breakthroughs in tunneling short course 2016

Breakthroughs in Tunneling

Short Course 2016 Tunnel Costing and Scheduling

Presented By: Jim Peregoy

Peregoy Construction Services

Tunnel Costing and Scheduling

I. Document Review and Site Investigation

II. Production Estimate III. Schedule IV. Cost Estimate V. Job Costing VI. Wrap-Up and General

Questions


I. Document Review and Site Investigations

A. Geotechnical Information B. Contract Requirements C. Special Conditions of Contract D. Specifications E. Plans/Drawings F. Site Visit


I. Document Review A. Geotechnical Information

1. Site Investigations a. Adequate b. Additional Required – Ability to Perform

2. Geotechnical Reports a. Data Report b. Design Report c. Interpretative Report d. Baseline Report

3. Is there adequate information

Tunnel Costing and Scheduling I. Document Review (continued)

B. Contract Requirements 1. Risk

a. Geotechnical b. Contractual

2. Standard Terms and Conditions a. Time Requirements/LD’s b. DSC/Change Clauses c. DRB Requirements d. M/D/W/L/SBE Requirements e. Permitting f. Licenses g. Insurance Requirements h. Payment/Retention Clauses


I. Document Review (continued) C. Special Conditions of the Contract

1. Bonus/Penalty Clauses 2. Contract Mandated Subcontractors or

Suppliers 3. Other


I. Document Review (continued) D. Specifications

1. Standard a. Local b. Regional/National

2. Special a. Allowable/Required Means and Methods b. Alternate/Workable Means and Methods c. Item Descriptions


I. Site Investigation E. Plans/Drawings F. Site Visit

1. Work Locations a. Accessibility b. Size c. Utilities d. Conflicts e. Additional Requirements f. Special Rules

2. Crewing a. Open/Closed Shop b. Hiring Requirements c. Local Availability/Import


I. Site Investigation (continued) E. Site Visit (continued)

3. Suppliers a. Availability b. Status – M/D/W/L/SBE c. Local/Regional/National

4. Services/Subcontractors a. Availability b. Status – M/D/W/L/SBE c. Work Items d. Typical Requirements


II.Production Estimate A.General Underground Work Conditions B.Means and Methods C.General Production Groups D.Takeoff E.Crewing F.Materials G.Equipment H.Subcontractors


II. Production Estimate A. General Underground Work Conditions

1. Specific Location 2. Confined Space 3. Long Distance Operations 4. Linear Operations 5. Linear Crew Support 6. Material Delivery 7. Limited Hoisting Capability 8. Concurrency 9. Production/Productivity Factors 10. Maximum/Average Production


II. Production Estimate (continued) B. Means and Methods

1. Selection a. Shaft/Portal b. Tunnel/Microtunnel

2. Special Requirements a. Preferred Method b. Typical verses Special Method c. Proven verses Unproven

Method/Material


II. Production Estimate (continued) C. General Production (and Cost)

Groups 1. Mobilization/Demobilization 2. Shaft/Portal Construction 3. Tunnel/Microtunnel Construction 4. Structure/Other Construction


II. Production Estimate (continued) D. Takeoff E. Crewing

1. Base Crews a. Shaft/Portal b. Tunnel/Microtunnel c. Structures/Other Work d. Closed Shop (Union) Considerations

2. Shaft/Portal Support Crews a. Hoisting b. Material Management c. Utility Control

3. General Project Support Crews a. Electrical/Mechanical Repair b. Engineering/Fabrication

Tunnel Costing and Scheduling II. Production Estimate (continued)

F. Materials 1. Typical 2. Non-Typical

G. Equipment 1. Type

A. Production B. Support

2. Quantity A. Number Required for Operation B. Back-up and Spares

3. Availability 4. Utilization

H. Subcontractors


III. Schedule A. Milestones B. Project Requirements C. Estimated Times D. Grouping E. Concurrency


III. Schedule A. Milestones 1. Bid Date 2. Begin Project Construction 3. Interim Milestones

4. Project Completion B. Project Requirements 1. Special Use Areas 2. Partial Completion 3. Other C. Estimated Times


III. Schedule (continued) D. Grouping E. Concurrency

1. Mobilization 2. Add Shaft/Portal 3. Add Tunnel/Microtunnel 4. Add Structures/Other Work 5. Demobilization

F. Check Requirements


IV. Cost Estimate A. Cost Categories B. Labor Cost C. Material Cost D. Service Cost E. Subcontractor Cost F. Equipment Cost G. Review of Estimate

Tunnel Costing and Scheduling IV. Cost Estimate A. Cost Categories 1. Direct Costs 2. Jobsite Indirect Costs B. Labor Cost 1. Closed Shop (Union) Wages 2. Prevailing Wages 3. Contractor Wages C. Material 1. Taxes 2. Quantities 3. Additives 4. Specialty 5. Miscellaneous


