Big Dig, Boston -
a project brief
by Sean O' Neill
Director of Communications
Massachusetts Turnpike Authority
Planning and Funding Strategies
- Annual Finance
Plan - CA/T was the first Federal Transportation Project in the
nation to submit annual finance plans that identified the sources and
uses of Federal and third party funds. Subsequently the Federal Highway
Administration instituted a national policy that all projects greater
than $1B submit annual Finance Plans using the Project's finance plan
as their roadmap.
- Grant Anticipation
Notes (GANs) - In order to expedite the Project schedule and leverage
Federal funds, the Commonwealth was able to issue bonds that funded
the Project using out year Federal funds as the source for retiring
the bonds. This concept had not been previously utilized on any large
scale nationally but the Commonwealth of Massachusetts was able acquire
$1.5B of GANS, or Grant Anticipation Notes, with this innovative program.
Programs of this type were subsequently used by several other states.
- Advance Construction
with Partial Obligation Authority Conversions - The traditional
federal obligation process required a State to begin a Project once
the State had accrued sufficient obligation authority to fully fund
a particular contact or project. Massachusetts was able to spearhead
this AC technique where Federal Highway would commit to authorizing
a contract to proceed (through Advance Construction or AC) and as obligation
authority was distributed each year the State would dedicate that authority
to ongoing contracts that had been previously authorized. The Commonwealth
shaved at least ten years off of the Project schedule by introducing
this scheme in the early 90's. Today it is a commonplace practice for
all State's transportation programs.
of the Importance of the Statewide Program - The Commonwealth of
Massachusetts realized that funding the CA/T Project cannot impact the
transportation priorities for the balance of the State. Therefore in
the early years of the Project, the Commonwealth established policies
for the use of Federal funds that would collectively keep the Project
moving expeditiously but provide a level of satisfactory funding for
other capital transportation projects within the State.
Infrastructure Fund - In the late 1990's the Commonwealth established
a dedicated revenue stream for transportation funding that minimized
public concerns over the ability of the Commonwealth to provide their
share of the Project funding needs. The Transportation Infrastructure
Fund or TIF was created whereby revenue from drivers' licenses and other
auto related fees would be earmarked solely for transportation purposes.
- Third Party
Construction - Within the City of Boston there are several agencies
advancing their particular construction programs. The CA/T Project envelope
at times encroached on the footprint of these other projects. In order
to minimize disruption to the public, minimize constructability interfaces,
and thus reduce overall cost, it was an early Project policy that the
work of the two agencies be combined in common areas alleviating the
need to disrupt the public multiple times.
Cost Control and Reporting
- Safety Program
- The Project has continually adopted the concept of 'zero accidents'
on the Project. Safety awareness has been paramount in daily meetings,
regular site walk downs, and the overall Project culture. Although there
have been accidents on the Project, the Project is extremely proud that
its performance has been continually significantly below the national
averages that has resulted in high morale within the labor force and
significant insurance savings to the Commonwealth
- Share Program
- As further encouragement for the contracting community to accent the
importance of safety and the 'zero accident' Project philosophy, the
SHARE Program was conceived whereby specific contractors with outstanding
quarterly safety statistics would receive a cash reward based on their
achievements. In many cases this cash reward would be shared directly
with their workers.
- Owner Controlled
Insurance Program - CA/T implemented an owner controlled insurance
program as opposed to contractor/consultant procured insurance which
eliminates overlapping coverages, allows the MTA to realize economies
of scale and promotes the expeditious processing and settlement of claims.
It has been estimated that this program saved hundreds of millions of
Financial / Cost Database - Oracle database software is utilized
to capture projectwide cost trends from all responsible departments
which are reported to senior management via the Monthly Cost Trending
Program. Computer terminals are deployed throughout the construction
field offices and the control project office for project staff to enter
real-time cost information.
- Cost Containment
- This is a formal committee consisting of MTA, FHWA and B/PB staff,
which meets regularly to review various cost and schedule suggestions.
Examples include various aspects of the design like the specific tunnel
finishes, building treatments, roadway materials and construction methods.
- Employee Suggestion
This is a program to reward employees for suggesting ways to reduce
project costs by providing cash bonuses. The cash bonuses are paid on
a non-reimbursable basis by the Management Consultant, which demonstrates
the Management Consultant's commitment to Cost Containment. It furthers
a Cost Containment mind-set for all employees.
- Design to
Cost Program - This program establishes a contractual Baseline Construction
Budget with the Final Design firm. This baseline budget is adjusted
throughout the final design phase only for changes to scope. If progress
estimates are higher than the baseline budget, the Final Design firm
is required to redesign without reimbursement.
- Monthly Cost
Trend Program - Cost trends across the entire project are captured
during each month and reported to senior management for information
and decision-making. Uses of project contingency budgets are evaluated
and follow-up actions to contain costs are identified.
