2007 ASTM International Advantage Award First Place
Managing Transportation Projects with ASTM International Standards
by Muthiah Kasi
This paper shows that the use of five ASTM International standards on building economics can pay big dividends in the planning and managing-to-cost of major transportation projects. Three examples are given: a billion-dollar reconstruction of an urban expressway, a complex bridge on an interstate expressway, and a successful proposal for the rehabilitation of a complex, 60-year-old viaduct in the heart of a large urban city. The first two projects won national recognition awards and in the third case study, the designers received a contract for their skill in cost management using ASTM International standards.
For the past 20 years, ASTM International standards on building economics have become a major tool in managing construction projects. In the early stages, the focus was buildings. Some of the standards still use the word “buildings” in their title. But in reality the standards are applicable to all aspects of construction, including transportation projects. For the past seven years, our firm has used ASTM standards in planning, design and construction of highways, highway bridges, railroad bridges and tunnels, demonstrating the value of standards to clients and to the firm.
This paper introduces five ASTM International standards developed by Subcommittee E06.81 on Building Economics; describes in three case studies how these five standards shown in Figure 1, separately and in combination, were used by a firm to value-engineer real-life construction projects; shows the cost-saving impacts achieved by using these standards to more cost-effectively plan and manage the projects; and describes the competitive benefits flowing to the firm that resulted from using the standards in these three projects.
The first and second case studies have distinctive focus in planning, design and project management. The first case study defines the cost planning of a $1.1 billion improvement of I-94 in Detroit, Mich. The second is the cost management of a signature bridge that is unique and one-of-a-kind in the nation. The third is a proposal for the major rehabilitation of an urban viaduct. Two of the five ASTM standards, E 1804 and E 2168, have a major impact in the planning and execution of cost management.
Applicable ASTM Standards
ASTM Standard E 1804, Practice for Performing and Reporting Cost Analysis During the Design Phase of a Project — This practice sets up the framework in which a project can be estimated properly. It establishes a structured method to support design decisions. It increases the communication between the designer, the owner and the cost estimator. It includes information and reasons on how and why the project has changed from the previous cost estimate.
ASTM Standard E 2103, Classification for Bridge Elements and Related Approach Work — This elemental classification, when used to estimate cost, helps one understand the cost of each design element. This form of estimate helps greatly in analyzing alternative elements and their functions.
ASTM Standard E 2013, Practice for Constructing FAST Diagrams and Performing Function Analysis During Value Analysis Study — This practice focuses on the information phase of the project. It helps the user analyze the stakeholder’s needs, desires and constraints, and convert them into project functions. It establishes a logical procedure for allocating cost to each function. Then, by comparing the cost of a function to its perceived value or need, mismatches — where the cost is high and the need is low — are discovered and corrected. This enables designers to increase the benefit-cost ratio.
ASTM Standard E 1369, Guide for Selecting Techniques for Treating Uncertainty and Risk in the Economic Evaluation of Buildings and Building Systems — This guide recommends techniques for treating uncertainty in input values to an economic analysis of a project. It also recommends techniques for evaluating the risk that elements of a project will have a less favorable economic outcome than what is desired or expected.
ASTM Standard E 2168, Classification for Allowance, Contingency and Reserve Sums in Building Construction Estimating — This classification allows planners to accommodate the costs of unknowns in design, planning and field conditions at an early stage of a project. It also identifies the people controlling each one of those unknowns. It facilitates the assignment of ownership of the resulting costs among the various stakeholders. It sets up a communication for discovering the reason for cost additions.
ASTM standard E 2168 introduces a new concept for managing unknowns. The following explanation of the grouping of unknowns helps the reader understand the concept of cost management and how it is used in Case Study 1.
In the planning stage, input about community growth and economic opportunities is gathered through a series of public information meetings. Maintenance and operation engineers identify all the deficiencies of the project site. This is based on traffic delays, accident data and access needs. Based on the collected data, a value planning or series of value planning studies using function analysis techniques (E 2013) will be conducted to define the scope of the project.
Using E 2013, the estimated cost is allocated to the functions of the project. It helps the decision makers understand the worth of fulfilling each need and desire while satisfying each constraint. In major projects, it is very difficult to assure the reliability of each decision. As time progresses, political and social changes can damage the decision, thereby substantially affecting the cost of the project. This may be further affected by field conditions and changes.
