Cost Estimate Validation Process - WSDOT's CEVP CEVP is a new, but still developing process to responsibly evaluate cost and risk for complex, urban, infrastructure projects. It was developed by a team including John Reilly and Michael McBride with Washington State Department of Transportation Managers David Dye, Cliff Mansfield and Jennifer Brown. They were then assisted by other consultants for implementation - Golder Associates (risk), Parsons Corporation (cost), KJM (estimating) and the University of Colorado (Process overview). Michael McBride contributed expertise in “due diligence” and validation of project costs. John Reilly addressed management and risk and the link between cost, risk, variability and probable projected cost. David Dye and Cliff Mansfield brought WSDOT management and cost estimating experience. Golder's Dwight Sangrey, Bill Roberds and Travis McGrath contributed expertise in risk and decision processes. Parsons Corporation's Keith Sabol contributed expertise in project cost management. KJM's Art Jones contributed estimating support and Keith Molenaar of the Univrsity of Colorado provided the implementation evaluation report. CEVP stands for “Cost Estimate Validation Process” These processes are a direct outcome of a critical need to ensure that we carefully and responsibly manage cost and risk for complex, urban, infrastructure transportation projects. The need has been well articulated by Doug MacDonald – the innovative Secretary of the Washington State Department of Transportation – in addressing his State’s funding priorities and the urgent need for substantial transportation improvements. Previous papers and presentations by John Reilly – given from 1998 to the present in the United States and 12 other countries – have focused on over-budget cost concerns, the need to control costs, to understand “cost-drivers” and to make better use of risk mitigation and improved management practices. The CEVP Approach: Take the current Project Estimate - examine and evaluate “base” costs - removing all variability and risk (contingencies) – in a concentrated workshop using National & International Experts and the Project Team Examine / identify cost variability and risk (contingencies) Examine / identify opportunities for improving cost and schedule and to avoid or minimize risk Develop the project schedule with major activities required (“flow chart”) Identify the probability and consequences of cost, variability, risk events and also opportunities - that affect probable costs and durations of project activities Combine base costs, variability, risk events and opportunities to create probable ranges of costs and schedules Prepare a report documenting the findings and conclusions regarding base costs, variability, risk and opportunity - and the new probable projected costs and schedules Present to the Project Team and Management Consider necessary changes and strategic initiatives Action items from the workshop are addressed by the Project Team Beneficial changes / adjustments are made, including new cost and schedule planning, expenditure / cashflow forecasts, requests and approvals Risk items identified are used to develop a risk mitigation strategy –a “Risk Management Plan”. The risk mitigation strategies reduce potential impacts – leaving “residual risk” An overall Strategic Approach can be developed for multiple Projects / Departmental Programs Strategies are monitored and modified as necessary by Senior Management In addition to those noted above, others involved with the CEVP process include the WSDOT Project Teams and their consultants plus representatives DMJM+Harris and the National Constructors Group. For further information, email John Reilly - see email address on the Home page. You can also go to the WSDOT website at http://www.wsdot.wa.gov/Projects/ProjectMgmt/RiskAssessment/default.htm