maximum Extreme Distribution - High probability of bid exceeding estimate. Low probability of the bid coming in significantly below the estimate.


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4.2.10 Signals Signal costs were estimated at $200,000 per intersection based on similar recent projects. The Team considered this as a reasonable estimate that had relatively low cost risk. Curve: Student’s “t” distribution - Low probability on bid being significantly higher or lower than estimate. 4.2.11 Risk: All elements except Bridge (10%) The MnDOT LWD system estimate had included a risk factor of 10% for this Part 2 of the Project. Based on the Team’s assessment of risk, the 10% was considered a reasonable amount for this scope of work, excluding the bridge approach spans to the main span of the River Bridge. The Team considered that the LWD multiplier for this item was conservatively high. 4.2.12 Risk: Bridge (20%) The risk on the approach spans to the extradosed main span was analyzed separately by the structural focus group assembled during the Review. The Team concluded that once the design is further formalized, the risk could possibly be reduced. The risk was arrived at by analyzing the elements of the bridge structure and coming up with a composite risk as shown in the following table:

CATEGORY a). Percentage of Construction Cost

b). Risk / Contingency

c). = a x b; Composite Risk Factor

Deck 65% 25% 16.3%Cables N/A 0.0%Pylons / Piers 10% 50% 5.0%Foundations 20% 10% 2.0%Other / Miscellaneous 5% 20% 1.0%

Total 100% 24.3%


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Based on the calculated risk at 24.3%, the Team elected to utilize a 20% contingency at this time for the estimate. Design decisions made in the near future on the extradosed main spans will somewhat determine what the final risk factor will be on these approach spans. This bridge consists of 6 extradosed spans plus 2 back spans. 4.2.13 Aesthetics, including Lift Bridge Modifications (7.5%) Aesthetic elements were included in the estimate at 7.5% of the non-bridge elements (assuming that bridge aesthetics are adequately accounted for in the bridge unit price). However, a portion of this aesthetics amount is included for aesthetic modifications to the existing lift bridge, which in the preferred alternative package is to become a part of the Loop Trail system.

Curve: Minimum Extreme Distribution - Lower risk of bid greatly exceeding estimate. Bid could fall somewhat below the estimate as a result of the conservatively high unit price


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4.2.14 Right of Way The majority of the right-of-way for this portion of the project was purchased in the past. The review of right-of-way cost estimates demonstrated that the parcels have been identified and the MnDOT right-of-way staff had estimated all of the costs considered to be associated with securing the right-of-way for the project. The Review Team agreed to add an additional 10% contingency on the estimates for this section of the Project.

Curve: Gamma Distribution - Probability is high that costs will exceed the estimate, while considered low that prices will fall below the estimate. Increasing land and housing prices have been considered in this probability.


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4.2.15 Railroad Agreement Cost A railroad agreement will be required for railroad relocation and coordination during the construction of this section of the project. An estimate of $5 million dollars was provided by the MnDOT Team members based on current scope and estimates. Curve: Normal Distribution - Average probability that the agreement costs will fall within the range of the estimate with equal chance of being above or below the estimate. 4.2.16 Major Utility Relocation Cost MnDOT provided detailed costs on the major utility relocation anticipated for this portion of the project. Unit prices were reviewed and considered adequate based on present day pricing. Curve: Maximum Extreme Distribution - High probability of bid exceeding estimate. Low probability of the bid coming in significantly below the estimate. The Team considered that the utility unit prices did not include a lot of risk factors.


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4.3 Wisconsin Approach (Part 3 of 4): (St. Croix River Bridge to East Project Terminus)

Scope of Part 3: Wisconsin Highway 35 will be relocated to the east of its present alignment to provide an interchange with relocated St. Croix County Highway E. Wisconsin Highway 64 will be constructed from the St. Croix River through the new interchange to the 150th Avenue overpass in the Town of St. Joseph.

Note: Aesthetics calculation in the above table excludes the trail costs Summary Probability Curve for Part 3 (Wisconsin Approach):


Current 2004 Estimate with Risk ~ $39 M

2004 Estimate


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Probability Curve Assumptions for the elements of Part 3 (Wisconsin Approach): 4.3.1 Roadway (LWD Method) including Erosion Control (5%) A review of the roadway elements for this Wisconsin approach section of the project showed that the LWD multiplier utilized appeared to be reasonable for the scope, noting that this portion had minor fill quantities. The Wisconsin DOT also reviewed the multiplier and found it reasonable for the scope of the Wisconsin approach. An additional 5% was added to this item for the contractor’s costs to meet environmental regulations such as erosion control requirements. An additional 1.25% was also added to the multiplier to cover the costs of high performance pavement.

