Transforming Stewardship and Oversight for Major Projects
Out of necessity, FHWA took a different approach to fulfilling its roles and responsibilities on the complex New NY Bridge Project.
Major infrastructure projects can be risky business. Major projects, those costing $500 million or more, typically have complexities such as a large scope, innovative financing, and alternative project delivery methods. These projects are very important to the Federal Highway Administration because of their national significance and the large amounts of Federal funding that make them possible. To protect the Federal investment and to ensure that Federal laws, regulations, and policies are followed, FHWA is charged with providing stewardship and oversight of these projects. Over time, FHWA has adapted how stewardship and oversight occurs to meet the challenges in carrying out its mission on major projects.
In the early days of building the interstate system, FHWA had full oversight on projects, meaning the agency was involved heavily and played central roles in the design and construction. However, as the interstate system was completed, additional laws changed the role of FHWA and delegated more responsibilities to States. The responsibilities and fundamentals of FHWA oversight still exist, but the way the agency performs its role continues to transform. The latest guidance, issued in 2014, furthered the transition from “full oversight” of projects to oversight activities primarily focused on areas of higher risk and opportunity. FHWA’s use of a risk-based approach for project stewardship and oversight intends to optimize the successful delivery of projects and to assure compliance with Federal requirements.
In the mid-1990s, the Central Artery/Tunnel Project (known as the “Big Dig”) in Boston, MA, was moving along full throttle. FHWA dedicated a team of approximately 15 staff that provided the design and construction oversight. This level of oversight was unprecedented in the number of personnel and resources assigned to a complex project. Today, however, FHWA has fewer personnel and resources to dedicate to a growing number of complex projects. The entire FHWA workforce declined from approximately 5,000 employees in the interstate construction era to fewer than 2,900 employees today. In 2001, when the Big Dig was under construction, there were only 10 projects that met the FHWA threshold for a major project. Today, there are more than 100 FHWA major projects across the country that meet the criteria.
Gone are the days when FHWA can be involved to the level of its participation during the interstate era, or to have the same level of resources devoted to major projects such as the Big Dig. For today’s major projects, FHWA needs a more creative and innovative way to get the job done. Therefore, FHWA is embracing project management fundamentals and conducting traditional stewardship and oversight in a risk management framework to successfully anticipate and manage uncertainties on major projects.
Taking a Risk-Based Approach in New York
Although the risk management framework is not new, the formal application of the risk model for the broad FHWA stewardship and oversight activities on major projects is a new approach.
“Traditionally we have applied this framework to our division’s performance planning process,” says Joan Walters, program analyst with FHWA’s New York Division, who assisted the division’s project manager with the application of the risk management approach to New York’s major projects. “But it can be applied to any of our programs, projects, or even for decisionmaking in our personal lives.”
Today’s major projects typically use alternative project delivery methods, such as design-build and public-private partnerships, which transfer responsibilities and risk from the traditional State sponsors to private companies. This approach compounds the complexity of projects and introduces uncertainties that could become deterrents to meeting FHWA objectives.
In New York, FHWA recently faced a major challenge in its stewardship and oversight duties on the New NY Bridge project. The New NY Bridge project is a $3.98 billion design-build project that replaces the existing Governor Malcolm Wilson Tappan Zee toll bridge with two new parallel cable-stayed bridges across the Hudson River from Rockland to Westchester counties. The owner and State sponsor is the New York State Thruway Authority (NYSTA). Completion of the project is scheduled for 2018.
Early in the project delivery process for the New NY Bridge, the staff at FHWA’s New York Division Office knew that they needed a different oversight model. In the environmental and design-build procurement phases of the project in 2012, they identified numerous uncertainties—including the ability to meet FHWA requirements, commitments to project stakeholders, and unprecedented oversight requirements in the project’s next phase, design and construction.
To compound the challenge, the division had limited resources and only one staff member fully dedicated to the project: the project oversight manager. This project necessitated leveraging the strengths of other personnel in the New York Division and others within FHWA to provide additional assistance.
