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75th St. Corridor Improvement Project

COST ESTIMATE REVIEW

Final Report

September 2014

75th St CIP – IDOT, CDOT, AAR FHWA COST ESTIMATE REVIEW

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TABLE OF CONTENTS

EXECUTIVE SUMMARY ........................................................................................................... 4

CHAPTER 1 – REVIEW PROCESS .............................................................................................. 9

REVIEW OBJECTIVE...................................................................................................................... 9

BASIS OF REVIEW......................................................................................................................... 9

REVIEW TEAM ........................................................................................................................... 10

DOCUMENTS REVIEWED ........................................................................................................... 10

REVIEW METHODOLOGY........................................................................................................... 11

CHAPTER 2 – REVIEW SUMMARY ......................................................................................... 17

PROJECT BACKGROUND, PURPOSE AND NEED ......................................................................... 17

REVIEW FINDINGS ..................................................................................................................... 22

REVIEW RECOMMENDATIONS .................................................................................................. 23

CHAPTER 3 – RISK ANALYSIS ................................................................................................ 24

COST FORECAST ........................................................................................................................ 24

SCHEDULE FORECAST ................................................................................................................ 27

REVIEW CONCLUSION ............................................................................................................... 30

ALTERNATIVE ANALYSIS SIMULATION ........................................................................................... 30

APPENDICES ........................................................................................................................ 31


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FIGURES

Figure 1 Year of Expenditure Cost Probability Curve ...................................................................... 4

Figure 2 Probability Based Project Completion Date ..................................................................... 6

Figure 3 75th Street CIP Project Study Area ................................................................................. 20

Figure 4 Distribution of Total Project Costs in YOE Dollars ......................................................... 25

Figure 5 Project Potential Schedule ............................................................................................. 28

TABLES

Table 1 CER Results vs. Pre-CER Cost Estimate ............................................................................... 5

Table 2 Base Variability ................................................................................................................. 12

Table 3 Market Condition - Probability of experiencing cost increase/decrease ........................ 14

Table 4 Market Conditions Variance from "As-Planned" ............................................................. 14

Table 5 Project Inflation Rates ...................................................................................................... 16

Table 6 Base Estimate Adjustments .............................................................................................. 21

Table 7 Base for CER Analysis ....................................................................................................... 21

Table 8 Project Summary Schedule Dates .................................................................................... 22

Table 9 Percentile Rankings of Total Project Costs in YOE Dollars ............................................... 26

Table 10 Simulation of Delayed Project Start ............................................................................... 30


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EXECUTIVE SUMMARY

A review team (Team) of the Federal Highway Administration (FHWA), the Illinois Department

of Transportation (IDOT) and their project consultants, the City of Chicago Department of

Transportation (CDOT), the Association of American Railroad (AAR) and railroad representatives

conducted a Cost Estimate Review (CER) to evaluate the cost and schedule estimates for the

proposed 75th Street Corridor Improvement Project (75th Street CIP), a project proposed as part

of the Chicago Region Environmental and Transportation Efficiency (CREATE) Program. The CER

was held at the Chicago, Illinois office of Jacobs Engineering Group, Inc. (IDOT Phase I Project

Consultant) from June 23 through June 26, 2014.

The objectives of the review were to:

Verify the accuracy and reasonableness of the current project estimate (including all

engineering, ROW, construction and other costs) and schedule.

Develop a probabilistic range for the cost estimate that represents the project’s current

stage of development (i.e., Phase I engineering).

Determine potential schedule impacts on the cost.

Range of Project Cost

Figure 1 Year of Expenditure Cost Probability Curve

70% = $952 M


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The CER cost probability curve in Figure 1 shows the potential range of project cost in Year of

Expenditure (YOE) dollars. FHWA requires the 70% level of confidence value or greater to be

used for major project Financial Plans and for published project documents. At a 70%

confidence level the CER YOE project cost is $951.9 million, which is 3.4% below the pre-CER

Project YOE cost estimate of $984.4 million provided by the project team (see also Table 1).

Two different approaches were used to arrive at the pre-CER (project team method) and the

CER (FHWA method) estimates. However, the CER estimate used the pre-CER base estimate

(2014 dollars) as its starting point. The difference in the estimate values can be attributed to a

combination of several actions taken in applying the FHWA approach to the pre-CER base

estimate, including removing the estimate contingency and adding in risk-based costs, adjusting

the base cost estimate using revised information provided during the review, and reducing the

inflation factor from 4.5% per year in the pre-CER estimate to 3.5% in the current CER.

Table 1 CER Results vs. Pre-CER Cost Estimate

The CER results are based on the Team’s input related to base estimate variability, market

conditions, inflation and risk factors for the project. The resulting range of probable project

costs from the 10% to 90% confidence levels is from $877 million to $984 million.

Based on this review, the 70% level of confidence amount of $951.9 million (YOE) is the

minimum that should be utilized in the current financial plan being prepared for the project,

with the use of a range recommended.

Risk Threats and Opportunities

The CER process began with removing contingencies from the pre-CER estimate, and then

adding the impact of base variability, market conditions, inflation and identified risks to arrive

at the CER results noted. The major cost threats identified that could potentially increase

project costs were:

Base Project YOE Pre-

CER Estimate

(with Contingency)

70% Level of Confidence

from CER YOE

Probability Curve Results

(with risks)

Delta /

Pct. Delta

Total Project Cost with

Inflation and previous /

fixed costs

$984.4 Million $951.9 Million $32.5 Million /

3.4%


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Structure Superstructure Cost Increases

Structure Substructure Cost Increases

Potential Construction Change Orders

The major Schedule threats that could potentially delay the project’s originally estimated

schedule and increase inflation costs are the following:

Right-of-way (ROW) Acquisition delay to project

Existing Railroad Operations during construction

Delays in the construction of new Bridge structures

Utility Relocation delays

Full project funding

Social and political sensitivities

A Schedule Opportunity was also modeled:

Opportunity to Avoid delays due to mild winter weather

The results of modeling the above schedule risks (threats and opportunities) are:

Figure 2 Probability Based Project Completion Date

70% = 10/29/2022

Pre-CER scheduled completion:

10/31/2021


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Figure 2 demonstrates that the current schedule has substantial risk of delay. The model shows

the range of predicted project completion dates with a 70% confidence level at the end of

October 2022, which is an approximate 12 month delay beyond the pre-CER scheduled

completion of the end of October 2021. This potential delay is the result of the impact of the

previously mentioned schedule threats.

Findings and Recommendations

The major findings during the CER included the following:

The Pre-CER estimate detail is advanced for level of design (preliminary engineering)

Relevant unit prices were utilized from IDOT/CDOT/ Railroads’ experience and project

complexity (i.e-CREATE –P1 project) and were found to be reasonable

The team had performed an analysis of risks specific to unique CREATE partnership (i.e.-

maintaining freight rail operations through construction)

Most construction is proposed within existing ROW, except portions of the east end of

P2

The structural elements of the project have been designed to the preliminary

engineering level (i.e. 30% plans) and are therefore relatively early in the design stage,

with greater uncertainty

Alignment geometrics and project limits have been tightly established via the input

received from CREATE partners and preliminary engineering/NEPA/public involvement

processes

Railroad force account work (vs. bid work) is expected to experience less risk due to

limited ROW needs and previously developed force account/firm labor contract

conditions and pre-established cost control procedures

The recommendations resulting from the review were the following:

Manage risk of structures cost uncertainty and scope creep

Mitigate potential or avoid change orders via strong design and construction

management practices, such as risk management and cost and schedule controls.

Manage schedule risks leading up to project construction, such as ROW acquisition,

utility relocation, track outages.

Contractors (non-railroad) should be ready to utilize good winter weather

Update and QA overall estimate as decisions are made, market conditions change, or other threats or opportunities are avoided, minimized, mitigated or realized


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Coordinate early on with Utility service providers and other contractors to inform them

of Buy America Requirements, advise potential contractors of this requirement and how

it could impact their material procurement

Understand utility costs and impact on schedule

Continue coordination and communication through the CREATE partnership

Continue proactive public outreach and involvement into the final design and

construction phases

Continue implementing risk management procedures, using the risk register

Update the cost estimate based on risk management process

Ensure that the project management plan addresses risk response strategies for

identified risks

In conclusion, the 70% level of confidence amount of $951.9 million (YOE) is the minimum that

should be utilized in the current financial plan being prepared for the project, with the use of a

range recommended.


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CHAPTER 1 – REVIEW PROCESS

A review team (Team) consisting of the Federal Highway Administration (FHWA), the Illinois

Department of Transportation (IDOT) and their project consultants, the City of Chicago

Department of Transportation (CDOT), the Association of American Railroad (AAR) and other

railroad representatives conducted a Cost Estimate Review (CER) to evaluate the cost and

schedule estimates for the proposed 75th Street Corridor Improvement Project (75th Street CIP),

a project proposed as part of the Chicago Region Environmental and Transportation Efficiency

(CREATE) Program. The CER was held at the Chicago, Illinois office of Jacobs Engineering Group,

Inc. (IDOT Phase I Project Consultant) from June 23 through June 26, 2014.

This document summarizes and reports the results of this review. Appendix D of this report

includes the Team’s close-out presentation provided on June 26.

The purpose of this chapter is to provide a general overview of the cost estimate review

process, including a discussion of the review objectives, team members, documentation

provided and methodology.

REVIEW OBJECTIVE

The objective of the CER was to conduct an unbiased risk‐based review to:

Verify the accuracy and reasonableness of the current total cost estimate to complete

the project

Develop a probabilistic range for the cost estimate that represents the current stage of

project design (i.e., Phase I engineering).

Determine potential schedule impacts to the project cost.

This review is a snapshot in time and it is recognized that the estimate will change as additional

information becomes available.

BASIS OF REVIEW

The Moving Ahead for Progress in the 21st Century (MAP-21) Act (P.L. 112-141) requires the

financial plan for all Federal‐aid projects with an estimated total cost of $500M or more to be

approved by the Secretary of Transportation (i.e. FHWA) based on reasonable assumptions. The

$500M threshold includes all project costs (i.e. Engineering, Construction, Right‐of‐Way (ROW),

Utilities, Construction Engineering, Inflation, etc.). The FHWA policy has established reasonable

cost variability assumptions to be utilize as a risk based analysis. A CER is required to provide

the risk based analysis of the estimate for a project over $500M and is used in the development

of the financial plan.


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The base estimates for the 75th Street Corridor Improvement Program were well above the

$500M, qualifying the project for the CER. The Team was able to present the scope of the

project, the basis for the current cost estimate, and input on the risks, market conditions and

other variables used in the CER analysis.

REVIEW TEAM

The Team brought together individuals with a strong knowledge of the project, including

expertise in specific disciplines represented in the project design. Throughout the CER

individuals with specific project expertise briefed the Team on technical issues and the estimate

development process, including the development of quantities, unit prices, assumptions,

opportunities and threats.

The Review Team was comprised of members of the following organizations:

FHWA

CREATE Program Manager

Resource Center Construction and Project Management (CPM) Team

Atkins Consultant

CREATE partner Railroads/Association of American Railroads Illinois DOT/Dept. of Public & Intermodal Transportation Chicago DOT Illinois DOT/CREATE Program Management Consultant

HNTB Project Consultant

Jacobs

The list of all CER attendees / participants is included in Appendix E on sign-in sheets.

DOCUMENTS REVIEWED

Documents provided to the Review Team prior to and during the workshop included:

Project Cost Estimate, including narrative of cost estimating methodology

Project Schedule

Project Risk Register

Current NEPA Documents


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Project Web Site Link

5-year construction sequencing plan for the project

REVIEW METHODOLOGY

The methodology for this cost estimate review is outlined as follows:

Verify Accuracy of Estimate

– Review major cost elements, descriptions, cost components and assumptions

– Review allowances and contingencies

– Adjust estimate as necessary

Discuss / Model

– Base Variability

– Market Conditions & Inflation

– Key Schedule & Cost Risks

Perform Monte Carlo simulation to generate a forecast range of estimated project costs

Communicate Results to the Project Team

VERIFY ACCURACY OF COST ESTIMATE

The Team was provided a project overview, including the scope of the project, stage of design

and the IDOT consultant cost estimating process utilized. A review of project documents

including the physical layout (e.g. maps, drawings) was also provided. The Team attended a site

visit on the initial day of the study, receiving a comprehensive overview of the construction

sites and the existing conditions of the project corridors. The Team also interviewed the

subject matter experts (SMEs) and developed an understanding of the estimate for both

quantity and unit cost development for the major cost categories.

MODEL PROJECT UNCERTAINTIES AND PERFORM MONTE CARLO SIMULATION

In general, uncertainties in the project estimate can be described as those relating to base

variability, market risks, inflation, cost and schedule risk events. Each of these were discussed

and modeled to reflect the total uncertainty associated with the estimate.

Base variability is a measure of uncertainty applied to the base estimate that represents the

inherent randomness associated with the estimating process. For example, if a different


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estimator were to develop the estimate using the same data source and following the same

general guidance his/her estimate would be different from that of the first estimator. Base

variability is also a function of the project’s current level of design and the process used to

develop the estimate. Additionally, the lack of details about the project and assumptions that

should be used to develop the estimate would cause more variability in the estimate. This base

variation is a function of the system (i.e., assumptions and data sources used to define the

estimate). Base variability has been applied to the base estimate exclusive of risks.