IV. Cost Estimate (continued) D. Service Cost 1. Engineering 2. Insurance/Bonding 3. Utilities 4. Survey 5. Cleanup/Janitorial 6. Permitting 7. Security 8. Disposal Site 9. Hotel/Per Diem/Subsistence 10. Freight 11. Equipment Fueling/Maintenance

Tunnel Costing and Scheduling IV. Cost Estimate (continued) E. Subcontractor Cost 1. Typical 2. Specialty 3. Support Costs F. Equipment Cost 1. Ownership 2. Operation 3. Reconciliation 4. Cost Sourcing G. Review of Estimate 1. Final Reconciliation 2. Escalation 3. Typical Heavy Civil Underground Splits 4. Typical Direct Verses Indirect Splits


V. Job Costing A. Cost Accounts B. Estimate to Budget Transformation C. Job Reporting D. Project Accounting 1. Labor Reports 2. Full Cost Reports


VI. Wrap Up and General Questions A. Document Review and Site Investigation B. Production Estimate C. Schedule E. Cost Estimate F. Cost Accounting


Thank You

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Breakthroughs in Tunneling Short Course 2016 University of Colorado

September 12 – 15, 2016 Unit 31


Introduction: Presenter: Jim Peregoy Affiliation: Principal – Peregoy Construction Services Experience: 40 Years in Heavy Civil and Underground Construction

Opening Comments

Presentation Format (general order of performance): I. Document Review and Site Investigation II. Production Estimate III. Schedule IV. Cost Estimate V. Job Costing VI. Wrap Up and General Questions

I. Document Review and Site Investigation A. Geotechnical Information

1. Site Investigations a. Adequate – Are the included investigations adequate to build the project – Is more

information necessary to submit a reasonable bid b. Additional Required/Ability to Perform – If more information is required, who will

perform the work – Is there a contractual avenue to actually perform additional work prior to the acceptance of bids – Who will have access to the additional information – Who will pay for the developing the additional information – How will any additional information affect the contract

2. Geotechnical Reports a. Data Report – Gives information on the character of the materials gathered and tested b. Design Report – Gives the basis of the design based on the geotechnical data report c. Interpretative Report – Gives the interpretation of the geology by the writer of the

report – It IS NOT a document that is intended to be a complete rendering of all possible geologic conditions that may occur at the site during construction – May be as much of a hindrance as a help – Contractor must make his own informed decision regardless of the geologist opinions – Usually accompanied by a disclaimer stating that the interpretation may not reflect the actual conditions at the site

d. Baseline Report – Intended to give baseline conditions for the project - Allows all bidders to price the same geotechnical risk into the project – Any condition worse than that shown in the baseline is for the Owners account – Any condition better than that discussed in the baseline is for the Contractors account

Breakthroughs in Tunneling Short Course – 2016 Unit 31 – Tunnel Cost and Scheduling CU – September 12-15, 2016 aaaa

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B. Adequate Information – Is there enough information to allow Contractor to offer a bid that is not burdened with numerous contingencies reflecting uncertainties for geotechnical conditions – Not all entities have the same issues – The entity who sees less risk will generally have a lower price

C. Contract Requirements 1. Risk

a. Geotechnical – Is the contractor satisfied enough with the information to bid on the work – Includes all information set out in the geotechnical baseline report

b. Contractual – Are there contractual clauses (or lack of clauses), or any other condition, that prevents the Contractor from offering a bid (time allowed, local conditions, no DSC or DRB clause, onerous Owner, inexperienced Engineer, etc.)

2. Standard Terms and Conditions a. Time – Is the time allowed to complete the work sufficient (or deficient, or much too

long) – What are the early/late start dates – Will the schedule cause an abundance of multiple shift operations – Are resources available as, and when, required – Will time be an issue for changes to the work – Will the Owner man the project for the entire period and how must the Contractor man the project to satisfy the terms of the contract – Penalties for late completion

b. Differing Site Conditions/Change Clauses – Allows Contractor to recover additional cost IF the character of the materials at the site differ materially from that which was portrayed AND the Contractors cost increases as a result – Allows changes to the work (and price) to overcome unanticipated conditions

c. DRB Requirements – Allows an outside team, comprised of experts selected by both the Owner and Contractor (and Consultant, depending on type of contract), to analyze disagreements and offer their opinion – May be binding or non-binding

d. M/D/W/L/SBE Requirements – Are there special requirements (or goals) to employ minority/disadvantaged/women-owned/local/small businesses while building the project – Are the goals reasonable for the nature of the work – Do the goals hinder the amount of work that MUST be performed by the Contractor due to the character of the project and highly specialized nature of underground work

e. Permitting – What special permits are required for the local area – Is there special procedures to obtain the permits – What permits have been obtained which permits are to be obtained by contractor – Clear definition

f. Licenses – Are there special licenses required to operate in the area g. Insurance Requirements – Are there special insurances (Railroad Protective,

