Saturday, June 30, 2012
Thursday, June 28, 2012
Tuesday, June 26, 2012
Monday, June 25, 2012
Saturday, June 23, 2012
Friday, June 22, 2012
Thursday, June 21, 2012
Conferees May Be Close to Coal Ash Resolution
Conferees May Be Close to Coal Ash Resolution
By Nathan Hurst and Alan K. Ota, CQ Staff
Highway bill negotiators appear to be nearing a compromise on the contentious question of regulating coal ash, potentially settling one of the big remaining obstacles to a conference agreement.House Republicans have been demanding language in the surface transportation authorization (HR 4348) that would bar the EPA from regulating fly ash as a hazardous waste. Recycled ash is often used in concrete and paving materials, and some states, including California, require its use to prevent water from seeping into concrete.
The House is set to vote Thursday on a motion instructing conferees to oppose EPA regulation of coal ash, an action that Republicans portrayed as a stand against an Obama administration “war on coal.” But the motion’s sponsor, West Virginia Republican David B. McKinley, acknowledged during floor debate that conferees were “deep in productive negotiations” on the issue and expected to resolve it soon.
The deal under discussion would prevent the EPA from listing coal ash as a “hazardous” material, which could preclude its use in road and bridge construction. Instead, the EPA could establish a national disposal standard for coal ash that states would administer, with support by federal regulators.
“We are confident we are very close to having language that Senate Democrats will agree to,” said an industry supporter, who added that negotiations were ongoing.
Sen. John Hoeven, R-N.D., also hinted during a Wednesday morning television appearance that conferees were close to settling differences on toll roads. Hoeven suggested conferees would rescind Senate-passed language to stop states from including certain privatized toll roads in their state spending that qualifies them for matching federal funds. The provision was added by Sen. Jeff Bingaman, D-N.M., as an amendment to the Senate-passed highway bill (S 1813).
“We have worked out a resolution on those issues,” Hoeven said on C-SPAN. “Essentially, the federal government will provide the money to the states, and it won’t count against them.”
Despite a call by leadership to complete a conference agreement this week and a flurry of urgent negotiations, many industry lobbyists and congressional aides believe another short-term extension will be needed. The current authorization (PL 112-102) expires June 30.
Senate Environment and Public Works Chairwoman Barbara Boxer said “core” transportation issues would have to be settled before other issues, such as House demands to include language mandating quick approval of the Keystone XL oil pipeline, are taken up.
“We first have to resolve the transportation part,” the California Democrat said. “Once we do that, then we’ll focus on where we are with the others. . . . I feel we can get it done quickly. It just depends on what the House decides to do.”
Some Issues to Require Boehner’s Attention
Adding to the sense of urgency, the House voted 386-34 on Wednesday to adopt a motion by Minnesota Democrat Tim Walz instructing conferees to produce a conference report by Friday. House Minority Whip Steny H. Hoyer, D-Md., plans to offer another motion Thursday that would instruct conferees to take up the Senate-passed bill in their report.“This commonsense motion to instruct simply says that we should take up the Senate bill,” Hoyer said in a written statement. “I believe the Senate version would pass the House if Republican leaders bring it up for a vote.”
Some of the most contentious remaining issues — including the Keystone pipeline — are likely to require the attention of House Speaker John A. Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev. But Boehner spokesman Michael Steel said such leadership discussions would not occur until Boxer, House Transportation and Infrastructure Chairman John L. Mica, R-Fla., and the other conferees resolve the remaining transportation policy issues.
Mixed Signals on Keystone
Meanwhile, Senate Republicans sent mixed signals about the importance of including a Keystone pipeline provision in a final agreement.John Cornyn of Texas, chairman of the National Republican Senatorial Committee, was among those who said including Keystone language is vital, noting that he voted against the Senate-passed bill, which didn’t address the pipeline.
“I think Keystone’s critical,” Cornyn said.
Other GOP senators instead emphasized concerns about meeting budget-related targets and restricting funding for non-highway projects.
“It would be great to get Keystone accomplished,” said Rob Portman of Ohio, who voted against the Senate’s two-year, $109 billion bill. He said the addition of Keystone would sway his vote in support. Without Keystone, Portman said he and other Republicans would expect the finished bill to live within Budget Control Act (PL 112-25) limits.