ASTM standard E 2168 identifies the unknown sums, divides them into three groups, and sets up a framework to manage them along with base cost. The sums are grouped under allowance, contingency and reserve.
Base cost includes all costs for the construction work including all trade costs and the prime contractor’s field requirements, and office overhead and profit.
Allowance is a sum of money that is planned to be spent, estimated in the absence of precise knowledge, and expected to ensure a full and complete estimate. Allowances cover events and activities that are normally internal and so are directly controllable within the project plan.
In the early planning stage, the cost of properties to be taken and the cost of maintenance of traffic during construction cannot be accurately calculated. These costs are examples of what are defined as allowances. This conveys to everyone that these items are needed but costs are not accurately determined yet. The project manager would have the authority to spend these funds during future phases.
Contingency is a sum of money that is not intended to be spent but is set aside to ensure that a financial buffer is available within the budget. It is used in the absence of precise knowledge and estimated to the best of one’s ability. This buffer is intended to assist in mitigating the effects of unplanned events and other risks that are normally external to the project plan and so are not directly controllable.
Additional costs due to unusual field conditions, strikes, unusual market conditions and constraints imposed by permitting authorities are also examples of contingencies. The term contingency conveys an understanding that these sums will likely not be spent.
These funds could be released by the next higher level of management over the project manager to use in funding costs that exceed the allowances or other unexpected expenses.
Reserve is a sum usually held by the owner and not normally intended to be spent. It provides insurance against a project or program failing to be completed within budget, or supplemental money in the case of changed management or program direction and requirements.
During the long planning process, decision makers (administration and political) may change. The cost of the project may be affected when decisions are reversed. ASTM E 2168 accommodates this change under reserve. Owners control the reserve.
The following two case studies illustrate project cost management using ASTM standards.
Case Study 1: A $1.1- Billion Roadway Reconstruction
The Michigan Department of Transportation conducted a unique, highly successful three-week value-planning (VP) study of the planning and engineering data component of the I‑94 early preliminary engineering study. The subject of the VP study was a seven-mile (10-km), $1.1-billion reconstruction and widening of I-94 through downtown Detroit, including two freeway-to-freeway interchanges and seven local interchanges. The proposed project consisted of the total reconstruction of the existing six-lane depressed freeway; widening to a total of four through-lanes in each direction and median barrier; and a total reconstruction of 30 bridges within the two freeway interchanges and another 40 bridges over the freeway. The freeway and service drive project would require the purchase of approximately 100 business and residential properties adjacent to existing I-94 (Figure 2).
The value planning was performed in two one-week sessions with a 10-day break. The participants included engineers from MDOT, our firm, and four other consultants. Our firm utilized the ASTM International standard on function analysis, E 2013, to define various functions and costs of the stakeholders’ needs and desires as well as the constraints. These needs, desires and constraints were converted to functions, and function costs were computed.
The ASTM standard on managing allocated sums is a major breakthrough for cost management. In this study, E 2013 was utilized to complete the function cost of major elements, such as retain earth, detour traffic, separate traffic, and discharge water. The computation of the costs of each of these functions is shown below.
Retaining Wall (Retain Earth): The base cost was listed as $20.6 million. Our analysis indicated a total length greater than what was assumed. Since no survey was done to accurately compute the length, an allowance of $21 million was estimated. This cost was based on aerial photography and contour maps. In addition, the VP team questioned the unit price of $60 per square foot. Recent bids on other projects showed a cost of $100/sq. ft. Based on this cost difference, a contingency of $27.5 million was assigned until a better verification of unit price could be achieved. The height of the wall was based on location. Base cost and allowance was based on the wall closer to the mainline (Figure 3a).
If the wall is moved away from the mainline, the height of the wall will be increased (Figure 3b). Since the decision to use a shorter wall may be changed in the future and there is a likelihood it may happen, a cost increase of $23 million was assigned to the reserve.
The cost of the retaining wall will be in a minimum range of $20.6 to $41.6 million, expected cost in a range of $41.6 to $69.4 million, and maximum cost in the range of $69.4 to $92.1 million (Figure 4). As the project progresses for the next five to eight years, the real cost will emerge within these ranges. Since the decision to move the wall has a price tag of $23.13 million, the decision makers will weigh this decision carefully.