Curve: Minimum Extreme Distribution - Lower probability of bid greatly exceeding estimate. Bid could fall somewhat below the estimate as a result of the conservatively high unit price utilized in the LWD multiplier.


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4.3.2 Bridge – STH 35 and CTH E over STH 64 A unit price of $125 per SF of bridge deck was considered reasonable, considering that the Team felt it would be a steel bridge in lieu of a standard concrete beam bridge. Curve: Maximum Extreme Distribution - High probability of bid exceeding estimate. Low probability of the bid coming in significantly below the estimate. 4.3.3 Bridge – County Road E over STH 64 The Team considered a unit price of $75 per square foot of bridge deck was reasonable for this bridge, with a concept of a standard concrete beam bridge considered.

Curve: Minimum Extreme Distribution - Lower probability of bid greatly exceeding estimate. Bid could fall somewhat below the estimate as a result of the conservatively high unit price utilized in the estimate.


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4.3.4 Loop Trail A review of the trail costs showed that the $80,000 per mile unit price was reasonable. The Team did not see any significant risk in this item. (Note: The Trail only covers that portion to be built on existing STH 64 from the east end of the existing lift bridge up the hill to existing STH 35. The other portions will be along a new STH 64 from the river to 35/E interchange). Curve: Normal Distribution - Average probability that the bid will fall within the range of the estimate with equal chance of being above or below the estimate. 4.3.5 Approach Panels Bridge approach panels were estimated based on recent MnDOT pricing. The bid results from previous projects were utilized to arrive at this value. The Team considered the price of $20,000 per panel as a reasonable current estimate for this work. Curve: Logistic Distribution - Reasonable probability that the bid will fall within the range of the estimate.


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4.3.6 Retaining Walls (Cast-in-Place) A price of $85 per square foot of retaining wall was agreed to by the Team, confirming the current estimate. Curve: Logistic Distribution - Reasonable probability that the bid will fall within the range of the estimate 4.3.7 Signals/Roundabouts Signal costs were estimated at $200,000 per intersection based on similar recent projects. The Team considered this as a reasonable estimate that had relatively low cost risk. Roundabouts may be considered in lieu of signals at the intersections in Wisconsin, and the Team considered that the costs of each would be reasonably close. Curve: Student’s “t” distribution - Low risk on bid being significantly higher or lower than estimate, considering that signal costs are relatively consistent for an intersection


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4.3.8 Risk (10%)

The MnDOT LWD system estimate had included a risk factor of 10% for this Part of the Project. Based on the Team’s assessment of risk, the 10% was considered a reasonable amount for this scope of work. 4.3.9 Aesthetics (7.5%) The cost of aesthetics has been included in the estimate at a mitigation package negotiation maximum level of 7.5% of the construction costs. As the aesthetics become further defined, the project team will be required to ensure that the associated estimated costs would be within the 7.5% limit.

Curve: Minimum Extreme Distribution - Lower probability of bid greatly exceeding estimate. Bid could fall somewhat below the estimate as a result of the conservatively high unit price utilized in the LWD multiplier.


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4.3.10 Risk: Right of Way (50%) The right-of-way on the Wisconsin side of the project was considered to be at high risk due to the volatility in land prices at this time. A significant acreage is to be purchased in Wisconsin, with the prices having increased significantly recently. For this reason, the Team agreed to include a risk factor of 50% on the right-of-way costs on the Wisconsin portion of the project.

Curve: Gamma Distribution - Probability is high that costs will exceed the estimate, while considered low that prices will fall below the estimate. Increasing land and housing prices have been considered in this probability.


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4.4 St. Croix River Bridge (Part 4 of 4): Scope of Part 4: The new four lane bridge will cross the river at the present location of the Highway 36/Highway 95 Interchange, approximately 7,550 feet south of the Lift Bridge along the Minnesota shoreline, crossing the St. Croix River perpendicular to its centerline and landing approximately 6,450 feet south of the Lift Bridge along the Wisconsin shoreline.

Note: Aesthetics in the above table is a set allowance for the river bridge.

4.3 River Bridge – Extradosed The price of $280 per square foot cost of bridge deck for the extradosed structure was developed by MnDOT and the project team based on information from other somewhat similar bridge construction in the United States. Estimated costs of the upcoming extradosed bridge in Connecticut were also considered. The Team felt that this price was on the low end of where the price could be, and determined that there was significant risk in this price being met as the project develops. The Team did agree to utilize the $280 per square foot cost as a conclusion of this review, but recommended a high-risk amount to be included. Summary Probability Curve for Part 4 (River Bridge):