“Even without Keystone, if the bill comes back within the budget constraints that we set up just last year under the Budget Control Act, I would be inclined to support it,” Portman said. The Senate rejected a Republican effort during floor debate in March to limit spending to Budget Control Act levels.
Jim DeMint of South Carolina, chairman of the Senate Republican Steering Committee, said it would be “important for the highway bill to stay within the revenues of gas taxes.”
DeMint also opposed the Senate bill, which is estimated to need about $12 billion in offsets to pay for spending in excess of projected Highway Trust Fund tax receipts over two years.
“To establish the precedent that we’re going to start paying for it in other ways is just not a good thing to do,” DeMint said. “We just need to pay for it with the trust fund.”
Sen. Charles E. Grassley, a supporter of the Senate-passed bill, said he favors Keystone but doesn’t think differences on the issue should preclude a final bill.
“We’ve got to make sure that people know that our highways are going to continue to be improved,” the Iowa Republican said. “So, we’re going to have to pass a highway bill one way or another. But I hope Keystone is in there.”
Humberto Sanchez and Richard E. Cohen contributed to this story.
Wednesday, June 20, 2012
Sunday, June 17, 2012
Saturday, June 16, 2012
Friday, June 15, 2012
Thursday, June 14, 2012
Wednesday, June 13, 2012
Tuesday, June 12, 2012
Monday, June 11, 2012
Sunday, June 10, 2012
Saturday, June 9, 2012
Friday, June 8, 2012
Wednesday, June 6, 2012
Tuesday, June 5, 2012
Work begins on new roundabout - SentinelSource.com: Local News: roundabout, city council, intersection road, roads and highways, old walpole road
Work begins on new roundabout - SentinelSource.com: Local News: roundabout, city council, intersection road, roads and highways, old walpole road: Work on the new roundabout at the Maple Avenue/Court Street/Route 12A and Old Walpole Road intersection begins today in Keene.
Monday, June 4, 2012
Sunday, June 3, 2012
It's Time to Pass CM/GC Legislation for Transportation Projects!
Construction Manager/General Contractor (CM/GC) is a construction project delivery method that includes a qualifications-based selection for a designer, a qualifications-based selection for a contractor, and as the project scope is better defined, a lump sum price from that same contractor. A qualifications-based selection is a selection process based solely upon qualifications without consideration of price. The opposite would be a low-bid selection where as long as the contractors are pre-qualified to do that type of work the selection is entirely based upon the lowest bid. The designer and contractor are both procured near the start of the project.
In previous years most construction projects were completed using a process called Design-Bid-Build (DBB). Using this process, the designer was selected using a qualifications-based selection, a construction plan set was created, and the owner procured a contractor using a low-bid selection process.
More recently Design-Build (D-B) delivery methodology has been used on more projects in the northeast. In this case the designer and contractor team together and provide the owner a lump sum price. There are different formulas being used to incorporate some qualifications into the decision, but the cost is the predominant selection criteria.
One of the strengths of DBB is that for State Transportation Agencies this is the incumbent system. Their staff has been trained on this methodology throughout their careers, their systems and protocols are designed for this methodology, and through a contractual relationship with the designer, they have a great deal of control over the contract plans. The disadvantages are that there is little/no contractor interaction during the design process that can result in constructability issues and that federal construction dollars can not be secured until the design is completed, the advertisement period is completed, and a contractor is under contract. With the fluctuation of federal funding and unforeseen delays on other projects, using this method requires States to have more projects "on-shelf". On-shelf projects are projects where the design is completed, but construction is not funded. These projects can be built if there is an influx of unanticipated money, but there is a risk of having these projects need to be updated if left on-shelf for too long.
D-B is a delivery method with a strong track record for expediting delivery on mega-projects, typically projects of more than $100 million dollars. Due to bonding requirements, these teams are almost always led by contractors with designers in a subcontractor/subconsultant role. Advantages include continuous contractor feedback throughout the design process, maximization of the contractor's staff and equipment in the design, and the ability to secure federal construction funds at about the 30 percent design stage.The disadvantages include a significant loss of control by the owner of the final product. Specifications will still need to be met, bu,t for instance, final aesthetics of a bridge could vary radically. Hidden disadvantages include taking the designer away from their traditional business model. A great example is insurance. Owners often require designers to increase their insurance requirements for D-B projects, but in many cases that is wasted expense. The reason is that Owner/Contractor contracts, which D-B contracts generally follow, are warranty-based. The contractor is warranting the product meets the contractual provisions. Their bonds follow suit. Designer's professional liability insurance is fault-based. As long as designers followed a reasonable standard of care, then their insurance doesn't kick in. The difference between a product warranty and an engineer's standard of care is very significant and could have significant ramifications for contractor, owner, and designer if the project goes poorly.
