Geotechnical Risk Management Tools for Design-Build Projectsonlinepubs.trb.org/onlinepubs/webinars/190401.pdfThe Transportation Research Board has met the standards and requirements

Geotechnical Risk Management Tools for Design-Build Projects

Monday, April 1, 20192:00-3:30 PM ET

TRANSPORTATION RESEARCH BOARD

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Purpose

Discuss NCHRP Research Report 884: Guidelines for Managing Geotechnical Risks in Design–Build Projects.

Learning Objectives

At the end of this webinar, you will be able to:

• Prioritize geotechnical risks• Identify one or more geotechnical risk

management tools to address each risk in order of priority

• Describe the challenges of each tool

http://www.trb.org/Publications/Blurbs/178145.aspx

Managing Geotechnical Risks in Design-Build Projects

Moderator: Ghada Gad, PhDCalifornia State Polytech University,

Pomona, CA

Presenters:Douglas D. Gransberg, PhD, PE

Gransberg & Associates, Inc.

Norman, OK

Bora Cetin, PhDIowa State University

Ames, IA

© 2019, All rights reserved, Douglas D. Gransberg 1

Agenda• Define the issue in the DB context• Benchmark state-of-the-practice

• Case law• Geotechnical risk management

• 5 strategies for managing DB geotechnical risk• Effective practices found in recent research

• RFP preparation• During procurement• Post-award

• Demonstrate emerging tools used on actual earthen dam project.


Recent Research on Design-Build Geotechnical Risk Management• Research teams included both engineers and

attorneys.• NCHRP Synthesis 429: Geotechnical Information Practices

in Design-Build Projects• NCHRP Legal Digest 68: Liability of Design-Builders for

Design, Construction, and Acquisition Claims• NCHRP 24-44: Guidelines for Managing Geotechnical Risks

in Design-Build Projects


NCHRP 24-44 Research TeamPrincipal Investigator – Douglas D. Gransberg, PhD, PE, DBIA

Co- Principal InvestigatorsMichael Loulakis, JD, DBIA

Capital Project Strategies, LLCReston, VA

Shannon Sweitzer, PE, DBIAS&ME

Raleigh, NC

Kevin McLain, PhD, PE, RGMissouri DOT

Jefferson City, MO

Ali Touran, PhD, PENortheastern University

Boston, MA

Dan Brown, PhD, PE, D.GEDan Brown and Associates

Jasper, TN

Bora Cetin, PhDIowa State University

Ames, IAGhada Gad, PhD

Cal Poly - PomonaPomona, CA

Ricardo Tapia, PhD, PMPPanama Canal Authority

Panama City, PN

Ivan CastroManatt Construction

Des Moines, IA

Industry AdvisorsJames Hunt, PE, CCM

Atkins AmericasNorman, OK

D. Micheal JamesDragados USA, Inc.

Tempe, AZ

Elizabeth M. Smith, PE, GE, D.GETerracon Consultants

Round Rock, TX


Research Instruments• Literature:

• Research - Update Synthesis 402 and Legal Digest 68• Case law – 1970 to 2017

• Content Analysis: 105 DB projects; 28 states. • Surveys

• Survey 1 – Agencies: 42 DOTs – 81% response rate• 20 > 10 DB projects; 8 < 10 DB projects;

• Survey 2 – Experts: 22 DOTs/24 industry – 31% response rate.• Case studies: 15 projects; 12 states + Panama Canal

Expansion Project


The Issue in Design-Build

• Owners typically select DB to accelerate project delivery (FHWA 2006).

• Owner design approval is a major hurdle to starting construction (Christensen and Meeker 2002).

• Geotechnical uncertainty is always high until the post-award site investigation and geotechnical design report can be completed (Hatem 2011).


The Issue in Design-Build

• Geotechnical and site engineering is the first major design package and the one with the highest pre-award uncertainty (Higbee 2004).

• Therefore:• It must be completed as expeditiously as possible (Koch et al

2010).

• The owner needs to reduce the impact of geotechnical uncertainty as expeditiously as possible (Kim et al 2009)


Key Risk Take-away• The owner is asking the design-builder to commit to a firm, fixed

price BEFORE the subsurface investigations and design are complete.

