• The needs of our clients - Owners, Agencies, Contractors and Manufacturers.
• Our responsibility to the underground construction industry.
• A desire to improve our projects, our infrastructure and our environment.
  

We ask for your interest, involvement and help to better address such issues and to improve our ability to manage, plan, design and construct.


1. Management systems, management authority
2. Procurement / Tendering / Contracting
3. Risk identification and reduction
4. Innovation and new technologies
5. Funding and financing
6. Politics, policies, the media and public relations

If you want to:

1. Better understand these issues
2. Review the suggestions of others
3. Identify ways to move these issues to resolution
4. Contribute data and case examples for us to use

You can help by emailing John@ThinkDeep.net and describing, presenting or discussing your issues of concern and how they have affected your projects.

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EXAMPLES OF ISSUES BY CATEGORY

1. MANAGEMENT SYSTEMS

Good management is essential for effective planning, design, construction and manufacture but, it is one of the most complex skills and disciplines we use. Management involves defining the project's core purpose and then the necessary goals and objectives, performance requirements, work processes and procedures, control systems, organization, roles and responsibilities, communications and working relationships.

Management's success is measured if we meet the project's quality, function, cost and schedule goals. How we do this is also important to our quality of life. Management is about leadership as well as administration, control and authority.

The following items have been identified as critical to success:

• A strategic approach for management of complex projects
• Wise and strong technical and political leaders who can communicate with the public and media
• Appropriate allocation of risk and responsibility - between owner, engineer and contractor
• Well constructed and communicated, comprehensive management plans
• Defined performance measures and performance incentives
• Alignment of the project team to goals and objectives
• Organizational suitability
• Partnering, Alliancing and other proactive management initiatives
• Dispute Review Boards, use of Mediation and Arbitration
• Resolving disputes, claims and avoiding litigation
  

2. PROCUREMENT / TENDERING / CONTRACTING

Contractual and procurement systems must be well-structured and compatible with the owner's goals and objectives. This critical link is often neglected or given low priority but it is necessary in order to balance and align the contracting and procurement approach with key project and technical requirements. Some identified areas for improvement and discussion include:

• Basic goals and objectives of the procurement
• Constituents to be satisfied, parties to agreements - the stakeholders
• Legal regulations, requirements and restrictions
• Legal liability and corresponding considerations
• Major constraints - known and potential
• Strategic procurement and/or contractual baseline approach
• Fair and reasonable price
• Managing change - equity and fairness - effect on tenders
• Openness of the procurement process
• Specifics of the procurement process
• Pre-qualification process / restrictions on better technologies
• Equal access to information
• Timely access to information
• Prescriptive or performance approach
• Should the owner define means and methods? Why?
• Opportunities and incentives for innovation
• Technical trade-offs and alternatives - Value Engineering
• Risk identification, evaluation and mitigation
• Punitive vs. incentive approaches to contracting
• Partnering, team alignment, dispute review boards, mediation processes and open communication strategies
• Pre-qualification of contractors including their suitability for the project and purpose
• Low-Bid fixed procurement - effects on quality, cost and schedule
• Low-Bid fixed procurement - effect on disputes, claims and litigation
• Alternative procurement methods - negotiated, compressed, best-and-final-offer, technical + cost evaluation, design-build, design-build-own-maintain/operate etc.
• Baseline approaches - strategic use of contract provisions and information.
  

We need to integrate contractual and procurement strategies with project management goals and objectives. All must be compatible to meet quality, cost, schedule and other goals.

We understand that public relations, management, planning, design and
construction are the prime concern of project mangers - but the influence of
the associated contractual systems and procurement regulations is sometimes
much more significant - as shown by the long list of projects involved in
disputes, claims and litigation.

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3. RISK IDENTIFICATION AND REDUCTION

Risk always exists in the design, procurement, construction and operation of large, complex projects, particularly those involving the underground - there are significant potential threats which, if they occur, will cause catastrophic events such as loss of life, damage to facilities, large cost increases and schedule delay.

Risk reduction through identification, mitigation and contingency planning is therefore a prudent and necessary management task.

Reasons to investigate potential threats:

• Reduce risk to goals and objectives of safety, schedule, budget.
• Demonstrate that options were comprehensively and rationally evaluated
• Process will reveal useful information even if threats do not eventuate
• Will clarify internal project goals, objectives and priorities
  

Characteristics of Infrastructure and Underground Projects

• Complex projects with many variables
• Expensive - many stakeholders involved
• High media and political attention
• Uncertain and variable ground conditions
• Construction sensitive to means and methods
• Laws and regulations may be restrictive
• Similar projects show great variation in different locations
  

Key risks for Infrastructure and Underground Projects

• Risk of injury or catastrophic failure, loss of life, material and economic damage
• Risks of significant increase of project cost
• Risks of a significant delay to project completion
• Risk of not meeting design, operational, maintainability and quality standards
  