Contingencies that include risks are removed from the estimate to avoid double counting risks

identified in the risk register. Allowances, such as items included as percentages of other items

in early estimates, and change orders typically remain in the base estimate.

Base variability is defined using a symmetrical distribution and often stated as a percentage

variation from the underlying base estimate. The team considered the variability to be +/- 9%

as shown in Table 2. This assumes the project is relatively well defined and has advanced

engineering and identification of issues, such that reasonable estimators would fall within +/-

9% of the current estimate at this point in the project. This base variability was developed with

the input that the non-railroad (civil infrastructure) elements of the project were defined to a

point where a base variability of 10% was deemed appropriate. The railroad portion of the

project is very well defined (when compared with the civil infrastructure improvements) and

the unit prices are likely to be more stable into the near future because of long term labor and

other contracts, thus minimizing the potential for variance within a range of near 8%. This is

combined with the potentially greater variability of the non-railroad elements, thus resulting in

a composite of near 9%.

Portion Final Design Right of Way

Acquisition Utility Relocation Construction

Base Variability +/- 9% +/- 9% +/- 9% +/- 9%

Table 2 Base Variability

Market Conditions - The Team discussed the uncertainties associated with Market Conditions at

the time of the construction procurement, when contractors or suppliers are pricing the

project. There is typically a strong relationship between the number of bidders and the

construction cost of a project at the time of pricing. Market conditions are a measure of

uncertainty that reflects the overall competitive environment at the time of pricing. The market

conditions are applied to the base estimate using a probability for “better than planned”, “as-

planned”, or “worse than planned” bidding environments (totaling 100%). The Review team

had discussion regarding the major projects competing for local resources during the years


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2017 – 2021, which is the planned schedule for 75th Street CIP construction. Major competing

projects and markets for resources include the following:

Utilities market: $300 million to $400 million per year is anticipated for the next 10 years, with

a resource constrained market that could likely drive up utility costs.

Highway Market: Anticipated competing projects include, but may not be limited to:

the I-90/I-94/I-290 Circle Interchange in downtown Chicago (schedule through 2018),

the current “Illinois State Toll Highway Authority (ISTHA)” program, although that program

is expected to taper after 2016 and wrap-up by 2020; and

the Illiana Expressway, although there is no ROD yet.

Comments identified that the highway construction market in Illinois is currently stressed;

however, there is minimal design underway at this time pointing to a decreasing IDOT program.

A potential increase could be in bridge rehabilitation projects.

Transit Market: The Chicago Transit Authority (CTA) has a $500 million per year capital

program for the next four years, with the potential for slight increases, particularly if funding is

identified for major rail projects such as the Red Line Extension or Red Purple Modernization

projects. . The CTA program beyond the next four years is relatively uncertain. Metra commuter

rail has substantial identified needs, but funding and time line for addressing these needs is

unknown at this time.

Aviation Market: Chicago O’Hare airport is unlikely to have large projects that will impact the

75th Street CIP project. The largest project planned at O’Hare is the consolidated rental car

facility (CONRAC) that is unlikely to have an impact on Highway / Rail projects.

Facilities Market: The vertical facilities market is relatively slow in the area at this time, with

most construction being apartments.

Rail Market: there is a “Positive Train Control” mandate for trains by 2015. It is not anticipated

that this mandate will impact the 75th Street CIP.

After discussing these local market factors, the team did not foresee any reason to forecast a

large market condition increase (worse than planned) or a large market condition decrease

(better than planned) for construction pricing. However, the Team forecasted market risk

increases with Utilities and Right-of-Way (ROW) costs, and utilized the following probability

distribution in the model:


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Project Element

Market Conditions

Probability of experiencing cost increase/decrease

Better Than

Planned As-Planned

Worse Than

Planned

Final Design / ROW / Utility costs 10% 60% 30%

Construction (projects P2 and P3) 8.5% 83% 8.5%

Construction (project EW2) 8% 84% 8%

Construction (project GS19) 10% 80% 10%

Table 3 Market Condition - Probability of experiencing cost increase/decrease

Table 3 notes the CER team’s expectations for future cost proposals on this project. Note that

each of the different design portions of the project have slightly differing ranges, with EW2

predicted to have the least market conditions impact since it is primarily railroad elements; P2

and P3 are slightly higher with a mix of railroad and civil work, and GS19 is even higher since it

is primarily civil and structural work. When the market condition variations shown in Table 3

occur, the Team expected the variance from the current estimate (As-Planned) as shown in

Table 4.

Project Element

Market Condition Cost Impact

(Variance from As-Planned)

Better Than Planned Worse Than Planned

Final Design, ROW, Utility costs 5% 10%

Construction (projects P2 and P3) 10% 15%

Construction (project EW2) 10% 15%

Construction (project GS19) 10% 15%

Table 4 Market Conditions Variance from "As-Planned"

Table 4 also illustrates that the CER Team generally considered cost increases (worse than

planned) would be of greater potential magnitude than if the variances are below the estimate


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(better than planned). This demonstrates the Team’s expectation that, should price escalation

from market conditions occur, it could have an increasing cost impact on the project.

Following the market conditions review, the CER Team discussed the project cost estimate (See

Appendix A), and established the risk register for both the cost and the schedule

threat/opportunity risks (See Appendix B). The project team provided a Pre-CER risk register

that was utilized to initially populate the CER risk register. (Where appropriate, cost elements

with multiple risks or groups of like risk elements were consolidated to reduce the number of

total risks entries . Each of these risks was then analyzed by the Team based on current project

conditions, and additional risks were also developed during the CER.

The risk register includes the event risk name, a description of the event, a probability measure

of the likelihood the event will occur, and a probability distribution of costs if the event were to

occur. The register also identifies if the risk event is a threat or opportunity for cost/schedule.

Risk threats increase costs/schedule length and opportunities decrease cost/schedule length . A

very important feature of the risk register is to establish the relationship of risk events. For

example, some risks are mutually inclusive/exclusive. Mutually inclusive means the risk event

can only occur if the prior risk event occurs. Conversely, for a risk event to be mutually exclusive

means that it can only occur if the prior risk event does not occur. Risk events can also be

independent in which case the probability of occurrence is not dependent on any other risk

event. Correlation determines how one risk event will sample relative to another risk event.

Correlation was established when there was reason to suspect that a relationship exists and

should be accounted for in the simulation.

After model inputs were developed for market conditions, base variability, and risk events, the

Team utilized the Monte Carlo simulation to generate a probability based estimate in Year of

Expenditure Total Project Costs. The simulation provides “what‐if” sensitivity analysis using

randomly selected values from the Team’s models. The simulation performs random sampling

to model thousands of project cost/schedule scenarios built from the Team’s input. The

simulation is run until the number of iterations creates a relatively smooth distribution curve. It

is important that the simulation outcomes be reviewed to ensure accuracy. The simulation

results from distribution curves covering all possible outcomes as shown in Figures 1 and 2 in

the Executive Summary. The key benefit of this process is that estimated cost and schedule

outcomes are associated with their probability of occurrence (See Appendix C).

Inflation usually has a significant impact on Year of Expenditure (YOE) Total Project Costs, and

its affects were modeled in this review. Costs were inflated using the current project schedule

and inflating to the midpoint of the planned expenditure for each project element (P2, P3, EW2,


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GS19), including any delays where appropriate. The inflation applied to the base estimate

utilized annual inflation rates per year (See Table 5). These inflation rates are based on a

discussion held by the project team where rates from 3% to 3.5% per year were expected.

After input from the 75th Street CIP cost estimating team, 3.5% for construction activity costs

and 3% for pre-construction professional services and relocations was agreed to. An inflation

rate of 4.5% was utilized for the pre-CER cost estimate. All other CREATE projects are inflated at

the 4.5% level.

Year’s Applied Final Design, ROW,

Utilities Construction

2014 to midpoint of phase/project

3.0% / year 3.5% / year

Table 5 Project Inflation Rates

The base dates for each project element are based on the preliminary 5-year construction

sequencing plan developed and agreed upon by the CREATE Program partners immediately

prior to the CER review.

COMMUNICATE RESULTS

The last part of the review is to communicate the results. This is accomplished by providing the

closeout presentation and final report to the Project Team and agency leaders. At the end of

the review, the CER Team provided a closeout presentation that summarized the review

findings. The presentation identified the review objectives and agenda, discussed the

methodology, available resources, estimate adjustments and highlighted the results of the

review. The closeout presentation also identified any significant cost and schedule risks, and

provided a brief overview of recommendations by the Review Team. This presentation is

included as Appendix D to this report.

It is important to understand that the estimate review is a snapshot in time of the estimate. As

additional information becomes available it is expected that the estimate will change and be

updated.

This final report communicates all findings of the review to the State DOT and the FHWA

Division office and serves as the official document for the CER. As noted earlier, the review

results are used in published reports and eventually in the approval of the financial plan. CER

reports are maintained by the FHWA Office of Innovative Program Delivery’s Project Delivery

Team in Washington D.C.


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CHAPTER 2 – REVIEW SUMMARY

PROJECT BACKGROUND, PURPOSE AND NEED

The Chicago Region Environmental and Transportation Efficiency (CREATE) Program was initiated in 2003 as a public‐private partnership to improve the rail and roadway transportation network within the Chicago area. The CREATE 75th Street Corridor Improvement Project (CIP) consists of four (4) supporting projects of independent utility, linked by the NEPA environmental clearance process. A substantial portion of freight and passenger rail traffic in the Chicago region suffers from congestion, low operating speeds, and service delays due to traffic demands that exceed the capacity of the regional rail system. The CREATE Program Final Feasibility Plan established overall Program Level Goals and Strategies and the CREATE Program Final Preliminary Screening (both published in August 2005) presented the purpose or objective of each component project within the program. These documents have since been amended and modified, most recently in January 2012. Based on the needs to improve the regional rail system, the goals of the CREATE Program are as follows:

Reduce rail and motorist congestion;

Improve the efficiency and reliability of freight and passenger rail service;

Enhance public safety through the reduction of rail-highway conflict points;

Promote economic development and job creation;

Improve air quality; and

Reduce noise from idling or slow moving trains throughout the Chicago metropolitan area. As part of meeting the CREATE goals, the purpose of the 75th Street Corridor Improvement Project (CIP) is to improve mobility for rail passengers, freight, and motorists. The specific needs of this project include:

Reducing conflicts that affect rail;

Reducing highway-rail crossing problems;

Reducing local mobility problems; and

Improving rail transit passenger service. Five (5) private railroad operators (RR) have been instrumental in assessing their own operational and infrastructure needs within the 75th Street CIP project area. In coordination with CREATE partners and consultant staff, independent capital costs estimates were developed for each railroad operators’ rail infrastructure improvements as well as signal


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systems required for efficient operations. CREATE RR partners participating in the 75th Street CIP include:

BRC – Belt Railway Company of Chicago

BNSF

B&OCT- Baltimore & Ohio Chicago Terminal Railroad (CSX) also known as CSX Transportation

CP

IHB

Metra – Metra Commuter Rail

NS – Norfolk Southern Railway

UP – Union Pacific Railroad The 75th Street CIP capital cost estimate was prepared to allow for the independent quantification and calculation of construction and professional service costs of the four (4) CREATE Program component projects (P2, P3, EW2, and GS19) that make up the 75th Street CIP. A description of the major construction components associated with each of these projects is shown below: P2 – Metra South West Service (SWS) Connection to Rock Island District (RID) Line

New rail flyover structure for a passenger rail connector through residential area

Metra flyover bridge on 40 MPH reverse curve, connecting to the RID Line at 74th St

ROW acquisition from the neighborhood south of Hamilton Park = 1.39 acres (No ROW required from Hamilton Park)

P3 ‐ B&OCT Yard Flyover of 75th Street Junction also known as Forest Hill Junction

Raise the two compass north/south CSX tracks over the east/west tracks at 75th Street Junction and over 71st Street (GS19)

Two (2) temporary tracks constructed east of existing B&OCT tracks (property owned primarily by City of Chicago) during construction

EW2 – 80th Street Junction

Two (2) additional tracks through 80th Street Junction

Relocates Amtrak, B&OCT and UP operations from the west side of corridor to east side of corridor

New bridge constructed for the UP over 88th Street t

New NS track constructed from I‐94 (Dan Ryan) north and west to Landers Yard

ROW acquisition of vacant land between two sets of RR tracks north of Vincennes Ave

and south of 80th Street Junction

Add second mainline track southeast of existing Metra track along Columbus Avenue, through existing NS Landers Yard

Reconfigure tracks in Landers Yard


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GS19 – 71st Street Grade Separation

Depress 71st Street profile by approximately 3 feet to provide vertical clearance of 16’‐6” beneath the new rail structure. Total length of reconstruction ≈ 660 feet.

