idce backgrounder

Delivering the PPP light rail*A review of PPP issues and activity

*new light rail for the state of confusion

Inky Dinky Confusion Express�

Foreword..................................................................................4

Introduction................................................................................6

Legal and policy guidance............................................................9

Communications plan................................................................19

Contract management guide and best practices........................28

Operations plan.........................................................................33

Risk...........................................................................................40

Contacts....................................................................................51

Authors

Jennifer SmolenDavid BrewerLamont HintonEric RaschMichelle McIverLance LacroixAnnie Brock

April 2013

We hope you find this paper useful; and we welcome debate and comments.

Our contact details are given at the back of this publication.

Contents

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Foreword

Light rail (also known as the tram, tramway, streetcar, light rapid transit, and LRT) occupies a special niche in the public transportation sector. After World War II, many tram systems either became obsolete or were removed as the automobile culture gained prominence. However, over the last decade, these systems have made an impressive comeback with superior technology, improved operations and higher benefit-cost ratios. As cities plagued with traffic congestion, high pollution levels, and soaring fuel prices explore alternatives for environmentally-sustain-able, inclusive and cost-effective mass transit solutions, light rail is emerging as a viable option.

Well-planned tramways enhance the reputation, ambience and competitiveness of any city - small, medium or large. The service quality, reliability and futuristic image of the modern tram boost ridership. Policy makers and urban planners prefer light rail because of its accessibility (low-floor design), quiet and emission-free operations, flexible capacity due to modular design, positive im-pact on property values, lower costs compared to heavy rail, ability to share track with mainline railways, smooth connectivity with other modes of transport, and commercial real estate development opportunities.

Globally, about 400 light rail systems are operational. Europe has the highest density with about 170 systems in operation, over 60 systems under construction, and over 100 systems planned. In North America, Middle East & Africa and Asia, new systems have been launched in the last decade and more are underway. Having gained acceptance and funding support, light rail projects are offering exciting business opportunities and fostering development of vibrant markets. As passenger demand grows, there is need for expansion of the light rail system. As existing systems grow older, upgrade and renewal is required for safe, reliable and comfortable operations.


Background on the State of Confusion

The State of Confusion has been growing at an accelerated pace for the past five years. Although the country as a whole has been experiencing significant economic distress, Confusion has managed to weather the recession through innovative partnerships, out-of-the-box ideas, and a dedication to developing and maintaining public infrastructure. Additionally, some newly discovered natural resources around the state have brought unexpected economic growth and opportunity to the State of Confusion.

Confusion City, the state capitol, has experienced a 4% growth rate for the past three years and it is anticipated to continue at an accelerated rate for at least the next 10 years. City planners have been unable to keep up with the new demands on infrastructure. More importantly, traffic congestion and environmental impact caused by the influx of people is beginning to stress the capacity of the city to function at an optimal level. Some new arrivals are drawn by the promise of new and productive jobs, others are tourists seeking to experience the newfound fame in the well-marketed State and its regions. The City Council has agreed that a new mass transit system will be required. The new mass transit system (light rail) will help to alleviate traffic congestion and environmental pollution effects caused by the increase in the population.

Introduction


Light rail: A new addition to existing transit

The Inky Dinky Express will encourage economic development by connecting people to jobs, supporting the revitalization that many areas are experiencing, complementing over $400 million in renovations and new construction underway in Lavish County and connecting major economic centers and key activity areas, like the mineral mines in the northwest region.

The Inky Dinky Express connects passengers with every county in the state, and with transit connections to the Red, Green, Purple, Orange, and Yellow lines, as well as to local bus services.

Benefactors of the new light rail system come from all walks of life. Connecting commuters with jobs strengthens the state and local workforce. Connecting university students and staff to University of Crazy and other schools develops the workforce for the future. Transporting goods like local-grown crops to areas within the state and as exports to neighboring states brings revenue to Confusion and supports direct rural and other indirect jobs. A result of all these improvements is increased tourism, which can happen easily from out of state as well as in-state, since some of the rail lines cross the Confusion border into neighboring states. Citizen involvement in state government will be encouraged thanks to this new mode of passenger transit with a stop specifically located near the capitol campus. An investment in modern mass transit over single-occupancy vehicles and highways is an investment in the future of Confusion.

The value of private business partner brings to public infrastructure development

While the State of Confusion has a long history of infrastructure successes like highways, bridges, and the existing bus system, light rail is a quickly-evolving technology. Specific skills in technical design and engineering, and how best to serve a customer base through this transit option, are not strengths inherent in state government. The State DOT will supervise closely one or more private businesses that specialize in modern light rail, in order to harness their skills, current knowledge, and frankly, their access to rapid private sector capital and investors. These efforts should result in a shorter lead time for moving the project forward.

Reassigning responsibility for labor negotiations to the private entity is also of value to the government. Confusion does have public unions, yet a private company is better positioned and experienced in working with job/project-specific labor disputes and agreements, freeing the government to do the work of government.