• Level of subsurface risk is in the eye of the beholder!• Directly related to the owner/design-builder’s individual and

collective perceptions.• Directly related to the contractual assignment of risk described in

the DB RFP.


DBB Versus DB Risk Profiles• Owners tend to bring a DBB

mentality to risk in DB contracts.• Shed risk = More cost• Share risk = Less cost• Perceptions are important!• Perceptions are driven by

personal experiences.• Perceptions may not be uniform

nor logical.

Design-Builder Owner Geotechnical Scope Risk

DBB • Warranties and Guarantees • Latent Defects - Workmanship • Competent Geotechnical

Construction Personnel Available

• Design Error and Omissions • Latent Defects - Design • Direct and Tacit Approval of

Constructive Changes to Design

DB

• Design Errors & Omissions • Warranties & Guarantees • Latent Defects - Design - Workmanship • Competent Geotechnical Design

Personnel Available

• Clear Geotechnical Scope Definition • Direct and Tacit Approval of

Constructive Changes to Geotechnical Design

• Geotechnical Design Review Comments and Directives

• Technical Review Capability Geotechnical Cost Risk

DBB

• Rework • Subcontractor Default • Market Fluctuation after Award

• Redesign and Resultant Rework • Construction Contract Amount • Market Fluctuation During Design

− Material − Labor

DB

• Rework • Redesign • Subcontractor Default • Market Fluctuation During Design

− Material − Labor

• Design-Build Contract Amount • Prompt Payment • Design-Builder Default

Geotechnical Schedule Risk

DBB • Contract Completion • Date • Liquidated Damages

• Timely Design Completion • Owner Furnished Property Delivery

DB • Delivery on Approved Schedule • Fast-Track Geotechnical Rework • Liquidated Damages

• Unrealistic Schedule • Timely Geotechnical Design

Approvals on Fast-Track Project • Owner Furnished Property Delivery


High Level Interpretation of Findings• US construction case law demonstrates that owners rarely win

differing site conditions (DSC) claims. When they do, it is usually based on a technicality like untimely notification.

• Nevertheless, Owners continue to rely on exculpatory language to try and shed geotechnical risk in DB projects.

• The industry recognizes the risk shedding bias and perceives geotechnical risk to be much higher than the authors of Owner DB requests for proposal (RFP).

• The result is the inclusion of contingencies for risks that may not be realized, which must logically increase the overall cost of the project.


Risk Management Measures

• Manage this risk by the following measures:• Requiring highly qualified and experienced geotechnical

personnel on design-builder’s staff (Scott et al 2006).

• Assigning the agency’s most qualified geotechnical personnel to DB project oversight (Potter and McMahon 2006).

• Mandating the use of geotechnical design solutions with which the agency is confident (Papernik and Farkas 2011).

• Retaining most, if not all, the traditional quality management (QM) roles and responsibilities for geotechnical features of work (Shane et al 2011).


Risk Management Measures

• Enhanced communication in the proposal preparation phase

• Confidential one-on-one meetings for ATCs• Permit competing DB teams to request/obtain additional site

investigation before submitting bid.• Explicit differing site conditions clauses.

• NOTE: DSC not required in Federal-aid DB projects• Risk sharing clauses• Expedited geotechnical design reviews


NCHRP 24-44 Guidelines

•Major conclusion: • The Owner and its industry partner need to align their

perception of geotechnical risks and business objectives as early as practical during the delivery of a DB project.


State-of-the Practice Benchmarks• Significant geotechnical risks does not constrain the

selection of DB as the project delivery method.• Owners seek to shed geotechnical risks in DB projects.• DSC clauses used to share risk in DB projects.• Some owners seek to limit the scope of the DSC clause

with exculpatory verbiage – “For information only -not for bidding purposes”


State-of-the Practice Benchmarks

• “Common perceptions of contractual risk allocation are the basis of a harmonious, effective and efficient construction project” (Loosemore and McCathy 2008).

• Perceptions of geotechnical risks between Owners and the DB industry are markedly different.

• Industry adds contingencies for risks it perceives.• Owners may be paying to unsuccessfully shed

geotechnical risk.