The CREATE Railroad partners generally staff their own, independent teams for construction of trackwork, signals and associated facilities (known as force account work). Under certain circumstance, Railroads may use the services of outside contractors specifically for grading activities, environmental mitigation, structures, roadway improvements, and track construction. In general, all CREATE Program project grade separations are contracted by the State or by local Agencies. The GS19 project segment, however, may be an exception where the structure work may be included with the scope of work of the P3 project, which may be led by CSX. Project phasing and funding – For the CER, the assumption was the 75th Street CIP would be built as one complete project, with all funding available prior to bidding, and a five-year construction schedule. The project team also wanted to document that MAP-21 (the federal transportation funding bill) allows projects to include a phasing plan that identifies fundable incremental improvements or phases that will address the purpose and the need of the project in the short term in the event there are insufficient financial resources to complete the entire project. Given the substantial total capital cost of the Preferred, there is some potential the entire project cost will not be provided in a single allocation, but will rather be provided over a number of years. Based on these considerations, an initial conceptual construction phasing plan for the project consisting of at least two major phases has been developed and will be considered with future CERs as appropriate. The specific sequence and duration of each of these phases will be adjusted to match the funding that is made available for the project as it is identified in future years. Each of these major phases could be built and would function as a viable transportation facility with substantial transportation benefits even if the other phases were never constructed. Each of these major phases is therefore considered to have operational independence and meets some element(s) of the project purpose and need. In order to meet all elements of the project purpose and need though, completion of all of the separate phases is necessary. The two major potential phases of the overall project are: P3/GS19 and P2/EW2.


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Figure 3 75th Street CIP Project Study Area

BASE ESTIMATE

The project team provided a cost estimate prior to the workshop. This pre-review estimate of

project cost was $818.5 million in 2014 dollars, and $984.4 million escalated to year of

expenditure (YOE) costs. The summary for this base estimate is shown in Appendix A of this

report.

BASE ESTIMATE ADJUSTMENTS

During the review of the project and estimate details, certain items came to the attention of

the review team that were considered to be adjustments to the base estimate, as opposed to

being risks for potential cost changes. These estimate adjustments are summarized as follows:


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Estimate Item Adjustments during CER Change to Base Estimate

($ in millions)

Final Design from 6% to 9% on different set of categories (now 1-9) $30.75

Public Outreach from .5% to 1% $4.03

Legal/permits from .5% to .25% ($0.38)

RR flagging, CEI and OH for RR company ($0.6)

Merged CEI and CM (total reduced from 8% to 7% for non-RR work) ($6.12)

MOT on contract P3 was removed (1% previous) ($1.35)

Temporary Facility Utility Relocation, Temporary ROW easements allowances for GS19 grade separation removed when line item cost was moved from Category 5.0 (Structures) to Category 2.0 (Civil)

($1.15) ($0.6)

($0.06)

Reduced Program Mgmt from 4% to 1% on different set of categories (now 1-9)

($8.9)

Total Estimate Adjustments $15.6

Table 6 Base Estimate Adjustments

This $15.6 million adjustment to the base estimate increased the present day estimate from

$818.5 million to $834.1 million that was used as the base for the CER. The $834.1 million

included $119.4 million of contingencies that were removed from the estimate to establish the

base CER value prior to adjusting for base variation, market conditions, risks and inflation. The

CER base was calculated using the following:

Item Description Cost Estimate Value

Pre-CER Base Present Day Cost Estimate $818.5

Cost Estimate adjustments during CER $15.6

Subtotal Cost Estimate Base $834.1

Removal of Contingency from Cost Estimate ($119.4)

Exclusion of expended/fixed costs (1) ($10.4)

Base Estimate for CER Analysis $704.3

Table 7 Base for CER Analysis

Note (1): The $10.4 million of expended / fixed costs is related to the preliminary engineering

and environmental document work (i.e., Phase I engineering) that has been completed or is

under contract.


22 | P a g e

SCHEDULE

Table 8 outlines some of the project milestone schedule dates.

Project Phase / Scope Schedule Start

Date Scheduled

Completion Date

P2 – Final Design / Right-of-Way / Utilities 4/1/2015 7/30/2017

P3 – Final Design / Right-of-Way / Utilities 4/1/2015 7/30/2017

EW2 – Final Design / Right-of-Way / Utilities 2/1/2015 10/1/2017

GS19 – Final Design / Right-of-Way / Utilities 4/1/2015 7/30/2017

P2 - Construction 8/1/2017

11/30/2020

P3 - Construction 8/1/2017

8/30/2019

EW2 - Construction 8/1/2017

10/31/2021

GS19 - Construction 10/1/2017

10/31/2019

Table 8 Project Summary Schedule Dates

The schedule date table is the current concept for the project that will be refined over time.

These dates were utilized primarily to develop the proper inflation calculations for the year of

expenditure estimates for the project.

REVIEW FINDINGS

Several findings were noted during the CER, including the following:

The Pre-CER estimate detail is advanced for level of design (preliminary engineering)

Relevant unit prices were utilized from IDOT/CDOT/ Railroads’ experience and project

complexity (i.e-CREATE –P1 project) and were found to be reasonable

The team had performed an analysis of risks specific to unique CREATE partnership (i.e.-

maintaining freight rail operations through construction)

Most construction is proposed within existing ROW, except portions of the east end of

P2


23 | P a g e

The structural elements of the project have been designed to the preliminary

engineering level (i.e. 30% plans) and are therefore relatively early in the design stage,

with greater uncertainty

Alignment geometrics and project limits have been tightly established via the input

received from CREATE partners and preliminary engineering/NEPA/public involvement

processes

Railroad force account work (vs. bid work) is expected to experience less risk due to

limited ROW needs and previously developed force account/firm labor contract

conditions and pre-established cost control procedures

REVIEW RECOMMENDATIONS

The following recommendations resulted from this review:

Manage risk of structures cost uncertainty and scope creep

Mitigate potential or avoid change orders via strong design and construction

management practices, such as risk management and cost and schedule controls.

Manage schedule risks leading up to project construction, such as ROW acquisition,

utility relocation, track outages.

Contractors (non-railroad) should be ready to utilize good winter weather

Update and QA overall estimate as decisions are made, market conditions change, or other threats or opportunities are avoided, minimized, mitigated or realized

Coordinate early on with Utility service providers and other contractors to inform them

of Buy America Requirements, Advise potential contractors of this requirement and how

it could impact their material procurement

Understand utility costs and impact on schedule

Continue coordination and communication through the CREATE partnership

Continue proactive public outreach and involvement into the final design and

construction phases

Continue implementing risk management procedures, using the risk register

Update the cost estimate based on risk management process

Ensure that the project management plan addresses risk response strategies for

identified risks


24 | P a g e

CHAPTER 3 – RISK ANALYSIS

Cost estimates, especially those for Major Projects, usually contain a degree of uncertainty due

to unknowns and risks associated with the level of detailed design completion. For this reason,

it is logical to use a probabilistic approach and express the estimate as a range rather than a

single discrete value. During the cost estimate review, uncertainties in the Project estimate

were modeled by the Team to reflect the opinions of the Subject Matter Experts (SMEs)

interviewed. The Team used the Monte‐Carlo simulation to incorporate the uncertainties into

forecast curves representing the expected range of cost and schedule for the Project.

These probability based estimates provide essential components to the decision making

process. Probability accounts for the uncertainty and reflects the collective “best guess” of

SMEs. A probability distribution can be used to represent the estimate’s Total YOE Project

Costs. Since the dollars represent YOE, the curve is often referred to as a forecast curve. The

forecast curve of YOE Total Project Cost for this Project is discussed below.

COST FORECAST

The forecast distribution curve for the project (shown in Figure 4 below and also as Figure 1 in

the Executive Summary) reflects all the underlying variation and risks associated with the

project. The variation and risks include base variability, market conditions at time of letting (i.e.

competition, supply and demand), inflation and project risks.


25 | P a g e

Figure 4 Distribution of Total Project Costs in YOE Dollars

Figure 4 demonstrates the results of the simulation and the proximity of the project pre-CER

YOE estimate ($984 Million) to the 70% probability guidance of $952 million, including to-date

and fixed costs. These costs include construction, design/engineering,

administration/overhead, right-of-way, inflation and contingencies (expressed in YOE dollars),

and depict the following:

The blue shaded (darker shade on left) area, represents a 70% probability that the total

cost for the cost will be less than $952 million dollars.

The red shaded area (lighter shade on right) of the graph represents a 30% probability

that total project costs will exceed $952 million based on the underlying variation within

the estimate.

The 70% result of $952 million is lower than the pre-CER estimate of $984 million by $32

million dollars, or approximately a 3% difference. This variance is a combination of

adjustments to the base estimate during the CER, the assessment of risk, and the

reduction of inflation from 4.5% in the pre-CER estimate to 3.5% in the CER.

Table 9 displays the probability range of forecast YOE costs from results in Figure 4:

70% = $952 M


26 | P a g e

Percentile Forecast values

0% $783,264,643

10% $876,945,471

20% $894,251,316

30% $908,217,603

40% $920,158,763

50% $930,286,668

60% $940,368,522

70% $951,904,257

80% $965,439,258

90% $984,108,792

100% $1,079,809,439

Table 9 Percentile Rankings of Total Project Costs in YOE Dollars

Table 9 demonstrates that the 20% to 80% range for the cost estimate is approximately $894 to

$965 million; a variance of approximately 8% between these values. The ranges below 20% and

above 80% are extremely wide and demonstrate the uncertainty of costs for this project should

extreme opportunities and/or risks be realized.

PROJECT RISKS (THREATS AND OPPORTUNITIES)

The purpose of the Risk Register is to identify significant cost and schedule risks for the project

so they can be modeled instead of assuming general contingency values. In the traditional cost

estimate, risks are often accounted for using estimates of contingency. During this review, the

pre-CER estimate contingency was removed, and the team developed the potential threats

and/or opportunities in lieu of contingency items. The Review Team worked together with the

SMEs to develop the threats and opportunities shown in the Risk Register in Appendix B to this

report. The most significant of these cost risks that could impact the project included the

following:

THREATS TO INCREASE PROJECT COSTS

Structures Superstructure Cost Increases: Likelihood of occurrence 80%; Most likely

impact if occurring $29 million

The Team identified the potential for large increases in the superstructure costs for structures

as the design progresses. Currently the structures are at a conceptual design level consistent

with Phase I preliminary engineering projects. As final design proceeds there is the risk or


27 | P a g e

greater structural reinforcement; beam or deck replacement, and widening than currently

estimated.

Structures Substructure Cost Increases: Likelihood of occurrence 80%; Most likely

impact if occurring is $14 million

The Team identified the potential for large increases in the substructure costs for structures as

the design progresses. Currently the structures are at a conceptual design level, and as final

geotechnical information is available and final design proceeds there is the risk of substructure

requirements that are more costly than presently estimated.

Potential Change Orders during construction: Likelihood 100%: Most likely impact

per portion of the project: P2-$8.9; P3-$12.8; EW2-$11.9; GS19-$1.2

The team agreed that there would likely be change orders during construction due to elements

such as unforeseen conditions or unanticipated changes to the design. A potential range of

impact was agreed to and modeled as from a low of 2% to a high of 10%, with a most likely of

6% of project costs for P2, P3 and EW2. The railroad work on these portions of the project are

expected to have a lower change order percentage than the civil work, and these composite

percentages were agreed to. For the portion GS19, a range of low of 5% to a high of 15%, with

a most likely of 10% of project costs was used, as this portion is all civil work and has a greater

potential for variance based on the team’s experience.

Other threats modeled that were low in probability and potential impacts include the potential

for additional railroad track replacement should there be design changes to the geometry of

the track layout, additional temporary track and signal work for extended duration or if portion

P3 is not first in the project sequence, potential additional work on the viaducts, and

miscellaneous potential quantity variances.

OPPORTUNITIES TO REDUCE PROJECT COSTS

There were no opportunities modeled related to the potential reduction of project costs. It was

part of the discussion that being able to mitigate the largest cost threats (structures increases

and construction change orders) will in effect reduce the costs of the project. The management

of these threats in effect is the opportunity to reduce project costs.

SCHEDULE FORECAST

Figure 5 (same as Figure 2 from the Executive Summary) displays results showing a low

probability for the project to end at the current scheduled completion date of October 31,


28 | P a g e

2021. The 70% probability level results in a date of October 29, 2022, approximately 12 months

after the current planned date of October 31, 2021. This variance can be attributed to the

significant schedule risks that have been identified and need to be managed. These threats are

described in the following section.

Figure 5 Project Potential Schedule

THREATS TO DELAY PROJECT SCHEDULE

Delay to Right of Way Acquisition; Likelihood – 80%; Most Likely Impact – 9 months

The CER Review Team discussed the potential for the delay of ROW acquisition on portions P2

and EW2 of the project. The potential acquisition delays are from 6 months to 12 months, with

a most likely impact of 9 months. Part of this delay threat is the current schedule that includes

2 years per portion of the project for completion of final design and right-of-way acquisition,

and the Team considered that this could be somewhat aggressive. There was discussion during

the CER that IDOT could ask for legislative approval for "quick take" authority to advance ROW

Acquisition to help mitigate this potential schedule threat.

Current Schedule Completion:

10/31/2021

70% = 10/29/2022


29 | P a g e

Existing Railroad Operations delaying construction: Likelihood – 50%; Most Likely

Impact – 3 months

The review team identified the threat, ensuring rail operations continue unimpeded by

construction during peak times, could extend the duration of project portion EW2 from 2 to 4

months, with the most likely impact being 3 months. Mitigation of this threat will require close

coordination between the railroads and the contractor related to peak time needs and

potential conflicts.

Bridge Structure material delivery delays: Likelihood – 50%; Most Likely Impact – 3

months

Potential delay in the delivery of fabricated material for bridge structures could have an impact

on the schedules for bridge construction, with a potential impact modeled from 1 month to 4

months, with the most likely impact being 3 months. The advanced scheduling and

coordination of any long lead-time materials will help mitigate this potential delay.