Traffic Control (Detour Traffic/Maintain Traffic): The desire was to close I-94 and detour traffic through improved service roads. Because the actual decision would not be made for another five to eight years, it was prudent to investigate an alternative. If the project were built in one direction at a time, substantial sheeting would be required to support the adjacent roadway. The cost of such a system is about $50 million.
In function analysis, the functions “Maintain I‑94 Traffic” and “Detour I-94 Traffic” were analyzed. “Detour I-94 Traffic” is much less expensive than “Maintain I-94 Traffic” along the interstate. Existing I-94 traffic will be lowered by two feet to three feet (0.6 m to 0.9 m) to get a higher vertical clearance under crossing bridges. The recommendation at this point is to “Detour I-94 Traffic” (Figure 5a).
However, as the project progresses, the detour may not be acceptable to the neighborhood or to the city. In that case the traffic may have to be maintained on I-94 along the construction with sheeting between existing roadway and new construction. The sheeting is necessary because the proposed roadway is depressed three feet below the existing roadway (Figure 5b). The cost of the function “Maintain Traffic” for the entire corridor is $50 million.
Storm Water (Discharge Water): The project at its early stage assumed that the elaborate drainage of the improved highway would be connected to the existing city storm sewer system that eventually discharges into the river. This was based on the assumption that there was a willingness and capacity of the stakeholder to accept this extra load. The alternative was to construct a parallel system. The cost of such a parallel system was calculated as $40.6 million. The parallel storm sewer along the I-94 corridor with pump stations and treatment system would independently discharge the water into the river.
The above issues are typical of the ones that are addressed. Forecasting costs ahead and itemizing them are keys to good cost management.
The three-week study cost was $270,000, about 0.02 percent of the $1.2 billion project cost. The study recommended a savings of $87.4 million with $65.8 million additional spending for project improvements. This resulted in an accepted net savings of $21.6 million.
In the preliminary report of this project, $357 million was allocated to general contingency. The limitation of this traditional approach is that the owners, planners, designers, stakeholders and contractors assume that this substantial amount of money is available to satisfy their needs. Individually each one looks at this amount as a large sum, however, collectively it may or may not be enough. In addition, as the project progresses over the years, the communication of the assumptions may be lost or misinterpreted.
If the project ends up (with no surprises) as planned and the owner does not have to change course, then the cost will be base cost plus allowance (minimum cost). If everything goes against what was assumed, the cost will be minimum cost plus contingency (expected cost). Finally, if the owners have to change their program to accommodate all stakeholders’ interests, then the cost will be (maximum) expected cost plus reserve. Figure 6 summarizes all the above groupings.
In the planning stage, the established range from minimum to maximum with proper explanation will help the owner manage the cost.
What Happens to the Allowance?
As the design progresses, the elements will be measured, quantities calculated and unit prices applied, and appropriate allowances will be rolled into base cost.
The decision makers will be meeting with all interested parties and special groups to understand their needs, desires and constraints. In this process some of the needs or constraints may be revised because of changed conditions or directions. They may be dropped or placed in the reserve. Dropped items will be removed from the allowance category or base cost. In addition, some desired items may be accepted. These desires will be removed from the reserve and placed in the allowance.
What Happens to the Contingency?
Contingency has two major divisions — specific and nonspecific. Nonspecific covers overall unexpected events or items. This approach is based on how comfortable the design professionals feel about the project. Specific contingency is divided into three major items — planning contingency, design contingency and construction contingency. Examples of planning contingency are location of a retaining wall or extent of right-of-way. Examples of design contingency are lack of knowledge of alignment or soil conditions. Construction contingency covers unknowns such as location of utilities, level of maintenance of traffic, number of stages or the degree of acceleration of schedule. As the project progresses through the planning, some design contingencies will be converted to appropriate base cost. Construction contingency will remain until the construction is complete.
What Happens to the Reserve?
As the project moves from the concept level, the decision makers will meet with all interested parties and special groups to more fully understand their needs, desires and constraints. In this process some of the desires will be dropped or scaled down because they are not affordable or are found to be not important to the general public interest. The cost of the rejected desires may be removed from the reserve. The cost of the undecided items will remain in the reserve. The cost of each accepted desire will be broken down into work items and added into the base cost. In addition, as noted before, some needs and constraints may be reclassified as desires and their costs placed in the reserve.
