Project Background
Portsmouth, VA’s, historic waterfront is home to a vibrant commercial and recreational seaport. Steeped in maritime heritage, the Hampton Roads port serves one of the nation’s oldest working harbors and one of its largest shipping industries. Marine cargo shipping, in particular, has long been a primary waterfront industry in Virginia and is a significant economic engine for the entire Commonwealth.
In 2004, APM Terminals, one of the world’s largest container port operators, initiated plans to expand its facilities along the Elizabeth River in Portsmouth and build the largest privately developed marine container terminal in the United States. Since the new terminal is expected to double the shipping capacity of the Hampton Roads port, the existing public roadways and bridges leading to the site were deemed insufficient. With the new facility slated to open in mid-2007, APM Terminals needed the upgraded transportation infrastructure to be in place before the end of 2006 in order to accommodate increased traffic capacity and begin its marine operations on time.
The Virginia Department of Transportation (VDOT) quickly realized that the traditional design-bid-build approach to highway construction, with its separate design phase and construction bidding phase, would have had difficulty meeting this schedule. This lead to VDOT advertising for its first-ever design-build public roadway contract.
Design-Build Option
VDOT recognized that the design-build method, where design and construction occur simultaneously, could significantly reduce the overall time needed to complete the project.
Design-build is ideal for the application of fast track construction techniques. By combining the bid and design phases with the permitting and construction phases, VDOT was able to allow the contractor to begin procurement of materials, equipment and contractor teams during the environmental process, before the final construction documents were fully completed.
VDOT awarded the project to international contractor Skanska, with engineering firm Vanasse Hangen Brustlin (VHB) as the design leader. The team embarked on an ambitious construction schedule in 2005 with substantial completion slated for the end of 2006.
Conserving Schedule, Containing Costs
It was not a small job. Transportation improvements included a new highway interchange; two new bridges; 2.1 miles of new roadway; relocation of 2,800 feet of roadway; drainage and utility segments; pavement design to accommodate significant loads; and wetland/waterway impact mitigation. The team also had to create a detailed traffic management plan to maintain access to local businesses, residential areas and a neighboring Coast Guard base.
The design-build method naturally lends itself to creativity in conserving schedule and containing costs because designers and builders are encouraged to be innovative and efficient. For instance, since design and construction occurred concurrently, Skanska/VHB was able to complete preconstruction design activities such as survey and soil borings during the environmental phase. In addition, the team tackled aggressively-timed schedules for governmental approvals and right of way permitting in tandem with project design and construction.
Also, under the design-build delivery model, one is dealing more with a performance specification than a finite design, which allows much more latitude concerning any unforeseen changes.
VDOT knew the final price for the completed infrastructure long before construction began because the contract was awarded as a lump sum design-build contract.
Minor changes — alignments, design and drainage details, etc. — were dealt with at the contractor-designer level without ever having to involve VDOT. Change orders arising from errors and omissions in the design were virtually eliminated because the design-build team was responsible for developing drawings and specifications as well as completing the construction.
Value Engineering and Constructability Reviews
Because Skanska/VHB worked as one team, they were able to perform value engineering and constructability reviews more efficiently during the entire design and construction process.
For example, construction of the new interchange on this project involved raising Route 164, a four-lane limited access highway, 25 feet to accommodate an overpass over the new APM Terminals Boulevard. Through careful construction phasing, the design-build team enabled all four lanes of highway traffic to be maintained throughout the project.
Skanska/VHB completed the project — under a fixed budget of $22 million — ahead of schedule in November 2006. Traditional design-bid-build contract prices typically increase about 10 percent during the life of the project. The resulting time savings from this design-build contract meant lower costs for the Commonwealth of Virginia and will allow APM Terminal’s marine container facility to open on time.
Lessons Learned
There were numerous advantages to VDOT’s choosing the design-build for this public roadway project and they plan to use this method on other public projects down the road. Among the benefits:
Singular Responsibility: By having a single point of responsibility for quality, cost, and schedule adherence, VDOT was able to focus on scope, timely decision-making, and accountability, rather than on coordination between engineers and contractors.
Quality: The design-build procurement documents clearly defined VDOT’s requirements and expectation by providing performance based specifications.
Cost Savings: By working and communicating as a team, design and construction personnel were able to evaluate alternative materials and construction means and methods with the objective of conserving cost.
Time Savings: By overlapping design and construction activities and eliminating the traditional construction bidding periods and redesign, the total design and construction time was reduced significantly.
Cost Containment: Guaranteed construction costs were known far earlier than with other delivery methods because the contract was issued for a fixed lump sum, rather than VDOT’s traditional unit-priced contract structure where the total dollar amount depends on item quantities. The design-build team continuously and simultaneously estimated construction quantities and costs throughout the life of the project.
Improved Risk Management: All aspects of cost, schedule and quality were clearly defined and responsibilities were appropriately assigned to each party up front. As this was a lump-sum contract, the design-build team bore the risk for changes, including utility growth.
Into the Future
When the new APM Terminal opens later this year, it will accommodate some of the largest cargo ships on earth and feed the economy of Virginia and the entire region. The Hampton Roads port will continue to thrive in the 21st century as the upgraded roadways and bridges move cargo swiftly and easily through the area and into America’s heartland.
INFO: Vanasse Hangen Brustlin, Inc. (www.VHB.com)