Legal and policy guidanceP3 Legal and Policy Analysis for the Inky Dinky Express

During the course of the semester and in preparation for both the Contract Management and Intergovernmental Affairs group projects, the team had conducted research and analysis of various state public private partnership laws and regulations. Of the states/jurisdictions evaluated (Virginia, Maryland, Washington, DC, and Washington State), the team decided to adopt Public, Private, Partnership (P3) guidance from the State of Maryland’s (MD) P3 regulations (Code of Maryland Regulations 11.07.06 ) and the State of Virginia’s (VA) P3 legislation (Code of Virginia 56-556 ). Based on team consensus that transparency and accountability are critical to P3 success, the adoption of MD regulations would be appropriate due to its stakeholder involvement and approval policies. However, the State of Confusion’s P3 project must also be founded on some of VA’s defined P3 law framework to ensure efficiency in the process.

There were three primary criteria the team used to evaluate the feasibility of adopting these jurisdictional laws and policies for the project:

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Transparency and Accountability – Are key state agencies, legislature, and the general public involved in, or made aware of, proposed or planned 3P projects from start to finish?

VA has an enacted a comprehensive P3 law for transportation projects, called the Public Private Transportation Act of 1995. VA only requires public input for unsolicited proposals. Most of the vetting and approval processes for P3 proposals occur within the VA De-partment of Transportation (VDOT) and any input from external agencies occur under VDOT’s oversight board which is mostly represented by members of the state’s trans-portation sector. A risk in taking VDOT’s approach is the public perception that this process could foster biased decision making and blur the lines of accountability to the state’s overarching interests and objectives for entering into P3 agreements. MD has no comprehensive 3P law enacted yet (the bill is before MD Governor Martin O’Malley for signature as of April 8, 2013). MD’s current P3 regulations and framework allow for multi-jurisdictional input during the vetting phase for both solicited and unsolicited proposals. MD also requires the concessionaire’s project plan and the contract agree-ment be approved by the MD Department of Public Works. Last, MD requires state legislature approval for contracts over $150 million. If the timeliness of these review and approval policies is not well-managed, MD runs the risk of creating a sluggish and convoluted vetting process – one that no private company would want to engage in. The team decided to adopt most of MD regulations to ensure transparency and accountabil-ity and also decided to enhance that by adding multi-agency reviews and multi-agency approvals at different stages of the process. This approach would ensure that a variety of state interests, risk mitigation concerns, and objectives are properly evaluated from a broader perspective– and not just that of the state’s transportation sector. The State of Confusion’s legislature will also be allowed to provide input during the jurisdictional and public comment phase of the project. The Hamilton Project’s discussion paper entitled, “Public-Private Partnerships to Revap U.S. Infrastructure” proffers the following caveat, “Finally, it is a bad idea to require legislative approval of PPP projects after the private concessionaire has been selected because this may lead to choosing firms with good lobbying abilities rather than firms that are the most efficient. Any legislative approval should take place before the project is put up for tender.” The team plans to mitigate the risk as defined by The Hamilton Group by ensuring that any political concerns raised during legislative review can be addressed in advance of the project’s approval and within a controlled timeframe.

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Process Efficiency – Is the process efficient enough to solicit, vet, and approve P3 projects in a timely manner and in a way that is worthwhile to potential private sector partners?

Efficiency in the P3 framework is key to ensuring the cost effective and successful launch-ing of 3P projects and fostering positive relationships and interest from the private sector. Of the two jurisdictions, VA’s process appears to be the most defined with a detailed flow process for soliciting, vetting, and approving proposals. Also, most of the reviews and approvals occur within, or are managed by VDOT, which leaves little opportunity for external forces to enter and disrupt the process through extraneous reviews and comment cycles. MD’s P3 policy is less defined but provides some process guidance regarding the competition phases of the project. For the State of Confusion P3 project, the team decided to utilize the well-defined framework of VA but include more stages of collaboration between state agency and the public stakeholders. To ensure efficiency in the process, there will be controlled, time-sensitive phases that encourage timely action and communication on behalf of all stakeholders at every stage of the process.

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Value-for-Money (VCF) – Do the laws and/or policy guidance champion state engage-ment in projects that meet standards of balancing economy, efficiency and effectiveness for a project, while maintaining quality?

Through our research, it appears that MD has no defined VCF analysis method but does loosely account for this concept it its general publication and its P3 regulations by stat-ing, “The MDTA shall consider entering into Transportation Public-Private Partnership agreements which demonstrate the ability to meet emerging transportation requirements of the State by allowing needed projects to be completed in a more timely or cost-effec-tive manner than otherwise might be possible using traditional sources of public financ-ing.” Although MD has no defined VFM model, there is a policy in place that in some way addresses the affordability of its ventures. MD determines its “emerging transpor-tation requirements” through its Maryland Transportation Plan which the 20-year vision for transportation in the state. The plan is re-evaluated and updated every five years per statutory requirement, and must align with the state’s overall capital improvement budget. MD regulations also require that the State Treasurer conduct an analysis of a potential project’s impact to the state’s capital debt affordability limits. These MD poli-cies ensure that all future traditional or P3 transportation projects are deemed feasible and affordable to the state’s short and long-term budgetary and infrastructure goals. However, VA provides a clearly defined VFM analysis model in its P3 policies which in-clude the following: 1) Creating a Public Sector Comparator which estimates the whole-life cost of carrying out the project through a traditional approach; 2) Estimating the whole-life cost of the P3 alternative; and 3) Completing a comparison of the costs of the two approaches. All VFM analysis activities are managed by VDOT, which can create the risk in public perception of the fairness of the analysis. Due to the fact that MD lacks a defined VFM model, the State of Confusion will combine MD’s usage of transportation plan statutory requirements with VA’s VFM analysis model. This approach will ensure that the project meets VFM standards, squarely align with the state’s overarching bud-get and infrastructure goals, and produces a transparent state expenditure plan. The combined influences of MD and VA laws and policies on the P3 framework for the State of Confusion’s Inky Dinky Express plan will allow for a streamlined and transpar-ent P3 process.

