Project Management View from Rail Transit Programs and Projects

February 26, 2020 was the 27th anniversary of the terrorist bombing of the World Trade Center in New York, USA.   This anniversary marks the start of a new era for design and construction requirements on projects funded by the government in the United States.   Rightly so, the development of projects since then have considered and incorporated structural hardening, security measures, and monitoring and surveillance enhancements.   It also introduced, military warfare type analyses for certain situations, metrics for injuries and casualties, and the consequential and collateral impacts to persons and damage to property.     

On September 11, 2001, a second terrorist action had far greater impact.   It too expanded the realization of threats and vulnerabilities on infrastructure around the world.

As of August 1, 2007, Owners using US government funding for capital projects are required to certify that the design deliverables and construction products demonstrate that they mitigate job hazards for product use, and they mitigate exposure to potential threats and vulnerabilities from the environment and other atypical influences.  Additionally, public agencies aso adapted more comprehensive processes to protect infrastructure and persons.

Design, Construct and Operate to Mitigate Hazards, Threats and Vulnerabilities

For most projects, job hazards are associated the contractor’s and supplier’s means and methods of construction or product manufacturing processes.   But the scope of the Systems Certification is to identify job hazards associated with persons that will operate and use the product completed by the project.   For rail transit projects, the users include employees, customers and members of the public.    Some of the hazards may be similar in categories but the potential impacts and the mitigation may be different.   For job hazards that can not be addressed by the designer or contractor, there will be accepted mitigations by the Owner, including operator training, personnel licenses and education, standard procedure and practices, and personal protective equipment.

The government, industry experts, and statutory agencies and authorities overseeing the management and operation of infrastructure have initiated standard protocols and certifications for projects.   The purpose of the certification requirements is to assure that the Owner, designer and contractor verify that the systems and security requirement are fulfilled in each project within the regions infrastructure, including transportation systems, government facilities, ports and cargo transfer facilities, and multi-modal hubs/facilities.  

The Certifications are a systematic review and verification that the job hazards, threats and vulnerabilities are addressed in the project deliverables during the milestones for:  

Design:  Verification proves the construction or purchase contract specified the technical requirements and product features to mitigate the job hazards, threats and vulnerabilities.  

Construction:  Verification proves the constructed or manufactured product is tested, and it meets the quality for contract requirements, which mitigate the job hazards, threats and vulnerabilities.

Start Up and Operation (Final):  Verification proves the accepted product from the contractor demonstrates operation with features, controls and procedures that protect the users and mitigates the defined job hazards, threats and vulnerabilities. 

The Certification processes and documents consist of a Certifiable Items List, job hazards or TV topics, design specifications and drawings, construction inspection and tests, startup and commissioning procedures and signatures of verification experts.   These documents are supplemented with Expert analyses and judgment by certified safety and security professional affirming the product requirements or Owner operational assets, procedures and operator training to mitigate potential job hazards and TV topics.  

The Certifiable Items List, job hazards and TV topics are defined by the Owner/Buyer organization based on past experience with design, construction and operation of similar equipment or constructed products or as defined by design consultants from new and emerging products proposed for the project. 

Systems Certification

Job hazards are the potential for injuries or death from the normal operation, inspection and maintenance of the designed product.  The designers and constructors of the project products will document the job hazards are mitigated by specifying and constructing the project with industry suppliers of equipment and systems.  Some job hazards to may include:

• Caught in equipment
• Struck by equipment
• Cut/dismembered by equipment
• Burned by fluid or heated equipment
• Improper operation
• Bypassing safety features
• Electric shock, shorts, electrocution

The mitigations may include:

• Safety covers and appliances
• Electrical grounding and switches
• Personal protective equipment
• Operational procedures

The verifications involves demonstrating the construction/product specifications and drawings or operator procedures contain requirements that are proven to address hazards that might be encountered from use by qualified operators and from public persons using the product.  

