23rd Avenue

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23rd Avenue Gateway Boulevard Interchange Review

• Office of the City Auditor
• Larry Laver Gordon M. Babey, M.Sc., P.Eng.

19th Avenue Flyover
23rd Avenue
GatewayBoulevard
CPRail
CalgaryTrail
OCA Webpage - www.edmonton.ca/auditor
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Who We Are
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Roadway Project Life Cycle - Terminology

• Strategic Planning (Transportation Master Plan)
• Concept Planning
• Preliminary Design
• Detailed Design
• Tender/Award
• Construction
• Operations

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The Audit Process
PROJECT MANAGEMENT
AUDIT PROCESS
Strategic Planning
Long-term/Annual Planning
Strategic Planning Concept Planning Preliminary
Design Detailed Design
Long-term/Annual Planning Planning
Strategic Planning Concept Planning Preliminary
Design Detailed Design Construction
Long-term/Annual Planning Planning Fieldwork
Strategic Planning Concept Planning Preliminary
Design Detailed Design Construction Post
Construction
Long-term/Annual Planning Planning Fieldwork
Reporting
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The Audit Process
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Audit Objectives and Reporting
ProjectManagement
CostEstimating
Governance/Approval
Area Planning/Land Acquisition
Procurement

• What are the reasons for the cost increase from
  75 to 260 million?

• What are the causes of the delay in project
  completion from 2006 to 2011?

• Did the City exercise due diligence as project
  owner in managing the project?

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What are the reasons for the cost increase from
75 to 261 million?

• Cost increased from 75 million (2003 concept
  plan) to
• 107 million (2004 preliminary design)
• 134 million (2006 detailed design)
• 261 million (2007 award)
• Overall increase of 186 million
• 86 million for escalation
• 22 million for design/scope changes
• 23 million for underestimation
• 55 million for market conditions

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What are the reasons for the cost increase from
75 to 261 million?

• Benefit-Cost ratio not updated or provided to
  decision makers for final decision
• The effort put into planning was lower than the
  guideline published by the AACE

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What are the reasons for the cost increase from
75 to 261 million?

• Standard methodology for presenting costs not in
  place
• Tools to validate cost estimates not in place
• Contingencies
• No allowance for unresolved risk elements
• Project cost estimating and budget presentation
  are not aligned
• Approved budget does not include cost for concept
  planning
• Cost sharing not reflected in budget
• Cost escalation
• City indices do not reflect heavy construction
  escalations
• Project estimates not stated in
  year-of-expenditure dollars

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What are the causes of the delay in project
completion from 2006 to 2011?
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What are the causes of the delay in project
completion from 2006 to 2011?

• Strategic Planning Possible Lost Opportunities
• Transportation Master Plan, Area Structure Plans,
  Traffic Impact Analysis
• Fundamental elements were identified during
  Strategic Planning
• Free flow on Gateway Boulevard/Calgary Trail
• 19th Avenue access
• Pipeline upgrade and environmental concerns
• Cost sharing opportunities
• The need to increase traffic capacity
• Pace of South Edmonton Common development

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What are the causes of the delay in project
completion from 2006 to 2011?

• Concept Planning 9 month delay
• Historically resourcing issues
• Inexperienced staff member assigned as project
  manager
• Experienced consultant co-managed the project
• Senior Advisory Council established
• Partnering workshop
• Team apprehensive and daunted by the project
• Public hearings remained open 3 months longer
  than anticipated
• City Council expressed desire to expedite the
  project when concept plan approved

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What are the causes of the delay in project
completion from 2006 to 2011?

• Preliminary and Detailed Design 24 month delay
• Citys project manager not full time
• Significant deficiencies in Concept Planning
• Land requirements not communicated in Concept
  Plan
• Land negotiation delays
• Risk of Municipal Government Act claims after
  construction
• Design plans developed and maintained for both
  over and under passes at 19th Avenue access
• Safety concerns identified with underpass
• Alternate designs continued to be evaluated to
  end of detailed design

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What are the causes of the delay in project
completion from 2006 to 2011?

• Tender and Construction Award 6 month delay
• Tender close delayed
• Plans and specifications not ready
• Negotiation on tender conditions
• Higher than anticipated costs required Council
  approval
• Construction term extended 24 months
• Construction of interchange increased from a
  2-year period to 3-years (12 months)
• Final pavement lift planned for phase 2
  incorporated into this project (12 months)

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Cost Estimating Practices

• Organizations
• British Columbia
• New Jersey
• Washington
• Ohio
• Queensland, Australia

• What We Found
• Trending of highway material costs
• Cost estimating validation process
• Office of estimating
• Project cost estimating manual
• Training plan for project cost estimating
• Ongoing analysis of construction inflation

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Did the City exercise due diligence as project
owner in managing the project?

• Ability to influence cost is greatest and most
  cost effective early in the project process.
• Several reports submitted to Transportation
  Public Works Committee/City Council after concept
  plan approved
• Alternative designs continued to be evaluated
  throughout project

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Did the City exercise due diligence as project
owner in managing the project?

• 23rd Avenue Project Assessment
• Project management manual not sufficient
• Communications not fully effective
• Learnings from completed projects not shared
• Process ownership and project resourcing was
  lacking
• Best practice methods not fully implemented in
  the following areas

• Road safety audits
• Risk management
• Records management
• Value engineering

• Constructability reviews
• Partnering sessions
• Traffic impact assessment
• Cost estimating practices

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Enterprise Risk Management
Phase 1Understand the organizations objectives,
strategic direction, stakeholders, and structure.
Phase 4Identification, evaluation and
implementation of actions to address risks
identified as priorities.
Phase 2Identify the consequence a risk event
will have on the stated objectives and existing
mitigating measures.
Phase 5Establish a monitoring process, evaluate
effectiveness of decisions and recommend
revisions.
Phase 3Systematic assessment of risks against
established criteria and setting of priorities.
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Did the City exercise due diligence as project
owner in managing the project?

• Project Management Maturity Assessment
• PMI (Best Practice Methodologies)

• Project Management Institute Maturity Model
• Level 1 Ad Hoc (23rd Avenue/Gateway Boulevard)
• Levels 4/5 (top levels) Integrated/Optimization
  (SLRT Drainage Design and Construction)

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Contract Procurement

• 4 contractors pre-qualified only 2 bid
• Tender customization without Law Branch review
  (prime contractor issue)
• Generally contracts were handled in accordance
  with City procedures and processes
• Exception - work started on 3 contracts before
  documents were in place
• Administration reviewed alternative tendering
  types to address volatile market conditions
• Industry identified a number of potential
  improvements
• Risk sharing
• Traffic accommodation/detours
• Noise bylaw exemptions (night work)
• Tendering methods
• Flexibility in meeting deadlines (weather delays)
• Involving construction industry during design

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Recommended Improvements

• Alternate project management delivery strategy
• Comprehensive communication plan
• Accountabilities of project managers as project
  owners
• Recalculation of benefit/cost ratios
• Enhancement of costing models and quality
  assurance processes
• Adjustment to the capital priorities
  planning/budgeting process
• Corporate processes (R/R and performance
  reporting)
• Project team continuity

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23rd Avenue Gateway Boulevard Interchange Review
Questions