Procedures Guide for Right-of-Way Cost Estimation and Cost Management (2009) / Chapter Skim
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From page 93... ...
A-38 R2.3 Condemnation A-40 R2.4 Relocation Costs A-42 R2.5 Right-of-Way Estimator Training A-44 R2.6 Separate Right-of-Way Estimators A-47 R2.7 Cost Estimate Map A P P E N D I X A Tools
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A-48 R2.8 Cost Estimate System A-57 R2.9 Formal Database A-62 R2.10 Purchase Values Database A-64 R3 Risk Analysis A-64 R3.1 Analysis of Risk and Uncertainty A-70 R3.2 Contingency -- Identified A-74 R3.3 Contingency -- Percentage A-77 R3.5 Programmatic Cost Risk Analysis A-ii Procedures Guide for Right-of-Way Cost Estimation and Cost Management
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From page 95... ...
. The strategies, methods, and tools are discussed in NCHRP Report 574 with the intent of supporting development of a total cost estimate for a project.
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This structure is also consistent with the structure of the tools described in the NCHRP Report 574 Tool Appendix. Right-of-Way Tool Selection In Chapters 4 through 7, tools are identified in relation to each of the three focused estimating efforts and cost management efforts that occur over the planning, programming, preliminary design, and final design phases of project development.
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When? This tool is used for preparing long-range right-of-way estimates during the planning phase of project development.
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The budgets for these projects are considered fixed and cannot be increased. Cost estimates for many of these projects were prepared based on limited scope definition.
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B1.3 Standardized Estimation and Cost Management Procedures The objective of standardizing procedures is to establish a common basis for all SHA project participants to follow when preparing cost estimates and to manage costs consistently over the project development process. Change occurs frequently as projects are developed.
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Further, significant tasks -- such as public input, environmental considerations, and the proper channels to obtain approvals as cost estimates are developed -- have been incorporated in the Missouri DOT procedures. An outline of the contents of the Missouri DOT procedure is provided below: 1-02.1 PURPOSE 1-02.2 GENERAL OVERVIEW 1-02.3 NEEDS IDENTIFICATION 1-02.4 NEEDS PRIORITIZATION 1-02.5 INITIAL PROJECT ESTIMATES 1-02.6 PROJECT SCOPING 1-02.7 PROJECT SCOPING MEMORANDUM 1-02.8 PROJECT SCOPING CHECKLISTS 1-02.9 PROJECT PRIORITIZATION 1-02.10 STIP COMMITMENTS 1-02.11 SCOPE CHANGES 1-02.12 PROJECT COST ESTIMATES 1-02.13 ENGINEER'S ESTIMATE 1-02.14 BID ANALYSIS PROCESS 1-02.15 RECOMMENDATION FOR AWARD OR REJECTION OF BIDS A tracking system for potential amendments to budgets is also covered in the Missouri DOT procedures to monitor changes and update the estimate accordingly.
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Tips As a means to monitor budget and schedule variances, compare original and current project scopes at key project development milestones and when changes arise. Resources California DOT Division of Design.
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It enhances management's ability to control project cost and schedule. A-8 Procedures Guide for Right-of-Way Cost Estimation and Cost Management Figure B1.4-1.
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Intervals should be closer together on highly complex projects or projects that are in a phase of high activity. Even during periods of inactivity, projects should be regularly examined to ensure that there are no variances in project costs or schedule.
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C1.1 Communication of Importance Every project estimate is important because cost is integral to project scope, and together cost and scope drive many of the project team's design and schedule decisions. Cost estimation must be viewed as an important and integral part of the project development function.
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When? Communication of importance should happen throughout all phases of project development.
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It buffers estimators by conveying that estimates are not absolute, but rather predictions based on the best information known at the time. This tool allows for more prudent decisions to be made from cost estimates.
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D4.1 Right-of-Way Cost Estimate File Because right-of-way estimates are usually created by the collaborative effort of many individuals and sections within the SHA–real estate, land management, mapping and surveying, and right-of-way; the assumptions upon which the estimate is based must be traceable; and to preserve the real estate information for future efforts, there should be a structured system for accumulating all right-of-way estimates and their supporting documentation. Construction contractors use their project estimates both to create the budgets for successful bids and as reference sources for developing future estimates.