This project received the 2005 National Value Engineering Award from the Association of American State Highway and Transportation Officials. The award noted “For demonstrating outstanding Value Engineering achievements in team work, cost savings... resulted in an overall improved project.”
Case Study 2: Single-Span, Modified Tied-Arch Bridge
This case study describes the cost management of a complex bridge using ASTM International standards E 2103, E 2013 and E 1804. The bridge is a single-span, modified tied-arch carrying I‑94 over Telegraph Road in Taylor, Mich. (Figure 7). This bridge was part of the reconstruction of I-94 for the Super Bowl XV game held in 2006.
There are four unique features, one-of-a-kind in the nation, that were technical and financial challenges to the designers and owners. The interior and exterior arches are unequal in length, have curved bracing, and are supported by a unique foundation. In addition, the arch rib is pressurized to monitor its quality.
There are two types of arch bridges — true arch (Figure 8a) and tied arch (Figure 8b). An arch carries the vertical load from beams and hangers. Hangers are hung from the arch. In a true arch, the load from the arch goes into the foundation as a vertical and horizontal force. In a tied arch, the vertical load goes into the foundation but the horizontal force is balanced.
This project featured a modified arch where the tie is buried under the road. The arches are inclined and connected by oval shaped bracing to resemble a football shape (Figure 9). The design details, fabrication and erection were not standard types and created a challenge to the estimators.
The arch ribs are not large enough for inspectors to crawl inside to inspect. For inspection purpose, the box-shaped ribs are pressurized, and pressure gages are installed. Inspectors can monitor the pressure for any leakage. If the pressure is maintained, there are no cracks in the welds of the arch. There can be no corrosion inside the welded box shape if no air can bring moisture inside. The inspectors then know that the structure is in good condition. All connections to the rib are complicated due to the pressurization of the ribs. It was a challenge to estimators to compute the cost of these nontraditional connections and curved bracings.
The costs of each element were organized in the ASTM Uniformat II Structure (E 2103). Figure 10 shows the estimated elemental costs of the arch as determined in the construction document phase.
In the following discussion, the history of the cost variances of some of the elements and the reasons are presented. ASTM E 2013 guides the development of function cost. ASTM E 1804 shows the organization for itemizing the changes from the planning phase to concept to construction document phase.
In the beginning, the state and federal government were reluctant to proceed with the design due to too many unknowns and unfamiliar conditions. The designers conducted a series of function analysis studies (E 2013) and identified possible impact elements and functions. These include concrete deck type, hanger type, foundation type and the shape of the arch. Engineers followed the E 1804 cost analysis. Using function analysis and value engineering, various elements with options and cost were reported.
In the program phase, the elements are not completely defined. The clear distance between abutments would not be known until roadway geometry was completed. The program cost was accepted as $16.2 million.
In the schematic phase, the elements are slowly developed. Base cost was detailed to $13.8 million with the $2.4 million as a general contingency. A risk analysis based on E 1369 showed the need to address the increasing steel price trend at the time. Unit price of structural steel for the arch rib was increased by 10 cents per pound and for transverse beams to 20 cents per pound. The total increase was about $240,000. The length of the bridge was increased from 220 to 246 feet (67 to 75 m) to meet the clear sight distance. The resulting cost increase was $140,000.
To comply with the Federal Highway Administration’s and MDOT’s position on not having a tied arch on grade separation structures, which are vulnerable to damage, the tie was buried under the roadway. This increased the cost by $400,000. The foundation tie was assumed to be post-tensioned concrete. To add redundancy, conventional reinforcing to resist the force was added. This increased the cost by $40,000. The total estimated cost at the schematic phase was $14.6 million.
In the design development phase, the deck was changed from post-tensioned concrete to conventional concrete. The cost increase was $308,000. The hanger assembly went through some changes. First, the type was changed from rods to strands. The cost increase was $200,000. Because it is a critical member in carrying the load, it was decided to increase its redundancy, thus each hanger assembly has a pair of strands, each one capable of carrying the total load (Figure 11).
This increased the cost by $180,000. It was also decided to pressurize the arch rib to monitor the integrity of the ribs and prevent interior corrosion.