Estimate Review Base without Risk = $105 M

Total ED River Bridge Span 2004 Estimate ~ $135 M

2004 Estimate


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Probability Curve Assumptions for the elements of Part 4 (River Bridge): 4.4.1 Risk: River Bridge (30%) The Team determined that there was significant risk in the extradosed main span portion of this project. Some of the major risks noted include the following: ♦ Contractor’s difficult access to the construction site ♦ Subsurface Conditions ♦ Aesthetic considerations in the design ♦ Anti-icing system ♦ Long term maintenance / inspection system design ♦ Environmental requirements ♦ Cast-in-place vs. precast construction ♦ Material availability and price volatility ♦ Constructability ♦ Code requirements ♦ Impact loads A structural evaluation breakout group met during the study to more closely evaluate the bridge structure. Many of the noted risks had significant discussion, with the key elements summarized as follows: ♦ Contractor’s difficult access to the construction site Much of the project will need to be accessed from the river. With the high slopes on opposite banks, staging for the approaches will need to be high on the banks. Other considerations will be required for the river work. Site condition will not allow haul roads or temporary roads to the river piers. Bluff land disruption will also not be allowed for river access. A staging area will need to be identified early to provide the contractor the best possible access to this difficult site arrangement. Access considerations include the need to move the larger pre-cast elements for easier delivery, and to minimize the impact on local traffic and existing infrastructure ♦ Subsurface Conditions Indications are the bridge will be supported on a limestone stratum. It was assumed that prefabricated cofferdams would be used during the construction of the foundations. Drilled shafts may be considered as they require less earthwork and fill material than other types of foundations, reduce the amount of hauling material, and may have less impact on the environment as a result of less noise. Considerations must be made for the water crossing, such as precast cofferdam, drilled shaft, or cylinder piles. Also, alternate foundation types and load testing could be considered, including


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self consolidating concrete for drilled shafts, micro-piles that are faster and can use smaller equipment for installation. It was recommended that design load testing needs to be completed as soon as possible to determine the size of the foundation required for the Extradosed Bridge. ♦ Aesthetic considerations in the design The Team discussed that the pylon shape, based on the conceptual drawings presented during the workshop, appears to have significant cost impact, with both special casting due to changes in the cross section and possible special anchoring to the main girders. The difficulty in constructing the pylons based on the final approved design is one of the highest risk factors on the project. ♦ Anti-icing system An allowance was made for this system. Concerns are that this allowance must be closely monitored as the design progresses for this element of the bridge structure. ♦ Long term maintenance / inspection system design The need for a built-in system for long-term maintenance was discussed, with requirements for ease of ongoing periodic inspection of the entire bridge. The need to adequately address the costs for this system was considered important as the design progresses. ♦ Environmental requirements The Team considered the need to meet all environmental requirements prior to and during construction of the project as a potential cost risk. Inadequately addressing and preparing for requirements could have significant impact on the duration of the project, thus impacting costs. ♦ Cast-in-place vs. precast construction This item was one of the most significantly discussed during the Review. The cost impact of utilizing cast-in-place or precast members on the bridge was seen as providing a wide variance in construction costs for a number of reasons. The risk of the design being constructable only utilizing cast-in-place was considered a large cost impact to the project. Some of the potential advantages to being able to utilize precast construction included the following:

• Most of the work associated with pre-cast construction is done in the pre-casting operation, which minimizes the time that the construction impacts the site

• Pre-cast construction elements are highly durable (high performance concrete), with lower life-cycle cost

• Can improve construction zone safety with less work on-site • Based on the total width of the structure, if two Segmental concrete box girders

are be proposed at this location, the Precast concept will result in an increased speed of construction as a result of ease of handling and erection.


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• Because of the short construction season the contractor may elect to perform as much of the construction activity as possible using conventional precast segmental technology

• The Precast segments can reduce the erection time, the casting and erection can occur simultaneously but independently. This parallel (production-line) method provides maximum scheduling flexibility and construction time

• This project is considered a large project; a standard shape of the superstructure box girder will result in a significant cost saving as a result of increase speed of erection.

• The nature of segmental bridge requires that the protection of the deck be paramount since the decks are not readily replaceable. To this end, overlays should be considered for Extradosed bridge and also the approach bridge. Based on the AASHTO LRFD Bridge Design Specifications, overlay is encouraged. Additional cost should be added to the cost of the superstructure.