Security Certification

Threats and vulnerabilities (TV) are the potential for property damage and injuries or death to persons due to accidental or intentional acts of distracted persons, criminals or terrorists upon the project product.  The mitigation of the threats and vulnerabilities are incorporated into product features such as bollards, barrier gates, high security fencing, crash walls, blast walls/shutters, planters, and surveillance cameras.   Some TV may include:

• Rammed by vehicles
• Impacted by explosive devices
• Exposed to biological, chemical and radioactive materials
• Hacker penetrated computers, network and corporate assets
• Breached by intruder and active shooter

The mitigations may include:

• Perimeter security lighting, fencing. bollards and gates
• Surveillance camera monitoring critical entrances, exits and secluded areas
• Access and intrusion detection devices
• Air, chemical, biological and radiological monitoring devices
• Computer and communication equipment firewalls
• Employee and Customer help stations
• Crowd control gates and barriers

The verification involves demonstrating the construction/product specifications and drawings contain requirements that are proven to address TV situations that might be encountered from outside influences. 

For more information, see Circular FTA C 5800.1, Safety and Security Management Guidance for Major Capital Projects.   https://www.transit.dot.gov/regulations-and-guidance/fta-circulars/safety-and-security-management-guidance-major-capital

TIP:    For projects where the Owner has comprehensive technical requirements that are routinely used to replace in-kind or construct identical facilities/equipment, it is likely the Owner already has a System Safety Management Plan that includes a standardized list of hazards, threat and vulnerabilities associated with the technical requirements.

This article complements the previous article “What are good practices for Commissioning Acceptance and Maintenance Plan (CAMP)?”  Tailored to rail transit projects, this article follows with  Q&A on CAMP definitions, description of CAMP deliverables, integrated managerial functions supporting CAMP, and the general activities and sequence for CAMP.    Here are Questions and Answers to CAMP – Part 1.

When Does the CAMP Process Start?

CAMP starts with the design of the project and the creation of construction documents, and it continues through the closeout of the contract/project.   The process will consist of iterative development of a content a Matrix that lists the components that will form the constructed product as described in the project scope and objective.   The Matrix also lists the expected CAMP deliverables, such as Operation and Maintenance Manuals, Warranty, Training, As-Built Drawings, Spare Parts, Software, and GIS/Asset Management data.   Starting the work in the design will assure that at the time of the construction contract award, the Seller and Buyer have the same expectations for the CAMP deliverables.

What are the definitions for CAMP?

Commissioning:   This is the pre-requisite activities and deliverables for starting the CAMP package and deliverables for Acceptance, and it is the Buyer’s (Owner) process for verification of project/contract scope and the Seller’s (Contractor) compliance with requirements.    The activities typically include Factory Acceptance Testing (FAT), On-Site Acceptance Testing (SAT), In-progress Inspections, Start-Up and Burn-In.   Commissioning activities should be integrated into Project Control schedules and Quality Plans, which contain quality control test and inspection plans.

Acceptance:  This is a predecessor activity for contract closeout, and it refers to the Final Acceptance by the Buyer/Owner, which follows completion of Commissioning activities and  A) Final formal inspection of the Seller’s work.   B) Seller’s completion of punchlist work.   C) Buyer’s  confirming resolution of Submittals and Non-Conformance Reports (NCR).   D) Buyer’s receipt of Seller’s training, As-Built drawings, Spare parts, Warranty, Operation and Maintenance Manuals (Inspection and Maintenance).   E) BIM/GIS and Asset Management Data.   Contractually, Acceptance equates to Construction Completion, which its tied directly to commercial provisions, Final Payment and Warranty, and is a milestone for the Project Control schedule.  

Maintenance:   This is a post-contract closeout activity and it refers to Buyer’s readiness to conduct periodic inspections and maintain the Seller’s accepted work.  The Buyer’s readiness includes A) Allocating operating budget and assign management responsibility.  B) Purchase and inventory of special tools, consumable items and spare parts.  C) Assign new or reallocate operation/maintenance staff and resources.  D) Update company asset inventory and insurance. 

What are CAMP requirements?

The requirements for the items cited in the definitions above are typically embedded in the contract document.    Typical contract sections or project plans for CAMP technical requirements or inputs in rail transit are:

• FAT/SAT:   This is found in the Division 2-16 Technical Specifications of the contract/purchase order.    It is most applicable to major systems and equipment, including signal systems, HVAC, substations, signal power motor generators, communications and supervisory control systems and control centers.   The Seller is required to submit detailed test procedures, and the test results for review and approval by the Buyer. 
• Inspections:   This is implemented under the General Provisions and detailed in Technical Specifications of the contract/purchase order.   It is most applicable to work covered by government permitting and code compliance, and it is described in the Buyer’s construction  manager’s  (CM) monitoring plan and in the CM’s inspection and testing plan  for overseeing the Seller’s work.
• Start-Up/Burn-In:   This is found in the Division 2-16 Technical Specifications of the contract/purchase order.   It is most applicable to power systems such as substations and signal power motor generators.   The Burn-in periods can range from 30 – 90 days after initial start-up under full load.   For replacement projects, the completion of the Burn-In for the new infrastructure is a predecessor activity in the Seller’s Detailed Contract Schedule for demolition of the old systems.  
• Final Inspection:    This is found in the General Provisions of the contract/purchase order, usually under the Payment and Time/Contract Schedule Milestones.   Final inspection is typically an end-of-contract item.  However, Buyer and Seller may agree to incremental inspection, use and occupancy of portions of the work.   The Seller’s detailed contract schedule and the Inspection and Test  Plan will delineate the proposed sequence for completing portions of the work.  
• Punchlist:   This requirement follows Final Inspection and it is a predecessor for achieving Time/Contract Schedule Milestone for Substantial Completion (SC) in the General Provisions of the contract/purchase order.   SC means the work is useful to the Buyer ahead of the completion of work and milestones such as Construction Completion and Contract Completion.
• Resolution of Submittals and Non-Conformance Reports (NCRs):   This is part of the Buyer’s contract monitoring plan and the project quality plan.  These Plans assure that delivered and installed products reflect the current contract including all negotiated changes and contract modifications, and the completion of corrective actions on NCRs under the Seller’s Quality Management Plan.

Recently I was asked to estimate the cost of the various deliverables that are contractually required from Sellers to Buyers.   The estimate included the Seller’s material cost, software cost, labor and administrative effort to prepare, publish and deliver multiple copies of knowledge deliverables, labor for knowledge transfer services, and administrative costs for post contract liabilities.   The knowledge deliverables consisted of As-Built drawings and Operation and Maintenance Manuals.   The knowledge transfer services consisted of training and organized handover of project records.   The post-contract liabilities consisted of Warranty services. 

From previous contract experience in the rail transit domain, the contract deliverables are usually covered in the Buyer/Seller agreement and the value is covered by the retainage withheld by the Buyer from the Seller’s approved progress payments.   The retainage is typically 5% and it’s released from the Buyer to the Seller at the completion of Final Payment, which is dependent on the Seller meeting the contract requirements.  

What the preliminary estimate showed was the cost to produce the end-of-contract deliverables expected by the Buyer from the Seller was within the 5% retainage amount.   As a result, the historical use of 5% retainage in contract payment transactions provided high confidence that the Seller would fulfill the requirements or in theory, risk the Buyer using the retainage to fund another professional service contract for completing the deliverables.   

After further review, the estimate did not though, account for the value of the knowledge and services to the Buyer’s operation.  Most of the end-of-contract deliverables will outlast the initial Buyer’s use and continue to provide knowledge for the operation and maintenance of the contract product.    For contract producing sophisticated systems or cutting edge technology and services, the value to the operations may be far more that the 5% retainage.   

Long after the Seller’s contract is closed out, the knowledge created will help the Buyer in training new employees on operating the system, conducting preventive, predictive and routine maintenance and in coordinating as-built conditions for future projects.  As a result, the Buyer will need to secure the knowledge for safe storage and quick retrieval and provide all resources needed for an operational asset. 

In order to assure the continued value of the end-of-contract deliverables, the Buyer will need to protect these legacy documents and establish knowledge management processes and resources.   Deliverables such as As-Built drawings, O&M Manuals and training lesson plans and materials will continue to provide the Buyer with critical knowledge to share with employees for years to come while the product continues through its use-life cycle.

What was once a paper exchange is now being replaced by paperless alternatives that are environmentally conscientious and take up less space and cost less.  Digital libraries on off-properties are replacing storage and retrieval of paper documents.  However, this transition is not yet complete and many companies still require a combination of paper and digital copies of project and contract documents.  