Bridge Structure construction delays: Likelihood – 50%; Most Likely Impact – 2 months

There is the potential that work on certain bridge structures may have to be delayed due to

work on other structures in the area and the importance of maintaining vehicular traffic. This

impact was modeled with a range of 1 to 4 months of potential delay. Mitigation of this threat

would be close coordination and scheduling of bridge construction well in advance to minimize

local maintenance of traffic.

Utility Relocation delays: Likelihood – 30%; Most Likely Impact – 3 months

The relocation of utilities was determined by the Team to have a 30% likelihood of impacting

the construction schedule. Should this threat occur, the impact was in a range from 1 to 5

months, with 3 months being the most likely delay. Communication and coordination with the

utility companies will mitigate much of this delay, although the threat of encountering

unknown utilities could still have an impact.


30 | P a g e

OPPORTUNITIES TO ADVANCE PROJECT SCHEDULE

Avoiding Weather Impacts: Likelihood – 60%; Most Likely Impact – 3 months

The current construction schedule assumes 4 months per year of slowed or inactive

construction due to the impact of inclement weather.The team considers that there is an

opportunity that this schedule could be improved should the winter weather be better than

typical and/or the contractor is able to schedule specific construction during the winter months.

REVIEW CONCLUSION

The results of the review demonstrate that the contingency amount in the pre-CER estimate

was sufficient to cover the risks identified during the CER, with the 70% result of $952 million

being approximately 3% less than the per-CER estimate of $984 million. There are major

threats for the team to manage, including the initial schedule threats to right-of-way acquisition

and utility relocation. There are also opportunities during the design stage to avoid some of the

major cost threats, and during the construction stage by aggressively managing scope changes,

to potentially reduce the overall project costs.

ALTERNATIVE ANALYSIS SIMULATION

The Team discussed a simulation option to model the threat of the project being delayed by 3

years due to funding constraints. The objective was to determine the potential total cost impact

of such a delay and an approximate monthly cost impact. This simulation was based on

delaying the start of final design for the portions of the project from 12/1/2014 to 12/1/2017.

This 3 year delay simulation resulted in the following:

Version 70% Cost Result

Current CER $952 million

Simulation with 3 yr delay to start $1,055 million

Delta $103 million

Delta Cost per month (delta / 36 months) $2.9 million / month

Table 10 Simulation of Delayed Project Start

The conclusion of this simulation is that for every month of delay to the start of the project the

project cost increases approximately $2.9 million, assuming that the cost escalation is in the

range of 3.5% per year. Note that this is a “straight line” calculation and does not examine the

compounding of inflation costs over time.


31 | P a g e

APPENDICES

APPENDIX A – Pre-CER Project Cost Estimate

APPENDIX A1: Updated Cost Estimate for CER Model

APPENDIX B – CER Risk Register

APPENDIX C – Crystal Ball Probability Analysis Results

APPENDIX D – Closeout Presentation

APPENDIX E – Workshop Agendas and Sign-in Sheets


32 | P a g e

APPENDIX A – Pre-CER Project Cost Estimate

CREATE - 75th ST CIPCost Estimate Review (CER)

DRAFT Project Summary

Revised: 5/12/2014

(DRAFT) CREATE 75th ST CIP: Summary of CER Inputs

Segment

LOOKUPPE/ENV Final Design ROW / Utility Construction

Construction

Related Prof SvcsPE Final Design ROW / Utility Construction

Construction

Related Prof Svcs

CREATE Phase I

Contingency &

Mgmt ResP2 $2,695,090 $6,800,338 $8,075,709 $148,873,168 $17,958,342 $0 $0 $1,615,142 $29,774,634 $0 $31,389,775

P3 $3,879,335 $9,451,679 $7,661,970 $214,289,326 $25,574,258 $0 $0 $1,532,394 $42,857,865 $0 $44,390,259

EW2 $3,602,048 $5,160,968 $7,886,081 $198,972,363 $20,501,911 $0 $0 $1,577,216 $39,794,473 $0 $41,371,689

GS19 $246,832 $799,055 $640,015 $13,634,660 $1,802,988 $0 $0 $128,003 $2,726,932 $0 $2,854,935

Segment Total $10,423,305 $22,212,040 $24,263,776 $575,769,517 $65,837,499 $0 $0 $4,852,755 $115,153,903 $0 $120,006,659

Check vs Detail $10,423,305 $22,212,040 $24,263,776 $575,769,517 $65,837,499 $0 $0 $4,852,755 $115,153,903 $0 $120,006,659

CREATE Total

Base Year

Estimate

Summary

No Contingency

With Phase I

Contingency &

Mgmt Res

Year of

Expenditure

Estimate

Summary

No Contingency

With Phase I

Contingency &

Mgmt Res

Base Yr (2013)

Project Totals

Base Yr (2013)

Project Totals

Future (Inflated)

Project Totals

Future (Inflated)

Project TotalsP2 $184,402,647 $215,792,422 P2 $220,727,857 $258,512,826

P3 $260,856,569 $305,246,828 P3 $305,950,453 $366,251,123

EW2 $236,123,371 $277,495,060 EW2 $288,719,102 $333,229,820

GS19 $17,123,550 $19,978,486 GS19 $20,113,313 $23,929,122

Future (Inflated) Total $698,506,137 $818,512,796 Future (Inflated) Total $835,510,725 $981,922,891

Cost of Inflation (Future - Base Year) $137,004,588 $163,410,095

Summary by

Account

Account Description Direct CostPhase 1 Allocated

ContgcyDirect Cost

Phase 1 Allocated

ContgcyDirect Cost

Phase 1 Allocated

ContgcyDirect Cost

Phase 1 Allocated

ContgcyDirect Cost

Phase 1 Allocated

ContgcyGrand Total

1.0 Removals / Demolition $3,236,987 $647,397 $4,257,380 $851,476 $21,296,492 $4,259,298 $0 $0 $28,790,859 $5,758,172 $34,549,031

2.0 $1,174,570 $234,914 $1,912,096 $382,419 $14,121,662 $2,824,332 $896,272 $179,254 $18,104,600 $3,620,920 $21,725,520

3.0 $21,116,900 $4,223,380 $22,525,775 $4,505,155 $41,379,526 $8,275,905 $0 $0 $85,022,201 $17,004,440 $102,026,641

4.0 $14,775,000 $2,955,000 $35,000,000 $7,000,000 $39,700,000 $7,940,000 $0 $0 $89,475,000 $17,895,000 $107,370,000

5.0 $92,837,000 $18,567,400 $133,978,000 $26,795,600 $49,309,625 $9,861,925 $11,544,000 $2,308,800 $287,668,625 $57,533,725 $345,202,350

6.0 $897,750 $179,550 $865,700 $173,140 $3,010,350 $602,070 $0 $0 $4,773,800 $954,760 $5,728,560

7.0 $1,650,317 $330,063 $3,834,495 $766,899 $18,508,916 $3,701,783 $39,988 $7,998 $24,033,716 $4,806,743 $28,840,459

8.0 $13,184,644 $2,636,929 $11,915,880 $2,383,176 $11,645,793 $2,329,159 $1,154,400 $230,880 $37,900,717 $7,580,143 $45,480,860

9.0 $4,769,253 $953,851 $6,933,910 $1,386,782 $3,541,445 $708,289 $579,199 $115,840 $15,823,807 $3,164,761 $18,988,568

10.0 $3,306,456 $661,291 $728,061 $145,612 $4,344,637 $868,927 $60,816 $12,163 $8,439,969 $1,687,994 $10,127,962

11.0 $27,453,769 $0 $38,905,272 $0 $29,264,927 $0 $2,848,875 $0 $98,472,844 $0 $98,472,844

SUBTOTAL $184,402,647 $31,389,775 $260,856,569 $44,390,259 $236,123,371 $41,371,689 $17,123,550 $2,854,935 $698,506,137 $120,006,659 $818,512,796

Utility

ROW

Professional Services

Signals & Systems

Structures

Viaducts

Environmental Mitigation

Miscellaneous & Temporary Facilities

$698,506,137 $120,006,659

CREATE Phase 1 Contingency (Mgmnt Res + Allocated)

Civil - Earthwork

Trackwork

Functional Class Costs (Less Contingency)

P2 P3 EW2 GS19 CREATE TOTAL

print date: 7/17/2014


33 | P a g e

APPENDIX A1: Updated Cost Estimate for CER Model

CREATE - 75th ST CIPCost Estimate Review (CER)

DRAFT Project Summary

Revised: 5/12/2014

(DRAFT) CREATE 75th ST CIP: Summary of CER Inputs

Segment

LOOKUPPE/ENV Final Design ROW / Utility Construction

Construction

Related Prof SvcsPE Final Design ROW / Utility Construction

Construction

Related Prof Svcs

CREATE Phase I

Contingency &

Mgmt ResP2 $2,706,856 $13,827,818 $8,875,709 $148,873,168 $14,211,924 $0 $0 $1,775,142 $29,774,634 $0 $31,549,775 $23,662,332

P3 $3,871,754 $19,788,732 $7,661,970 $212,940,889 $20,338,419 $0 $0 $1,532,394 $42,588,178 $0 $44,120,572 $33,090,429

EW2 $3,617,775 $18,226,243 $7,086,081 $198,972,363 $18,732,527 $0 $0 $1,417,216 $39,794,473 $0 $41,211,689 $30,908,767

GS19 $226,920 $1,123,403 $2,209 $12,480,260 $1,154,609 $0 $0 $442 $2,496,052 $0 $2,496,494 $1,872,370

Segment Total $10,423,305 $52,966,196 $23,625,970 $573,266,680 $54,437,479 $0 $0 $4,725,194 $114,653,336 $0 $119,378,530 $89,533,898

Check vs Detail $10,423,305 $52,966,196 $23,625,970 $573,266,680 $54,437,479 $0 $0 $4,725,194 $114,653,336 $0 $119,378,530 $89,533,898

CREATE Total

Notes:

Phase I - PE/ENV; Phase II - FD/ROW/UT; Phase III - Construction

Construction Related Professional Services include: Project Management; Construction Management (RR Force Acct & Consultant); Legal, Permitting, Reviewing Agency Fees; Survey, Permitting and Inspections; Public Information/Advocacy

CREATE Partners agreed to range of 7% - 10% for Construction Management OR as determined by Owner

YOE Calculations utilize Phase I, Phase II, Phase III escalation rates corrollated to segments P2, P3, EW2, GS19 expenditures

CREATE Phase I (PE, Environmental) Contingency includes: 5% Management Reserve + 15% Applied (Design, Construction) Contingency

CREATE Phase II (conclusion of Final Design) Contingency includes: 5% Management Reserve + 10% Construction Contingency

Segment

LOOKUPStart Date Duration (Mo) Start Date Duration (Mo) Start Date Duration (Mo) Start Date Duration (Mo) % Completion

P2 Jan-11 47 Apr-15 26 Apr-15 28 Aug-17 40

P3 Jan-11 47 Apr-15 26 Apr-15 28 Aug-17 24

EW2 Jan-11 47 Feb-15 30 Feb-15 32 Oct-17 49

GS19 Jan-11 47 Apr-15 26 Apr-15 28 Aug-17 26

Notes:

Final Design Duration is calculated as 2 months less than ROW / Utility Coordination duration

Base Year

Estimate

Summary

No Contingency

With Phase I

Contingency &

Mgmt Res

With Phase II

Contingency &

Mgmt Res

Year of

Expenditure

Estimate

Summary

No Contingency

With Phase I

Contingency &

Mgmt Res

With Phase II

Contingency &

Mgmt Res

Base Yr (2013)

Project Totals

Base Yr (2013)

Project Totals

Base Yr (2013)

Project Totals

Future (Inflated)

Project Totals

Future (Inflated)

Project Totals

Future (Inflated)

Project TotalsP2 $188,495,475 $220,045,251 $212,157,807 P2 $217,041,988 $253,642,869 $244,492,967

P3 $264,601,765 $308,722,337 $297,692,194 P3 $299,971,907 $356,371,643 $343,483,102

EW2 $246,634,989 $287,846,678 $277,543,755 EW2 $288,539,390 $332,301,394 $320,261,214

GS19 $14,987,401 $17,483,895 $16,859,772 GS19 $17,062,808 $20,231,560 $19,493,845

Future (Inflated) Total $714,719,630 $834,098,160 $804,253,528 Future (Inflated) Total $822,616,092 $962,547,467 $927,731,128

Cost of Inflation (Future - Base Year) $107,896,462 $128,449,307 $123,477,600

Account Direct CostPhase 1 Allocated

ContgcyDirect Cost

Phase 1 Allocated

ContgcyDirect Cost

Phase 1 Allocated

ContgcyDirect Cost

Phase 1 Allocated

ContgcyDirect Cost

Phase 1 Allocated

ContgcyGrand Total

1.0 $3,236,987 $647,397 $4,257,380 $851,476 $21,296,492 $4,259,298 $0 $0 $28,790,859 $5,758,172 $34,549,031

2.0 $1,174,570 $234,914 $1,912,096 $382,419 $14,121,662 $2,824,332 $12,440,272 $2,488,054 $29,648,600 $5,929,720 $35,578,320

3.0 $21,116,900 $4,223,380 $22,525,775 $4,505,155 $41,379,526 $8,275,905 $0 $0 $85,022,201 $17,004,440 $102,026,641

4.0 $14,775,000 $2,955,000 $35,000,000 $7,000,000 $39,700,000 $7,940,000 $0 $0 $89,475,000 $17,895,000 $107,370,000