♦ Material availability and price volatility The Team discussed that local availability of materials at the time of construction could have significant impact on costs of the project. This risk could be alleviated somewhat by ensuring that material availability and price volatility trends are closely tracked as the design progresses. ♦ Constructability Ease of constructability is considered a significant risk by the Team. Considerations of having the contractor community involved in providing input during the design phase was seen as a way of mitigating this risk and arriving at an efficient construction method. ♦ Code requirements Potential changes to local codes prior to the design being completed for the project was seen as a potential risk by the team. ♦ Impact loads The design of the bridge foundations / piers to withstand the impact of ships or floating objects was considered a cost risk to the project. Other considerations the Team determined to minimize the potential time delay during design and construction included the following:

• Use accelerated testing technology to address material acceptance. • Conduct a formal bridge type study for the Extradosed Bridge and the balanced

cantilever construction • Review the impact of longer spans on the construction time and cost • Standardize structure types and shape for both the Extradosed Bridge spans and

the approach spans


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• Simplify complex framing. Work to arrive at a design concept with simplified design and detail

• Optimize substructures and foundations • Work towards Constant depth and constant shape for the entire length of the main

structure

The type of project delivery and procurement method was also discussed. Some of the major items discussed included the following:

• Design-build delivery system could result in a shorter construction time and shifts the responsibility and risk to the design-build team. Stipends were also discussed as a possibility. Concern with design-build is the amount of risk the contractor will include for the extradosed bridge type.

• Partial design/build (Best Value selection) was discussed as an alternative. • Design/bid/build; Traditional alternative could provide more price competition.

Risk is not having contracting community involved through the design phase and bidding a less than optimal construction price.

• Construction manager at risk (guaranteed maximum price); This system has good contractor input through design, but no price competition.

• Cost + time bidding; include incentives for schedule • Contracting techniques-incentive/disincentive • Partnering agreements

These major risks and factors provide an opportunity for the design selection team to manage the concepts to result in alternatives that will allow a competitive market for efficient construction solutions, thus minimizing the cost risks. Based on these risks the structural team evaluated each category on the bridge and arrived at a composite risk factor for this portion of the project as shown in the following table:

CATEGORY a). Percentage of Construction Cost

b). Risk / Contingency

c). = a x b; Composite Risk Factor

Deck 35% 20% 7.0%Cables 10% 15% 1.5%Pylons / Piers 15% 100% 15.0%Foundations 35% 25% 8.8%Other / Miscellaneous 5% 20% 1.0%

Total 100% 33.3% After discussing the risk with the Team, the decision was made to utilize a 30% risk factor at this time. This 30% factor was then included in the estimate and considered to cover much of the risk associated with the risk items noted for this bridge.


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The following is the probability assumption curve selected for the main spans of the bridge, based on the previous evaluation of the risk assessment for this portion of the project.

Curve: Maximum Extreme Distribution - There is a high probability of bid exceeding estimate. Low probability of the bid coming in significantly below the estimate. This is the most significant item on the project, and demonstrates the risk the Team considered with the extradosed bridge structure. The range of the extreme distribution goes to amounts over 50% higher than the base estimate.


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4.4.2 Aesthetics (Allowance) MnDOT discussed that, according to cost participation policy, an allowance of $3 million dollars would be utilized for aesthetics on the St. Croix River Crossing. This includes the extradosed river spans plus the main approach spans. The Team did not review this allowance.

Curve: Uniform Distribution - Fixed allowance for this aesthetics item resulted in the Team recommending a uniform probability distribution.


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4.4.3 Anti-Ice Bridge Deck Equipment Based on other comparable projects, an allowance of $3 million dollars was included in the estimate for anti-icing equipment to be installed on the bridge. The Team considered this allowance reasonable for this stage of the project.

Curve: Logistic Distribution - Reasonable probability that the bid will fall within the range of the estimate for this bridge equipment. Team felt comfortable with information from recent projects. 4.4.4 Right of Way No right-of-way is required for this portion of the project crossing the river.


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4.5 Other Project Elements:

Scope of other project elements: • Mitigation

Fixed: Mitigation items that have a set amount allocated as a limit. These costs have been set as fixed for this estimate and study. Variable: Mitigation items that are estimates at this time and could vary as

the design develops.

• Project Development, Design/Engineering and CEI Percentage allowance for developing the project preliminary design, finalizing the design and procurement of the project, and providing construction engineering and inspection (CE&I) during the construction phase of the project.

• Inflation

Estimate of the inflation (escalation) of the cost of design and construction costs as the project progresses.

• Construction Contingency

Contingency set aside for changes and unforeseen conditions during construction based on the typical changes on other major structure projects throughout the country.

• Management Reserve

Reserve set aside for the cost of approved requests for changes from outside parties such as local municipalities and other public agencies/entities during construction.

• Inflation Impact per additional month

Estimate of the cost impact to the project budget based on a month of delay during the pre-construction phase.


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Probability Curve Assumptions for the Other Project Elements: Mitigation Package A detailed mitigation estimate was provided during the Review. The total cost of the mitigation package (fixed and variable) was estimated at $16.552 M. The cost data for the mitigation package is included in Appendix A of the Report. The Team reviewed the mitigation portion and concurred that it sufficiently covered the known mitigation scope required for the project. Since many of the mitigation items were fixed, the Team calculated separate line items of fixed and variable mitigation for risk assessment purposes. 4.5.1 Mitigation (Fixed)

Curve: Uniform Distribution - Fixed items for a portion of the mitigation have been identified separately for this uniform probability distribution.