FHWA established a team for the project, including technical specialists from the New York Division, FHWA Resource Center, and FHWA headquarters office. The team, headed by the project oversight manager, first defined what stewardship and oversight would look like for the project. The team’s approach included three elements: (1) stewardship—the “soft” activities that provided influence, leadership, and technical assistance; (2) oversight—the “hard” review and inspection activities that looked at compliance; and (3) approvals—the approvals FHWA would retain at key milestones or when Federal action was needed. The project team set this common stewardship and oversight vision to help define and prioritize their involvement in the project.
Establish the Project’s Risk Context
The first step in FHWA’s risk management model was to identify the project risk context. To accomplish this, the FHWA team working on the New NY Bridge had to establish the background and overall context, and define what FHWA success would mean for this project.
After the contract was awarded and entered the design-construction phase in 2013, the FHWA project team met and brainstormed what was specifically important to FHWA. This discussion was the first in a series that followed in the typical risk management framework.
The division project manager facilitated the initial discussion with support and leadership from Chris Gatchell, director of engineering at the New York Division. “With design-build being new to New York, the New York Division staff found ourselves not understanding our stewardship and oversight roles and responsibilities with respect to the project, which was creating confusion and frustration,” says Gatchell. “This specific meeting focused on brainstorming ideas from the New York Division team about what they thought was important regarding the project. This required the team to think about FHWA’s role. The result of this session really set the stage for the division office’s project management plan and risk management approach for the project.”
The team developed a set of goals, objectives, and specific Federal requirements for the project. They addressed how risks were allocated in the contract documents, how NYSTA was set up to provide the owner’s oversight, and key commitments made to third parties, resource agencies, and the public. The team also reviewed and considered NYSTA’s and the design-build contractor’s preliminary risk registers that contained a list of potential project uncertainties including threats and opportunities. Furthermore, they evaluated and assessed the FHWA headquarters Resource Deployment Tool, which establishes a consistent risk context for comparing all major projects and for the deployment of resources.
The outcome of these activities was the following set of goals and objectives: to ensure that the project complies with laws, regulations, policies, and contract obligations; to provide leadership and technical assistance to the project sponsor; and to preserve the public trust in FHWA and the U.S. Department of Transportation.
FHWA also compared its goals to those of NYSTA and the design-build contractor. All had similarities and differences. Examples of similar goals included completing the project on time and maintaining a positive reputation. Some differing goals included the following: FHWA is primarily focused on meeting Federal requirements, while NYSTA is striving for low, long-term bridge maintenance costs, and the contractor has a goal to meet the project requirements while maintaining financial viability for its company stakeholders. This comparison provided insights on the way each entity approached the project, and it also pointed to potential areas of elevated stewardship and oversight risk where FHWA would need to spend more time.
The FHWA team’s context for the project centered around the following key areas: (1) the project cost of $3.98 billion, (2) the use of innovative financing, (3) the 3.1-mile (5-kilometer)-long crossing with complex cable-stayed bridge, (4) challenging geotechnical conditions, (5) the project location in a suburban environment with sensitive human and natural resources and a number of environmental commitments, (6) the great deal of political interest in the project from Federal, State, and local levels, and (7) the use of design-build as a new project delivery method for the State. Identifying these key areas and a common vision enabled the team to advance to the next step in the FHWA risk management model: identifying the specific risks to achieving FHWA goals and objectives.
Identifying the Risks of Many “Firsts”
The New NY Bridge was the first of its kind for the FHWA New York Division. It was the first large design-build project, the first cable-stayed bridge constructed by the State, and the first time the FHWA New York Division administered Transportation Infrastructure Finance and Innovation Act (TIFIA) financing. To top it off, the sponsor was nontraditional and did not have a long-standing relationship with FHWA. The FHWA team’s knowledge of what could happen was limited, and a lot of uncertainty existed.