Excess/Umbrella Liability, Errors and Omissions, Builders Risk, Flood/Earthquake, etc.) that may, or may not, be available to any Contractor for any project

h. Payment/Retention Clauses – Will there be sufficient payment in adequate time to cover the costs incurred – Is the retention clause reasonable for the risk incurred – Will there be a “cost of money” item to be added to the estimated cost of the project to cover the wording of the payment and retention clauses

D. Special Conditions of the Contract 1. Bonus/Penalty Clauses – Is there penalty a clause for late completion – Is there a bonus

clause for early completion – Are the bonus/penalties reasonable – Does the project time allow the project to be reasonably completed w/o invoking the penalty clause – Is there a chance to earn the bonus

2. Contract Mandated Subcontractors/Suppliers – Is the TOTAL cost included in the bid documents – Will there be a competitive bidding process – What is the risk for using that entity in the total context of the project – Is there any (positive/negative) history w/ that entity – How is the time of performance tied to the contract


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3. Other – Are there any special conditions that are out of the ordinary and will require time and/or cost to complete (utility relocation, easements, permits, special consideration for land owners, etc.)

E. Specifications – Means and methods verses performance based 1. Standard

a. Local – Has the contractor had to comply with the specifications on past projects – Are the specifications reasonable – Are there any “special” circumstances in the specifications that cause the means and methods to vary outside the normal industry standard limits

b. Regional/National – Do the specifications accurately reflect the work to be completed – Are any of the specifications not reasonable for the location of the work – Will the means and methods for the area be affected by the specifications

2. Special a. Allowable/Required Means and Methods – Are the means and methods specified

applicable to the work – If so, are they w/i the Contractors reasonable capabilities – If not, are there avenues for use of different methods

b. Alternate/Workable Means and Methods – Performance specifications – Are alternate methods allowed for the project – Is there a better method than now specified – Who takes the risk of the methods

c. Item Descriptions – What is included in each pay item – What is not included in any pay item but required for the complete project (site work, utility connections, material disposal, etc.)

F. Plans/Drawings – Minor notes in the standard, or detailed, plans may have an effect on the cost, and performance, of the work

G. Site Visit 1. Work Locations

a. Accessibility – Is the site accessible for the delivery of equipment – Are special arrangements needed due to the individual locations (haul units, special trailers, extra hoisting, etc.), permit conditions, public notification, etc.

b. Size – Will the operations be compromised because of the size of the site – If the site is too large, who has the responsibility of protecting the public for the duration of the project – If the site is too small and another site is required, who has responsibility for traffic control and movement between the sites – Is there additional property provided in the terms of the contract – Will the Contractor have to find additional work areas – What are the costs associated w/ split site work

c. Utilities – Are the required utilities available in the required quantities – What are the costs to bring in, use, and remove each utility – Is there any impact to the surrounding area

d. Conflicts – Who resolves conflicts between the entities using locations – Is there something that is installed under one contract and removed under another (installed in first contract for ease of work but not used until a follow-on contract that is essentially un-related to the initial work) – Are there any (non-standard) costs to be incurred to use the sites – Are there Owner installed utilities

e. Additional Requirements – Are there any special requirements due to the actual location and the surrounding area (100 year flood elevations, noise limitations, CO2 emissions, lighting restrictions, work time restrictions, etc.)

f. Special Rules – Are there special rules for easements – Are there any special rules due to the actual locations (local statutes, seasonal limitations, etc.)


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2. Crewing a. Open/Closed Shop – Will the contractor be allowed to hire and release as he deems

appropriate or necessary – Are there rules for numbers of personnel for a particular operation – Who determines which group has jurisdiction over what operations – How will non-local labor be utilized within the general rules for the area

b. Hiring Requirements – Are there affirmative action rules – Are there apprentice or training requirements

c. Local Availability/Import – Is there sufficient local based labor to construct the project, as well as any other or follow-on work in the area – If labor is to be imported, must it fit the rules of the local area

3. Suppliers a. Availability – Are there enough local suppliers to generate competition for the business

and reasonable assurance of supply as, and when, needed – If one entity can’t produce, are there others who can be used in a time of need – What is the cost implication of such an action

b. Status – M/D/W/L/SBE – Are there enough local suppliers of the correct designation to allow the work to be reasonably built under those requirements – What are the cost parameters of using such an entity – Are there any contractual limitations for using such entities

c. Local/Regional/National – If non-local suppliers are required, how many other suppliers exist and what is the price differential to use them for the project – Will their products be available as, and when, needed