Like the intangible value of a Warranty, the value of the knowledge from the end-of-contract is hard to quantify.   And its true value will only be appreciated when needed and usually at an inconvenient time.    But the qualitative value to a typical railroad organization includes:

• Engineering design for as-built conditions of the parent project that are essential to support future child projects
• Engineering construction for instructions on preventive and routine maintenance and life cycle overhauls on the project products
• Engineering construction for Warranty plans for monitoring and executing repairs on project products
• Engineering design and construction for troubleshooting PLC and microprocessor  operating and application hardware and software
• Procurement for ordering information of consumable and maintenance materials for the project products
• Stores for storing and maintaining inventory of spare parts to support maintenance and repair of project products
• Asset management for comprehensive data and information on constructed products from the project to support maintenance and future modifications
• Human Resources for  lesson plans and documentation for training personnel on operation and maintenance of the project products

TIP:   Most projects funded by the US government are required to retain project records for a defined period, and thereafter can determine the disposition of the records, including disposal.   Buyer’s should have a plan for selecting the records and the medium for longer term storage and retrieval of project knowledge.

TIP:   Buyer’s should review contract requirements to assess if the paper focused deliverables are more cost effective than a digital approach for the scope of the project.  For smaller, lower budget projects, paper may still be the best medium for contract deliverables.  For larger, high budget projects, digital software and licenses may be a more effective solution, which can be accessed and searched by the Buyer from any computer location 24 X 7. 

Feedback to Comments 

A.  On estimated cost:  The evaluation of estimated cost for deliverables was favorable because it was a Design-Build contract, where the value of the design allowed for a buffer.     The estimate relative to a fixed bid/lump sum may require the Buyer consider a large retainage percentage to cover expectations on a contract with systems.  The estimated value does not include the spare parts, which would be itemized separately in the bid price of the contract. 

B.  The closest rail transit projects consider knowledge management is as-built deliverables and O&M Manuals. Historically, rail transit projects deal with paper and hammers. As system projects increase the volume of paper, Buyer’s in the rail transit domain will need to consider management and sharing knowledge via electronic/digital medium. 

C.  On IT initiatives for KM:  Historically commuter railroads with budgets that are funded by the government, which off-set actual operating expenses to fare revenue ratio, tend to lag with leading edge IT practices in other industries. However, as the volume of paper increases with the size and complexity of mega projects, it will be inevitable for railroads to consider paperless approaches. While limiting paper, the are still projects that will require paper copies and software hard drives on-site for immediate use in recovery and restoring operations. 

Until recently, Commissioning, Acceptance and Maintenance Plan (CAMP) deliverables on major projects were delegated to the contractor for determining format, content, level of detail and the submittal date.   Typically, the compilation of the associated deliverables was part of final acceptance of contract products by the Buyer and achieving the performance milestone by Seller for contract completion.   At contract completion, the withheld retainage by the Buyer, which can be 5% deducted from all Seller’s progress payments through 100% earned contract value, becomes part of the contract closeout.   As a result, contractors typically leave the CAMP deliverables until the end of the contract.

Contract closeout means the Buyer’s Project Manager (PM) can close the remaining administrative office, package the files for storage, and be reassigned to other projects on a full-time basis.  For the Seller’s PM, it means all financial reimbursement obligations are complete and they can close files and financial bookings, and reassign any remaining staff to other contracts.

However, there are numerous Lessons on contracts from closeout experiences that reflect poor quality and incomplete CAMP deliverables.  The situation is compounded by the urgency of the Buyer’s PM to closeout the contract and of the Seller’s PM to collect all retainage due from the already approved payments.  At this time on the contract lifecycle, CAMP deliverables can easily become secondary, as both PM’s are usually focused on closeout and moving on to new projects or contracts.

In order to mitigate the risk of poor quality and incomplete CAMP deliverables on rail transit projects, a major United States (USA) commuter railroad updated its requirements for consultant design contracts and contractor construction contracts.  The scope of work for design contracts specify that a CAMP Matrix be developed and submitted with each level of deliverables.   The Division 1 Specifications for the construction contracts specify the CAMP as a deliverable with scope, product and execution requirements that include the CAMP Matrix – developed by the design consultant.  

The CAMP Matrix includes the major systems constructed, and for deliverables, such as Training, Operation and Maintenance Manuals, Spare Parts, Software, Software Licenses, Warranty, and As-built drawings, which are itemized in the Divisions 2-16 Specifications of the construction contract.   Some Mega projects also include deliverables for BIM/GIS, Asset Management and service contract agreements.   As the Matrix progresses from the design contract and into the construction contract, more detailed descriptions of the components /systems of the constructed product are incorporated.  This creates better understanding of the CAMP deliverables. 