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Communications and community involvementInky Dinky Confusion Express Strategic Plan:Communications and Community InvolvementThe Inky Dinky Confusion Express (IDCE) Strategic Plan for Communications and Community Involvement serves the communication and information needs of the proj-ect, Lavish County and the State of Confusion by providing objectives, identification of key audiences, and provision of specific communications guidelines and standards. Definitions of the term communication, with its roots in the Latin communis, range from the conveyance of information to a requirement that the information be transmitted in a manner that it may be understood. Thus, in this plan, consideration is given both to simple provision of information and assessment of whether or not the information has been understood as it was intended. Focus groups afford a measure of the effective-ness of community involvement and public awareness strategies, thereby providing a guide for future action.

PurposeThe Inky Dinky Confusion Express Strategic Plan for Communications and Community Involvement provides a means for the IDCE Team, Lavish County and the State of Con-fusion to deliver a clear and consistent message to the citizens of Lavish County and its environs that will:• Provide education about the benefits and funding of the Inky Dinky Confusion Ex-press.• Generate public support and collaboration for the Inky Dinky Confusion Express.• Create demand for use of the Inky Dinky Confusion Express.

Assumptions• All Inky Dinky Confusion Express team members and project partners are active par-ticipants in the communications process.• Inky Dinky Confusion Express commits to a communications dialogue, allowing an interchange and discussion of information.• Inky Dinky Confusion Express operates with transparency, in a desire that the citizenry of Lavish County and the State of Confusion will trust their motives and decision-mak-ing.

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Objectives1. Ensure clear and consistent communication to recipients by providing a framework for consistent messaging by the IDCE and its partners.

a. Maintain a standard IDCE brand identity for all presentations and stakeholder communications.b. Maintain relevant information in all communication channels.c. Participate in special events to promote IDCE.d. Provide an annual update on overall IDCE accomplishments.

2. All IDCE team members and partners understand and use the communications frame-work.

a. Design, write and distribute up-to-date information in support of the IDCE.b. Create consistent announcements of new programs, projects, campaigns.c. Collaborate with other business units within the IDC to provide relevant infor-mation that impacts the organization at large.d. Establish and maintain procedures for executing short-term, mid-term and ad hoc tactical communication plans.

3. Formation of a Community Advisory Committee to ensure continuous dialogue.a. Empowered by State of Confusion statute.b. Charged by the IDCE and Lavish Countyc. Responsibilities:

i. Advise IDCE and Lavish County on all issues having direct community im-pact.ii. Take the lead regarding citizen participation.iii. Provide recommendations regarding IDCE communications.

4. Educate IDCE team members and partners on the results of the communications framework.

a. Solicit feedback from Lavish County, the State of Confusion and IDCE team members and partners.b. Provide training for Inky Dinky Confusion Express team members and project partners, as necessary.

Audience

The expected audience for IDCE communications includes:• Citizens of Lavish County and the State of Confusion• Elected officials of Lavish County and the State of Confusion• Inky Dinky Confusion Express riders• Lavish County and the State of Confusion community groups• Lavish County and the State of Confusion businesses and groups• Lavish County and the State of Confusion educational institutions• Media

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Communications Guidelines• Ensure timely and meaningful communication.

o Provide information the audience wants and needs, not just what is required.o Provide a clear, consistent, and easily recognizable message.o Avoid information “overload.”

• Each communication should fit its intended audience.• Use all appropriate and available communication channels.

o Repeat messages through various channels, as needed.• Direct the message to the audience.• State any necessary action(s) at the beginning of each message.• Create demand by pulling for information from the audience.

o Deliver measurable campaigns and programs to create loyalty.o Manage expectations.

• Provide a closing statement.• Include appropriate IDCE segment contact information, to include a link to the appro-priate location on the IDCE website.