4. Services/Subcontractors a. Availability – Are there enough local service providers or subcontractors to generate

competition for the business – If one entity can’t produce, are there others who can be used in a time of need – What is the cost implication of such an action

b. Status – M/D/WL//SBE – Are there enough local service providers or subcontractors of the correct designation tom allow the work to be built under those requirements – Are there any contractual limitations for using such entities

c. Work Items – Do any of the work items require the use of specialty suppliers or subcontractors – Will there be reasonable competition for the work

d. Typical Required Service Providers and Subcontractors i. Hauling – Removing the excess soil and rock form the project sites

ii. Disposal Sites – Permanent disposal of the excess soil and rock

II. Production Estimate – This presentation will deal only w/ crew/production estimating and will not address estimates generated by applying past unit prices to quantities for future projects – The former method is the method generally used by Contractors to estimate, bid, win, and successfully construct work – The latter is dangerous for contractors to use since each project is different and unit prices from a previous project (even if similar in scope and area) do not generally reflect the cost of the work for future projects A. General Underground Work Conditions

1. Specific Location – Must build work in the intended position regardless of the actual site conditions – A deviation from line and/or grade is usually accompanied by some sort of re-alignment or reconstruction effort – No option (normally) to change equipment if conditions are not as expected – Equipment selection is extremely important

2. Confined Space – No option to increase crews to increase production – No option (generally) to switch equipment – Specific crew requirements for performing operations – Crew requirements may actually impede progress if the work area is too small


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3. Long Distance Operations – For long tunnels, access may not be available at intermediate points – Support services need special consideration – Increased distance usually requires more crew, more equipment, and more support operations (multiple passing tracks in a tunnel, power or ventilation boosters, etc.) – Additional personnel and/or equipment requirements may be short-lived and need to be balanced against the overall needs of the project

4. Linear Operations – Each operation is generally followed by a subsequent operation – Few options to perform concurrent operations to minimize support crewing

5. Linear Crew Support – Must provide crews at each change of direction or operation (i.e. shaft/portal surface, shaft/portal invert, end of trailing gear, machine face, etc.)

6. Material Delivery – Underground operations require materials to be delivered as a part of the production operation – While support for tunneling may have a minimal effect on production, material mobilization for shafts/portals is always on the critical path (limited hoisting and access to the surface)

7. Limited Hoisting Capability – Any project that includes shaft access will necessarily have issues with the number of hoisting lines that can be used within the shaft – The number of lines determines the speed of the various operations and the maximum production on the project – Shaft diameter is critical and there is a minimum practicable size

8. Concurrency – Strive for as many concurrent operations as possible – Any combination that allows a greater use of a support crew will necessarily reduce overall cost

9. Production/Productivity Factors – All work items have a production/productivity factor associated w/ them – Setup and removal items are usually governed by time while specific production units are governed by “so-called” man-hour factors (what a normal man can accomplish in one hour on a sustained basis) – Support crews are either included, or specifically excluded, in the typical records of man-hour considerations for each Contractor – The factors for underground work generally show much less overall production than other factors since there is limited (confined) space (and therefore a limited number of workmen) and more support (non-production) personnel are required for each unit of work – Factors for typical items of work are generally estimated as separate line items in the production analysis and recovered in the job costing in the same manner

10. Maximum/Average Production – The actual setup of equipment always determines the maximum production – Since the average production some percent of the maximum number, equipment layout and setup are critical for high production work

B. Means and Methods 1. Selection – Must give careful consideration – Will always determine success of project –

Shaft/portal work may be equally as important as tunnel/microtunnel work a. Shaft/Portal – Generally typical for the area and geotechnical conditions

i. Contract Required – Are there specified methods and will they work – Are they cost effective – Will a subcontractor be involved

ii. Alternates – Are alternate methods available – Will they be allowed – Who has the risk of performance – Will a subcontractor accept that risk (of performance)

b. Tunnel/Microtunnel – Specific for local geotechnical conditions – May also be area related (but not always)

i. Contract Required – Are there specified methods and will they work – Are they cost effective

ii. Alternates – Are alternate methods available – Will they be allowed – Who has the risk of performance

2. Special Requirements – Great variance in Contractors, personnel, and their use of methods a. Preferred Method – What method is the contractor is more comfortable performing (i.e.

dewatering verses compressed air verses EPB TBM, etc.) – Driven to some extent by the Contractor preferred method


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b. Typical verses Special Method – What experience do supervision and crews have with the methods – Will there be special conditions for a given entity to employ that method

c. Proven verses Unproven Method/Material – Will methods and/or materials used in another application be useful for the current situation