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4.5.2 Mitigation (Variable)

Curve: Logistic Distribution - Reasonable probability that the bid will fall within the range of the estimate for these variable mitigation items.


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4.5.3 Project Development, Design/Engineering, and Construction, Engineering and Inspection (CEI) The team reviewed each of these items and the associated estimates in detail. An independent evaluation was performed that arrived at close to the previously estimated 25% allowance for these items. Based on this review, the Team considered this a reasonable estimate at this time. There were multiple risk factors identified for this line item, including:

• Limited pool of qualified consultants, designers, contractors – could result in higher costs • Risk of increased costs due to delays • Risk of depth of knowledge/experience on this type of project • Risk of increased costs due to multiple contracts and multiple delivery methods • Funding availability could result in extended project duration increasing inflation costs

Curve: Maximum Extreme Distribution - High probability of bid exceeding estimate. Low probability of the bid coming in significantly below the estimate. Although the Team considered that the 25% factor covered all of these items, there was some concern that additional labor may be required for the completion of the design stage, the construction stage, and the other project development costs such as public involvement.


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4.5.4 Inflation Both MnDOT and WisDOT contacted their financial management team for information on recent inflation. Both States considered that a 3% factor for inflation would be sufficient. The Team did see significant risk in utilizing this amount, however, agreed to utilize this amount in calculating inflation to the estimated midpoint of project expenditures in approximately 2010.

Curve: Normal Distribution - Average probability that the bid will fall within the range of the estimate with equal chance of being above or below the estimate. This is based on the Minnesota and Wisconsin DOTs agreeing that a 3% inflation factor is considered appropriate at this time. Although a normal distribution was utilized, this is a major unknown that could play a significant part in the bid costs when the project is bid.


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4.5.5 Construction Contingency Based on FHWA major projects having changes during construction in the range of 5% to 10%, and WisDOT experiencing similar change values on their major projects, the Team agreed to utilize a 7.5% construction contingency for unknowns during this project. This contingency is intended to cover unforeseen conditions, scope changes and other impacts where contractually the contractor is owed additional funds beyond the contract amount.

Curve: Normal Distribution - Average probability that the bid will fall within the range of the estimate with equal chance of being above or below the estimate. Unknowns due to weather, resource availability, site conditions and other events could impact this cost item.


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4.5.6 Management Reserve The Team discussed a management reserve to account for third party changes during construction that have not been anticipated in the design. Although the Team did not consider this a significant risk at this time, a 1% allowance was included in the estimate for the management reserve. This item is only an allowance and was not calculated in the bottom line probability distribution. However, the 1% for management reserve is included in the final estimate based on the Team’s review. 4.5.7 Project Delivery Method Although not a specific line item in the estimate, the risks associated with different types of project delivery methods were discussed by the Team. Some of the risks and opportunities associated with utilizing Design-Build in lieu of the Design-Bid-Build method were identified as the following: Risks by utilizing Design-Build:

• WisDOT cannot utilize DB without Legislative Approval • Potential for higher bids in DB due to “best value” method • Potential of successful low bid DBB contractor being unqualified • Learning curve/lack of experience could result in the preparation of a more extensive

Design-Criteria • Risk of having to complete ROW acquisition • Limited creativity opportunity with DB process • Potential for extensive review process during design resulting in delayed construction,

delay claims

Opportunities by utilizing Design-Build:

• D-B could result in accelerated schedule for the project • D-B could result in shift of risk/responsibility on to DB • Best Value D-B could provide better opportunities to attract qualified designers.

However this method may not result in the lowest bid. • Potential for initiating early industry review prior to formal acquisition process • Opportunity to identify economical design alternatives


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APPENDICES


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APPENDIX A

Estimate Summary Spreadsheet

and

Summary of Mitigation Items


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APPENDIX B

Estimate Review Summary Presentation

* Note that this presentation was from the Workshop/Review and does not include a later

change to the fixed mitigation value

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St. Croix River Crossing ProjectCost Estimate ReviewCost Estimate Review

August 2005

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St. Croix River Crossing ProjectCost Estimate ReviewObjective

Verify the accuracy and reasonableness of the current total cost estimate to complete the St. Croix River Crossing project and to develop a probability range for the cost estimate that represents the project’s stage of design.