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From page 108... ...
The right-of-way estimate file should include all estimates prepared for the project up to and including any right-ofway estimates needed to support changes made during construction. Archiving right-of-way cost estimate files is good practice because the files are often useful in reconciling completed project cost, responding to future inquiries, and when developing future estimates.
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From page 109... ...
Tips The project right-of-way estimate file should, at a minimum, include any assumptions that have been made, the current project scope, right-of-way maps, aerial photos, and a copy of or reference to the cost data used to develop the estimate. This basic information should be included in each project estimate file, regardless of project development phase–the creation of the file begins with the very first right-of-way estimate.
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From page 110... ...
. Resources The Florida DOT "Guidance Document for Right-of-Way Cost Estimates" offers guidance about files: www.dot.state.fl.us/rightofway/documents/ROWmanual/Acrobat%20files/guide2.pdf Chapter 4 of the Caltrans Right of Way Manual also offers guidance.
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However, having such reviews conducted earlier in the design process can provide real benefits, because they often discern cost drivers that can be addressed by design changes, thereby reducing project cost. Examples Several SHAs have used retired personnel or other professionals to conduct estimate reviews.
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In particular, the committee A-18 Procedures Guide for Right-of-Way Cost Estimation and Cost Management
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These reviews can provide real benefit because they often discern cost drivers that can be addressed by design changes and, in so doing, reduce project cost. It is still possible at these points in project development to find a least-cost solution that accommodates design requirements and at the same time minimizes real estate cost.
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Market forces and thirdparty interventions can have a major effect on project real estate cost and must be accounted for in the estimation process. A-20 Procedures Guide for Right-of-Way Cost Estimation and Cost Management
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Examples The FHWA document Major Project Program Cost Estimating Guidance, June 4, 2004, specifically calls attention to the following cost that must be included in a project's right-of-way estimate: • Costs for stormwater management, • Wetland mitigation, and • Other work outside the roadway prism. This includes the contractual obligations with property owners to relocate fencing, reconstruct gates, and reconstruct road approaches, and so on, if not included in the engineer's estimate.
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The process coincides with the project development process milestones. A-22 Procedures Guide for Right-of-Way Cost Estimation and Cost Management
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At a minimum, project cost estimates should be reviewed annually. A new or revised project estimate should be prepared at the following major milestones or stages of project development: project initialization, conceptual plan/environmental document completion, preliminary plan completion, and right-of-way plan completion.
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Why? By listing items that can affect a project's cost or schedule, and by keeping the list current, the project team has a better perspective for setting proper contingencies and controlling cost escaA-24 Procedures Guide for Right-of-Way Cost Estimation and Cost Management
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The red flagging of these items may not involve any formal qualitative or quantitative risk analysis of the factors, but it keeps the team mindful of their existence. The list also helps the team to remove contingency from the project cost estimate as the design progresses and risk issues are resolved.
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• Response actions • Responsibility (task manager) A-26 Procedures Guide for Right-of-Way Cost Estimation and Cost Management
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At the earliest stages of project development, the risk charter will be helpful in a risk identification capacity. As the project progresses, more rigorous and quantitative risk management can be performed and the charter will become an even more valuable tool for cost estimation management and risk monitoring and control.
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. Cost Estimating Validation Process (CEVP)
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Figure I2.2-2. (Continued)
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The Caltrans list is quite comprehensive, and A-30 Procedures Guide for Right-of-Way Cost Estimation and Cost Management
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3. R2 Right-of-Way Right-of-way administrators have reported a number of challenges routinely encountered in right-of-way cost estimation: (1)
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What Is It? This tool encourages early consultation between the agency's design, construction, and right-of-way sections in order to better define interchange land requirements and the cost of A-32 Procedures Guide for Right-of-Way Cost Estimation and Cost Management Table I2.3-2.
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Caltrans sample organizational and project management risk list.
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A-34 Procedures Guide for Right-of-Way Cost Estimation and Cost Management Table I2.3-4. Caltrans sample right of way, construction, and regulatory risk list.
