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Transportation Estimators Association Conference. Procedures Guide for Right of Way Cost Estimation and Cost Management. Saratoga Springs, New York October 4, 2008. NCHRP Project 8- 49 (2). Stuart Anderson Texas A&M. Keith Molenaar Univ. Colorado. Biloxi, Mississippi June 13, 2007. - PowerPoint PPT Presentation
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Transportation Estimators AssociationConference
Saratoga Springs, New YorkOctober 4, 2008
Procedures Guide for Right of Way Cost Estimation and Cost Management
Biloxi, MississippiJune 13, 2007
NCHRP Project 8- 49 (2)
Stuart Anderson Texas A&M
Cliff Schexnayder Del E. Webb School of Const., ASU
Keith Molenaar Univ. Colorado
Outline• Background
• Methodology
• Data Collection and Results
• Issues
• Procedure Guide
• Discussion
Background
• State highway agencies (SHAs) have identified cost escalation to be a consistent problem
• Phase I of NCHRP Project 8-49– Focused on the larger issue of cost escalation relative
to general project cost estimating– Produced Guidance, Report 574, which focused on
strategies, methods, and tools
• Phase II of NCHRP 8-49– Target specific area for elaboration – Right of Way
Research Objective
Develop an all-inclusive set of right-of-way
cost estimation and cost estimation
management procedures based on literature
and current practice, which integrates
cost estimate and cost management steps
documented in NCHRP Report 574
to support the right-of-way process.
Research Tasks
• Task 1. Update Literature Review
• Task 2. Examine and Document Successful Right-of-Way Estimating and Management Practices
• Task 3. Develop Methods and Tools for Right-of-Way Estimating and Management
• Task 4. Develop Procedures on Right-of-Way Cost Estimating and Management
• Task 5. Prepare Report and Right-of-Way Cost Estimating and Management Procedures
MethodologyFramework
• Phase I implications– Project development phases– General project cost estimation and estimate
management steps– Cost estimating and cost management
flowcharts– Tool appendix approach
MethodologyFramework
• Impact of Phase I approach on Phase II– Focus on creating a ROW Cost Estimating
and Cost Management Procedures Guide – a “how to”
– Create more detailed processes for cost estimating and cost management for ROW to support procedure guide
– Use some Phase I tools but created a few additional tools focused on ROW using same format and structure
MethodologyData Collection
• Literature review• On-site interviews
– Interview Protocol• 15 questions• Six areas of interest which focused on different aspects of
the cost estimation and estimate management process – Interview Process
• Who?– SHAs and other organizations that acquire ROW– Central Office and Region/District perspectives
• How?– Use the protocol as a roadmap during interviews– Ask each question relative to the development phase
MethodologyData Analysis Approach
• Review of Practices– Critical issues to ROW cost estimation– Successful practices and tools
• Flowchart technique– Data was subdivided into four categories:
• Inputs (primary and secondary)• Process steps• Outputs• Decisions and loops (cycles within the process)
Data Collection
• Interview participants– 7 State Highway Agencies (40 individuals)– 2 Local Public Agencies (5 individuals)
• Interview process– Open discussion– Protocol as a checklist
• Documents collected– ROW manuals– Unique tools used in practice (i.e. cost estimating
systems, estimate documents, spreadsheets)
• Early flowchart feedback
Limitations of the Research
• Small sample size
• Differences between agencies being interviewed:– Large verses small– Organizational make-up – centralized verses
decentralized– Project development phases– Terminology and acronyms
ResultsProblem Areas
• Damages • Condemnations• Appreciation and other market conditions• Risk analysis and contingency• Early scope definition• Estimating tools• Estimator experience and knowledge
Right of Way Issues
• Current practices lack structure and organization.
• Communication between ROW personnel and project development team personnel needs to improve.
• The ROW cost estimation process is highly dependent on the level of scope definition.
Right of Way Issues (continued)
• Planning estimates do not typically involve ROW personnel.
• SHAs underutilize risk analysis and the application of contingency in all estimates.
• Cost estimation management and cost control are underutilized.
PROGRAMMING
ROW Project Development:· Define Project Scope:
Identify ROW area and/or rough parcels needed (impacted)
· Document ROW Required on rough conceptual plan or aerial photo (schematic)
Determine Baseline ROW Estimate Basis· Review ROW required as documented per
project type and scope· Request clarification of uncertain ROW
requirements· Document requirements in project estimate
file
Approve & Communicate Baseline ROW Cost Estimate· Obtain management approval· Authorize communication internally and
externally
Determine Baseline ROW Risk & Set Contingency· Identify risks· Assess and analyze risks· Assign contingency· Document risk analysis and basis for
contingency· Compile baseline ROW cost estimate (base
plus contingency)
Review Baseline ROW Cost Estimate· Determine level of review· Review estimate basis & assumptions· Verify completeness and Cost Data· Review Contingency amount based on
identified risks
Baseline ROW Cost Estimate
To PreliminaryDesign
ScopeDevelopment
ROW Requirements
Input from Environmental,
Utilities, Railroad
Prepare Baseline ROW Base Estimate· Review estimate basis· Document observations from field visit · Calculate potential area of land by land type· Develop cost basis for each ROW element· Convert cost basis to estimate for each
element· Document estimate assumptions including
uncertain items· Summarize all estimate elements for total
ROW base cost
Real Estate Appreciation
Rate
Land Market Values
Field Visit by Estimator (Improvements,
Damages, Existing Conditions, etc.)