Since implementing in the late 2000’s, the USA commuter railroad has collected Lessons Learned on CAMP requirements, which are used during the development of new projects and contracts.   Enhancing the contracts was proven to enable Buyer’s PMs to better manage the Seller’s PMs and realize higher quality and comprehensive CAMP deliverables that met the real expectations of the Owner’s operating departments.   

The CAMP Matrix makes it clearer to both PM’s on the scope of deliverables and it provides the foundation for expanding the use into alternate delivery contracts such as Design Build (DB).   Thanks to designing CAMP into the deliverables, the Seller for DBB contract has well defined requirements and deliverables scope for CAMP.  In DB contract, the Seller will develop the CAMP scope during the design phase and compile the source documents from construction contract submittals from the DB prime and all its subcontractors and vendors/suppliers.  

Due to the size of scope and contract values on mega projects, the planned intermediate use of contract products for operational use ahead of the contract completion/final acceptance milestone is a practical necessity.   In the current rail transit environment in USA, the project leadership commitments to funding partners, stakeholders, politicians and influencers create urgency to place products in-service for Ribbon Cutting ceremonies and press conferences.   As a result, Owner’s assume responsibility for maintenance well ahead on the scheduled contract or project completion.  This requires that the usual end-of-contract CAMP activities become incremental and intermediate, and the project team needs to adjust project management staffing by Buyers and Sellers to expedite CAMP deliverables.

Good Practices for CAMP

• Identify detailed CAMP roles, responsibilities, personnel interfaces and scope  interdependencies in Project Management Plans, Project Quality Plans, Contract Quality Plans, Construction Monitoring Plans, Integration Plans and Contract Management/Administration Plans
• Integrate the CAMP requirements, including processes/work flows and schedules, into the technical specifications of contracts and contractors’ subcontract agreements and purchase orders
• Insist CAMP activities and deliverables be defined in contract performance milestones and in the contractor’s Detailed Contract Schedule.
• Define and dedicate manpower for Points Of Contact (POC) and signature approval authorities from the Owner, Buyer’s PM and Seller’s PM
• Create performance monitoring metrics for reporting progress on CAMP deliverables to project management leadership and to Owners
• Provide comprehensive portfolio of samples that can be used as Models for all deliverables and other written documentation necessary for the lifecycle of CAMP.

Topics for Further Consideration at Closeout:

• Assigning a Value for Warranty - Payable after Warranty Period Ends:   The integration of formal and enforceable contract requirements for CAMP may necessitate a change in the contract performance milestones.   While impractical – based on current Owner/Contractor transactions, withholding a percentage of payments to cover the warranty period may be needed to assure equal priority by Buyer’s PM and Seller’s PM to the Owner’s requirements.  Equally, Owner’s need to dedicate a team to extend the management for warranty from the initiate incremental acceptance products up to one year after contract final acceptance or as otherwise defined in the contract, which is more typically construction completion.
• Defining the Owner’s Project/Operating Role and Resources for Commissioning:  CAMP is part of the Seller’s contract.  But the actual commissioning includes the Owner’s activities to take responsibility for the contract product and undertake project and operating budget reimbursed actions to ready the organization to assign manpower and budget accordingly.   The Commissioning may need to extend to the end of the contractor’s Warranty period.

TIP:   CAMP deliverables should be tailored to the Owner’s expectations and to SAMPLES of CAMP documents accepted to the Owner on previous contracts.

TIP:   CAMP deliverables should utilize as many of the documents reviewed during construction contract Submittals, which typically include detailed instructions for start-up, operation and maintenance as well as a list of recommended consumable parts, replacement spare parts, inspections, warranty and trouble shooting information. 

TIP:  Owner/Buyer should compile a set of SAMPLE documents – proven acceptable to Owner POCs, that can be used by Buyer/Seller PMs to create and distribute CAMP deliverables. 

TIP:   Buyer’s CAMP Manager should have access to information across various functional silos of the project management organization and data management system software, including design (CAMP development), construction (CAMP implementation and training records), quality (Product/system tests, inspections and various reports) and commercial (Contract changes, requests for acceptance, payment for spare parts, and requests for release of retainage). 

TIP:   Since final acceptance of products initiates the start of the Seller’s warranty period, Seller’s PM, Buyer PM’s and Owner should create a post contract completion team to monitor the warranty lifecycle, which may occur while construction is on-going and extend after contract completion is achieved.

TIP:   Since receipt of spare parts is in the CAMP scope, Buyer’s and Seller’s PMs need to establish a formal process and documentation to manage the transfer of spare parts to support the incremental final acceptance of contract products.  