Actions required to identify and reduce risk

• Plan to identify risks - early in the project's life
• Industry awareness of the risk identification and mitigation process
• Education about the risk identification and mitigation process
• Practical applications of risk identification and mitigation
• Refinement of the risk identification and mitigation process
• Accumulation of data to support risk identification and mitigation
• Workshops for risk identification and mitigation
• Strategic risk mitigation plans - to prepare for risk events
• Communicate risk mitigation work to public increase awareness of responsibility
  

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4. INNOVATION, TECHNOLOGY & COMPETITION

Innovation varies significantly from country to country and is related to funding and profitability. Some say the Government must fund innovation - others say that the Government is too inefficient. Some have argued that profitability depends on innovation - others say that innovation will occur only if National Policies support the application of innovation, measured by more efficient projects, without undue legal penalties.

While some apply "innovative" techniques and technology, others are reluctant to risk exposure to liability issues until these contractual approaches and new technologies have been "proven" in an acceptable setting. Others say that the competitiveness of National and individual companies is directly linked to innovation. Others say that this is only the case if the innovations are directly useful and are reliable in application.

Significantly, many innovative techniques have a common characteristic of integrating design and construction and they require design/construction type decisions to be made during design. This argues that only design-build procurements can produce innovation. All of this indicates that this is a difficult area to address - but one that needs a higher level of attention by the underground construction industry.

Opportunities for innovative applications of new design and construction methods do not occur frequently. It is important that implementation of new approaches and techniques be
managed carefully. Full consideration needs to be made of impacts, cost-benefit-tradeoffs,
risk, local contractor's ability, precedents and the effects of changes to traditional roles and responsibilities.

It is appropriate that we advocate and reasonably consider the use of new alternative technologies for large public works programs. Changes to accepted practices are not without risk and substantial technical and administrative difficulties in implementation.

The role of the owner is crucial - the owner is usually, but not always, a public agency with multiple, sometimes conflicting responsibilities, and an inbred culture which can be resistant to change. New technologies are generally not welcome. For benefits to be realized there must be a reasonable balancing of risk and reward but - balancing risk and reward is better understood by the more competitive private sector.

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5. FUNDING AND FINANCING

Funding for infrastructure is critical for viability of our society. However, the net non-military investment in infrastructure over the last 40 years (in the U.S.) has dropped as a percentage of gross national product. Our productivity has also dropped in this timeframe. Ashauer has suggested that there is a correlation. There is compensation from other increases in our efficiency - computers, the Internet etc. - but vital infrastructure services must be funded.

Consideration of the following points may be of help:

• Role of Federal, State and Local Governments in funding infrastructure
• Taxation related to use of funds
• Investment strategies - pay-back periods
• How to count the benefits of infrastructure projects
• How to establish quality and operational standards related to investment
• Operating subsidies and user-fees
• Role of Government or private corporations in providing services
• Funding burdens on infrastructure - for example, a high percentage of cost required by financing vs. the actual cost of the construction
• Life-cycle cost evaluation for projects - best overall value vs. least initial cost
• Accounting capital vs. operational and maintenance costs separately.
  

What should we do, as an industry, to stabilize financing for infrastructure and underground projects? What's wrong with the current approach? Your input is welcome.

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6. POLITICS, POLICIES AND MEDIA

Policy decisions and their impact on underground construction are not well published, discussed or understood in engineering related technical literature. As design and construction engineers, we focus more on technical issues than policy and its implications.
The following points may be of help:

• Policy relates to politics, sociology, economics and mostly, "soft" sciences.
• Engineers need to appreciate the influence of policy on the funding and
  viability of complex, underground projects.
• Engineers may not be good at understanding broad questions of public policy. Understanding policy requires a more diverse education.
  

As engineers, we often make initial decisions about major underground public works projects on cost and/or cost/benefit - defined in engineering terms - even though, politics, sociology, economics and, in particular, environmental considerations will strongly influence and determine the final form of the project. An example of such thinking is the ITA 1990 Report "Cost - Benefit Methods for Underground Urban Public Transportation Systems" which implies that decisions are predicated (only) on cost considerations.

Thus, engineers often find difficulty understanding and dealing with policy issues related to underground construction projects which are generally in dense, complex urban environments. Policy issues are not easily susceptible to quantitative engineering/technical analysis.

As engineers and related professionals we have a belief that problems can be solved by the application of scientific principles, practical considerations, hard work and commitment based on our training and experience. This is our profession, our training and our aptitude.

It may be necessary to broaden the base from which we draw these conclusions. Our discussions and dialogue should not be narrowly, exclusively technically focused. Our basic goal is to build a constructive, functional environment for society.

As the complexity of the urban environment increases, and environments become interdependent on a national and perhaps an international scale, it becomes more difficult to make decisions simply and to develop a coherent system which will satisfy the public and all policy issues.

To discuss these issues or contribute a question or observation, please join the discussion by sending an email to: John@ThinkDeep.Net.

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