Communication channels• Website with project details: map, timeline, meetings• Brochures, fact sheets & PowerPoint presentations• Social Media• Email/E-newsletters• Telephone hotlines• Print Media• Television/Radio• Special Events• Newsletter providing project updates • Focus groups/workshops• Feedback

o Websiteo Telephone comment lines

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Community Advisory CommitteeTo appropriately reflect the IDCE purpose of encouraging economic development by connecting people to jobs, supporting the revitalization of many areas of the State of Confusion and complementing over $400 million in renovations and new construction underway around the state and connecting major economic centers and key activity areas, membership will include:• Citizens of the State of Confusion• Light Rail Transit advocates• Businesses within one mile of IDCE rail lines• State of Confusion Convention & Visitors Bureau• State of Confusion General Assembly Members (appointed by Governor)• Representatives of Inky Dinky Confusion Express• University of Crazy• Lavish County Airport Commission• Advises IDCE on community issues such as station area land use, station design, feeder bus routings, and impacts on residential and business communities.

o Expected to influence station locations, site plans, aesthetic design guidelines, bus connections, cost containment, public art and community involvement in station design.

• Facilitates two-way communication between IDCE and the citizens of Confusion. • Assists State residents, transit riders, the general public and other interested parties in being informed and involved in IDCE.• Meetings:

o Monthly.o Minutes will be published on the IDCE website.o A period for public comment will be included during each monthly meeting.

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Assessment• Print/television/radio media coverage suggested metrics:

o Amount of coverage received.o Tone of coverage (i.e. positive or negative)o Which media outlets?

- Where in those outlets?- Achievement of desired visuals?- Spokespeople quoted?• Interactive media suggested metrics:

o Number of visitors.o Time on the site.o Pages visited.

• Public inquiry suggested metrics:o Number of letters/emails/telephone calls.o Tone of correspondence/calls.

• Benchmark of metrics:o Track before, during and after communications campaigns to measure the change in metrics over time.

• Focus Groups


Inky Dinky Confusion Express ProjectCitizens Advisory Committee - Agenda

January 20136:00 Welcome Chairperson6:05 Introductions CAC members and project staff6:20 Project status: preliminary engineering (PE) and federal funding process Deputy Project

Director6:30 Project status: Final Environmental Impact Statement (FEIS)process Project Manager6:40 Community Advisory Committee roles and responsibilities Community Affairs Manager6:50 Introduction to design - Director7:10 Safety & Security Project Director7:20 Public comment7:25 Wrap-up/next meeting Chairperson7:30 Adjourn


February 20136:00 Welcome

Chairperson6:05 Engineering update Deputy Project Director6:20 Private public partnerships

Deputy Project Director6:50 Station locations - Design Manager7:00 Train horn noise - Deputy Project Director7:10 Public involvement update - Community Affairs Manager7:20 CAC Member roundtable7:25 Public comment7:30 Adjourn


March 20136:00 Welcome CAC Vice Chair Position Chairperson6:05 Engineering update Deputy Project Director6:15 Environmental Impact Statement (EIS): CAC Priority Topics Deputy Project Director6:35 Relocations and Acquisitions Project Real Property Director6:45 ADA Compliance Deputy Project Director7:00 Pedestrians/Bicycles Community Affairs Manager7:10 Safety & Security Project Director7:20 CAC Roundtable7:25 Public comment7:30 Adjourn


Inky Dinky Confusion Express ProjectCitizens Advisory Committee

February 2013

Topics of Interest

Topic Updated at CACBudget

Bike & pedestrian routes across bridges

Train horn noise / quiet zones

Elevated track

Safety and Security Q&A

ADA Compliant

Bikes on light rail cars


State of Confusion: Demographics, 2012


Inky Dinky Confusion Express (IDCE)Public Private PartnershipsContract Management and Best Practices

The Inky Dinky Confusion Express (IDCE) Management Team has taken a very aggres-sive approach and conducted extensive research in evaluating the practice of Public Private Partnerships (PPP), Contract Management and Best Practices in delivering a light rail project in a cost efficient manner. A Public Private Partnership is a contractual agreement between a public agency (federal, state or local) and a private sector entity. According to the National Council for Public-Private Partnerships, “Through this agree-ment the skills and assets of each sector (public & private) are shared in delivering a service of facility for the use to the general public. In addition to the sharing of resources, each party shares in the risk and rewards potential in the delivery of the service and/or facility.”

One of the most successful methods to control costs and generate revenues employed by other infrastructure sectors is the use of Public Private Partnerships. As stated in 49 U.S.C. 5309(c)(6), “Effective PPP’s in comparison to conventional procurements reduce and allocate risks associated with new construction, accelerate project delivery, improve the reliability of projections of project costs and benefits, and enhance project performance.” Public Private Partnerships are essentially a form of procurement.

The (IDCE) Management Team is extensively evaluating the use of Design-Bid-Build (DBB), Design-Bid (DB), Design-Build-Operate-Maintain (BDOM), Design-Build-Fi-nance-Operate (DBFO), Build Operate-Transfer (BOT), Build- Own- Operate (BOO) and lastly, the full delivery or program management contracting used in PPPs.

Contract management and best practices


With the Design-Bid-Build (DBB) approach, the project sponsor, not the construction contractors, is solely responsible for the financing, operation, and maintenance of the facility and assumes the risk that the drawings and specifications are complete and free from error.