C. General Production (and Cost) Groups 1. Mobilization/Demobilization

a. Pre-Project Costs – Bonds, insurance premiums, special material/equipment/service down payments (material or equipment), outside services (engineering, submittals, scheduling), permits, etc.

b. Site Work – Clear & grub, dirt work, utilities, geotechnical membrane, rock base, silt fencing, fencing, sound walls, etc.

c. Equipment Setup/Disassembly – Utilities, compressed air plant, ventilation plant, cranes/hoisting plant, production equipment, loaders, shop, offices, dryhouse, etc. – All including loading, freight and off-loading

d. Restoration – Remove all previous site work, roadwork, settling ponds, etc. – Repair/replace concrete flatwork, areas damaged through construction operations, sodding/seeding, landscaping, etc.

2. Shaft/Portal Construction a. Excavation/Support – Size of shaft/portal for project needs and/or for final

configuration (may be much different) – Hand digging, machine digging, drill/blast/muck for excavation – Ring beam, lagging, liner-plate, rock bolts, wire fabric, shotcrete, concrete, segments, ground freezing, caisson, sheet piles, soldier piles, slurry walls, etc. for support – Groundwater control (pre/in-situ/post grouting {consolidation-compensation-compaction-contact}, pumping, vacuuming, etc.)

b. Completion Work – Concrete work (surface prep. resteel, forming, placing, finishing, coating, etc.) – Backfill (hand, machine, sand/cement grout, etc.)

c. Other – Site mobilization or preparation and demobilization or restoration

3. Tunnel/Microtunnel Construction a. Special Setup/Removal – Convert shaft/portal to tunneling operations, setup tunneling

equipment, remove tunneling equipment, remove shaft/portal equipment, etc. b. Excavation/Support/Lining – Excavation may include: tail and/or starter tunnels,

typical tunnel excavation and support, shaft/portal support, project support, maintenance, clean excavation, etc. – Support may include: rock bolts, wire fabric, steel ribs, lagging, liner-plates, shotcrete, spiling, concrete segments, etc. – Lining may include: two cleanups, installation of the lining; grouting, patching, connections, testing, etc.

c. Linear Nature – General operations in the tunnel/microtunnel are linear and one has to follow another – A problem with any operation will generally delay the entire sequence of operations – Try to size crews to allow concurrent activities to occur during the same reasonable time frame to minimize re-work

4. Structure/Other Construction a. Excavation/Support/Lining – Similar to the issues w/ shaft/portal construction w/ open

cut as a potential excavation/support method – May be off-line (not involved w/ the tunnel) and allow some concurrent operations

b. Other – Site mobilization or preparation and demobilization or restoration, unit price items, ancillary items, etc.

c. Generally Non-Linear – If off-line, may be performed at some convenient time before the project is completed to allow crews to be utilized in an efficient manner

D. Takeoff – Takeoff is generally much simpler for the shaft and tunnel operations – It does not have the same complexity as other construction for structures or other


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work – When takeoff quantities for shafts and tunnels differ greatly from the bid items, make sure there an understanding of why the quantities are different, cost the proper amount of work, and take the difference into account when closing and bidding the project

E. Crewing 1. Base Crews

a. Shaft/Portal – Generally include foremen, bottom workers, mucking, hoisting, and support materials delivery – Will generally include some time from the on-site repair personnel

b. Tunnel/Microtunnel – Generally include supervision, foremen, heading workers, tunnel workers (behind the heading), on-location repair personnel (mechanical and electrical), utility install/repair personnel, shaft/portal bottom-men and top-men, hoisting, and support material

c. Structures/Other Work – Generally include foremen, in-shaft workers, mucking, hoisting, specialty workers and support material delivery

d. Closed Shop (Union) Considerations – Make sure there us an understanding of what organization claims what work as well as the foreman or manning requirements for each organization

2. Shaft/Portal Support Crews – Tunnel Construction a. Hoisting – Include crane operator(s) and oiler (if required) b. Material Management – Include loader (or small crane) operator and laborers c. Utility Control – Generally laborer(s)

3. General Project Support Crews – All Operations a. On-Site Mechanical Repair – Include master mechanic, mechanical supervision, and

mechanic(s) and/or welder(s) b. On-Site Electrical Repair and Support – Include master electrician, electrical

supervision, and electrician(s) c. On-Site Engineering/Fabrication – Include field engineer and mechanic/welder(s) –

May be from a different bargaining unit than similar needs in other areas

F. Materials 1. Typical – Local availability – May need to expand material list developed during site visit 2. Non-Typical

a. Sourcing – Usually known by tunneling contractors or those familiar w/ the work b. Availability verses Time – Will the special products be available as, and when, needed

in sufficient quantities to complete the work w/o delay c. Competition – Are enough sources available to allow competitive pricing