The cost of detail changes and pressurizing was estimated to be $180,000. At the end of the design development phase, the cost of the project was estimated to be $15.2 million.
Due to the uniqueness of this structure, using cost data of past projects did not guarantee the effective cost management of this special structure. Using E 1804 and E 2103, cost variation was tracked with proper documentation. By using function analysis (E 2013), cost was allocated more accurately to each element.
In the construction document phase, when all policy decisions were made and all the details were known, the design team developed a detailed cost estimate compatible to design details and specifications. The team at this point optimized the sections with finite element analysis. This and other detail changes reduced the engineer’s estimate to $14.4 million.
The table shows the details of validation during design. By using the five ASTM standards, cost was managed better, contributing to a final engineering estimated cost of $14.4 million, which is 1.8 million less than the program cost (see Figure 12).
This bridge won six awards, including two national awards. Both the National Structural Engineers Association and the National Steel Bridge Alliances selected this bridge design as the best structure. A major criterion for its selection was its cost effectiveness.
Case Study 3: Viaduct Rehabilitation
By using ASTM standards, our firm demonstrated an increased performance in project planning in more than 10 projects from 2005 to 2007. These projects were recognized by the American Council of Engineering Companies, the American Association of State and Highway Transportation Officials, the Structural Engineers Association of Illinois, the National Steel Bridge Alliance and other organizations. Our firm used this experience in successfully obtaining a design contract for a proposed rehabilitation of a complex 60-year-old viaduct in the city of Philadelphia, Pa.
One of the reasons for the selection is our proposed method of cost management using ASTM International standards. Following is the quote by the U.S. Department of Transportation for the lead ranking.
- The firm team plans to make cost effective decisions based on the principles of “right-sizing” and not just least initial cost by utilizing nationally recognized procedures such as the ASTM Cost Allocation Methodology; Function Analysis and their AASHTO award winning in-house generated blcc17 process. These three tools will assist in the selection of an appropriate, cost effective rehabilitation strategy that satisfies the project needs as well as the key stakeholders’ desires.
In Case Study 1, assumptions and decisions that are made today will impact the cost eight to 10 years from now when the actual construction begins. By dividing costs into groups, the intent of each is explained and the purpose of cost allocation will be clear. In addition, ownership of each major cost is identified. This will streamline the decision-making process and force people to be aware of the consequences of their decisions financially.
In Case Study 2, the decisions from program to construction were properly documented, their cost impact tracked and the reasons for variation recorded. ASTM International standards in this case helped keep the project under budget.
Justification, documentation, and communication of cost management are complex and at times confusing. ASTM standards provide a comprehensive and simple methodology to manage cost. The two examples show how a project can benefit, whether it is a design and construct project or long-range planning, design and construct project. Consultants who can master these standards will have an edge over others. The third case study demonstrates a state DOT’s confidence in ASTM International standards.
In the August 2007 issue of ASTM Standardizations News, the “Word from the Chairman” states,
- Assessing the most important benefits of standards, respondents pointed to the following: quality control and assurance, consistency and uniformity, performance measurement, leveling the playing field with competitors, safety enhancement and improved customer satisfaction.
The three case studies demonstrate the proper use of ASTM standards on economics, which result in major benefits to the user, the client and the customer. Using the standards will:
- Ensure quality control and quality assurance. Using ASTM
E 1369 and ASTM E 1804 sets forth an arranged method of cost analysis and establishes a structural method to support design discussions.
- Provide consistency and uniformity. Using ASTM E 2168 establishes a classification for allowance, contingency and reserve sums to be used in construction project and program estimating.
- Achieve an effective, economical project. Using ASTM E 2013 provides a logical structure for the function analysis of the project and a system to identify unnecessary costs and provides a measurement platform.
- Establish a set of standards to measure and document the process, providing a level field with competitors and improving customer satisfaction.
The networks of roads and major highways in the United States exploded in the 1950s. Since then the total length of highways has extended tremendously. Now maintaining, operating, rehabilitating and replacing is a major economic burden on the taxpayers. The transportation area industry’s 450,000 bridges, tunnels and culverts require more than $500 billion to replace. Utilizing the economic standards of ASTM International will help plan and manage this expensive challenge to the country. //