During the stimulus and period following the on-shelf projects dried up. To ensure federal construction dollars were spent D-B delivery was elected to spend the money, instead of only selecting the best delivery method for the projects.
Lastly, I cited the effectiveness of D-B methodology on mega-projects (exceeding $100M). The jury is still out about how D-B scales down to smaller projects. I suspect that the effective cutoff for construction costs is somewhere between $30-$50 million where the process routinely works well. At lower cost projects, designers are becoming almost an irrelevant commodity, but even contractors lose economies of scale to the process. There will always be projects that fit the process better or well-oiled teams that can make the difference on these smaller projects, but I think over time it will be proven that lower dollar D-B projects are not effective. Initially many companies are willing to take a loss to have D-B experience, but it is not reasonable to think that once these companies have this experience they will continue to chase projects that do not provide a reasonable return on investment.
I think the middle ground between DBB and D-B can be taken up by CM/GC. This process can be scalable down to smaller sized projects, maintain the owner control of the design process, provide constructability reviews by the actual contractors, and will allow federal construction dollars to be secured earlier in the process. The disadvantages include the need for legislative authority, the learning curve for owners and contractors, and getting contractors on board with qualifications-based selection.
Contractors had less of a learning curve with D-B, while the designer's business plan was turned on its head. CM/GC is the designer's revenge. The process will be very familiar for the designer, but the contractor will need to reform their marketing strategies, likely to include hiring new staff. The phrase often used is a "beauty contest". Some of the larger D-B firms I have worked with had marketing departments compatible with those of a design firm, but especially if CM/GC is scaled down to smaller projects many very competent contractors have non-existent marketing staffs and could require significant changes in their business philosophy.
Two recent projects I have been familiar with would have been great uses for the CM/GC methodology. One project was a D-B and one was a DBB. The D-B was a small project (under $10M) with significant risk from environmental, railroad, and Right-of-Way. Given the limited profit margins inherent on these low dollar D-B projects the risk was too great so we walked away. The CM/GC process would have allowed these risks to be better defined while still meeting deadlines for federal construction dollar allocation. Using D-B inappropriately will ultimately drive some good contractors from the market and lead to higher costs as competition diminishes. The second project was a DBB where the designer's approach and the contractor's approach were equally sound, but so different that the owner paid for design not used, effort to evaluate the contractor's methodologies, and a lot of time was lost from the schedule while ultimately ending up somewhere in the middle of the two approaches. Had this been CM/GC, the designer and contractor could have collaborated on the effort while securing the owner's blessing. With the knowledge of the means and methods of the contractor early items such as geotechnical borings, permitting, and right-of-way could be more strategically targeted to the contractor's approach. The result would have been a more efficient design targeting the contractor's strengths.
In summary each procurement methodology has its strengths and weaknesses, every project has its unique challenges, and owners, designers, and contractors have their own strengths, weaknesses, goals, and aspirations. By seeing each of these procurement options as only a tool as effective as the appropriateness of its use, a lot of very positive results can be obtained. D-B and DBB need to have CM/GC added to the tool box to provide State Agencies the right procurement methods to maximize limited transportation funding.
In previous years most construction projects were completed using a process called Design-Bid-Build (DBB). Using this process, the designer was selected using a qualifications-based selection, a construction plan set was created, and the owner procured a contractor using a low-bid selection process.
More recently Design-Build (D-B) delivery methodology has been used on more projects in the northeast. In this case the designer and contractor team together and provide the owner a lump sum price. There are different formulas being used to incorporate some qualifications into the decision, but the cost is the predominant selection criteria.
One of the strengths of DBB is that for State Transportation Agencies this is the incumbent system. Their staff has been trained on this methodology throughout their careers, their systems and protocols are designed for this methodology, and through a contractual relationship with the designer, they have a great deal of control over the contract plans. The disadvantages are that there is little/no contractor interaction during the design process that can result in constructability issues and that federal construction dollars can not be secured until the design is completed, the advertisement period is completed, and a contractor is under contract. With the fluctuation of federal funding and unforeseen delays on other projects, using this method requires States to have more projects "on-shelf". On-shelf projects are projects where the design is completed, but construction is not funded. These projects can be built if there is an influx of unanticipated money, but there is a risk of having these projects need to be updated if left on-shelf for too long.