Owner vs. Industry Expert Risk Perceptions

IMPORTANCE INDEX [%]

47.00-51.00 Groundwater/ Water table

Seismic RiskSettlement in generalContaminated material

Scour of bridge piersSoft compressible soilSettlement of bridge approachesSettlement of adjacent structureLiquefaction

Ground water infiltrationPresence of rock/bouldersUnderground manmade debrisSoft clays, organic silts, or peatSensitiveness of public consideration

Groundwater/ Water table Slope instabilityLandslidesLateral spreadingHighly compressive soilsExisting structures likely to be impacted by the work (other than utilities)

Settlement in general Rock Faults/ FragmentationSoft compressible soil Subsidence (subsurface voids)Slope instability Unsuitable materialSettlement of bridge approaches Karst formationsScour of bridge piers Caverns/voids

Highly compressive soilsPresence of rock/bouldersUnsuitable material

Sensitiveness of public consideration Replace in situ material with borrowed material

Soft clays, organic silts, or peatExisting structures likely to be impacted by the work (other than utilities)Contaminated material

LandslidesUnderground manmade debris Eroding/mobile ground conditionsSettlement of adjacent structure Chemically reactive groundGround water infiltration

Subsidence (subsurface voids)Rock Faults/ Fragmentation

Eroding/mobile ground conditionsKarst formationsSeismic RiskLiquefactionLateral spreadingChemically reactive groundCaverns/voids

INDUSTRY PERSPECTIVESIMILAR PERSPECTIVEDOTs PERSPECTIVE

15.00-19.00

23.00-27.00

35.00-39.00

27.00-31.00

39.00-43.00

43.00-47.00

31.00-35.00

19.00-23.00

Common

Owners’ risk perception

Design-builders’ risk perception

• 27 geotechnical risk factors identified in the research.

• Asked to rate the frequency and impact.

• Computed an importance index.


Potential Solution from Findings• Proposed solution: Align the perceptions of

geotechnical risk of the Owner and the DB team early in the project delivery process.

• Potential contractual mechanisms to permit the early alignment of geotechnical risk perceptions.

• Progressive DB (Maryland)• DB with multiple notices to proceed (Ohio +)• DB with a fixed scope validation period (Virginia)


Strategies for Aligning Perceived Geotechnical Risk

• Implement early contractor design involvement through encouraging geotechnical ATCs during procurement.

• Use DB process to address other subsurface issues like utility company timeliness by involving third party stakeholders as early as practical in project development and delivery.

• Raise the visibility of geotechnical issues in DB projects to ensure competing contractor teams understand the level of criticality on each project.


Strategies for Aligning Perceived Geotechnical Risk

• Avoid differing site conditions claims through enhanced contract mechanisms designed specifically for addressing geotechnical risks.

• Promote an atmosphere of life cycle-based design and construction decision-making with respect to geotechnical risk on DB projects.

Life cycle-based geotechnical design: Make design decisions to minimize life cycle cost…

i.e. maximize cost certainty – rather than minimize capital cost.© 2019, All rights reserved, Douglas D. Gransberg 19

Effective Practices during RFP Development• Geotechnical baseline report (GBR)• Database of geotechnical information from all past projects• Identify and sample possible contaminated material sites• Gather property owner subsurface history during right of way

acquisition• Flexible project footprint during NEPA clearance• Prescriptive geotechnical design• Performance specifications for post-construction performance

(subsidence, etc.)


Effective Practices during Procurement

• Weight geotechnical qualifications in the RFQ and carry over the evaluated score to the final award.

• Include weighted geotechnical evaluation criteria in best value award scheme

• Include geotechnical life cycle criteria in best value award scheme

• Differing site conditions clause


Effective Practices during Procurement• Progressive DB procurement• Encouraging geotechnical alternative technical concepts (ATC)• Allow competitors to designate boring locations during

proposal preparation• Unit prices for contaminated material remediation• Unit prices for selected geotechnical pay items


Effective Practices during Post-Award• Scope validation period to define the final geotechnical

scope of work after which differing site conditions claims are disallowed.