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Otherwise, estimate ROW needed according to type of project. For the regional Transportation Plan, two methods have been used to estimate the ROW costs.
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Advance purchase of right-of-way can eliminate or at least moderate this volatile component of early project cost estimates and therefore improves the accuracy of the estimate. A-36 Procedures Guide for Right-of-Way Cost Estimation and Cost Management
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The package will include (but may not be limited to) a CE document, copies of property valuation appraisals, preliminary design maps, and written justification for the protective purchase.
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What Is It? This is a tool to educate project managers and estimators about the schedule changes, which can affect the overall project estimate, and the direct right-of-way cost impacts of using conA-38 Procedures Guide for Right-of-Way Cost Estimation and Cost Management
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Kockelman, Right-of-Way Acquisition and Property Condemnation: A Comparison of U.S. State Laws, Journal of the Transportation Research Forum 44 (3)
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In addition, the Uniform Act requires the availability of replacement housing for displaced persons, sets minimum standards for such housing, and A-40 Procedures Guide for Right-of-Way Cost Estimation and Cost Management
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, and the cost of relocation actions must be included in a project right-of-way cost estimate.
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A-42 Procedures Guide for Right-of-Way Cost Estimation and Cost Management
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During the early phase of a project development, the right-of-way needs may not be defined clearly enough to differentiate between what will be a whole take and what will be a partial take. If it is helpful, cost estimates may be limited to whole parcel acquisition.
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Therefore, those responsible for estimating the cost of real estate for right-of-way must possess knowledge concerning a unique set of rules and regulations and understand the lead time requirements that follow from the rules and regulations. Aside from property acquisition costs, right-of-way estimators must also estimate administrative costs, including labor costs for environmental assessments, title research, appraisals or A-44 Procedures Guide for Right-of-Way Cost Estimation and Cost Management
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The Florida DOT has recommended (Guidance Document 2 Right of Way Cost Estimates, Revised: April 2004) the use of right-of-way cost estimating teams for certain projects.
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FHWA's order requires that specific research and related data collection be conducted to provide information on environmental justice concerns. The FHWA's Office of Real Estate Services has a Project Development Guide, which contains a practical approach to project right of way.
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When? A conceptual level Cost Estimate Map can be used during the planning phase as a basis for preparing a Conceptual ROW Estimate.
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In its more advanced state, the map will help identify potential parcels and provide insights into improvements and damages as a result of whole or partial takes. Example At Caltrans, a cost estimate map is provided that usually consists of an aerial photo, right-of-way boundaries, and affected parcels of each of the alternatives at the programming stage of project development.
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Figure R2.7-1. Caltrans cost estimate map for a proposed project.
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Estimation of right-of-way is often a complex procedure because it includes many details about the real estate, which may differ from parcel to parcel. From the start of project planning until project construction, the right-of-way cost estimates are prepared at various stages.
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Appendix A A-51 Figure R2.8-1. Screen capture of VDOT's cost estimating system (PCES)
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A-52 Procedures Guide for Right-of-Way Cost Estimation and Cost Management Figure R2.8-2. Screen capture of VDOT's cost estimating system (PCES)
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In general, right-of-way cost estimating techniques are discussed and the use of supporting information is identified. Cost values are provided for many estimate elements.
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Figure R2.8-4. Ohio DOT estimating sheet.
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One spreadsheet, Right of Way Long-range Cost Estimate, has three tabs and is used Appendix A A-55 Figure R2.8-5. Caltrans electronic spreadsheet for right-of-way estimating.
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This spreadsheet also has a tab that helps track estimated costs of a parcel versus acquisition costs. The spreadsheet is very comprehensive in its treatment of right-of-way cost estimates.
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Florida DOT: "Right of Way Long Range Cost Estimate (Estimate_LongRange_Version_4.xls) " and "Right of Way Work Program Cost Estimating Software System." The FDOT Office of Right of Way is located at: http://www.dot.state.fl.us/rightofway/default.htm R2.9 Formal Database Historical bid based estimation is the most common type of cost estimation used by SHAs.