5.0 $92,837,000 $18,567,400 $133,978,000 $26,795,600 $49,309,625 $9,861,925 $0 $0 $276,124,625 $55,224,925 $331,349,550

6.0 $897,750 $179,550 $865,700 $173,140 $3,010,350 $602,070 $0 $0 $4,773,800 $954,760 $5,728,560

7.0 $1,650,317 $330,063 $3,834,495 $766,899 $18,508,916 $3,701,783 $39,988 $7,998 $24,033,716 $4,806,743 $28,840,459

8.0 $13,184,644 $2,636,929 $10,567,443 $2,113,489 $11,645,793 $2,329,159 $0 $0 $35,397,880 $7,079,576 $42,477,455

9.0 $4,769,253 $953,851 $6,933,910 $1,386,782 $3,541,445 $708,289 $1,999 $400 $15,246,607 $3,049,321 $18,295,928

10.0 $4,106,456 $821,291 $728,061 $145,612 $3,544,637 $708,927 $210 $42 $8,379,363 $1,675,873 $10,055,235

11.0 $30,746,598 $0 $43,998,905 $0 $40,576,544 $0 $2,504,932 $0 $117,826,980 $0 $117,826,980

$188,495,475 $31,549,775 $264,601,765 $44,120,572 $246,634,989 $41,211,689 $14,987,401 $2,496,494 $714,719,630 $119,378,530 $834,098,160

Phase 2 Allocated

Contgcy$23,662,332 $33,090,429 $30,908,767 $1,872,370 $714,719,630 $89,533,898 $804,253,528

Description

Summary by Account

SUBTOTAL

GS19 CREATE TOTAL

Functional Class Costs (Less Contingency) CREATE Phase 1 Contingency (Mgmnt Res + Allocated)CREATE Phase II

Contingency &

Mgmt Res

$714,719,630 $119,378,530

PE/ENV Final Design ROW / Utility Construction

P2 P3 EW2

Removals / Demolition

Civil - Earthwork

Trackwork

Signals & Systems

Structures

Viaducts

Environmental Mitigation

Miscellaneous & Temporary Facilities

Utility

ROW

Professional Services

print date: 9/30/2014


34 | P a g e

APPENDIX B – CER Risk Register

Risks included in the Probability Model: the following risks were considered by the Team to have a reasonable chance of occurrence and were included in the model with a probability percentage and range of impact should they occur.

Risk # Event Risk Name Risk Type Detailed Description of Risk Event Probability 10% Cost Most Likely Cost 90% Cost

Cost Risk

(Threat/

Opportunity)

10% Schedule

(Mo)

Most Likely

Schedule (Mo)

90% Schedule

(Mo)

Schedule Risk

(Threat/

Opportunity)

1 Removal of Track & Signal items Cost/Schedule

Design changes to track geometric

layout requiring additional track

replacement

25% 1,138,234$ 1,422,793$ 1,707,352$ Threat 0.00 0.00 0.00 Threat

2Quantity Variance with Civil/Earthwork

itemsCost/Schedule

Potential additional quantities for

Civil/Earthwork items as required10% 1,263,827$ 1,579,784$ 1,895,741$ Threat 0.00 0.00 0.00 Threat

3 71st St at-grade crossing Cost Potential additional utilities work 50% 40,713$ 50,891$ 61,069$ Threat 0.00 0.00 0.00 Threat

4Interim Track and Signal work for

extended durationCost

Additional temporary track and

signal work for extended duration

or if project P3 is not first in the

project sequence

40% 2,000,000$ 2,500,000.00 3,000,000$ Threat 0.00 0.00 0.00 Threat

5Structures - waste site near

abmutment exc.Cost

Special waste site near abutment

excavation; addtl geotech will

occur in the future, cost is based

on additional excavation and

hauling of material

5% 2,876,686$ 5,753,372.50 8,630,059$ Threat 0.00 0.00 0.00 Threat

6Substructure Rehabilitation

(Structures)Cost

Basic Rehabilitation will change as

geotech information is realized80% 7,191,716$ 14,383,431.25 21,575,147$ Threat 0.00 0.00 0.00 Threat

7Superstructure Rehabilitation /

Widending (Structures)Cost

Substantial Structural

Reinforcement; Beam or Deck

Replacement; Widening

80% 14,383,431$ 28,766,862.50 43,150,294$ Threat 0.00 0.00 0.00 Threat

8 Structures - delivery delays Schedule Delay in delivery of materials 50% 0 0.01 0.02 Threat 1 3 4 Threat

9 Structures - delayed improvements Schedule

Consecutive (or close by) bridge

improvements may be delayed to

minize traffic impacts due to road

closures

50% 0 0.01 0.02 Opportunity 1 2 4 Threat

10 Opportunity to avoid weather impacts Schedule

4 months per year are included for

the impact of Weather events

requiring construction to slow or

stop; the team considers that

there is an opportunity that this

schedule could be improved

60% 0 0.01 0.02 Opportunity 2 3 4 Opportunity

11 EW2 Operations impact delays SchedulePotential for operations delays

during peak RR seasons50% 0 0.01 0.02 Threat 2 3 4 Threat

12Viaduct elements; additional costs and

scopeCost

There will likely be additional work

on the viaducts as the scoping and

pricing for improvements are

finalized

90% 500,000$ 1,000,000$ 1,500,000$ Threat 0.00 0.00 0.00

13 P2 ROW Acquisition Delay SchedulePotential delay to the acquisition

of ROW on project P2. 80% 0 0.01 0.02 Threat 6 9 12 Threat

Risk # Event Risk Name Risk Type Detailed Description of Risk Event Probability 10% Cost Most Likely Cost 90% Cost

Cost Risk

(Threat/

Opportunity)

10% Schedule

(Mo)

Most Likely

Schedule (Mo)

90% Schedule

(Mo)

Schedule Risk

(Threat/

Opportunity)

14 EW2 ROW Acquisition Delay SchedulePotential delay to the acquisition

of ROW on project EW2. 80% 0 0.01 0.02 Threat 6 9 12 Threat

15 Utility relocaton delays Schedule

Potential for delay to the

relocation of utilities delaying the

start of consructon on the project.

Probability is at 30% since there is

an opportunity to complete the

utility relocations at the beginning

of construction, if necessary.

30% 0 0.01 0.02 Threat 1 3 5 Threat

16 GS19 Change Orders Cost

Unforeseen changes during

construction (Change Orders). For

the IDOT work on GS19, the range

is 5% low, most likely 10% and

high end 15%.

100% 624,013$ 1,248,026$ 1,872,039$ Threat 0.00 0.00 0.00

17 P2 Change Orders Cost



the RR work on projects P2, P3

and EW2, 2% is low; 6% likeliest

and 10% high

100% 2,977,463$ 8,932,390$ 14,887,317$ Threat 0.00 0.00 0.00

18 P3 Change Orders Cost





and 10% high

100% 4,258,818$ 12,776,453$ 21,294,089$ Threat 0.00 0.00 0.00

19 EW2 Change Orders Cost





and 10% high

100% 3,979,447$ 11,938,342$ 19,897,236$ Threat 0.00 0.00 0.00

Risks not included in the Probability Model: the following risks were identified by the Team (many pre-CER) but were not considered to have a high enough probability of occurrence to be included in the probability model. Therefore, these risks had zero probability and did not impact the model. It is recommended that the Team continue to monitor these risks to determine if they could have any future impact.

Risk # Event Risk Name Risk TypeDetailed Description of Risk

Event Probability 10% Cost Most Likely Cost 90% Cost

Cost Risk

(Threat/

Opportunity)

10% Schedule

(Mo)

Most Likely

Schedule (Mo)

90% Schedule

(Mo)

Schedule Risk

(Threat/

Opportunity)

1 Demolition of ROW Schedule

Identification of contaminated

items requiring development of

mitigation strategy and potential

procurement of services. In team

discussion it was considered very

unlikely that a delay would occur,

and this risk was retired.

0% 0 0.01 0.02 Threat 0.00 0.00 0.00 Threat

2 Union Avenue Cost

Potential additional work to keep

Union Avenue open. In

discussion, it was considered

unlikely this risk would occur and

the risk was retired.

0% 0 0.01 0.02 Opportunity 0.00 0.00 0.00 Threat

3Track - added track, turnouts,

crossovers, etc.Cost

As design progresses, could be

additional track and related items

added. In the workshop

discussion, the team considered

the track quanitites would very

likely remain consistent.

Therefore, this risk was retired.

0% 0 0.01 0.02 Threat 0.00 0.00 0.00 Threat

4Control Point Signals; additional

work related to these new signalsCost

As design progresses, could be

additional control point signals

and related items added. During

the workshop, the team

considered it unlikely that

additional control point signals

would be added. Therefore, this

risk was retired.

0% 0 0.01 0.02 Threat 0.00 0.00 0.00 Threat

5Stuctures - improved schedule due

to design standardization Schedule

Standardization of structural

elements to decrease lead time

on material delivery. The team

considered it unlikely this could

improve the schedule. Therefore,

this risk was retired.

0% 0 0.01 0.02 Opportunity 0.00 0.00 0.00 Opportunity

6Stuctures - lower costs due to

standardization Cost

standardization of structural

elements resulting in greater

quantities and lower unit cost of

procurement. This item was

considered by the team to be very

unlikely that it would occur, and

therefore it was retired.

0% 0 0.01 0.02 Opportunity 0.00 0.00 0.00 Threat



Cost Risk

(Threat/

Opportunity)

10% Schedule

(Mo)

Most Likely

Schedule (Mo)

90% Schedule

(Mo)

Schedule Risk

(Threat/

Opportunity)

7 Viaducts - additional quantities Cost

Addtl quantities for special waste

site near abutments, rehab or

other modifications. Item was

considered by the team to be very

unlikely and therefore was

retired.

0% 0 0.01 0.02 Threat 0.00 0.00 0.00 Threat

8 Viaducts - standardized designs Cost/Schedule

Potential for standardized design

which should decrease costs and

save on delivery schedule. Item

considered very unlikely by the

team and therefore was retired.

0% 0 0.01 0.02 Opportunity 0.00 0.00 0.00 Opportunity

9Environmental Mitigation -

Hazardous MaterialsCost

unkown HazMat locations along

RR or Private ROW. After team

review, it was considered the

estimate is conservative for the

sites identified, and it is very

unlikely that the costs will exceed

what is estimated or that there

will be any schedule impact.

Therefore, this item was retired.

0% 0 0.01 0.02 Threat 0.00 0.00 0.00 Threat

10Misc - additional Staging, MOT,

FlaggingCost

Estimate is conservative with

allowances for these items. This

risk was considered by the team

to be very unlikely and was

retired.

0% 0 0.01 0.02 Threat 0.00 0.00 0.00 Threat

11 Utility Conflicts - RR ROW Cost/Schedule

Minor unkown utility conflicts

may be present within RR ROW.

This is considered unlikely and

was retired.

0% 0 0.01 0.02 Threat 0.00 0.00 0.00 Threat

12Utility Conflicts -

Roadway/InfrastructureCost/Schedule

Additional mitigation measures at

known utilty conflicts.

Coordination of relocation

between utility holders. The team

agreed that the allowance for

utility relocations is sufficient to

cover this potential, and therefore

the risk was retired.

0% 0 0.01 0.02 Threat 0.00 0.00 0.00 Threat



Cost Risk

(Threat/

Opportunity)

10% Schedule

(Mo)

Most Likely

Schedule (Mo)

90% Schedule

(Mo)

Schedule Risk

(Threat/

Opportunity)

13ROW - Acquisition of alternative

ROW parcelsCost/Schedule

Potential for the identification and

acquisition of alternative ROW

parcels. Risk was considered by

the team to be very unlikely and

therefore was retired.

0% 0 0.01 0.02 Threat 0.00 0.00 0.00 Threat

14 ROW - Advanced Procurement Schedule

Advance procurement of ROW to

proceed during the final design.

This could not advance until

funding is avialable. This is

unlikely at this point and was

retired.

0% 0 0.01 0.02 Threat 0.00 0.00 0.00 Opportunity

15 PS - NEPA Clearance delay Schedule

Delay of NEPA clearance would

delay the entire project. Current

NEPA clearance date is October

2014. Team considers that delay

to this item is very unlikely and

this risk was retired.

0% 0 0.01 0.02 Threat 0.00 0.00 0.00 Threat

16 PS - Delays during Final Design

Modifications to track schematics

or special trackwork causing

realignment of tracks and/or

grade separations; new ROW or

ENV impacts; very unlikely that

the design duration will be

exceeded. Therefore, this risk

was retired.

0% 0 0.01 0.02 Threat 0.00 0.00 0.00 Threat

17 PS - advanced track improvements

advance placement of temporary

and permanent track

improvements (where possible) at

the beginning of construction.

This item is considered part of the

normal construction, and no

advanced contracts are

anticipated. Therefore, this risk

was retired.


18 PS - construction through winter

Identify opportunities to continue

construction activities through

winter months (where possible)

i.e. - drill shafts. This is

considered part of the current

schedule and therefore the risk

was retired.




Cost Risk

(Threat/

Opportunity)

10% Schedule

(Mo)

Most Likely

Schedule (Mo)

90% Schedule

(Mo)

Schedule Risk

(Threat/

Opportunity)

19PS - Proj Development delays add

construction CM

Delays in project development or

construciton requiring additional

funds for PM activities beyond

forecast at contract execution.