TIP:   Typical projects start with a Kick-Off Meeting, the completion of CAMP including the warranty period one-year after contract final completion, should be finalized by a Closeout Meeting between the Owner, Buyer’s PM and Seller’s PM.   As may be required, Owner’s final evaluation of Seller’s performance should record and assessment for CAMP and Warranty.

TIP:    Mega projects always start with a ground breaking ceremony where top officials from the Owner, Buyer’s PM team, Seller, Funding Partners, politicians and other influencers are smiling and holding shovels.   The CAMP deliverables and the completion of warranty – one year after full contract completion should be equally ceremonial, such as a press conference with similes, hand-shakes and words of satisfaction between the Owner, Buyer’s PM and Seller’s PM.  As may be required, Owner’s final evaluation of Seller’s performance should record and assessment for CAMP and Warranty.

In short, stop voluntarily creating the potential for risk events on projects that may not have adequate management resources to ensure opportunities are realized and threats are mitigated! 

Projects are exposed to risks throughout the project lifecycle and they present threats and opportunities for altering the original project plan for scope, schedule, budget and quality expectations as well as for adjusting the project business case for purpose, deliverable requirements and functionality, and the cost benefit analysis for project completion. 

Guides for project management and practice standards for project risk management are available from government funding agencies and from industry advocates and professional development organizations such as the Federal Transit Administration (www.transit.dot.gov) and the Project Management Institute (www.pmi.org).    Managing risks also requires experienced project professionals with demonstrated expertise in the industry domain of the project and with adequate allocation of hours and budget to perform risk management activities.  

Hard risks can be addressed with engineering solutions and added funds to retain schedule goals.  But soft risks require managerial solutions that must be addressed with funds, changes in project management processes and other innovations that mitigate impacts to extending schedule duration and forecasting new milestone dates.    

Organizational processes and internal struggles between managerial silos create risks on projects.  Many of the risks in this category can be managed and controlled by diligently monitoring events and consequences to assure operational initiatives do not place new burdens on established project objectives, management processes, performance metrics and progress to goals.

Here are some examples soft risks:

1. Mitigate project level changes to the project plan/charter.   While continuous change is a common mantra, it is not a license for project governance, and program and project managers to propose and implement unbridled changes in the project scope and requirements.   Decisions for changes must be vetted with rigor tested to assess facts, substantiate benefits, identify the consequences, and the expected benefits.   Mitigation can be supplemented by developing a Plan B for recovery if the outcomes of the change are not achieved.   

2. Mitigate changes to roles and personnel assignments.   Turnover of personnel during a project life cycle can occur due to actions outside the control of the project manager.   While a certain amount of events can be anticipated by monitoring years of service and performance records of assigned personnel, most changes are driven by the work environment created by the organization, project governance, program and project management and the priorities in the company’s providing management, design and construction services.   Mitigation can be supplemented by enhancing project management activities to incorporate cross-training and a succession plan to reduce impacts for transitioning staff in and out of the team.      

3. Mitigate changes in organizational processes and procedures.   Most projects rely upon the organization’s existing processes and procedures as the foundation for project processes and procedures.   As a result, changes in project processes and procedures should be carefully implemented by ensuring the intended benefits of the change outweigh any increase in complexity, management oversight and the duration for completing the transaction.   Mitigation can be supplemented by ensuring project governance is flexible to allow the project to vary from organizational work flows while maintaining the intended accountability for managerial diligence and accountability for compliance with professional standards in the industry and licensing/educational oversight.

4. Mitigate changes created by political influences outside of project governance.   Ideally, political will can provide added urgency, funding, and streamlined regulations/processes to help progress project work.   However, sometimes there are arbitrary project metrics that are committed to that may fall outside the realm of reality.   Mitigation can be supplemented with a robust project communication plan that builds and maintains channels for aligning tactics and strategies between project governance, political officials, news and television media and community influencers.     

In the rail transit domain, the value and duration of projects, including planning and defining requirements, can span 5 years to 10 years.   For megaprojects in this domain, the operating organizations are usually highly bureaucratic.   As a result, the project durations can be longer due to factors that add time and complexity for processes associated with government contracting requirements, securing bonds and insurance carrier support, managing available manpower and labor agreements, coordinating a large quantity of contracts and project participants, monitoring vast interdependencies and interfaces, directing the logistics for work within fixed boundaries, and for managing materials provided by the project to contractors. 