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A-58 Procedures Guide for Right-of-Way Cost Estimation and Cost Management Figure R2.8-8. Data sheet from the Caltrans right-of-way electronic spreadsheet.
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However, the information within such as database can support the preliminary design phase of project development when cost estimate updates are being prepared and especially when a parcel-by-parcel estimating approach is used. Appendix A A-59
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A-60 Procedures Guide for Right-of-Way Cost Estimation and Cost Management
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The data are also used to generate cost estimates for remedial action, for use in determining property values during the right-of-way appraisal process. Reports can automatically be generated from the database.
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. R2.10 Purchase Values Database Producing accurate right-of-way cost estimates and managing real estate acquisition cost can be challenging.
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By analyzing the actual cost record, management can update the cost estimate -- make a forecast–and act to control project cost.
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In a qualitative analysis, the project team assesses each identified risk for its probability of occurrence and A-64 Procedures Guide for Right-of-Way Cost Estimation and Cost Management
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At the earliest stages of project development, risk analysis will be helpful in developing an understanding of project uncertainty and in developing an appropriate project contingency. As the project progresses, risk analysis can be used in a comprehensive risk management monitoring and control process to help manage cost escalation resulting from either scope growth or the realization of risk events.
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Quantitative analysis typically begins in a way similar to the quantitative analysis describe above, but then applies a direct and more accurate assessment of probability and impact and incorporates these assessments into a probabilistic cost-risk model. A-66 Procedures Guide for Right-of-Way Cost Estimation and Cost Management Figure R3.1-1.
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Appendix A A-67 Figure R3.1-1. (Continued)
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A-68 Procedures Guide for Right-of-Way Cost Estimation and Cost Management Figure R3.1-1. (Continued)
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Appendix A A-69 Figure R3.1-1. (Continued)
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available during the various phases of project development. More generally, at any stage in the development of a highway project, cost estimates will consist of three components for which there are different amounts of information: "Known/Knowns" (known and quantifiable costs)
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All too often, if the cost of an item is not known, it is not included in early cost estimates. There is also opportunity for other items (e.g., environmental mitigation costs)
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The Association for the Advancement of Cost Engineering International (AACEI) has developed a cost estimate classification system that defines five estimate classifications.
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. • Findings and recommendations that allow WSDOT project teams and senior management to better understand the basis, content, and variability of cost estimates.
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Why? At any stage in the development of a project, cost estimates will consist of three components for which there are differing amounts of information: "Known/Knowns" (known and quantifiable costs)
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A contingency amount should be included in every project estimate from the earliest planning stage of project development to the final PS&E; however, as shown in Figure R3.2-1, the magnitude of the contingency amount decreases as the scope is defined and the design progresses. Examples Many SHAs use standard percentages, such as the Maryland DOT percentages shown in Table R3.3-1, to develop estimate contingency amounts.
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• Right-of-way unknowns: Early in project development it is almost impossible to know the number of partial takes, the exact appreciation to apply, or the number of parcels that will go to condemnation. • Construction unknowns: This risk factor might be addressed with a reserve to cover construction change orders due to differing site conditions and other construction issues.
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www.aacei.org/technical/ ppg.shtml R3.5 Programmatic Cost Risk Analysis State highway and transit agencies are beginning to realize the value of integrating cost estimation practice and cost estimation management with comprehensive risk management processes. Programmatic cost risk analysis involves all four steps of the classic risk management process -- risk identification, risk analysis, risk mitigation and planning, and risk monitoring and control.
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It allows cost estimates to be conveyed transparently to management. It reveals risk and uncertainty involved with the project at each stage of the process.
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developed the Cost Estimating Validation Process (CEVP) to assist in evaluating the quality and completeness of project estimates, including the anticipated uncertainty and variability of the projected cost and schedule.
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Source: Project Risk Management Handbook, Caltrans Statewide Office of Project Management Improvement, 2007. Table R3.5-2.
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Table R3.5.3 presents the seven phases in the WSDOT CEVP process. Although the workshop is a key component of the CEVP process, the CEVP process involves many other components that are integrated into the cost estimation, risk management, and project management processes at WSDOT.
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. Major Project Program Cost Estimating Guidance.
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