G. Equipment 1. Type

a. Production i. Typical Operations – Drilling equipment, grouting equipment, excavation

equipment (track-hoes, excavators, etc.), loading equipment, generators, hoisting equipment (general cranes), and hauling equipment

ii. Special Operations – Availability issues – TBM’s and shields (w/ complete backup systems), drilling equipment (hand, mounted {shaft, tunnel}, etc.), grouting equipment (special), mucking equipment (LHD, overshot, Hagglund, etc.), special hoisting equipment (special cranes, vertical belt, alimak, man-elevator, work decks, etc.), conveying equipment (both horizontal, inclined, and vertical), concrete equipment (forms, distributors, transports, pumps, buckets, etc.), linear plant (water,


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air, air, discharge, concrete/shotcrete, rail, ties, vent bag/line, etc.), rolling stock (locomotives, muck cars, special transport cars, flat cars, etc.), and ventilation equipment (fans, boosters, storage units, etc.)

b. Support – Compressed air plant, pumping equipment, electrical equipment, and shop equipment

2. Quantity a. Number of Sets Required – How many concurrent operations (shaft/portal support and

structures or other work) b. Backup/Spares Required – Requirements for number of backup units or spares for each

applicable unit (rolling stock, muckers, drills, cranes, etc.)

3. Availability – Ownership – Internal rent – External rent – Purchase/Salvage – Combination 4. Utilization – Project time compared to actual use (Ownership verses Operation) – Very

important in total cost for project

H. Subcontractors 1. Savings over self-performed in area – General operations that are easily sub-divided from

the balance of the project – Specialty subcontractors are generally more experienced, have greater efficiency, and are less expensive

2. Required by nature of work – Divers, haulers, near-surface concrete work, special linings (Raven, T-Lok, Linabond), etc.

III. Schedule – Develop based on best knowledge at the time of bid – Modify as needed before starting work – At start, establish baseline for future comparisons – Schedule is greatly affected by season A. Milestones

1. Bid Date – May be moved several times during the bidding period – Understand the relationship of scheduled items in the event the date slips (sometimes several months) and how a new set of seasons may affect the project

2. Begin Project Construction – Depends on contract and conditions – May be a range of dates – Generally pick the early start and understand that the schedule may slip – Same understanding about how a different seasonal start affects the overall project

3. Interim Milestones – Are there any project requirements where a site is not available until a specified time or a site must be turned over to another entity before completion of the work

4. Project Completion a. Substantial – All work done and Owner can take over basic project – Small work items

and punch-list remain b. Final – All work completed on the project including demobilization and final surface

cleanup

B. Project Requirements 1. Special Use Areas – Defined constraints for special areas – May be for a specified period of

time or for a specified duration – Understand specified time w/ regard to a different start than presumed

2. Partial Completion – May need to turn over work prior to final completion – May affect other start/finish operations

3. Other – After developing the schedule make sure that all requirements are still met – If start is modified, make sure the requirements are still met

C. Estimated Times – Time estimates developed in II. Production Estimate (previous) should be entered into each section – Add minor time allowances for unforeseen site or weather conditions or poor project interface – The least expensive method (single/double/triple shift and five/six/seven days per week) for any typical project should


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be used in the first run – Modifications must be made if the least cost scenario does not meet the project schedule requirements

D. Grouping – Each production group (II.C. previous) should be scheduled together to allow a complete look at the project in terms of resources (personnel and equipment) required – A critical path may be developed so long as the path may be modified if the start date changes – Add a group for pre-site work (typically design work and submittals) to show when that work must be completed to make sure each section of the work begins as needed – The exercise will also assist in determining when project indirect personnel are required for the work and how many man-months will be required to complete the project

E. Concurrency – Schedule as much concurrency as possible so long as resources are available (and costed into the work) 1. Mobilization – At the beginning of the project and as the initial work at each separate site 2. Add Shaft/Portal – As soon as any site is ready, and the submittals are complete, begin

adding this work as a concurrent items (where possible) 3. Add Tunnel/Microtunnel – After the initial shaft/portal is complete, from which the tunnel

will be driven, add the individual tunneling items 4. Add Structures/Other Work – Theses items are generally scheduled when convenient and

no shaft/portal work is necessary to maintain the tunnel items 5. Demobilization – Generally show a demobilization for each site and the total project – As an

alternative, show a demobilization for each work type and the total project

F. Check Requirements – When the schedule is complete check, and double check, to make sure all project requirements are met