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Cost Estimate ReviewWorkshop Team Members

FHWA StaffMnDOT StaffWisDOT StaffPBS&J (Consultant)

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Cost Estimate ReviewPBS&J Team Members

Multidiscipline A/E Firm ~ 3,700 employees60+ offices nationwide

David Carter – Team LeaderVP, National Business Sector Manager –Construction Consulting

Praveen Ommi – Cost EstimatorVP, Division Manager – Construction Consulting

Morad Ghali, P.E. – Structural EngineerChief Structural Engineer

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Cost Estimate ReviewAgenda

Monday, Aug. 8Understanding of Project Scope, Current Cost EstimateReview Roadway Estimates and LWD Estimating Process

Tuesday, Aug. 9Review Structures EstimatesReview Non-Construction Costs (PE, CEI, CM, Inflation, Contingency)Review Right-of-Way Cost Estimates

Wednesday, Aug. 10Finalize Base Cost EstimatesDiscussion on potential risks and opportunitiesRisk Analysis

Thursday, Aug. 11Finalize review of project costsAnalyze risks and develop cost estimate probability range

Friday, Aug. 12Presentation of findings and recommendations

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Cost Estimate ReviewMethodology

Project Scope ReviewCurrent cost estimate overview for Preferred Alt. PackageCost Estimate Review

Scope included in the 4 parts - Minn.(2), Wis., River Bridge Understanding of the LWD ProcessIdentified Scope not accounted for in the current cost estimateTechnical Disciplines input (Roadway, Structures, ROW, Mitigation, etc.)

Structures Task Force AssembledAssessment of Bridge Types – Example of Connecticut Bridge

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Cost Estimate ReviewMethodology

Contractual Delivery Methods, Market ConditionsRisks and Opportunities AnalysisInflation to anticipated mid-point of construction

3% per year to 2010

Post Bid Costs Construction ContingencyManagement Reserve

Establish Total Future estimated costs for programming purposes

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Cost Estimate ReviewSummary of Review Findings

Confirmed that the project estimate is consistent with the stageof project development

LWD Estimating SystemNeed for Documentation of multipliers selectionLWD Process has limitations on unique project requirements

The river bridge type, configuration and constructability are the major contributors to the risk associated with the project

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Cost Estimate ReviewReview Results

$474Total Project Costs 2010

$37Construction Contingency (7.5%) and Management Reserve (1%)

$437Subtotal 2010 Costs

$71Inflation at 3% per year to 2010

$366$305Subtotal 2004 Costs

$55$10Risk Estimate (scope, design variances - construction and ROW)

$311$295Base Estimate (incl. construction, mitigation, ROW, engr., cei)

Review Results

Project Estimate

(costs in millions)

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Total Project Costs 2010

Construction Contingency (7.5%) and Management Reserve (1%)

Subtotal 2010 Costs

Inflation at 3% per year to 2010

Subtotal 2004 Costs

Risk Estimate (scope, design variances -construction and ROW)

Base Estimate (incl. construction, mitigation, ROW, engr., cei)

(costs in millions)

$305

$10

$295

Project Estimate

$474

$37

$437

$71

$366

$55

$311

Review Results

$61

$45

$16

Delta

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Additional Scope / Revised Estimates Identified in Review ($ in Millions)

Railroad Agreement $ 6.9Erosion Control and High Perf. Pavement $ 5.4Anti-Ice Bridge Deck Equipment $ 3.8Major Utility Relocation Cost $ 3.0Adjusted Wisc. STH 35 Bridge Cost per SF $ 0.7Bridge Removals $ 0.3Contaminated Soil Removal $ 0.3Retaining Walls – revised estimate $ 0.1Reduction in Aesthetics – revised estimate $-4.2TOTAL ESTIMATE CHANGE ~ $16 M

Note: Changes include risk and engineering factors

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Additional Risk Impacts ($ in Millions):

Extradosed Bridge Risk (30%) $ 30Minn. Approach Spans to River Bridge Risk (20%) $ 4Right-of-Way Risk

Minnesota ROW (10%) $ 1 Wisconsin ROW (50%) $ 2

Associated Engr/CEI (25%) $ 8

TOTAL ADDITIONAL RISK IMPACT ~ $ 45 M

Above Values rounded to nearest million dollars

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Risk Simulation Impact of delay:

Total Estimated Impact for one year –

~ $13 million

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Cost Estimate Review - Risk Analysis

60% Certainty from $306 to $332 M

60% Certainty from $400 to $430 M

60% Probability from $100 to $120 M

Roadway Approaches – Minimum Extreme Distribution

Signals – Student’s t DistributionRiver Bridge – Maximum Extreme DistributionEstimated CostEstimated Cost

Estimated Cost

Freq

uen

cy

Freq

uen

cy

Freq

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Cost Estimate ReviewRisk Analysis

