Lessons Learned Airport Capital Development

Transcription

1 Lessons Learned Airport Capital Development

2 Objectives 1. Highlight lessons learned from implementation of airport capital programs 2. Identification of selected leading practices associated with lessons learned

3 LESSON #1 When developing capital programs, use bottoms up project definition process POTENTIAL IMPACT wide range of interpretation of project scope, associated cost and schedule overruns, incorrect funding assigned

4 LESSON #1 Leading Practice Project Level: Detailed cost estimates (Construction Specification Institute [CSI] Divisions Standard budget definition across projects If Detailed costs not available: Development of standard unit cost for reoccurring projects Development of adjustment factors for standard unit costs Identification of funding sources at the project level Program Level: Clear reconciliation of buildup from project level

5 LESSON #1 Leading Practice (Cont.) Establishing a project budget using standards: Assumption: $100 of construction costs DISCLAIMER this is a starting point there are wide range of reasons why this budget breakdown may be different Budget Element Amount Architect/Engineer $ Construction $ PM/CM $ 5.00 Testing $ 2.00 Contingency $ TOTAL: $

6 LESSON #2 Develop a rigorous project and program evaluation process for inclusion in CIP POTENTIAL IMPACT wish list projects implemented at expense of needed projects; higher than needed rates & charges

7 LESSON #3 Select optimal project delivery and contracting methodology best aligned with organization s capabilities and funding plan POTENTIAL IMPACT cost/schedule overruns by using complex project delivery/contracting methods; funding applied incorrectly based on contracting methodology selected; organization may not have tools to successfully administer project/program

8 LESSON #3 Leading Practice 1. Clear review of project delivery options (D/B, D-B-B) 2. Clear review of contract type used (LS, GMP, Unit Price) 3. Demonstrated capability in managing selected project delivery method and contracting used

9 LESSON #3 Leading Practice (CONT) 4. Documented identification and measurement of risks associated with selected project delivery 5. Documented identification of risks associated with selected contracting methodology 6. Documented evaluation of funding plan and selected project delivery and contracting methodologies EXAMPLE: Assumptions made during financial modeling may not be representative of actual conditions) D/B vs. D-B-B change orders Cashflow needs/projections

10 LESSON #4 Invest time in planning and developing processes off-line prior to selecting an IT solution to bring processes on line POTENTIAL IMPACT high IT spend on process definition/integration; IT solution does not deliver desired results; IT solution creates more work for PM; IT solution does not address all key departments that need project/program data (e.g. Engineering/Finance/Administration); high cost of integration to legacy financial systems; departments procure their own systems and data not integrated

11 LESSON #5 It takes several departments within an airport organization to successfully delivery capital programs POTENTIAL IMPACT Finance: incorrect amount of debt issued at the wrong time; substandard cashflow projection; projects not reported in a standard way Engineering/Construction not enough $ made available to optimally delivery program; financial decisions take too long; no control over budget Administration dashboard reports not available, KPI s not available, extensive effort to get reports; departments not working towards common goals

12 LESSON #6 A capital program can be budget rich but fund source poor. Continuous monitoring is necessary throughout the lifecycle of a program. POTENTIAL IMPACT Skewed use of funding resulting from actual conditions results in shortfalls of certain fund sources

13 END