IV. Cost Estimate – Presentation presumes that both the production estimate and the schedule are complete A. Cost Categories – Some part of the direct costs are generally used the basis for spreading

jobsite indirect costs (and margin) to determine the total cost of a bid item (and the final bid price) 1. Direct Costs – Those costs directly attributable to an item of work – Labor, materials,

services and subcontracts are generally obvious – Equipment may not be as obvious but should be priced, to the greatest extent possible, in the direct costs so that a true cost is generated for the purposes of determining cost for quantity variations while the project is in process – Equipment handled in the indirect cost will not have the same effect when spread on the basis of labor or total item cost – These costs will be developed and grouped according to the groupings discussed in I.D.2.c and II.C previously – Any cost type (labor, materials, services, subcontractors, or equipment) can be a direct cost

2. Jobsite Indirect Costs – Those costs necessary for a project but not for any specific item of work – These costs may be spread to the direct costs on the basis of the labor, or total cost (w/ or w/o subcontracts) of the direct items – Each Contractor has a method for collecting these costs for analysis and comparison to previous similar projects a. Labor – Site supervision, engineering, equipment repair, material delivery, and typical

on-site office staff b. Materials – Only those that can be considered consumed on the project c. Services – Typical for the entire project d. Subcontractors – Only for those that span several items or groups of items e. Equipment – Only those items which are specific indirect items (trucks, settling tanks,

offices, dry house, powder magazine, etc.) – Small corrections to the total project equipment cost are generally made in these costs


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B. Labor Cost – Includes base wage, premiums, fringe benefits (health insurance, pension, vacation, etc.), insurance (FICA, FUET, SUET, Workmen’s Compensation, etc.) – May also include insurances that are based on the labor value of a contract (general or umbrella liability, etc.) – The premium portion of the wage will directly follow the presumptions built into the schedule (III. previously) 1. Closed (Union) Shop Wages – Generally include fringe benefit items specifically for the

unions (dues, safety, training, etc.) – Also may modify the crewing for the project (adding oiler, compressor operator, generator operator, brakeman, etc.) – Generally north of the Ohio River (projected west) and north of San Diego County (in California)

2. Prevailing Wages – Usually on government sponsored projects – May or may not be on traditional closed (union) shop projects – Generally reflect the closed (union) shop costs for the area (but not always) – Sometimes these wages are too low to attract the type of labor necessary to efficiently build the work and the Contractor will pay more than required – Consider time allowed for project to consider escalation

3. Contractor Wages – In traditional open shop areas the Contractor will determine the wages, fringe benefits and crewing – Generally in areas that are south of the Ohio River (projected west) and San Diego County (in California) – Wages must reflect the conditions of the area as well as the project – Consider time allowed for project to consider escalation

C. Material Cost – Permanent and consumable 1. Taxes – Taxes generally don’t apply to materials that are incorporated into the work – Taxes

always apply to materials that are not a final part of the work and are consumed while building the project

2. Quantities – Some quantity of waste and or overage should be added to each material – Concrete, shotcrete, and other filler materials generally depend on the excavated volume and a factor of 3% to 50% must be added to compensate for such waste and overage – Special consideration must be given for specialty materials and any return policies – Also consider haul-off and disposal of materials wasted on the project

3. Additives – Special additives needed for some materials (possibly to put shotcrete to “sleep” and “wake up” for later use, fluidifier for concrete/grout, replaceable sleeves for packers, etc.)

4. Specialty – TBM cutters, spiling, lattice girders, dywidag rod, etc. 5. Miscellaneous – Small tools, safety supplies, welding supplies, fasteners (bolts, nuts,

washers, etc.) office supplies, postage, dunnage, etc. – Consider time allowed for project to consider escalation

D. Service Cost – Include sales and/or use tax as applicable 1. Engineering – Schedule, submittals, reading instruments, etc. 2. Insurance/Bonding – Any special requirements for project 3. Utilities – Water, sewer, electric, gas, etc. for all operations (office, shop, tunnel and

shaft/portal) – Make sure cost priced in the equipment operation is not duplicated here 4. Survey – Self-performed or specialty contractor (special needs for underground work) 5. Cleanup/Janitorial – Regular site maintenance – Include containers and haul-off –

Remember settling tanks and pond and their cleanup/removal at the end of the project 6. Permitting – Sometimes may need help navigating the permitting issues in the local areas 7. Security – Based on site location and level needed – Special service or general personnel 8. Disposal Site – May need separate sites for soil, rock and waste – May need site for

contaminated materials – Generally permitting required for each site 9. Hotel/Per Diems/Subsistence – Contractors personnel and/or personnel imported to the site –

Include travel costs for crew 10. Freight – To, from, and w/i the project – Decisions based on equipment location prior to

project and projected location of equipment after work – May be highly variable – Past costs per type of project generally control cost allowed for a given Contractor


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11. Equipment Fueling/Maintenance – Typical in large urban areas where such services are available – Make sure cost priced in the equipment operation is not duplicated here