This item was considered to be

included in the Change Order risk,

and therefore, this risk was

retired.

0% 0 0.01 0.02 Threat 0.00 0.00 0.00 Threat

20 Potential Labor Strike Schedule

Potential for a labor strike that

could delay the projects. There is

very little risk on the RR portion of

the work. Also not considered a

large risk on the State portion.

Therefore, this risk was retired.

0% 0 0.01 0.02 Threat 0.00 0.00 0.00

21

Scope Changes (Management

Reserve) are covered in the line

item details of the other risks

Cost

This item was considered to be

covered in other risks and

therefore was retired.

0% 0 0.01 0.02 Threat 0.00 0.00 0.00


35 | P a g e

APPENDIX C – Crystal Ball Probability Analysis

CER Template_v59_75th CIP_CER_Report(2).xlsm

Crystal Ball Report - Full

Simulation started on 6/26/2014 at 8:29 AM

Simulation stopped on 6/26/2014 at 8:30 AM

Run preferences:

Number of trials run 10,000

Monte Carlo

Random seed

Precision control on

Confidence level 95.00%

Run statistics:

Total running time (sec) 70.52

Trials/second (average) 142

Random numbers per sec 24,248

Crystal Ball data:

Assumptions 171

Correlations 0

Correlated groups 0

Decision variables 0

Forecasts 7

Forecasts

Page 1


Worksheet: [CER Template_v59_75th CIP_CER_Jun_24_2014.xlsm]Risk Register

Forecast: Risks Cell: W8

Summary:

Entire range is from $13,051,296 to $131,082,301

Base case is $71,628,560

After 10,000 trials, the std. error of the mean is $193,117

Statistics: Forecast values

Trials 10,000

Base Case $71,628,560

Mean $72,027,064

Median $72,863,770

Mode ---

Standard Deviation $19,311,675

Variance $372,940,773,812,172

Skewness -0.0900

Kurtosis 2.59

Coeff. of Variability 0.2681

Minimum $13,051,296

Maximum $131,082,301

Range Width $118,031,004

Mean Std. Error $193,117

Total Probable Cost Impact

Page 2


Forecast: Risks (cont'd) Cell: W8

Percentiles: Forecast values

0% $13,051,296

10% $45,933,408

20% $54,651,574

30% $61,635,254

40% $67,405,134

50% $72,861,095

60% $77,756,510

70% $83,070,699

80% $88,832,095

90% $96,522,932

100% $131,082,301

Page 3


Worksheet: [CER Template_v59_75th CIP_CER_Jun_24_2014.xlsm]YOE

Forecast: Inflation Cell: C29

Summary:

Certainty level is 39.40%

Certainty range is from -Infinity to $137,719,391





Trials 10,000

Base Case $139,266,247

Mean $139,836,147

Median $139,745,470

Mode ---


Variance $56,727,006,162,600

Skewness 0.0658

Kurtosis 2.98


Minimum $114,154,204

Maximum $168,952,915



Page 4


Forecast: Inflation (cont'd) Cell: C29


0% $114,154,204

10% $130,272,678

20% $133,527,625

30% $135,796,387

40% $137,824,954

50% $139,744,106

60% $141,624,769

70% $143,775,034

80% $146,234,575

90% $149,478,782

100% $168,952,915

Page 5


Forecast: Project Completion Date Cell: C30

Summary:


Certainty range is from -Infinity to 10/29/2022

Entire range is from 6/14/2021 to 6/10/2024

Base case is 9/8/2022

After 10,000 trials, the std. error of the mean is 1.62


Trials 10,000

Base Case 9/8/2022

Mean 9/26/2022

Median 9/6/2022

Mode ---

Standard Deviation 162.15

Variance 26,293.48

Skewness -0.1478

Kurtosis 2.69


Minimum 4/1/2021

Maximum 11/28/2023

Range Width 1,092.22

Mean Std. Error 1.62

Page 6


Forecast: Project Completion Date (cont'd) Cell: C30


0% 4/1/2021

10% 8/15/2021

20% 10/12/2021

30% 2/15/2022

40% 5/15/2022

50% 7/31/2022

60% 9/10/2022

70% 10/29/2022

80% 2/15/2023

90% 5/6/2023

100% 11/28/2023

Page 7


Forecast: Risks (Threats/Opps) Cell: C26

Summary:





Trials 10,000

Base Case $72,142,237

Mean $72,540,167

Median $73,401,733

Mode ---


Variance $373,498,622,862,276

Skewness -0.0893

Kurtosis 2.59


Minimum $13,051,296

Maximum $132,606,373



Page 8


Forecast: Risks (Threats/Opps) (cont'd) Cell: C26


0% $13,051,296

10% $46,485,017

20% $55,089,921

30% $62,128,351

40% $68,001,806

50% $73,401,473

60% $78,290,715

70% $83,601,360

80% $89,412,973

90% $97,115,899

100% $132,606,373

Page 9


Forecast: Total Project Costs (CY) Cell: C27

Summary:







Trials 10,000

Base Case $786,861,867

Mean $790,702,813

Median $790,695,722

Mode ---


Variance ##################

Skewness 0.0594

Kurtosis 2.95


Minimum $662,379,072

Maximum $921,055,806



Includes base costs, prior costs, fixed costs, and risks

Page 10


Forecast: Total Project Costs (CY) (cont'd) Cell: C27


0% $662,379,072

10% $744,643,879

20% $760,386,574

30% $771,370,165

40% $781,383,510

50% $790,691,646

60% $799,327,456

70% $809,262,391

80% $821,062,777

90% $836,773,876

100% $921,055,806

Page 11


Forecast: Total Project Costs (YOE) Cell: C28

Summary:



Entire range is from $776,533,276 to $1,088,060,285




Trials 10,000

Base Case $926,128,114

Mean $930,538,960

Median $930,266,137

Mode ---


Variance ##################

Skewness 0.0561

Kurtosis 2.95


Minimum $776,533,276

Maximum $1,088,060,285



Includes base costs, prior costs, fixed costs, risks, and inflation

Page 12


Forecast: Total Project Costs (YOE) (cont'd) Cell: C28


0% $783,264,643

10% $876,945,471

20% $894,251,316

30% $908,217,603

40% $920,158,763

50% $930,286,668

60% $940,368,522

70% $951,904,257

80% $965,439,258

90% $984,108,792

100% $1,079,809,439

End of Forecasts

Page 13


Assumptions

Worksheet: [CER Template_v59_75th CIP_CER_Jun_24_2014.xlsm]BaseCost

Assumption: As-Planned CONSTR-EW2 Cell: J79

Triangular distribution with parameters:

10% $198,111,450 (=I62)

Likeliest $217,704,890 (=J62)

90% $237,298,330 (=K62)

Assumption: As-Planned CONSTR-GS19 Cell: J82


10% $12,407,731 (=I65)

Likeliest $13,634,869 (=J65)

90% $14,862,007 (=K65)

Assumption: As-Planned CONSTR-P2 Cell: J73


10% $148,407,434 (=I56)

Likeliest $163,085,092 (=J56)

90% $177,762,751 (=K56)

Page 14


Assumption: As-Planned CONSTR-P2 (cont'd) Cell: J73

Assumption: As-Planned CONSTR-P3 Cell: J76


10% $212,284,170 (=I59)

Likeliest $233,279,308 (=J59)

90% $254,274,446 (=K59)

Assumption: As-Planned FD/ROW/UTIL-EW2 Cell: J78


10% $23,034,215 (=I61)

Likeliest $25,312,324 (=J61)

90% $27,590,433 (=K61)

Page 15


Assumption: As-Planned FD/ROW/UTIL-GS19 Cell: J81


10% $1,024,308 (=I64)

Likeliest $1,125,613 (=J64)

90% $1,226,918 (=K64)

Assumption: As-Planned FD/ROW/UTIL-P2 Cell: J72


10% $20,660,209 (=I55)

Likeliest $22,703,527 (=J55)

90% $24,746,844 (=K55)

Assumption: As-Planned FD/ROW/UTIL-P3 Cell: J75


10% $24,980,139 (=I58)

Likeliest $27,450,702 (=J58)

90% $29,921,265 (=K58)

Page 16


Assumption: BtP Cell: D37

Yes-No distribution with parameters:

Probability of Yes(1) 0.0 (=D37)

Assumption: BtP (D38) Cell: D38






Page 17











Page 18











Page 19











Page 20


Assumption: BtP CONSTR-EW2 Cell: I79


10% $176,340,961 (=F62)

Likeliest $195,934,401 (=G62)

90% $215,527,841 (=H62)

Assumption: BtP CONSTR-GS19 Cell: I82


10% $11,044,244 (=F65)

Likeliest $12,271,382 (=G65)

90% $13,498,520 (=H65)

Assumption: BtP CONSTR-P2 Cell: I73


10% $132,098,925 (=F56)

Likeliest $146,776,583 (=G56)

90% $161,454,241 (=H56)

Page 21


Assumption: BtP CONSTR-P3 Cell: I76


10% $188,956,240 (=F59)

Likeliest $209,951,377 (=G59)

90% $230,946,515 (=H59)

Assumption: BtP FD/ROW/UTIL-EW2 Cell: I78


10% $21,768,599 (=F61)

Likeliest $24,046,708 (=G61)

90% $26,324,817 (=H61)

Assumption: BtP FD/ROW/UTIL-GS19 Cell: I81


10% $968,027 (=F64)

Likeliest $1,069,332 (=G64)

90% $1,170,637 (=H64)

Page 22


Assumption: BtP FD/ROW/UTIL-P2 Cell: I72


10% $19,525,033 (=F55)

Likeliest $21,568,351 (=G55)

90% $23,611,668 (=H55)

Assumption: BtP FD/ROW/UTIL-P3 Cell: I75


10% $23,607,604 (=F58)

Likeliest $26,078,167 (=G58)

90% $28,548,730 (=H58)

Assumption: Schedule CONSTR-EW2 Cell: L25


Minimum 44.1 (=J25*(1-K25))

Likeliest 49.0 (=J25)

Maximum 53.9 (=J25*(1+K25))

Page 23


Assumption: Schedule CONSTR-GS19 Cell: L28


Minimum 23.4 (=J28*(1-K28))


Maximum 28.6 (=J28*(1+K28))

Assumption: Schedule CONSTR-P2 Cell: L19


Minimum 36.0 (=J19*(1-K19))


Maximum 44.0 (=J19*(1+K19))

Assumption: Schedule CONSTR-P3 Cell: L22


Minimum 21.6 (=J22*(1-K22))


Maximum 26.4 (=J22*(1+K22))

Page 24


Assumption: Schedule FD/ROW/UTIL-EW2 Cell: L24


Minimum 28.8 (=J24*(1-K24))


Maximum 35.2 (=J24*(1+K24))

Assumption: Schedule FD/ROW/UTIL-GS19 Cell: L27


Minimum 25.2 (=J27*(1-K27))


Maximum 30.8 (=J27*(1+K27))

Assumption: Schedule FD/ROW/UTIL-P2 Cell: L18


Minimum 25.2 (=J18*(1-K18))


Maximum 30.8 (=J18*(1+K18))

Page 25


Assumption: Schedule FD/ROW/UTIL-P3 Cell: L21


Minimum 25.2 (=J21*(1-K21))


Maximum 30.8 (=J21*(1+K21))

Assumption: WtP Cell: F37


Probability of Yes(1) 0.0 (=F37)

Assumption: WtP (F38) Cell: F38



Page 26











Page 27











Page 28











Page 29





Assumption: WtP CONSTR-EW2 Cell: K79


10% $230,767,184 (=L62)

Likeliest $250,360,624 (=M62)

90% $269,954,064 (=N62)

Assumption: WtP CONSTR-GS19 Cell: K82


10% $14,452,961 (=L65)

Likeliest $15,680,099 (=M65)

90% $16,907,237 (=N65)

Page 30


Assumption: WtP CONSTR-P2 Cell: K73


10% $172,870,198 (=L56)

Likeliest $187,547,856 (=M56)

90% $202,225,514 (=N56)

Assumption: WtP CONSTR-P3 Cell: K76


10% $247,276,067 (=L59)

Likeliest $268,271,204 (=M59)

90% $289,266,342 (=N59)

Assumption: WtP FD/ROW/UTIL-EW2 Cell: K78


10% $25,565,447 (=L61)

Likeliest $27,843,556 (=M61)

90% $30,121,665 (=N61)

Page 31


Assumption: WtP FD/ROW/UTIL-GS19 Cell: K81


10% $1,136,869 (=L64)

Likeliest $1,238,174 (=M64)

90% $1,339,479 (=N64)

Assumption: WtP FD/ROW/UTIL-P2 Cell: K72


10% $22,930,562 (=L55)

Likeliest $24,973,880 (=M55)

90% $27,017,197 (=N55)

Assumption: WtP FD/ROW/UTIL-P3 Cell: K75


10% $27,725,209 (=L58)

Likeliest $30,195,772 (=M58)

90% $32,666,336 (=N58)

Worksheet: [CER Template_v59_75th CIP_CER_Jun_24_2014.xlsm]Risk Register

Page 32


Assumption: ci 10Substructure Rehabilitation (Structures) Cell: T19


10% 7,191,715.63 (=Q19)

Likeliest 14,383,431.25 (=R19)

90% 21,575,146.88 (=S19)

Assumption: ci 11Superstructure Rehabilitation / Widending (Structures) Cell: T20


10% 14,383,431.25 (=Q20)