60% Probability from $306 to

$332 M

Total Project Estimate

Review 2004 with Risk ~

$366 M


Total Project Estimate Review - 2004

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$430 M

Estimate Review without risk = $403 M

Total Project Costs with risk

and inflation 2010 ~ $475 M

Total Project Estimate Review - 2010

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$430 M

60% Probability from $100 to $120 M60% Probability from $100 to $120 M

Total ED River Bridge Spans Estimate with risk ~ $135 M

Estimate Review Base = $105 M

Part 4 – Extradosed River Bridge Spans

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Cost Estimate ReviewRecommendations

Consider review resultsReporting current estimated costs rangeReporting risk for entire projectConsidering programming estimated costs

Consider Packaging Project to attract a high level of competition

Innovative contract administration options

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Cost Estimate ReviewRecommendations

Focus effort on River Bridge configurationaffects the degree of environmental impacts and construction duration has impact on approach spans presents the opportunity to manage the risk

ConstructabilityCompetition – precast vs. cast-in-place optionMaterials availability

HAS LARGEST IMPACT ON PROJECT~ 60% of the project estimated costs~ 80% of the risk on the total project

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Cost Estimate ReviewConclusions

Current Concept has a relatively high cost risk

Cost risk can be managed through:Cost effective design decisions on river bridgeFocus on river bridge constructabilityContractor involvement / options

Range of Probability in mid-60% certainty:Estimate 20% 80%

2004 Base $306 M $332 M2010 Programming $400 M $430 M

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St. Croix River Crossing ProjectCost Estimate Review

Questions?


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APPENDIX C

Review Agenda


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WORKSHOP AGENDA DATE TIME ACTIVITY .

8/8 - 8/12 7:30 am Continental Breakfast

8/9 - 8/11 12:00–12:30 Lunch (8/8 and 8/12 working lunches)

8/8 Mon 8-11 Introductions, review project scope, status, cost estimates 8/8 11-12 Review Roadway cost estimates 8/8 12-1 Senior Management briefing – Working Lunch 8/8 1– 4:30 (Continue) Review Roadway cost estimates

8/9 Tue 8–9 Review Structures Cost Estimates/Structures general discussion 9-9:45 Connecticut Project Presentation – Steve Stroh, URS

9:45-10:30 Continue Structures Costs discussion/Struc. Task Force identified 10:30-12:00 Structures Task Force Breakout

8/9 10:30-12:00 Review other non-construction costs 8/9 12:30–2:30 Review Structures Task Force discussion results

8/9 2:30-4:30 (Continue) Review other non-construction costs

8/10 Wed 8-10:30 Review ROW / Aesthetics / Signals / Ret. Walls / Other

8/10 10:30–12 Finalize Roadway and Bridge cost reviews 8/10 12:30–4:30 Identify cost and schedule risks for the project

8/11 Thu 8–12 Finalize review and risk analysis / discuss delivery methods 8/11 12:30–4:30 Finalize review and begin preparation of presentation 8/12 Fri 8 – 11:30 Finalize and practice presentation

8/12 12 – 2 Presentation and wrap – up – Working Lunch


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APPENDIX D

Review Work Plan


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WORK PLAN

Objective: Verify the accuracy and reasonableness of the current total cost estimate to complete the St. Croix River Bridge project and to develop a probability range for the cost estimate that represents the project’s stage of design.

Project Background: This project consists of a new National Highway System crossing of the St. Croix River, a federally designated wild and scenic river and the State Line between Minnesota and Wisconsin. The purpose of the project is to provide the capacity for existing and future traffic needs and to remove through traffic from local traffic within historic downtown Stillwater, Minnesota. The construction portion of the project consists of 4 elements: 1) Trunk Highway (TH) 36 – Trunk Highway (TH) 5 to Osgood Ave., 2) the Minnesota Approach, 3) The River Bridge Crossing, and 4) the Wisconsin Approach. This project is currently in the National Environmental Policy Act of 1969 (NEPA) stage. The cost estimate for the extradosed bridge in alternative B-1 will be reviewed along with the Minnesota and Wisconsin Approaches and TH36-TH 5 to Osgood Ave.

Approach/Methodology:

• Review project details and review the existing project estimates

o All costs associated with the project shall be reviewed, including construction, maintenance of traffic, preliminary engineering, construction engineering, utilities, right-of-way, NEPA environmental mitigations, environmental stewardship, congestion management system, public relations, hazardous and contaminated materials, program management, and natural and cultural resources. Validity of present day costs, inflation factors, and the application of contingencies will be analyzed.

• Use a systematic process review to evaluate the available information and then identify and

describe cost risks associated with the unknown elements of the project. Prioritize all identified risks and assign costs to each risk.

• Use appropriate computer simulation software to model the cost estimate structure. • Develop the cost estimate and schedule for the project as a probability range.

A team has been assembled to meet the above objective utilizing information, which will be provided by MnDOT. The Team will be reviewing with the Supplemental Draft Environmental Impact Statement’s (SDEIS) total project cost estimate report for Alternative B-1 extradosed bridge option.