To help with this complex situation, FHWA used the Delphi technique. The technique is an established risk tool for soliciting opinions from a wide range of experts to gain a further understanding of possible project risks, including both threats and opportunities in various program or project delivery areas. This process enabled FHWA to cast a wide net and seek the unbiased opinions of project managers and technical experts within FHWA across the country. These experts had pertinent experience and helped to identify top potential risks and initial response strategies.
After the initial round of feedback in June 2013, the project team combined the responses and a consensus of top risks into similar risk categories and risk statements. The team entered these into a project risk register, which generated categories and areas that FHWA then converted into risk statements.
|Risk Categories and Areas|
Analyzing the Risks
To analyze the identified risks, FHWA used a qualitative assessment to characterize the general likelihood and impact of the risks on FHWA goals and objectives. The team chose a qualitative approach over a more detailed quantitative approach because of the higher level oversight and stewardship role of FHWA.
Typically, FHWA project goals are broader compared to those of a State, contractor, or other project stakeholder. In this qualitative approach, FHWA assigned values to likelihoods (What is the likelihood of the risk event occurring?) and impacts (What is the impact of the risk on achieving project objectives?) ranging from high to low on a 5-point scale. This approach enabled a relatively quick assessment and a simple visual rating. To determine the likelihood and impact ratings, FHWA considered factors such as the level and experience of staff and the potential for waste, fraud, and abuse.
When FHWA conducted the risk scoring, it included the entire FHWA multidisciplinary project team rather than relying on only the subject matter experts to provide scores for the risk areas. Through this collaboration and crosscutting of program areas, all risk perspectives for the project were considered during the qualitative scoring process, producing more unbiased and normalized results. The output of this step was a list of all the project risk statements ranked by priority.
|Likelihood Impact and Criteria|
What is the likelihood of the risk event occurring?
What is the impact of the risk on achieving project objectives?
Prioritizing the Risks
The team then reviewed and prioritized the assigned risk scores to determine where to focus FHWA resources. The team members generated a final risk score by multiplying the likelihood score by the impact score. These results were plotted on heat maps that visually show the likelihood versus impact. Risks plotted in a “red area” on the heat map are considered high risks, those in yellow are medium risks, and those in green are low risks.
The FHWA project team validated the prioritization by sending the risk statements, risk scores, and heat maps out to the larger FHWA team of experts. The whole team reviewed the work to make sure the ranked risks made sense, and to assess whether they needed to make adjustments or identify additional risks. The team modified a couple of the risk priorities after comparing the scores.
Response Strategies and Monitoring
For each identified risk, FHWA brainstormed a list of response strategies. What actions will FHWA take to mitigate, avoid, accept, or transfer threats, or enhance opportunities? The team included hard compliance activities (oversight), softer influencing and technical assistance activities (stewardship), and FHWA approvals required by law.
The FHWA project oversight manager, with input from the FHWA project team, assigned staff to take responsibility for each risk response. The outcome was a prioritized list of risk response strategies with FHWA staff assigned, and an overall understanding of the workload expected for FHWA staff.
In the final step (monitor, evaluate, and adjust), FHWA developed a stewardship and oversight plan based on the outputs from the risk framework steps. This plan includes all documentation of the process, including explanations of the risk identification, a summary of the latest risk scoring analysis with consideration of how risk scores are trending and mapping on heat maps, risk allocation, and tracking of risk response tasks.
FHWA shared the stewardship and oversight plan and risk register with NYSTA to assist with the alignment of risks and responses and so that NYSTA could incorporate the information into its risk management process.
The two key outputs for this stage were the plan and documentation of implemented strategies. FHWA updates the plan periodically and updates the risk scores on an annual basis.
Putting the Plan into Action
After FHWA identified the initial risks and developed its plan for stewardship and oversight, the division office involved the assigned personnel as necessary to put the risk-based approach into action. The following examples demonstrate how these individuals carried out their roles.
Geotechnical Stewardship and Oversight
Justice Maswoswe, a senior geotechnical engineer with the FHWA Resource Center, visited the New York Division Office upon request to discuss the project’s geotechnical risks and potential response strategies. The soil and rock conditions for the project were challenging and presented a great risk. The bridge approaches have shallow water depths to extremely soft soils. The bedrock depth on the east approach and main span ranges from 200 to 300 feet (61 to 91 meters), and on the west approach bedrock depth is greater than 800 (244 meters).