D-B is a delivery method with a strong track record for expediting delivery on mega-projects, typically projects of more than $100 million dollars. Due to bonding requirements, these teams are almost always led by contractors with designers in a subcontractor/subconsultant role. Advantages include continuous contractor feedback throughout the design process, maximization of the contractor's staff and equipment in the design, and the ability to secure federal construction funds at about the 30 percent design stage.The disadvantages include a significant loss of control by the owner of the final product. Specifications will still need to be met, bu,t for instance, final aesthetics of a bridge could vary radically. Hidden disadvantages include taking the designer away from their traditional business model. A great example is insurance. Owners often require designers to increase their insurance requirements for D-B projects, but in many cases that is wasted expense. The reason is that Owner/Contractor contracts, which D-B contracts generally follow, are warranty-based. The contractor is warranting the product meets the contractual provisions. Their bonds follow suit. Designer's professional liability insurance is fault-based. As long as designers followed a reasonable standard of care, then their insurance doesn't kick in. The difference between a product warranty and an engineer's standard of care is very significant and could have significant ramifications for contractor, owner, and designer if the project goes poorly.
During the stimulus and period following the on-shelf projects dried up. To ensure federal construction dollars were spent D-B delivery was elected to spend the money, instead of only selecting the best delivery method for the projects.
Lastly, I cited the effectiveness of D-B methodology on mega-projects (exceeding $100M). The jury is still out about how D-B scales down to smaller projects. I suspect that the effective cutoff for construction costs is somewhere between $30-$50 million where the process routinely works well. At lower cost projects, designers are becoming almost an irrelevant commodity, but even contractors lose economies of scale to the process. There will always be projects that fit the process better or well-oiled teams that can make the difference on these smaller projects, but I think over time it will be proven that lower dollar D-B projects are not effective. Initially many companies are willing to take a loss to have D-B experience, but it is not reasonable to think that once these companies have this experience they will continue to chase projects that do not provide a reasonable return on investment.
I think the middle ground between DBB and D-B can be taken up by CM/GC. This process can be scalable down to smaller sized projects, maintain the owner control of the design process, provide constructability reviews by the actual contractors, and will allow federal construction dollars to be secured earlier in the process. The disadvantages include the need for legislative authority, the learning curve for owners and contractors, and getting contractors on board with qualifications-based selection.
Contractors had less of a learning curve with D-B, while the designer's business plan was turned on its head. CM/GC is the designer's revenge. The process will be very familiar for the designer, but the contractor will need to reform their marketing strategies, likely to include hiring new staff. The phrase often used is a "beauty contest". Some of the larger D-B firms I have worked with had marketing departments compatible with those of a design firm, but especially if CM/GC is scaled down to smaller projects many very competent contractors have non-existent marketing staffs and could require significant changes in their business philosophy.
Two recent projects I have been familiar with would have been great uses for the CM/GC methodology. One project was a D-B and one was a DBB. The D-B was a small project (under $10M) with significant risk from environmental, railroad, and Right-of-Way. Given the limited profit margins inherent on these low dollar D-B projects the risk was too great so we walked away. The CM/GC process would have allowed these risks to be better defined while still meeting deadlines for federal construction dollar allocation. Using D-B inappropriately will ultimately drive some good contractors from the market and lead to higher costs as competition diminishes. The second project was a DBB where the designer's approach and the contractor's approach were equally sound, but so different that the owner paid for design not used, effort to evaluate the contractor's methodologies, and a lot of time was lost from the schedule while ultimately ending up somewhere in the middle of the two approaches. Had this been CM/GC, the designer and contractor could have collaborated on the effort while securing the owner's blessing. With the knowledge of the means and methods of the contractor early items such as geotechnical borings, permitting, and right-of-way could be more strategically targeted to the contractor's approach. The result would have been a more efficient design targeting the contractor's strengths.
In summary each procurement methodology has its strengths and weaknesses, every project has its unique challenges, and owners, designers, and contractors have their own strengths, weaknesses, goals, and aspirations. By seeing each of these procurement options as only a tool as effective as the appropriateness of its use, a lot of very positive results can be obtained. D-B and DBB need to have CM/GC added to the tool box to provide State Agencies the right procurement methods to maximize limited transportation funding.
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