E. Subcontractor Cost 1. Typical – Muck haul, site work, concrete flatwork, landscaping, restoration, etc. 2. Specialty – Geotechnical, site work, grouting, dewatering, support of excavation (slurry wall,

secant piles, soldier piles, ground freezing, caisson, etc.), structural concrete, etc. 3. Support Costs – Make sure subcontractor quotes are complete – Add costs (including sales

tax as applicable) where necessary to generate complete costs

F. Equipment Cost – Two categories – Ownership must be for the length of equipment time on the project – Operation is only for the actual equipment use on the project – Both components should be estimated independently to accurately reflect both costs – A reconciliation should be made at the completion of the job cost estimate to make sure that the total equipment cost accurately reflects the work to be performed 1. Ownership – All dependent on number and type of equipment

a. Internal – Contractors fleet b. External – Local outside rental – Include sales tax c. Purchase/Salvage – Special equipment required for project – Equipment not in

Contractors fleet – May be better for total cost to Contractor than internal or external rental – Include sales tax

d. Combination – For multiple sets may use multiple cost types

2. Operation – Include sales tax a. Fuel – Gasoline, diesel, natural gas, electricity – Don’t double costs up w/ services-

utilities b. Lubrication – Oil & grease c. Labor – Maintenance, repair, and overhaul labor should be a part of the equipment cost

since it is driven by the equipment use on the project – Don’t double up costs w/ production support crews for mechanical repair or service cost for fueling/maintenance

d. Parts i. Repair – Major overhaul (engines, transmissions, etc.) and job-site repair (starters,

generators, brakes, etc.) ii. Ground Engaging Components – Bucket teeth, moll boards, tires, tracks, hard-

facing, etc. – Generally will not cost TBM cutters or picks here but will cost w/ special materials

iii. Undefined – These costs are specific to a particular machine or type of equipment

3. Reconciliation – Equipment cost reconciliation should be performed at the completion of the estimate AND before the final estimate is turned into a bid – Reconciliation at both times helps to make sure that any decisions regarding self-performed verses subcontracted work will not affect the total equipment charges required to construct the project

4. Cost Sourcing – Blue Book, USA CoE, CalTrans, contractor records, etc.

G. Review of Estimate – While each estimate is different from any other, certain relationships between the categories of cost generally hold true – A final check should be made for the relationship between all cost types as well as the relative percentages of direct and indirect costs for the entire estimate 1. Final Reconciliation – A final reconciliation of total cost should be made before turning the

estimate into a bid to insure that all decisions regarding: a) overtime, b) self-performed verses subcontracted work, c) equipment requirements, and d) scheduling requirements, remain within acceptable limits for the final version of the estimate


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2. Escalation – Factors regarding escalation of labor, materials, services, and subcontractors (not always) – Use of construction indices – Looking at past trends locally, regionally, and nationally – Generally paying attention to the factors that drive costs for all items (fuel being a driver in today’s market) – Single factors should be applied to a point between ½ and 2/3 of the schedule for the project

3. Typical Heavy Civil Underground Project Splits a. Labor – 30% to 50% of total cost b. Permanent Materials – 10% to 30% of total cost c. Consumable Materials/Services – 10% to 20% of total cost d. Subcontracts – 5% to 30% of total cost e. Equipment

i. Ownership – 8% to 15% of total cost ii. Operation – 5% to 10% of total cost

4. Typical Direct verses Indirect splits for Heavy Civil Projects a. Directs – 60% to 80% of the total cost b. Indirects – 20% to 40% of the total cost

V. Job Costing A. Cost Accounts – Generally similar to those for the production groups (II.C. previously)

B. Estimate to Budget Transformation – May or may not reflect bid item groups – Must make sense for the requirements of the project as well as the requirements of home office responsible for obtaining future work

C. Job Reporting – Accounts must make sense for job personnel – Must also be reasonably easy to use for home office personnel – Avoid large accounts where smaller accounts will give an accurate representation of the work – The accounts must be reasonable to allow monthly tracking of the project

D. Project Accounting – Reports necessary for successfully managing construction projects 1. Labor Reports – Typically on a weekly basis – Allows job personnel (down to the foreman

level) to analyze where the costs were during the previous period – Allows the optimum planning for future periods

2. Full Cost Reports – Typically on a monthly basis – Allows home office and project management to review progress and costs in a timely manner to identify future issues and cost savings or overages as early as possible

VI. Wrap Up and General Questions A. Investigations – Site and Contract B. Production Estimates C. Schedule D. Cost Estimate E. Job Costing

Peregoy Construction Services 456 Rascal Crossing

O’Fallon, Missouri 63366 [email protected]

breakthroughs in tunneling short course 2016

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