These characteristics pose difficult choices for deep foundation types and introduce risks for foundation capacity and constructability. Maswoswe reviewed the geotechnical soil, rock profiles, and other project information, and, together with the FHWA team, targeted certain areas for FHWA involvement during the design and construction of the project. Because they could not review all plans, they targeted the most important items that pose the greatest risk to the success of the project: a detailed review of the pile test program, a review of the geotechnical conceptual design report, a review of main span final designs, and construction inspections on each foundation type.
Risk in Environmental Commitments
Melissa Toni, the environmental specialist in the New York Division, was heavily involved in the National Environmental Protection Act (NEPA) process for the New NY Bridge project. She coordinated with resource agencies on permit requirements, and she led a consultation with the National Marine Fisheries Service to obtain a biological opinion for two endangered fish species.
The NEPA record of decision and biological opinion described the basis for the NEPA decision and summarized mitigation measures. The decision included environmental performance commitments and compensatory mitigation. Some of the risks included commitments during construction related to construction noise, air quality, water quality, and the two endangered fish species. FHWA, through Toni’s involvement in the risk process, prioritized specific tasks including reviewing the environmental compliance plans and conducting environmental reviews in the field. Toni’s involvement also included design reviews to ensure that designs and construction means and methods were within the environmental commitments and permits. This involvement enabled FHWA to advise NYSTA on when to consider designing to the permit condition, or when to apply for a permit modification.
Other tasks included coordinating with resource agencies at important intervals and reevaluating consultations proactively when required by project changes.
“Through the risk identification process, FHWA division office managers realized the amount of effort [required] to mitigate the key environmental risks for this project, and my workload was [adjusted] accordingly,” says Toni.
Because of these specific risk responses by FHWA and work with NYSTA and the contractor, the environmental compliance is held to a high standard and FHWA is meeting its project goals.
Oversight of Cable-Stay Design
The cable-stay design presented a challenge for oversight because the FHWA New York Division, NYSTA, and the New York State Department of Transportation went into the project with limited experience with cable-stayed structures. The design-build contractor had international experts with experience in other countries, but most with different design codes than used in the United States.
“The FHWA [New York] Division requested assistance from both FHWA headquarters and the Resource Center for technical cable-stayed structure design and construction support,” says Dan Byer, a bridge engineer with the FHWA New York Division. “[We wanted] to capitalize on expertise and lessons learned nationally and internationally.”
This was the first of three major cable-stayed bridges being constructed for the New York City metro area, all three being advanced by different owner agencies and design-build contractors. With FHWA being the common thread for these projects, the agency seized the opportunity to take a leadership role in some technical areas of the cable-stay bridge design and construction and share lessons learned with the various State partners.
Byer quickly broadened the FHWA team’s knowledge and involved Brian Kozy, a structures engineer at FHWA headquarters, and Chris Millington, a structures engineer with the New York Division. Using the risk-based process, they identified the key risks: the edge-girder design, cable anchorages, redundancy, and security threats. Through targeted design reviews and meetings, FHWA worked with NYSTA and the project designer to review design plans and ensure that the bridge meets Federal regulations and policies. Furthermore, through indepth construction inspections, the FHWA team could provide a layer of quality assurance to verify that what was designed on paper was being built in the field and with acceptable quality.
Because this area presented a significant opportunity for technical assistance and technology transfer, FHWA delivered cable-stay design training for the contractor and State oversight teams and facilitated project visits at the other two cable-stayed bridge sites.
Material Quality and Acceptance
The design-build contract for the New NY Bridge assigned some of the traditional roles for quality assurance to the design-build company, while NYSTA maintained appropriate aspects of owner acceptance. In addition, NYSTA was poised to use new procedures for quality verification and owner acceptance for the first time in New York. This scenario presented high risks for FHWA in terms of material quality.