• Multiple notices to proceed• Design-builder produced GBR (GBR-C)• Negotiated GBR interpretation• Use of allowances

• Differing site conditions allowance• Contaminated material allowance• Unforeseen utilities allowance


Effective Practices during Post-Award

• Validate proposed life cycle elements during design• Encourage life cycle related value engineering

proposals from subcontractors • Pro-active production-based scheduling to quantify

parameters of DSC claims if they occur.


Proactively Mitigate DSC Impacts

• Uncertainty is always high in DB geotechnical features of work.

• Even with the most thorough site investigations, the possibility of encountering differing conditions still exists.

• Therefore, the DB construction administration system should be established to provide the necessary benchmarks for measuring time and schedule impact when a compensable DSC is realized.


Planned (CPM) versus Actual (Data) This can be done automatically from

DWRs submitted to a cloud from an iPhone.


“How the Honolulu Geotechnical Baseline Reports Reduced the Subsurface Risk at Bid Time”

• Example of Site Characterization:

• Ground conditions can be easily visualized

• Key Soil and rock layers are defined

• Profiles not individual boring logs

Steven R. Saye, P.E. Kiewit Engineering Group


Preconstruction Visualization and Risk AssessmentConvert soil profile to a risk rating


Preconstruction Visualization and Risk Assessment


CPM was invented in 1968. Linear scheduling method

was used to build the interstate system in the 50s,

60s, and early 70s.

Monte Carlo simulation results for grout curtain production

Example Forensic DSC Claim Analysis ModelUse the linear scheduling format as a communication tool to explaining the events that either support or deny a contractual breach.• Daily Reports as data source: Work performed between stations in a given date.• Use the linear scheduling model: x-axis as physical alignment and y-axis as time.• No activities or production rates, just actual data plotted as lines.• Influential factors may be included graphically, such as underground conditions,

rainfall data, production as volumes or any other physical unit within the time unit.


Panama Canal Expansion - Borinquen Dam 1E Model• Linear Schedule Model:

• Identify key activities (Critical Path) with unique colors:• Grout Curtain• Foundation Treatments• Blankets• Embankment Core

Blankets

Core

FoundationTreatmentsGrout Curtain


Borinquen Dam Core Construction


Borinquen Dam 1E Model• Linear Schedule Model:

• Extract data from daily reports:• Activity Type• Initial Station• Final Station • Date

Task-ID Name Date Start.Distance End.DistanceA-00001 / Capa 1 16-Jul-13 620 630 A-00002 / Capa 2 17-Jul-13 645 670 A-00003 / Capa 3 17-Jul-13 620 630 A-00004 / Capa 4 23-Jul-13 645 675 A-00005 / Capa 5 24-Jul-13 660 670 A-00006 / Capa 6 24-Jul-13 675 695 A-00007 / Capa 7 24-Jul-13 660 670 A-00008 / Capa 8 25-Jul-13 675 695 A-00009 / Capa 9 25-Jul-13 670 695 A-00010 / Capa 10 25-Jul-13 660 670 A-00011 / Capa 11 25-Jul-13 695 700 A-00012 / Capa 12 25-Jul-13 660 670 A-00013 / Capa 13 25-Jul-13 690 700


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Baseline Grouting Sequence

Actual Grouting Sequence



Summary• Best way to mitigate DB geotechnical risk: start digging as

soon as practical, identify the in situ conditions and retire it early.

• Best way to minimize the cost of DB geotechnical risk in procurement: align the Owner and the Design-builder’s perceptions and implement risk sharing.

• Best way to mitigate the cost of DB geotechnical realized risks: proactive as-built schedule documentation.

• Bottom-line – Paying for unrealized geotechnical risks adds no value to the project. So bring a DB mentality to the DB project.


Today’s Speakers

• Ghada Gad, California State Polytech University, Pomona, [email protected]

• Doug Gransberg, Gransberg & Associates, Inc., [email protected]

• Bora Cetin, Iowa State University, [email protected]

mailto:[email protected]



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Documents

Geotechnical Risk Management Tools for Design-Build Projectsonlinepubs.trb.org/onlinepubs/webinars/190401.pdfThe Transportation Research Board has met the standards and requirements