The Design Build (DB) delivery approach combines the design and construction phase into one, fixed-fee contract. Under a DB contract, the design-builder, not the project sponsor, assumes the risk that the drawings and specifications are error free. The ben-efits of a Design Build Delivery Approach are as follows:

Time Savings

• The potential for time savings results from early contractor involvement in the design phase, which increases the constructability of the design plans;• The ability to work concurrently on the design and construction phases for portions of the project; and • The elimination of the bidding process between the design and construction phases that is required of traditional DBB project delivery.

Cost Savings

• The potential for cost savings results from continued communication between design, engineering, and construction team members throughout the delivery;• Reduced inspection requirements by the project sponsor; • Reduced change orders due to early involvement of the construction contractors in the design phase; and • Shortened project timeline

Shared Risks

• Since the potential project risks are shared among the public and private sectors, the risks may be assigned to the party best able to handle them.

Improved Quality

• The potential for improved quality results from the involvement of the design team through project development and opportunities to incorporate project innovations and new technology that may arise based on project needs and contractor capabilities.


With Design-Build-Operate-Maintain (DBOM), the selected contractor is responsible for the design, construction, operation, and maintenance of the facility for a specified time. The contractor must meet all agreed upon performance standards relating to physical condition, capacity, congestion, and/or ride quality. The benefit is increased incentives for the delivery of a higher quality plan and project because the design-builder is respon-sible for the performance of the facility for a specified period of time after construction.

Design-Build-Finance-Operate is a variation of the DBOM approach in that, in addition to the design, construction, and operation of the project, the contractor is also respon-sible for all or a major part of the project’s financing. The benefits are the same as those under the DBOM approach and also include the transfer of the financial risks to the design builder during the contract period.

With the Build-Operate-Transfer, the project sponsor retains ownership of the facility as well as the operating revenue risk and any surplus operating revenues. The benefits involve increased incentives for the delivery of a higher quality plan and project because the contractor is responsible for the operation of the facility for a specified time period after construction.

The design, construction, operation, and maintenance of a facility are the responsibility of the contractor with the Build-Own-Operate approach. Ownership of the facility re-mains with the private contractor. The benefits are, the contractor is assigned all operat-ing revenue risk and any surplus revenues for the life of the facility.

The construction contractor provides a wide variety of services beyond construction to the project sponsor with the Full Delivery or Program Management approach. These services generally begin during the design phase and may continue through the op-eration and maintenance of the facility. The benefit of the Full Delivery or Program Management approach is that it allows the project sponsor to leverage its resources throughout the design, construction, and operation of the facility.

The best practices for the public-sector apply to every stage in the formation and imple-mentation of a PPP, from selecting and designing the project, to developing a regulatory structure and a transaction process, to supervising the private company entitled to tem-porarily own and operate the asset throughout the project’s life cycle. In addition, public-sector leaders must take the necessary steps to cultivate an environment in which PPP projects can grow, such as securing the right project-management expertise within the government and employing policies that support a vibrant industry of engineering and construction companies as well as other private-sector partners, such as financiers.


Best Practices Exhibit


The light rail system for the Inky Dinky Confusion Express has been fully vetted with the Federal Transportation Authority of the State of Confusion. The Federal Transportation Authority estimates operation and maintenance cost of $35 million annually. We are extremely pleased that the Federal Transit Authority has expressed a high degree of confidence in this estimate.

The Inky Dinky Confusion Express is committed to doing everything possible to bring an extraordinary benefit for the residents in the State of Confusion. Benefits include, creat-ing hundreds of construction jobs, meeting vital transportation needs, spurring new de-velopment, growing the State’s tax base, and supporting the other neighboring projects. As has been reported in several publications, the Inky Dinky Confusion Express cars will be purchased by a private rail company to meet the operations and maintenance cost needs. The private rail company will provide supplemental contributions to endow a $10 million fund to operate and maintain the system for 30 years or until 2043, at which point Inky Dinky Confusion Express will be maintained by the State of Confusion unless an agreement is reach by the initial term. If a new agreement has not been approved prior to expiration of the initial term, the private company will donate the assets and op-erating responsibility to the State of Confusion.

The annual budget will, therefore, be met privately through a combination of passenger fares, advertising naming rights, and the Inky Dinky Confusion Express Endowment. These revenues and resources are expected to cover 80% of the operating cost for the Inky Dinky Confusion Express system.

Operations plan


What the light rail will look like

As illustrated below in figure 1.1, the Light Rail will be a state fixed rail system connect-ing the main circulatory traffic plan to the State of Confusion. The Light Rail System is 55 miles long with 15 stops. The Light Rail System is envisioned to follow a long side running alignment through a majority of corridors with median –running operations north and south and east to west. There is no business or residential dislocation expected. The Light Rail System will be comingled with vehicular traffic. The Inky Dinky Express envisions providing premium transit service along the corridor with 7.5 minutes head-lights during peak periods and 12 minutes headways during the off peak periods. The annual ridership is projected to be 2 million unique passengers in the first year of opera-tion and growing by a projected 32% in 2043.