Tim LaCoss, a materials specialist with the FHWA New York Division for 20 years, stepped in to assist with targeting the high-risk areas in material quality. LaCoss championed the review of the design-build contractor’s quality plan, helping to develop the quality verification software, and leading value-added construction inspections that concentrated on areas that posed the greatest threat to quality. For example, LaCoss helped the team target erecting the steel superstructure and fabricating the precast concrete deck panels. His actions led to recommendations and ultimately to solutions that improved the quality of materials used on the project.
TIFIA Loan Financing
In December 2014, when the TIFIA loan closed for the New NY Bridge project at $1.6 billion, it was the largest TIFIA loan ever. It was also the first TIFIA loan to be administered by the FHWA New York Division. The loan agreement specified oversight activities for USDOT TIFIA loan officers and oversight activities for the FHWA New York Division. These activities were designed to protect USDOT interests and mitigate and monitor the risk.
This framework drove activities for Jim Griffin, division director of the Office of Finance and Administration with the New York Division. Griffin and the financial team, with the project oversight manager, held the responsibilities to mitigate risks and meet FHWA goals, including disbursing the TIFIA loan as planned.
The risk response activities included billing reviews for the first $1.6 billion to review eligibility for Federal funding and to ensure that progress payments had an acceptable cost basis. Other activities included certifying all billing requests, reviewing cost controls and procedures, and spot-checking earned value of progress payments. These activities aligned with the broader financial reviews that the USDOT TIFIA office conducted and in totality provided adequate protection of the Federal interests.
Disadvantaged Business Enterprise
From the beginning of the project, Christine Thorkildsen, a civil rights program manager with FHWA’s New York Division, was involved in the risk framework for stewardship and oversight. She helped FHWA and NYSTA keep the focus on the administration of the Disadvantaged Business Enterprise (DBE) program, an important goal for FHWA and NYSTA because of the opportunities the goal creates for disadvantaged small businesses. The DBE goal for the project was set at 10 percent.
According to Thorkildsen, “Since the DBE program is a shared risk between FHWA and NYSTA, we focused on developing administrative DBE procedures that could be used within the confines of design-build contracting to meet the intent of the Federal regulation.”
Specific risk response tasks to meet the DBE goal included the following: helping NYSTA establish the oversight team, reviewing the NYSTA oversight procedures, reviewing and approving the design-build contractor’s DBE plan, and partnering with NYSTA and the design-build contractor to achieve DBE opportunities on this project. These efforts produced a greater understanding of FHWA expectations and a greater opportunity for success and compliance with Federal requirements.
FHWA learned a great deal using the risk management model to develop project-level stewardship and oversight roles on the New NY Bridge project. The model enabled the FHWA team to establish clear stewardship and oversight goals and to promote a common vision of success for the project. The model also assisted the oversight team to gain a greater understanding of the project and focus limited resources on the highest threats and opportunities. In addition, it facilitated the alignment of oversight activities with other partners.
“I can unequivocally say that FHWA’s involvement in the New NY Bridge project has contributed greatly to its success,” says Jamey Barbas, NYSTA project manager. “From the start, their oversight and guidance has been very collaborative and professional and targeted to areas that needed it most.”
Risk-based stewardship and oversight accomplished using this approach aligns with the greater FHWA values of collaboration, serving the public interest, leveraging diverse thinking and experience, supporting all partners, and maintaining integrity in its decisionmaking. Because of the lessons learned on the New NY Bridge project, the Major Projects Team in FHWA headquarters has developed guidance on this approach for FHWA to use on other projects. This guidance is available to FHWA users on the Major Projects Microsoft® SharePoint® site.
John Burns is the FHWA specially designated project oversight manager for the New NY Bridge project. He has managed the project for FHWA through all phases, including the environmental process, design-build procurement, and, currently, the design and construction phase. Burns has been with FHWA for 20 years. He is a professional engineer and has a bachelor’s degree in civil engineering from Rensselaer Polytechnic Institute.
For more information, contact John Burns at 518-431-8875 or firstname.lastname@example.org.