- Early ID Program
program highlights issues, which potentially could increase project
cost. Issues are gathered from all project departments and reviewed
weekly by senior project management to mitigate impacts where possible.
- Value Engineering
- During the Preliminary Design Phase, a group of experts from the other
B/PB offices were brought in for a one to two week period to review
and comment on the in progress preliminary designs.
- VECP Program
- The Value Engineering Contractor Proposal program awards 50% of total
savings realized from a contractor proposed idea to the construction
- Material Disposal
Through a Project initiative, an agreement with the city of Quincy was
negotiated which saved the Project some $60 million compared to the
original disposal concept and further benefited Quincy and Milton by
closing landfills at no cost plus converting these city areas to revenue
- Industry Peer
- The MTA engaged the National Academy of Engineers to perform an independent
assessment of the project management and contract administration practices
employed on the CA/T project.
- Lessons Learned
- Engineering and Design have always been an evolutionary process. Due
to the length of the CA/T Project, capturing lessons learned through
a formal program from early construction contracts and corporate experience
on other projects could greatly benefit later contracts.
- PCA Initiative
Program - A significant portion of cost changes during construction
result from differing site conditions, with the majority of the cost
being the residual schedule impact costs to the contract as well as
interfacing contracts. Prior to this program, all such actual site conditions
had to be negotiated. To reduce cost, the Project created bid items
to obtain competitive pricing for removal of unspecified obstructions
and other actual underground conditions.
Reviews - Throughout all phases of design, the Project utilizes
on-project and off-project construction experts to review final design
submittals to ensure that the designs are constructible and thereby
avoid claims and delays.
- Pre Advertisement
Open Issue Reviews
- Prior to advertising a construction package, unresolved design issues
are reviewed by senior design and construction managers (including MTA,
FHWA, and B/PB). This group evaluates project exposures and decides
whether to proceed from a cost/schedule efficiency viewpoint or wait
until the issues are resolved.
- It has always been the practice of the Project to work harmoniously
with the Project's many contractors. To facilitate this concept the
Project has utilized a partnering program whereby the owner/management
consultant can understand firsthand the concerns and challenges of the
contractor and vice versa. This process has greatly improved the traditional
adverse owner-contractor relationships and improved communications across
- Issue resolution
- As one may expect there are many instances where the view of the contractor
is not consistent with the understanding of the owner especially in
the area of claims. A formal program to assist resolution of these differences
was established by the Project team. This process requires a series
of progressive reviews by various levels of management and if that does
not resolve the impasse the process involves the use of Dispute Review
Boards consisting of off-project experts experienced in claims administration.
- Claims Avoidance
In this program, claims analysts from active construction contracts
are assigned to review similar contracts still in design, with the intent
of minimizing the recurrence of similar claim issues.
- Schedule Initiative
- Time always translates into money. Therefore, CA/T management instituted
an aggressive program to identify schedule saving initiatives. Throughout
the life of the project, schedule savings ideas have been evaluated
based on cost/benefit analyses and technical merit.
- Throughout construction, the project has utilized the Primavera CPM
product to maintain a project master schedule. This schedule is the
product of all individual contractor schedules, identifies all contractor
interfaces, and identifies schedule trends against major road opening
- C17AA Incentive
Clause - The CA/T construction schedule requires efficient management
of multiple/complex contract interfaces. An incentive fee clause was
included in the I-93 Tunnel Finishes contract to acknowledge that the
Contractor's participation is essential to interface management and
to compensate the Contractor for schedule flexibility, ingenuity, and
- Fast Track
- At he outset of the Project it was understood that while various parts
of the Project were in construction other parts of the Project would
still be in the design phase. This industry wide management practice
reduced the Project duration by several years, minimizing impacts to
the Boston area and reducing the costs attendant with extended schedules.
- Project Specific
Estimating Database - The Project established an estimating database
that was the primary source for pricing the several contract estimates.
This database was customized for the CA/T Project scopes of work and
work methodologies. It employed crew based estimating methodology whereby
very experienced construction superintendents would assign a crew, equipment
and other material requirements to a particular scope of work based
on the Project's unique working circumstances. The database was continually
refined and updated based on the bidding environment on the Project.
It did not rely on unit price values from other Projects within the
State or other States because those Projects were not of the complexity
as the CA/T Project.
Processing - There are several processes for a mega-project that
were traditionally performed in a hard copy environment. The CA/T Project
embraced the concept of using electronic means for various processes
if appropriate. Various levels of management approved contractor and
design consultant invoices electronically. Material requisitions for
smaller purchases were processed in electronic fashion. If security
could be maintained and the process lent itself to electronic means
then the position of the Project was to pursue the electronic availability
of such a process.