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Workshop (Tentative) Schedule: The following general approach will be used to systematically review the total cost estimate and maintain team focus throughout the 5 day workshop:

Task / Time Mon 8/8 Tue 8/9 Wed 8/10 Thu 8/11 Fri 8/12

am pm am pm am pm am pm am pm 1. Familiarize team with overall Project Scope, current project status, preferred alternative scope, and cost estimates - AM Present approach to Senior Leadership at noon

2. Review Roadway/MOT cost estimates – AM/PM. Drainage – PM

3. Review Bridge Structure cost estimate – AM (possible Task Force Assembly). Include ~ 9 a.m. presentation on Connecticut bridge.

4. Review other non-construction costs (PE, CEI, CM, PR) - PM - Bridge Task Force Assembly - PM

5. Review Right-of-Way Cost Estimates - AM

6. Review Aesthetics, Signals/Retaining Walls, Mitigation package and other non bridge/roadway costs – AM

7. Finalize review of Roadway and Bridge costs as required – AM/PM

8. Identify cost and schedule risks associated with elements of project - PM

9. Finalize review of overall project costs, discuss project delivery methods - AM

10. Analyze risks and develop cost estimate probability range - AM

12. Review probability range of cost estimate and schedule, and begin development of presentation - PM

13. Finalize presentation/review of cost estimate – AM. Present findings in briefing - PM

The above schedule will be utilized to keep the Review on track, however, there will be flexibility should further review of certain disciplines be required. The team will review all components of the Total Project Current Cost Estimate. Validity of present day costs, inflation factors, and the application of contingencies will be analyzed.

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Results: The results will be summarized for a preliminary briefing on Friday afternoon, August 12th, and will be submitted in a final report to be issued within 30 days of the completion of the Review.

Team Members: The following will participate as team members for the cost review:

• FHWA Minnesota Division • FHWA Major Projects Unit • MnDOT • WisDOT • PBS&J Team Members

Required Documents (tentative list):

• Most recent/updated Cost Estimate (Electronic copy in spreadsheet required) • DSEIS Report (electronic and/or hardcopy) • Drawings • Cost Estimate Quantities and Unit Pricing Back-up (if available) • MnDOT Historical Unit Prices (for past 3 years, if available) • Recent MnDOT/WisDOT Bid Results for major projects (for 2004/2005, if available) • Contractual Delivery Method and Project Restrictions impacting cost and schedule (if any) • Any other related and application information


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APPENDIX E

Cost Estimate Review

List of Attendees and

Daily Sign-in Sheets


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All Team members and other attendees from the first day of the Review are shown below. The next few pages include the sign-in sheets from all five days of the workshop.

St. Croix River Crossing Project – Cost Validation Attendees Various Sessions during Week of August 8 – 12, 2005 Name Represents

Thomas Ravn MnDOT ICI Amber Blanchard MnDOT BR DB Todd Clarkowski MnDOT Metro Terry Pederson WisDOT PM Frank Pafko MnDOT Envir. Praveen Ommi PBS&J David Carter PBS&J Morad G.Ghali PBS&J Romeo Garcia FHWA Tom Sorel FHWA Chris Crowmwell FHWA Kevin Kliethermes FHWA Paul Nishimoto FHWA Washington Valerie Svensson MnDOT Bridge Adam Josephson MnDOT Metro Rick Arnebeck MnDOT Metro Gary Thompson MnDOT ICI Terry Zoller MnDOT Metro John Sampson MnDOT Metro Karl Weissenbom MnDOT LA Dave Hall MNDOT Bridge Ed Katzmark MnDOT Metro Alana Getty MnDOT Metro Douglas Differt MnDOT Dep Comm Bob Winter MnDOT Operations Dick Stehr MnDOT Eng Services Pat Hughes MnDOT Metro Dan Dorgan MnDOT Bridge David Dahlberg MnDOT Bridge Tom Styrbicki MnDOT Bridge Paul Kivisto MnDOT Bridge Keith Molnau MnDOT Bridge Bill Dreher WisDOT Bridge Shalini Chandra MnDOT Grad. Eng. Joe Gladke MnDOT Construction Rich Lamb MnDOT Geotech Cheryl Martin FHWA Bob Newbery WisDOT Environmental Kevin Chesnik WisDOT Khani Sahobjam MnDOT Metro Tom Beekman WisDOT Planning On the second day (Tuesday) of the Review, a member of the design team for an extradosed bridge structure currently being designed for the I-95 New Harbor Crossing (Pearl Harbor Memorial Bridge) in New Haven, Connecticut, also joined the Team to provide an overview of extradosed bridges and to participate in a bridge structures focus group that day.


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