CALIFORNIA WATER FIX: Metropolitan Committee hear presentation on the cost estimate and risk assessment for the Delta tunnels
Assistant General Manager Roger Patterson introduced Chuck Gardner, the program manager for the outside group of consultants who prepared the estimate and risk assessment for the California Water Fix project.
It’s not a unit price extension program, it is tailored specifically to this region in California, the Pacific labor base, equipment availability based on independent third party and Corps of Engineer rates, and the State of California Department of Labor.” Mr. Pettiette presented a slide showing the distribution of costs for the California Water Fix.
It is the what the program would have cost in 2014 dollars.
We went out and we sought material and equipment, and independent labor prices to go into this estimate.” Bob Goodfellow with Aldea Services was retained to do a risk assessment for the California Water Fix program.
Mr. Goodfellow explained the process as such: in the workshops, they tried to identify risks and assess them; they next generated a risk register with a scoring chart, and they then identified control and mitigation measures.
If you allocate risk to yourself, that’s sometimes called acceptance, you accept those risks; if you transfer risks to others, that’s allocation through a contract document to the contractor.” Mr. Goodfellow noted that guidance documents from the tunnel industry identify three items: to have an experienced project team, the use of a risk register as a risk management and risk presentation tool, and having a consistent and continuous risk management process from the early planning, all the way through the life of the project.
The geotechnical delays, either in design or in construction with such a lot of tunneling involved, geotechnical is obviously going to be a major risk that needs to be attended to and mitigated considerably.” Mr. Goodfellow said they then took Mr. Pettiette’s estimate, using the base estimate number at the 50th percentile; they then quantified the risks, put them into time and dollars, and compared the risk exposure numbers with the line item of contingency from the base estimate.
He presented a slide showing the distribution, noting that the numbers are all lined up along the 75th percentile of cost certainty.
Once they added in the risks to the cost, the number goes up to $11.7 billion; they were able to reduce that through successful mitigation down to a base cost plus risk number of $10.7 billion at the 75th percentile, Mr. Goodfellow said.
However, an advantage to keeping things in 2014 dollars allows how design changes in the project affect the costs “There’s any number of ways you can slice and dice this cost estimate,” Mr. Gardner said.