1. Government contracting requirements:  In exchange for funding, government processes and reporting add significant hard and soft costs to contracts.   In the US, these include requirements for union level rates of pay, overall diversity of employees in the company, compliance with safety regulations, use of quality process, security checks on employees and subcontractors, specific percentages of work by designated subcontractors, and US made steel and US headquarter locations.   Risk mitigation includes processes and strategies for interpreting the requirements and the standard for demonstrating compliance.

2. Insurance:   The magnitude of cost on construction contracts affects the expense to contractors for obtaining specified insurance types and liability levels.   The high cost of insurance premiums can limit the number and proposed price for bids on contracts.   In some cases, it may prohibit insurance carriers from offering policies within the contractors bid price framework.   As a result, Owners can be forced to re-bid the contract with a reduced scope by creating several different contracts, which will allow bidders to obtain required insurance policies for the work.   Risk mitigation includes periodic peer reviews with contractors and insurance companies to align procurement plans with the current industry environment.     

3. Manpower and labor agreements:    New construction and job creation create an economic benefit.  However, they may outpace the availability of manpower in the region were the work is located.   As a result, Owners may require contractors to enter into non-binding labor agreements with trade unions to increase confidence that qualified manpower will be available for the work without creating a hardship to existing contracts from contractors competing for qualified workers.  Risk mitigation includes periodic peer reviews with contractors and local labor officials to assess overall labor availability and the projected public and private contract acquisitions.      

4. Quantity of contracts:  The quantity of contracts within a project proportionally affects the level of manpower for direct work and for management and oversight of the work to meet the project’s overall objectives and quality expectations within the established scope schedule and budget.   In addition to increasing the complexity of execution, it also requires more resources for managing interdependencies and interfaces between the contracts.   Risk mitigation includes a well defined and maintained procurement plan that describes the each contract scope, interfaces and interdependencies with other contracts, and the sequence of execution in the project.      

5. Quantity of project participants:   The quantity of project participants proportionally affects the complexity of the projects’ communications management plan, and other essential project management plan actions.    The other actions include establishing baseline requirements, making decisions and resolving conflicts throughout the project lifecycle, and for identifying the acceptance criteria for deliverables.    Risk mitigation includes a well defined and maintained system of current names and contact information for distributing project documents, scheduling and requesting attendance at meetings, and for organizing and managing project records.   

6. Interdependencies and interfaces:    The quantity of interdependencies and interfaces affects the project team’s ability to make schedule adjustments to work around problems and implement schedule recovery to achieve the project milestones dates on the path to project completion.   The higher the quantity, the lower the ability to maintain project progress and dates.   Consequently, the higher the risk threat for missing dates and extending the project duration and for adding soft cost for management staff that is proportional to the longer project duration.   Risk mitigation includes regular discussion of risks at monthly management coordination meetings, project meetings and contractor progress meetings.       

7. Logistics:    The work boundaries of the project and the amount of resources scheduled to work creates and inverse ratio that affects the environment for efficient execution and optimum progress to original scheduled project milestone dates and goals.  At some point, the amount of area required for personnel, equipment, material staging and means and method processes will not achieve planned productivity within the defined work boundaries.    Risk mitigation includes a detailed master construction schedule and integration plan, and a fully staffed and comprehensive construction management and monitoring plan.

8. Materials Management:   While most typical contracts transfer project risks to the contractor, so it is unusual for projects to plan to provide materials to contractors for installation.   When it occurs, the most common execution involves using in-house personnel from the rail transit agency to install, test and commission the constructed product.  As a result, the project creates a material procurement and inventory management plan, which is overseen by the construction manager and executed by in-house personnel.    This arrangement of responsibilities introduces risks that would normally be managed exclusively by a prime/general contractor.   Risk mitigation includes creating a material management plan with detailed processes and procedures  for managing requirements, purchase cycles and lead times, receipt inspection, inventory control, and for warehouse and distribution operations        

TIP:  Conduct a time study of recurring risk management activities and deliverables to estimate the manhours required from supporting staff. 

TIP:  Ensure Agendas for monthly project meetings, monthly contract progress meetings and periodic management oversight meetings include risk topics.

TIP:  Project program budgets should identify separate budget line items and schedule duration reserves that can be drawn down for mitigating and responding to risks.