Condemnation RateHistorical
Data
- Removal of Improvements- Relocation Assistance- Support Costs
Future Development (Community
Planning)
Represents the dynamic nature of the milestone dependant on the practices
of the State highway agency.
*
Priority Program≤ 10 years
*
FromPlanning
Modifications
Update Estimate Basis(Scope/
Location)
Prepare Base Estimate
Perform Risk Analysis
(Set Contingency)
Review Total Cost Estimate
Historical Data Input from 3rd Parties
Input from Disciplines
Market Conditions
Baseline Estimate
TrafficRoadwayStructures
ROWEnvironmentalConstruction
Utilities
Project Scoping5-25% Design
Project Complexity
Obtain Appropriate Approvals
Communicate Approval
Macro Environment
Project Estimate
P
RE
LIM
IN
AR
Y D
ES
IG
N
Authorize Project
*
PR
OG
RA
MM
IN
G
Database
Document
Step
Input
Milestone
Pha
se
Legend
Decision
COST ESTIMATING AND COST ESTIMATING MANAGEMENT
To Final Design
ROWResearchResults
ProceduresGuide
Development
Procedure GuideOutline
• Chapter 1 Introduction• Chapter 2 Integrated Estimating Process• Chapter 3 Agency Level Process Overview• Chapter 4 Conceptual ROW Estimating• Chapter 5 Baseline ROW Estimating• Chapter 6 Update ROW Estimating• Chapter 7 ROW Cost Management• Chapter 8 Conclusions• Appendix - Tools
Agency Level Process
Flowchart
Plan
ning
Transportation Need
Conceptual ROW Cost Estimating
ROW CostManagement
Update ROW CostEstimating
Baseline ROW Cost Estimating
Pro
gram
ming
Preli
mina
ryDe
sign
Conceptual ROWRequirements
Conceptual ROWCost Esimate
ROWRequirements
Baseline ROW Cost Estimate
(for Authorization)
ROW Requirements(Preliminary ROW
Plans)
Updated ROW Cost Estimate
Final ROWPlans
Forecasted Total Cost
Letting
F
inal D
esign
*
STIP
Priority Program
Long RangePlan
*
Represents the dynamic nature of the milestone dependant on the practices
of the State highway agency.
*
Actual Parcel Cost
ROW Estimate Elements
• Land only
• Land and structures
• Other property improvements
• Damages
• Utility relocations
ROW Estimate Elements
• Relocation assistance program
• Administrative settlements
• Settlements or trails
• Support Costs
• Appreciation
Key ROW Estimate Inputs
• Requirements
• Values for land and structures
• Historical data
• Inflation/appreciation rates
• Condemnation rates
• Future highest and best use
Conceptual ROW Cost Estimating Planning Phase
PLANNING
ROW Project Development:· Define Project Scope:
Planner & Project Engineer perform field visit to determine Conceptual ROW Scope
· Document ROW Required
Determine ROW Estimate Basis· Review ROW required as documented
on schematic (Land Use, Location, etc.)· Create ROW Estimate file
Prepare Conceptual ROW Estimate· Determine Total ROW area and
approximate # of parcels to be impacted· Determine approximate # of parcels to
be impacted· Document location, existing conditions,
assumptions, and limitations for ROW requirements
· Develop cost basis including land values, RAP, support costs, improvements, damages, etc.
· Estimate condemnation rate and costs· Apply inflation rate
Determine ROW Risk & Set Contingency· Identify and evaluate major risks· Assign percentage to account for risks
Conceptual ROW Cost Estimate
To Programming
Conceptual ROW Cost Estimating
Historical Data
- Removal of Improvements- Relocation Assistance- Support Costs
Real Estate Inflation
Rate
ROW Requirements
Land Market Values
Field Visit by Estimator (Improvements,
Damages, Existing Conditions, etc.)