5 Support Facilities: Yards, Shops, Administration

A preferred separate vehicle storage and maintenance facility will be located in each city within the State of Confusion. These vehicle storage and maintenance facilities will provide light maintenance repairs, with indoor and outdoor storage and administra-tive offices available. Each facility will have the ability to wash cars and make general repairs. For complex and heavy maintenance needs, Inky Dinky Confusion Express will outsource these services as part of an overall fleet management approach. Inky Dinky Confusion Express believes the A-70 vehicle model and specifications represent the largest potential vehicle that will be considered for the system, thus representing a conservative design at a feasible cost. Additional rail cars will be stored throughout the network. Parking requirements for employees and visitors have been evaluated for the support facilities.

Bicycle Accommodations

Consideration was given to the addition of a specially designed bicycle lane along the rail corridor. There are no designated bicycle lanes along any streets within the cities of the State of Confusion. Extensive analysis was completed and numerous alterna-tives evaluated to determine how to best accommodate bicycle intersections with the light rail operation, particularly in Lavish County. Due to the design principles in place by the DOT, vehicle traffic lanes must be greater than 12 feet wide or the potential for accidents is beyond the acceptable risk. At this time, establishment of bicycle lanes is not feasible.

15 Stations, Stops, Terminal, Intermodal

The current design has 15 stop locations along the route, as depicted in Figure 1.1. There are currently no plans in place to identify additional stops. However, all expected growth of the Inky Dinky Confusion Express is in Lavish County and near the Capital. All locations have large platforms and are designed for level boarding and are ADA compli-ant. Platform heights will be 14 inches from the top to the rail; length will be a minimum of 60 feet, with a preferred length of 80 feet. At a minimum, every platform will include a station name, ADA ramps, station signage, lighting, LED message boards, closed security systems, emergency phone and a covered ticket vending machine. Additional station design features include: a covered seating area; radiant heat to assist in melting snow, to assure passenger comfort as they wait; media/information cubes, bike storage and Wi-Fi access. Base stations will be designed and constructed with the necessary infrastructure to accommodate future stations enhancements. The Rail Management Company will be responsible for all future station modifications and upgrades, includ-ing those required due to sponsorship agreements. Future maintenance costs for and above base model will be the responsibility of the Rail Management Company. The Rail Management Company will pursue private sponsorship, to provide funding for future enhancement, for each of the 15 stations, after station property space has been appor-tioned to the Rail Management Company by the State of Confusion.


SERVICE PLAN

An analysis was conducted to simulate the round trip running time, cycle time and the number of vehicles needed for operation of the Inky Dinky Confusion Express Project. A preferred service frequency and vehicle fleet size has been established so a sufficient number of rail vehicles will be in service during peak time periods, minimizing pas-senger wait time. During peak hours, frequency of service will be 7-8 minutes; during non-peak hours, 15-20 minutes. The service plan developed for weekends, Saturdays, Sunday/holidays provides for a frequency of 20-30 minutes. All frequency of service timing is based on estimates using available demographics and is subject to change.


Special Events Operations

During special events at the Capital in Lavish County, the Inky Dinky Confusion Express Streetcar Service may operate one way travel between Inundated County and Confusion City at a frequency of every 10 minutes.

Emergency Operation Plans

During the project’s next phase, the Inky Dinky Confusion Express will develop a comprehensive Safety and Security Plan addressing these features throughout the life of the project, including the construction and operation of the project. The Inky Dinky Confusion Express envisions coordinating the emergency service providers along the corridor to assure both short term and long term concerns are addressed. All other safety and security items are incorporated in the Risk Management Section. In event of scheduled delays to incidents and other disturbances along the line, the Inky Dinky Confusion Express operators will be trained to handle incidents in a professional manner.

Coordination with Bus Operations

Bus transit within the State of Confusion exists, but is in a transitional phase. Inky Dinky Confusion Express has confidence that effective cooperation and communication with the appropriate bus transportation agencies will enable light rail and bus operations to work in harmony with each other.


Introduction to contract risk

The diagram below provides a spectrum according to the degree of risk in the determination of the type of contracts for a procurement action. The risk to Inky Dinky Lightrail Express increases as the contract type moves from Lump Sum Firm Fixed Fee to Cost plus Fixed Fee. The former is the easiest to administer, but the risk to the contractor increases. The latter involves the highest uncertainty and the contractor does not guarantee to deliver the product or finish the project at the contract award price. As discussed in FAR Part 16, the factors that should be considered in determining appropriate contract types are: price competition, realistic pricing standard, degree of uncertainty and impact on cost evaluation, type and complexity of the work, urgency, period of performance, contractor’s technical qualification, contractor’s financial responsibility, past performance, concurrent contract work load, extent of subcontracting, availability of procurement history, and contract administration. The Federal Common Grant Rules expressly prohibit the use of the cost plus a percentage of cost and cost plus a percentage of construction cost methods of contracting.


