WSDOT is committed to constant cost evaluation as a means to better manage projects and respond to public skepticism and concern about project estimates and actual costs.
WSDOT has been tackling this issue since February 2002, when we developed the Cost Estimate Validation Process - CEVP®, a groundbreaking effort to identify and quantify potential risks that can impact a project's budget or schedule. In 2003, we updated several project estimates to maintain project cost integrity.
CEVP® will help communicate the identified risks and their potential cost impacts so that the public can understand the limits and assumptions of an estimate and better understand what people will actually see as the project proceeds.
What is CEVP®?
CEVP® is an intense workshop in which a team of top engineers and risk managers from local and national private firms and public agencies examine a transportation project and review project details with WSDOT engineers. Many of the participants have had extensive first-hand experience in large project programming and delivery.
The CEVP® workshop team uses systematic project review and risk assessment methods to identify and describe cost and schedule risks, and evaluate the quality of the information at hand. Importantly, the process examines, from the very beginning, how risks can be lowered and cost vulnerabilities can be managed or reduced. A dividend of CEVP® is the promotion of activities that will improve final cost and schedule results.
What is in a CEVP® Summary?
A one-page CEVP® summary shows:
- Project description and benefits.
- Project schedule showing "mid-point of construction" dates to account for inflation.
- Project cost probability ranges at the current state of project design.
- Major risk factors and unknowns to which cost estimates are subject.
Summaries are provided for full project implementation and also for scenarios where parts of projects could be undertaken within an overall regional plan considering available funding. These scenarios have been selected in consultation with regional decision makers. CEVP® reports provide backup detail for the conclusions stated in the summaries.
Each project's CEVP® summary reflects the unique features of that individual project; but all of the summaries share the following points:
- Project cost estimates are stated in dollar ranges, not as single numbers. This reflects the limits of estimating precision at the planning stage when crucial decisions are yet to be made and the specific risks cannot be costed exactly.
- Risk considerations specific to each project are identified and described so that specific risk issues can be foreseen, discussed, and evaluated by the public as the project moves forward.
- Likelihood of project construction schedules are taken into account and schedule-based adjustments are made to the estimates to reflect the smaller purchasing power of dollars to be spent on construction several years in the future.
- Changes from previous CEVP® releases are included in the one-page summaries for projects that have gone through an updated CEVP® review.
Why did WSDOT re-run some CEVP® project estimates?
There are several reasons to revise CEVP® estimates. In the past year, project engineering has advanced, providing new information and introducing more certainty toward the final project. A new CEVP® can help identify how project changes will impact costs. In some cases, scope changes are enough to redefine the project, calling for a new estimate. Some projects are important parts of the Puget Sound area Regional Transportation Improvement District (RTID), where decision-makers are working to craft funding plans for projects to address some of the Puget Sound region's most significant transportation problems.
We believe CEVP® improves everyone's ability to work together on a regional proposal, leading to reasonable expectations about what can be delivered from new State and regional taxes. It also improves accountability for the public agencies delivering the projects.
Past Project Summaries
WSDOT has focused its CEVP® review efforts on the major projects in King County, where the largest problems are expected to be encountered in matching the states biggest transportation needs to available funding.
2004
- SR 99 Alaskan Way Viaduct and Seawall Replacement
- SR 509 / I-5 Freight and Congestion Relief Project
- SR 520 Bridge Replacement and HOV Project
2003
- I-90 Two-Way Transit and HOV
- I-405 Congestion Relief and Bus Rapid Transit
What else should I know about CEVP®?
CEVP® continues to be developed. The CEVP® summaries are not a warranty that the estimates are perfect; for it is true that you only know the final costs of a project when the project is completed. CEVP® cannot change the fact that it is very early in the project development process for many of these major projects. There are still many unknowns. But risk areas that could drive up project costs can be communicated fairly to the public. In addition, the early identification of risk areas creates management opportunities to minimize the potential of project costs associated with some of those risk areas.
Journal Articles Relating to CEVP®
- Article from Seattle Daily Journal of Commerce (August 12, 2003) (pdf 430 kb)
WSDOT Program Looks at Risks to Create Better Cost Estimates
By Marc Stiles
Critics of the Washington State Department of Transportation might find it hard to believe, but its new technique of estimating the cost and risk of major projects is generating a buzz across the country.
- Article from Public Roads (July/August 2004)
Building Public Trust by Jim Sinnette
The road to public confidence is paved with accurate cost estimates and schedules, community involvement, progress tracking, and effective communications.
- Article from Public Roads (July/August 2004)
Accounting for Megaproject Dollars by Jim Sinnette
Efforts are underway to help improve cost estimating for major highway projects.
- Articles from the July/August 2004 issue of Public Roads relating to a variety of highway issues.
For more complete information see 2003 CEVP® Overview (pdf 224 kb).
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