Likeliest 28,766,862.50 (=R20)

90% 43,150,293.75 (=S20)

Assumption: ci 12Structures - delivery delays Cell: T21


10% 0.00 (=Q21)

Likeliest 0.01 (=R21)

90% 0.02 (=S21)

Page 33


Assumption: ci 13Structures - delayed improvements Cell: T22


10% 0.00 (=Q22)


90% 0.02 (=S22)

Assumption: ci 14Stuctures - improved schedule due to design standardization Cell: T23


10% 0.00 (=Q23)


90% 0.02 (=S23)

Assumption: ci 15Stuctures - lower costs due to standardization Cell: T24


10% 0.00 (=Q24)


90% 0.02 (=S24)

Page 34


Assumption: ci 16Viaducts - additional quantities Cell: T25


10% $1,145,712 (=Q25)

Likeliest $1,432,140 (=R25)

90% $1,718,568 (=S25)

Assumption: ci 17Viaducts - standardized designs Cell: T26


10% $190,952 (=Q26)

Likeliest $238,690 (=R26)

90% $286,428 (=S26)

Assumption: ci 18Environmental Mitigation - Hazardous Materials Cell: T27


10% $849,246 (=Q27)

Likeliest $1,061,558 (=R27)

90% $1,273,869 (=S27)

Page 35


Assumption: ci 19Misc - additional Staging, MOT, Flagging Cell: T28


10% $1,141,702 (=Q28)

Likeliest $1,427,128 (=R28)

90% $1,712,554 (=S28)

Assumption: ci 1Removal of Track & Signal items Cell: T10


10% $1,138,234 (=Q10)

Likeliest $1,422,793 (=R10)

90% $1,707,352 (=S10)

Assumption: ci 20Utility Conflicts - RR ROW Cell: T29


10% 0.00 (=Q29)


90% 0.02 (=S29)

Page 36


Assumption: ci 21Utility Conflicts - Roadway/Infrastructure Cell: T30


10% $2,531,809 (=Q30)

Likeliest $3,164,761 (=R30)

90% $3,797,714 (=S30)

Assumption: ci 22ROW - Acquisition of alternative ROW parcels Cell: T31


10% $829,405 (=Q31)

Likeliest $1,036,756 (=R31)

90% $1,244,107 (=S31)

Assumption: ci 23ROW - Advanced Procurement Cell: T32


10% 0.00 (=Q32)


90% 0.02 (=S32)

Page 37


Assumption: ci 24PS - NEPA Clearance delay Cell: T33


10% 0.00 (=Q33)


90% 0.02 (=S33)

Assumption: ci 25PS - Delays during Final Design Cell: T34


10% 0.00 (=Q34)


90% 0.02 (=S34)

Assumption: ci 26PS - advanced track improvements Cell: T35


10% $619,899 (=Q35)


90% $929,849 (=S35)

Page 38


Assumption: ci 27PS - construction through winter Cell: T36


10% 0.00 (=Q36)


90% 0.02 (=S36)

Assumption: ci 28PS - Proj Development delays add construction CM Cell: T37


10% $592,321 (=Q37)


90% $888,482 (=S37)

Assumption: ci 29Opportunity to avoid weather impacts Cell: T38


10% 0.00 (=Q38)


90% 0.02 (=S38)

Page 39


Assumption: ci 2Demolition of ROW Cell: T11


10% 0.00 (=Q11)


90% 0.02 (=S11)

Assumption: ci 30 EW2 Operations impact delays Cell: T39


10% 0.00 (=Q39)


90% 0.02 (=S39)

Assumption: ci 31Potential Labor Strike Cell: T40


10% 0.00 (=Q40)


90% 0.02 (=S40)

Page 40


Assumption: ci 32Viaduct elements; additional costs and scope Cell: T41


10% $500,000 (=Q41)

Likeliest $1,000,000 (=R41)

90% $1,500,000 (=S41)

Assumption: ci 33P2 ROW Acquisition Delay Cell: T42


10% 0.00 (=Q42)


90% 0.02 (=S42)

Assumption: ci 34EW2 ROW Acquisition Delay Cell: T43


10% 0.00 (=Q43)


90% 0.02 (=S43)

Page 41


Assumption: ci 35Utility relocaton delays Cell: T44


10% 0.00 (=Q44)


90% 0.02 (=S44)

Assumption: ci 36GS19 Change Orders Cell: T45


10% $624,013 (=Q45)

Likeliest $1,248,026 (=R45)

90% $1,872,039 (=S45)

Assumption: ci 37P2 Change Orders Cell: T46


10% $2,977,463 (=Q46)

Likeliest $8,932,390 (=R46)

90% $14,887,317 (=S46)

Page 42


Assumption: ci 38P3 Change Orders Cell: T47


10% $4,258,818 (=Q47)

Likeliest $12,776,453 (=R47)

90% $21,294,089 (=S47)

Assumption: ci 39EW2 Change Orders Cell: T48


10% $3,979,447 (=Q48)

Likeliest $11,938,342 (=R48)

90% $19,897,236 (=S48)

Assumption: ci 3Segment 1 Cell: T12


10% $1,263,827 (=Q12)

Likeliest $1,579,784 (=R12)

90% $1,895,741 (=S12)

Page 43


Assumption: ci 41Scope Changes (Management Reserve) are covered in the line item details of the other risksCell: T50


10% 0.00 (=Q50)


90% 0.02 (=S50)

Assumption: ci 471st St at-grade crossing Cell: T13


10% $40,713 (=Q13)


90% $61,069 (=S13)

Assumption: ci 5Union Avenue Cell: T14


10% $477,358 (=Q14)


90% $716,038 (=S14)

Page 44


Assumption: ci 6Track - added track, turnouts, crossovers, etc. Cell: T15


10% 4,622,368.04 (=Q15)

Likeliest 5,777,960.05 (=R15)

90% 6,933,552.06 (=S15)

Assumption: ci 7Control Point Signals; additional work related to these new signals Cell: T16


10% 2,727,000.00 (=Q16)

Likeliest 3,408,750.00 (=R16)

90% 4,090,500.00 (=S16)

Assumption: ci 8Interim Track and Signal work for extended duration Cell: T17


10% 2,000,000.00 (=Q17)

Likeliest 2,500,000.00 (=R17)

90% 3,000,000.00 (=S17)

Page 45


Assumption: ci 9Structures - waste site near abmutment exc. Cell: T18


10% 2,876,686.25 (=Q18)

Likeliest 5,753,372.50 (=R18)

90% 8,630,058.75 (=S18)

Assumption: Pb EW2 Operations impact delays Cell: O39


Probability of Yes(1) 0.5 (=O39)

Assumption: Pb 71st St at-grade crossing Cell: O13



Page 46


Assumption: Pb Control Point Signals; additional work related to these new signals Cell: O16



Assumption: Pb Demolition of ROW Cell: O11



Assumption: Pb Environmental Mitigation - Hazardous Materials Cell: O27



Page 47


Assumption: Pb EW2 ROW Acquisition Delay Cell: O43



Assumption: Pb GS19 Change Orders Cell: O45



Assumption: Pb Interim Track and Signal work for extended duration Cell: O17



Page 48


Assumption: Pb Misc - additional Staging, MOT, Flagging Cell: O28



Assumption: Pb Opportunity to avoid weather impacts Cell: O38



Assumption: Pb P2 ROW Acquisition Delay Cell: O42



Page 49


Assumption: Pb Potential Labor Strike Cell: O40



Assumption: Pb PS - advanced track improvements Cell: O35



Assumption: Pb PS - construction through winter Cell: O36



Page 50


Assumption: Pb PS - Delays during Final Design Cell: O34



Assumption: Pb PS - NEPA Clearance delay Cell: O33



Assumption: Pb PS - Proj Development delays add construction CM Cell: O37



Page 51


Assumption: Pb Quantity Variance with Civil/Earthwork items Cell: O12



Assumption: Pb Removal of Track & Signal items Cell: O10



Assumption: Pb ROW - Acquisition of alternative ROW parcels Cell: O31



Page 52


Assumption: Pb ROW - Advanced Procurement Cell: O32



Assumption: Pb Scope Changes (Management Reserve) are covered in the line item details of the other risksCell: O50



Assumption: Pb Structures - delayed improvements Cell: O22



Page 53


Assumption: Pb Structures - delivery delays Cell: O21



Assumption: Pb Structures - waste site near abmutment exc. Cell: O18



Assumption: Pb Stuctures - improved schedule due to design standardization Cell: O23



Page 54


Assumption: Pb Stuctures - lower costs due to standardization Cell: O24



Assumption: Pb Substructure Rehabilitation (Structures) Cell: O19



Assumption: Pb Superstructure Rehabilitation / Widending (Structures) Cell: O20



Page 55


Assumption: Pb Track - added track, turnouts, crossovers, etc. Cell: O15



Assumption: Pb Union Avenue Cell: O14



Assumption: Pb Utility Conflicts - Roadway/Infrastructure Cell: O30



Page 56


Assumption: Pb Utility Conflicts - RR ROW Cell: O29



Assumption: Pb Utility relocaton delays Cell: O44



Assumption: Pb Viaduct elements; additional costs and scope Cell: O41



Page 57


Assumption: Pb Viaducts - additional quantities Cell: O25



Assumption: Pb Viaducts - standardized designs Cell: O26



Assumption: si 10Substructure Rehabilitation (Structures) Cell: AB19


10% 0.00 (=Y19)

Likeliest 0.00 (=Z19)

90% 0.00 (=AA19)

Page 58


Assumption: si 11Superstructure Rehabilitation / Widending (Structures) Cell: AB20


10% 0.00 (=Y20)


90% 0.00 (=AA20)

Assumption: si 12Structures - delivery delays Cell: AB21


10% 1.00 (=Y21)


90% 4.00 (=AA21)

Assumption: si 13Structures - delayed improvements Cell: AB22


10% 1.00 (=Y22)


90% 4.00 (=AA22)

Page 59


Assumption: si 14Stuctures - improved schedule due to design standardization Cell: AB23


10% 0.00 (=Y23)


90% 0.00 (=AA23)

Assumption: si 15Stuctures - lower costs due to standardization Cell: AB24


10% 0.00 (=Y24)


90% 0.00 (=AA24)

Assumption: si 16Viaducts - additional quantities Cell: AB25


10% 0.00 (=Y25)


90% 0.00 (=AA25)

Page 60


Assumption: si 17Viaducts - standardized designs Cell: AB26


10% 0.00 (=Y26)


90% 0.00 (=AA26)

Assumption: si 18Environmental Mitigation - Hazardous Materials Cell: AB27


10% 0.00 (=Y27)


90% 0.00 (=AA27)

Assumption: si 19Misc - additional Staging, MOT, Flagging Cell: AB28


10% 0.00 (=Y28)


90% 0.00 (=AA28)

Page 61


Assumption: si 1Removal of Track & Signal items Cell: AB10


10% 0.00 (=Y10)


90% 0.00 (=AA10)

Assumption: si 20Utility Conflicts - RR ROW Cell: AB29


10% 0.00 (=Y29)


90% 0.00 (=AA29)

Assumption: si 21Utility Conflicts - Roadway/Infrastructure Cell: AB30


10% 0.00 (=Y30)


90% 0.00 (=AA30)

Page 62


Assumption: si 22ROW - Acquisition of alternative ROW parcels Cell: AB31


10% 0.00 (=Y31)


90% 0.00 (=AA31)

Assumption: si 23ROW - Advanced Procurement Cell: AB32


10% 0.00 (=Y32)


90% 0.00 (=AA32)

Assumption: si 24PS - NEPA Clearance delay Cell: AB33


10% 0.00 (=Y33)


90% 0.00 (=AA33)

Page 63


Assumption: si 25PS - Delays during Final Design Cell: AB34


10% 0.00 (=Y34)


90% 0.00 (=AA34)

Assumption: si 26PS - advanced track improvements Cell: AB35


10% 0.00 (=Y35)


90% 0.00 (=AA35)

Assumption: si 27PS - construction through winter Cell: AB36


10% 0.00 (=Y36)


90% 0.00 (=AA36)

Page 64


Assumption: si 28PS - Proj Development delays add construction CM Cell: AB37


10% 0.00 (=Y37)


90% 0.00 (=AA37)

Assumption: si 29Opportunity to avoid weather impacts Cell: AB38


10% 2.00 (=Y38)


90% 4.00 (=AA38)

Assumption: si 2Demolition of ROW Cell: AB11


10% 0.00 (=Y11)


90% 0.00 (=AA11)

Page 65


Assumption: si 30 EW2 Operations impact delays Cell: AB39


10% 2.00 (=Y39)


90% 4.00 (=AA39)

Assumption: si 31Potential Labor Strike Cell: AB40


10% 0.00 (=Y40)


90% 0.00 (=AA40)

Assumption: si 32Viaduct elements; additional costs and scope Cell: AB41


10% 0.00 (=Y41)


90% 0.00 (=AA41)

Page 66


Assumption: si 33P2 ROW Acquisition Delay Cell: AB42


10% 6.00 (=Y42)


90% 12.00 (=AA42)

Assumption: si 34EW2 ROW Acquisition Delay Cell: AB43


10% 6.00 (=Y43)


90% 12.00 (=AA43)

Assumption: si 35Utility relocaton delays Cell: AB44


10% 1.00 (=Y44)


90% 5.00 (=AA44)

Page 67


Assumption: si 3Segment 1 Cell: AB12


10% 0.00 (=Y12)


90% 0.00 (=AA12)

Assumption: si 41Scope Changes (Management Reserve) are covered in the line item details of the other risksCell: AB50


10% 0.00 (=Y50)


90% 0.00 (=AA50)

Assumption: si 471st St at-grade crossing Cell: AB13


10% 0.00 (=Y13)


90% 0.00 (=AA13)

Page 68


Assumption: si 5Union Avenue Cell: AB14


10% 0.00 (=Y14)


90% 0.00 (=AA14)

Assumption: si 6Track - added track, turnouts, crossovers, etc. Cell: AB15


10% 0.00 (=Y15)


90% 0.00 (=AA15)

Assumption: si 7Control Point Signals; additional work related to these new signals Cell: AB16


10% 0.00 (=Y16)


90% 0.00 (=AA16)

Page 69


Assumption: si 8Interim Track and Signal work for extended duration Cell: AB17


10% 0.00 (=Y17)


90% 0.00 (=AA17)

Assumption: si 9Structures - waste site near abmutment exc. Cell: AB18


10% 0.00 (=Y18)


90% 0.00 (=AA18)

Worksheet: [CER Template_v59_75th CIP_CER_Jun_24_2014.xlsm]YOE

Assumption: V20 Cell: V20


5% 2.79%

Likeliest 3.00%

95% 3.21%

Page 70


Assumption: V7 Cell: V7


5% 1.58%

Likeliest 3.31%

95% 4.36%

End of Assumptions

Page 71


Sensitivity Charts

Page 72


Page 73


End of Sensitivity Charts

Page 74


36 | P a g e

APPENDIX D – Closeout Presentation

Cost Estimate Review June 23-26, 2013

FHWA Closing Presentation

June 26, 2013

Conduct an unbiased risk-based review to verify the accuracy and reasonableness of the current total cost estimate and project schedule to complete the

• 75th Street CIP

and to develop a probability range for the cost estimate that represents the project’s current stage of design.