TABLE OF CONTENTS

1.0 INTRODUCTION 1.1 Purpose Of The Risk Management Plan2.0 RISK MANAGEMENT PROCEDURE2.1 Process2.2 ROLES AND RESPONSIBILITIES2.3 Risk Identification2.3.1 Methods for Risk Identification2.4 Risk Analysis2.4.1 Qualitative Risk Analysis2.4.2 Quantitative Risk Analysis2.5 Risk Response Planning2.6 Risk Monitoring, Controlling, And Reporting2.7 Risk Contingency Budgeting3.0 TOOLS AND PRACTICES4.0 CLOSING A RISK5.0 LESSONS LEARNED

APPENDIX A: RISK MANAGEMENT PLAN APPROVALAPPENDIX B: RISK REGISTER

INKY DINKY LIGHT RAIL PROJECTRISK MANAGEMENT PLAN

Version Number: 1.0Version Date: 04/01/2013

VERSION HISTORYVersionNumber

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1.0 Lance Lacroix 04/01/2013 Original

Risk plan


1.0 INTRODUCTION1.1 PURPOSE OF THE RISK MANAGEMENT PLAN

A risk is an event or condition that, if it occurs, could have a positive or negative effect on a project’s objectives. Risk Management is the process of identifying, assessing, responding to, monitoring and controlling, and reporting risks. This Risk Management Plan defines how risks associated with the Inky Dinky Light Rail Project will be identified, analyzed, and managed. It outlines how risk management activities will be performed, recorded, and monitored throughout the lifecycle of the project and provides templates and practices for recording and prioritizing risks by the Risk Manager and/or Risk Management Team.

Risks related to IT systems or applications must be identified and documented based on the methodology in NIST SP 800-30, Risk Management Guide for Information Technology Systems. IT system or application weaknesses must be identified on an associated plan of action and milestones (POA&M) and tracked in accordance with IDLR Project POA&M guidelines. Appropriate pro-tective measures must be taken to safeguard sensitive IT system or applica-tion weaknesses or vulnerabilities from unauthorized disclosure.

2.0 RISK MANAGEMENT PROCEDURE2.1 PROCESS

In order to manage risk, the following rules should be applied to this process: make risk management part of the project; identify risks early in the project; communicate about risks; consider both threats and opportunities; clarify own-ership issues; prioritize the risks; analyze the risks; plan and implement risk responses; register project risks; and track risks and associated responses. The project manager working with the project team and project sponsors will ensure that risks are actively identified, analyzed, and managed throughout the life of the project. Risks will be identified as early as possible in the project so as to minimize their impact. The steps for accomplishing this are outlined in the following sections. The IDLR Project Manager (or designee) will serve as the Risk Manager for this project.

A distinction may need to be made between overall project risk management and IT system or application risk management. Risks related to IT systems or applications must be identified and documented based on the methodol-ogy in NIST SP 800-30, Risk Management Guide for Information Technology Systems.


2.2 ROLES AND RESPONSIBILITIES

Role ResponsibilitiesBusiness SME (BSME) The BSME assists in identifying and determining the context,

consequence, impact, timing, and priority of the risk. Risk Manager or Project Manager (PM)

The Risk Manager or PM is a member of the Integrated Project Team (IPT). The Risk Manager or PM determines if the Risk is unique, identifies risk interdependencies across projects, verifies if risk is internal or external to project, assigns risk classification and tracking number. During the life of the project, they continu-ally monitor the projects for potential risks.

Integrated Project Team The IPT is responsible for identifying the risks, the dependencies of the risk within the project, the context and consequence of the risk. They are also responsible for determining the impact, timing, and priority of the risk as well as formulating the risk statements.

Risk Owner(s) The risk owner determines which risks require mitigation and contingency plans, he/she generates the risk mitigation and con-tingency strategies and performs a cost benefit analysis of the proposed strategies. The risk owner is responsible for monitor-ing and controlling and updating the status of the risk throughout the project lifecycle. The risk owner can be a member of the project team.

Other Key Stakeholders The other stakeholders assist in identifying and determining the context, consequence, impact, timing, and priority of the risk.

2.3 RISK IDENTIFICATIONRisk identification will involve the project team, appropriate stakeholders, and will include an evaluation of environmental factors, organizational culture and the project management plan including the project scope, schedule, cost, or quality. Careful attention will be given to the project deliverables, assumptions, constraints, work breakdown schedule (WBS), cost/effort estimates, resource plan, and other key project documents.

2.3.1 Methods for Risk IdentificationThe following methods will be used to assist in the identification of risks as-sociated with Inky Dinky Confusion Express Project: • Brainstorming• Interviewing• SWOT (Strengths, Weaknesses, Opportunities and Threats)• Diagramming• Etc.

A Risk Management Log will be generated and updated as needed and will be stored electronically in the project library located on the Inky Dinky Light Rail Project website.


2.4 RISK ANALYSISAll risks identified will be assessed to identify the range of possible project outcomes. Risks will be prioritized by their level of importance.

2.4.1 Qualitative Risk AnalysisThe probability and impact of occurrence for each identified risk will be as-sessed by the project manager, with input from the project team using the following approach:

Probability of Occurrence•High – Greater than 50% probability of occurrence•Medium – Between 30% and 50% probability of occurrence•Low – Below 30% probability of occurrence

2.4.2 Quantitative Risk AnalysisAnalysis of risk events that have been prioritized using the qualitative risk analysis process and their affect on project activities will be estimated, a nu-merical rating is applied to each risk based on quantitative analysis, and then documented in this section of the risk management plan.