Review ROW Cost Estimate· Review estimate basis/assumptions· Verify completeness and cost data
Condemnation Rate
Future Development (Community
Planning)
Approve and Release ROW Cost Estimate
Transportation Need
Long Range Plan
>20 years
Baseline ROW Cost Estimating
PROGRAMMING
ROW Project Development:· Define Project Scope:
Identify ROW area and/or rough parcels needed (impacted)
· Document ROW Required on rough conceptual plan or aerial photo (schematic)
Determine Baseline ROW Estimate Basis· Review ROW required as documented per
project type and scope· Request clarification of uncertain ROW
requirements· Document requirements in project estimate
file
Approve & Communicate Baseline ROW Cost Estimate· Obtain management approval· Authorize communication internally and
externally
Determine Baseline ROW Risk & Set Contingency· Identify risks· Assess and analyze risks· Assign contingency· Document risk analysis and basis for
contingency· Compile baseline ROW cost estimate (base
plus contingency)
Review Baseline ROW Cost Estimate· Determine level of review· Review estimate basis & assumptions· Verify completeness and Cost Data· Review Contingency amount based on
identified risks
Baseline ROW Cost Estimate
To PreliminaryDesign
ScopeDevelopment
ROW Requirements
Input from Environmental,
Utilities, Railroad
Prepare Baseline ROW Base Estimate· Review estimate basis· Document observations from field visit · Calculate potential area of land by land type· Develop cost basis for each ROW element· Convert cost basis to estimate for each
element· Document estimate assumptions including
uncertain items· Summarize all estimate elements for total
ROW base cost
Real Estate Appreciation
Rate
Land Market Values
Field Visit by Estimator (Improvements,
Damages, Existing Conditions, etc.)
Condemnation RateHistorical
Data
- Removal of Improvements- Relocation Assistance- Support Costs
Future Development (Community
Planning)
Represents the dynamic nature of the milestone dependant on the practices
of the State highway agency.
*
Priority Program≤ 10 years
*
FromPlanning
Modifications
Update ROW Cost Estimating
PRELIMINARY DESIGN
ROW Project Development:· Refine ROW Scope per
preliminary plans and refined overall Project Scope
· Develop preliminary ROW plan
Approve & Communicate Updated ROW Cost Estimate· Review Impacts of changes· Obtain management approval· Authorize communication internally and
externally
Review Updated ROW Cost Estimate· Review estimate changes (basis and
assumptions)· Verify completeness and cost data for
changes· Review effect of changes on contingency
amount
Updated ROW Cost Estimate
To FinalDesign
ROW Requirements (Preliminary ROW
Plans)
Revised ROW Required
(Revised Plans)
Estimate on Budget?
YES
NO
Update ROW Estimate Basis· Review current ROW plans and
compare to previous requirements· Identify changes· Update ROW Estimate file
Update ROW Risks & Contingency· Review risks· Update risks as necessary· Update contingency value· Document update to risk and contingency
Input from Environmental,
Utilities, Railroad
Update ROW Base Estimate· Review updated estimate basis to understand
changes· Document observations of field visit to
confirm modifications· Review changes to existing estimate
assumptions/limitations· Calculate total area of land for each parcel· Revise cost basis to update estimate for each
element· Convert cost basis to update estimate for
each element· Update estimate documentations include
uncertain items· Summarize all estimate elements for updated
total ROW cost
Real Estate Appreciation
Rate
Land Market Values
Field Visit by Estimator (Improvements,
Damages, Existing Conditions, etc.)
Condemnation Rate
Historical Data
- Removal of Improvements- Relocation Assistance- Support Costs
Future Development (Community
Planning)
*
STIP≤ 4 years
Represents the dynamic nature of the milestone dependant on the practices
of the State highway agency.
*
FromProgramming
Potential Design/ROW Trade offs
CostEstimation
ManagementLoop
Modifications
ROW Cost Management -
Final Design Phase
No
Assess ROW Scope, Conditions, and Cost· Compare final ROW plan requirements with
previous requirements· Identify specific changes in ROW
requirements by parcel· Estimate Cost Impact on each affected parcel· Compare with current budget for impacted
parcel
Evaluate Potential Cost Impact· Compare actual ROW cost against
current budget by parcel· Determine cost impact on total ROW
budget
Adjust ROW Budget· Document change including changes to
estimate basis and assumptions· Notify Project Development Team of
modified budget
To Construction
Actual ParcelCost Data
FINAL DESIGN
ROW Project Development:· Finalize ROW
Requirements· Finalize ROW Plans
Appraisal & Acquisition Activities· Select Parcels · Appraise Property· Acquire Property· Obtain ROW Clearance· Initiate and perform
ROW condemnation (if necessary)
RecommendBudget
Adjustment?
YES
CostManagement
Loop
No
Adustm
ent
ROW Requirements (Final ROW Plan)
Forecasted Total ROW Cost
(W/Deviations)
FromPreliminary
Design
Updated ROW Cost Estimate
• Cost Estimation/Cost Management Step– Introduction– Flowchart– Flowchart step
• Project complexity• Phase inputs• Process step description• Tools (tied to tool appendix)• Tips for success• Outputs
Procedure Guide“How to” Chapter Contents
• Structured Approach• Collaborative Atmosphere• Key principles
– Create an environment for success– Create procedures for establishing a Baseline
ROW Cost Estimate– Create processes to identify risk and for
setting appropriate contingency– Require ROW reviews– Create ROW cost control mechanisms– Support good communications practices
Procedure GuideConclusions
Questions, Answers, and Discussion!