2

Cost Estimate Review Objective

Planning Level Cost Est.

NEPA Process

Federally Funded

PLANNING

Potential cost ≥ $500 M

or TIFIA

NEPA APPROVAL (ROD, FONSI)

CER

Updates to FP, PMP, & Cost

Verifications

NO

NO

YES

Not Applicable

Not a Major Project *

*Unless of Special Interest

Draft PMP

Initial FP Authorization of

Federal funds for Construction

PMP Update

Final PMP

CER

Basic Major Project Process

3

Presenter

Presentation Notes

This is the preferred location for a CER. However, the requirement is that the CER be completed prior to construction. CER is recommended before releasing the project cost estimate to the public.

4

Review Agenda June 23-26, 2014

525 W. Monroe - Room 200, Chicago, IL 60661 MONDAY, June 23

10:30 a.m. to 2:00 p.m. – Project Site Visit /Lunch 2:30 p.m. – FHWA overview for CER 3:00 p.m. – Overview State Estimation Process 3:30 p.m. – Market Conditions 4:00 p.m. – Soft Costs (Administrative, inflation, allowances) 4:30 p. m.- Contingency/ Risk Register Items 5:30 p.m. – Adjourn TUESDAY, June 24 8:00 a.m. – Removal/Demolition, Track work, Signals & Systems 11:30 a.m. – Lunch 1:00 p.m. – Structures, Civil / Earthwork, Viaducts 4:30 p.m. – Adjourn

Presenter

Presentation Notes

Highlights the typical agenda for a CER.

5

Review Agenda (cont.)

WEDNESDAY, June 25 8:00 a.m. – Utilities, Right-of way 11:30 a.m. – Lunch 1:00 p.m. – Environmental, miscellaneous & Temporary Facilities, Funding 4:00 p.m. – Revisit estimate items and review risk register details, including descriptions and aggregate minor risks 5:30 p.m. - Adjourn THURSDAY, June 26 8:00 a.m. – Findings and Report Preparation 11:00 a.m. – Closeout Presentation

FHWA • CREATE Program Manager • Resource Center CPM Team • Atkins Consultant

Railroads/Assn. of American Railroads Illinois DOT/Dept. Public & Intermodal

Transportation Chicago DOT Project Team Consultants Jacobs HNTB

6

Review Participants

Project Cost Estimate

Project Schedule

Project Risk Register

Current NEPA Documents

Project Web Site Link

7

Documentation Provided

Basis of Review

8

Review based on estimates provided by the Team in advance with revisions made during the review

Review to determine the reasonableness of assumptions used in the estimate

Not an independent FHWA estimate – Did not verify quantities and unit prices – Goal is to verify accuracy and reasonableness of estimate

Risk-based Probabilistic Approach

Verify

• Major cost elements • Allowances/contingencies • Adjust estimate as necessary

Model

• Base variability • Market conditions and inflation • Risk events (cost, schedule, probability, impact, relationships) • Monte Carlo simulation

Communicate

• Closeout Presentation • Final report • Issuance of NEPA Decision Document • Approval of finance plan

Review Methodology

9

Review Baseline

*Assumes Inflation Rate 4.5%

10

Total Cost (2014): $818.5 million Total Cost (YOE): $984.4 million*

Project Completion October 31, 2021

CER Estimate Adjustments

11

Added $15.6 million of estimate adjustments: Modified Final Design from 6% to 9% on different

set of categories (now 1-9) Public Outreach from .5% to 1% Legal/permits from .5% to .25% Merged CEI and CM (total reduced from 8% to 7%

for non-RR work) MOT on contract P3 was removed (1% previous) Reduced Program Mgmt from 4% to 1% on different

set of categories (now 1-9)

75th St. CIP Estimate (2014 dollars) $818.5M Adjust for prior and fixed costs $(10.4M) Estimate adjustments $15.6M Subtotal $823.7M Contingencies ($119.4M) Base Cost for Risk Analysis $704.3M

12

CER Analysis

.

13

Review Findings

Advanced estimate for level of design Relevant unit prices from IDOT/CDOT/RRs

experience and project complexity Analysis of risks specific to unique CREATE

partnership Most construction in existing ROW, except P2 Structures – early in design -> greater uncertainty

14

Review Findings

• Geometrics & project boundaries have been tightly established via the NEPA/public involvement

• RR work expected to experience less risk due to limited ROW needs and previously developed force account/firm contract conditions and pre-established cost control procedures

15

Base Variability

• Cost +/- 9%, except PE/ENV 0% – (accounts for less risk for RR portion)

• Schedule +/- 10%, except PE/ENV 0% • Basis

• Current level of design of 15-30% • Good coordination has occurred in many areas for early

design level. RR work has less uncertainty.

16

Market Conditions Construction

Base Estimate

(As-Planned) XX% Probability

Worse Than Planned

8,9,10% Probability

Better Than Planned

8,9,10% Probability

Magnitude of Impact

+15% -10%

17

Inflation

• Annual Inflation - Model assumes: – 3% FD/ROW/Utilities – 3.5% Construction

• Basis - IDOT/RR experience

18

Example Risk Analysis

Likelihood of Occurrence – 90% Cost Risk Impact

– Minimum: $0 million – Most Likely: $12 million – Maximum: $19 million

ROW Property Acquisition – Threat Risk for the acquisition of ROW land acquisition (unit price does not reflect premium for settlements)

Likelihood of Occurrence 90%

Impact of Occurrence Triangular Distribution Most Likely : $12 M Minimum (10%): $ 0 M Maximum (90%): $19 M

19

Example Risk Analysis (cont.)

10%

90%

20

Cost Risks

Threats Structure Superstructure Cost Increases Likelihood – 80% Most Likely – $28.8 million

Structure Substructure Cost Increases Likelihood – 80% Most Likely – $14.4 million

21

Cost Risks

Threats (continued) Potential Change Orders Likelihood – 100% Most likely by contract: GS19: $1.2 Million P2: $8.9 Million P3: $12.8 Million EW2: $11.9 Million

22

Schedule Risks

Threats ROW Acquisition delay to project (P2 & EW2) Likelihood – 80% Most Likely – 9 months

EW2 Operations delaying construction Likelihood – 50% Most Likely – 3 months

23

Schedule Risks

Threats (continued) Structures delays Likelihood – 50% Most Likely – 3 months (Delivery Delays) Most Likely – 2 months (Minimize Traffic Impacts)

Utility Relocation Delays Likelihood – 30% Most Likely – 3 months

24

Opportunities

Opportunities Avoid Winter Weather Impacts Likelihood – 60% Most Likely – 3 months savings

25

Total Project Cost (YOE dollars)

*Submitted Pre CER YOE estimate = $984.4 Million

70% = $952 M

26

Total Project Cost (YOE)

Percentile Ranking

Percentile Forecast values 0% $783,264,643

10% $876,945,471 20% $894,251,316 30% $908,217,603 40% $920,158,763 50% $930,286,668 60% $940,368,522 70% $951,904,257 80% $965,439,258 90% $984,108,792

100% $1,079,809,439

27

Project Completion Date

*Submitted Pre-CER Completion Date: October 31, 2021

70% = 10/29/2022

28

Recommendations Manage risk of structures cost uncertainly and growth Mitigate change orders via strong design and

construction management practices Manage schedule risks leading up to project award: ROW acquisition, utilities, track outages, structures

and utility schedule delays Contractors (non-RR) ready to utilize good winter

weather Update and QA overall estimate as decisions are

made, market conditions change, or other threats or opportunities are avoided, mitigated or realized.

29

Recommendations Coordinate early on with Utilities. Inform Utilities of Buy

America Requirements early on. Continue aggressive coordination and communication

through the CREATE partnership Continue proactive public outreach and involvement Continue implementing risk management procedures Managing risks via the risk register Updating estimate based on risk management

Ensure that the project management plan addresses risk response strategies for risks identified

30

Total Project Cost (YOE dollars) Simulation with 2020 Construction Start

*Submitted Pre CER YOE estimate = $984.4 Million

70% = $1,026 M

31 Project Completion Date Simulation with 2020 Construction Start

*Submitted Pre-CER Completion Date: October 31, 2021

70% = 3/29/2025

FHWA will prepare a final report documenting review findings. Draft report for review within 30 days Draft report will be e-mailed to Division Office Division Office will review the draft and forward it to the

Project Team Final report issued within 30 days after receipt of comments Final report forwarded to the Division Office for distribution to

the Project Team FHWA uses the results as the official cost estimate for

the project (NEPA, IFP, reporting) Estimate review is a snapshot of the current estimate

CER Next Steps

32

Questions?

34

Simulation Results 2020 Construction Start

2020 Simulation Results*: $1,026 Million Current Results*: $ 952 Million Delta Costs: $ 74 Million 2020 Simulation Results: 3/29/2025 Current Results*: 10/29/2022 Delta Schedule: 29 months Cost Delta per month of delay: $2.5 Million • Rough estimate of inflation impact

* Year of Expenditure results at 70% confidence level


37 | P a g e

APPENDIX E – Workshop Agendas and Sign-In Sheets

1

75th CIP Cost Estimate Review Draft Agenda

June 23-26 My Major Project Project Date: June 23-26, 2014 My State Department of Transportation Meeting Location: 525 W. Monroe, Chicago, IL 60661 Room 200 MONDAY, June 23 10:30 a.m. to 2:00 p.m. – Project Site Visit (see route map below) 10:30 a.m. – Meet at CTCO (1501 S Canal St) 11:00 a.m. – Depart CTCO 11:30 a.m. – Arrive at 80th Street 11:45 p.m. – Arrive at Emerald Wye 12:05 p.m. – Arrive at 71st Street grade separation 12:15 p.m. – Eat “best hot dog in America” at Fat Johnnie’s Famous Red Hots (7242 S Western Ave) 1:00 p.m. – End lunch 1:10 p.m. – Arrive at 83rd St grade crossing 1:20 p.m. – Arrive at Forest Hill Jct. / P3 flyover 1:30 p.m. – Leave Forest Hill Jct. / P3 flyover 2:00 p.m. – Return to Jacobs (525 W Monroe) 2:30 p.m. – FHWA overview for CER 3 p.m. – Overview State Estimation Process 3:30 p.m. – Market Conditions 4 p.m. – Soft Costs (Administrative, inflation, allowances) 4:30 p. m.- Contingency/ Risk Register Items 5:30 p.m. – Adjourn TUESDAY, June 24 8:00 a.m. – Removal/Demolition, Trackwork, Signals & Systems 11:30 a.m. – Lunch 1:00 p.m. – Structures, Civil / Earthwork, Viaducts 4:30 p.m. – Adjourn WEDNESDAY, June 25 8:00 a.m. – Utilities, Right-of way 11:30 a.m. – Lunch 1:00 p.m. – Environmental, miscellaneous & Temporary Facilities, Funding 4:00 p.m. – Revisit estimate items and review risk register details, including descriptions

and aggregate minor risks 5:30 p.m. - Adjourn THURSDAY, June 26 8:00 a.m. – Finalize estimate items and risk register details. 10:00 a.m. – Findings and Report Preparation 11:30 a.m. – Lunch 1:00 a.m. – Findings and Report Preparation 3:30 p.m. – Closeout Presentation

2

*** Some CERs include a project site visit. This is usually dependent on the project’s vicinity to the location of the CER. Google 3D may be used as an alternative to a site visit.


38 | P a g e

APPENDIX F – Pre-CER Risk Register


39 | P a g e

APPENDIX G – Project Cost Estimating Guidelines