Impact•High – Risk that has the potential to greatly impact project cost, project schedule or performance•Medium – Risk that has the potential to slightly impact project cost, project schedule or performance•Low – Risk that has relatively little impact on cost, sched-ule or performance

Risks that fall within the RED and YELLOW zones will have risk response plan which may include both a risk response strategy and a risk contingency plan.


2.5 RISK RESPONSE PLANNINGEach major risk (those falling in the RED & YELLOW zones) will be assigned to a risk owner for monitoring and controlling purposes to ensure that the risk will not “fall through the cracks”.

For each major risk, one of the following approaches will be selected to address it:• Avoid – Eliminate the threat or condition or to protect the project objectives from its impact by eliminating the cause• Reduce/Mitigate – Identify ways to reduce the probability or the impact of the risk• Accept – Nothing will be done • Transfer/Share – Shift the consequence of a risk to a third party together with owner-ship of the response by making another party responsible for the risk (buy insurance, outsourcing, etc.)

For each risk that will be mitigated, the project team will identify ways to prevent the risk from occurring or reduce its impact or probability of occurring. This may include prototyping, adding tasks to the project schedule, adding resources, etc. Any second-ary risks that result from risk mitigation response will be documented and follow the risk management protocol as the primary risks.

For each major risk that is to be mitigated or that is accepted, a course of action will be outlined in the event that the risk does materialize in order to minimize its impact.


2.6 RISK MONITORING, CONTROLLING, AND REPORTINGThe level of risk on a project will be tracked, monitored and controlled and reported throughout the project lifecycle.

Risks will be assigned a risk owner(s) who will track, monitor and control and report on the status and effectiveness of each risk response action to the Project Manager and Risk Management Team on a weekly basis.

A “Top 10 Risk List” will be maintained by the PM/Risk Manager or IPT and will be re-ported as a component of the project status reporting process for this project.

All project change requests will be analyzed for their possible impact to the project risks.

As Risk Events occur, the list will be re-prioritized during weekly reviews and risk man-agement plan will reflect any and all changes to the risk lists including secondary and residual risks.

Management will be notified of important changes to risk status as a component to the Executive Project Status Report every two weeks.

The Risk Manager (PM) will: • Review, reevaluate, and modify the probability and impact for each risk item every two weeks.• Analyze any new risks that are identified and add these items to the risk list (or risk database).• Monitor and control risks that have been identified• Review and update the top ten risk list every two weeks.• Escalate issues/ problems to management when the documented mitigation actions are not effective or producing the desired results or the overall level of risk is rising. The Risk Owner will:• Help develop the risk response and risk trigger and carry out the execution of the risk response, if a risk event occurs.• Participate in the review, re-evaluation, and modification of the probability and impact for each risk item on a weekly basis.• Identify and participate in the analysis of any new risks that occur. • Escalate issues/problems to PM that,o Significantly impact the projects triple constraint or trigger another risk event to oc-cur.o Require action prior to the next weekly reviewo Risk strategy is not effective or productive causing the need to execute the contin-gency plan.

Risk activities will be recorded in the Risk Register located on the Inky Dinky Confusion Express Project website.


2.7 RISK CONTINGENCY BUDGETINGA risk contingency budget can be established to prepare in advance for the possibility that some risks will not be managed successfully. The risk con-tingency budget will contain funds that can be tapped so that your project doesn’t go over budget.

There is a total of $10 Million in the Inky Dinky Confusion Express budget allocated for Risk Management activities. These activities may include, but are not limited to, identifying, analyzing, tracking, controlling, managing, and planning for risks. This also includes creating and updating the risk response strategies and contingency plans.

3.0 TOOLS AND PRACTICESA Risk Management Log will be maintained by the project manager and will be reviewed as a standing agenda item for project team meetings.Risk activities will be recorded in the Risk Register located on the Inky Dinky Confusion Express website.

4.0 CLOSING A RISKA risk will be considered closed when it meets the following criteria:

• When risk is no longer a reasonable threat, or the risk has occurred and is now an issue, that particular risk may be closed in the Risk Register.• The IDCE Project manager has the authority to close any risk.

5.0 LESSONS LEARNEDThe lessons learned will be captured and recorded in the IDCE Project Data-base located on Inky Dinky Confusion Express website.


Appendix A: Risk Management Plan ApprovalThe undersigned acknowledge that they have reviewed the Inky Dinky Confusion ExpressProject Risk Management Plan and agree with the information presented within this document. Changes to this Risk Management Plan will be coordinated with, and approved by, the undersigned, or their designated representatives.

Signature: Date: Print Name: Title:Role:




ContactsUnited StatesJennifer [email protected]

United StatesDavid [email protected]

United StatesLamont [email protected]

United StatesEric [email protected]

United StatesMichelle [email protected]

United StatesLance [email protected]

United StatesAnnie [email protected]


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