Analytical approach to the Springfield Interchange Improvement Project

University of Maryland University College

Oct 30, 2016

Darren Smothers

Latoya Simms

Christopher Towson

Lusetha Rolle-Dowston

Antonio Muckelvene

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 Inception Phase

During the inception phase of the Springfield Interchange Improvement Project (SIIP), there

were major issues that plagued the procurement management process. First, the cost estimation process

was completely off target. The Virginia Department of Transportation (VDOT) underestimated the cost

of a project of this magnitude, often referred to as a mega-project. “VDOT had no previous experience

with such large-scale projects and used obviously flawed techniques in compiling its estimates (Anbari,

2002, p.6). Projects undertaken by VDOT usually had a budget under 50 million.

As a result of poor estimating, the project tripled in cost, from an initial estimate of 200 million

made in 1994 to 600+ million by the year 2002. Initial estimates ignored/excluded standard major

highway construction practices that engineers should have been able to anticipate. VDOT also had the

freedom to create their estimate through any process they felt was best without any opposition from the

federal government. According to the 2002 two-year study by the U.S. Department of Transportation

inspector general, the Federal Highway Administration “has established few requirements to ensure

that reasonable cost estimation is an integral part of any state's highway project management or

planning process” (Shear & Shaver, 2002).

The financial management of SIIP also affected the procurement management process within

the inception phase. In the early 1990's VDOT had amassed a financial reserve of nearly 500 million.

During the time of recession, Virginia's then Governor, L. Douglas Wilder, extracted 200 million of the

reserve to help balance the state's budget. “Under David R. Gehr, a veteran employee who became

VDOT's top bureaucrat in 1994, the department carried out a plan to spend money faster, rather than let

politicians use it as a convenient bank account” (Shear, 2002). Along with the newly passed

transportation bill by the U.S. Congress that increased federal funding for Virginia after they spent its

matching money first, VDOT went on a spending frenzy.

With mild winters between the years of 1994 and 1998 construction projects were conducted

year-round. VDOT began allowing construction projects to began before all funding was approved,

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 increasing the annual spending from 966 million in 1994, to 1.8 billion four years later. Department

officials that were responsible for the approval of funding to contractors were unsure whether or not

there was enough funding to actually pay them for the work performed. With cost overuns and political

pressure looming, the SIIP suffered in the process. “The state of Virginia waited too long to authorize

and fund the official start of the project while motorists battled congestion and dodged treacherous

traffic situations” (Anbori, 2002, p. 6).

Development Phase

What is the development phase? During the development phase of a project, organizations establish

potential suppliers, and everything that will be procured during the project is planned out and arranged

into place. Although the development is not required to have during smaller projects, it is important

that when organizations do utilize this phase, they do it correctly in order for the organization to be

thoroughly aware of what will be implemented and who will do the implementing successfully. The

Springfield Interchange Improvement Project (SIIP) has been created to better the transportation

system located in Northern Virginia. The case study provides a large explanation and investigation of

the project’s phases, including its development phase.

Primarily, the transportation system wanted to accumulate information on how to improve itself

from people of the community. This is useful because the community consists of the people taking

advantage of the transportation system, so their needs matter the most. Many centers or programs,

including the public information center (IC), and the Congestion Management Program (CMP), were

created in order to keep everything moving in an orderly fashion (Frank Anbari, 2002). These

programs were also composed so that during the construction of the project, residents and customers

would not have concerns. Also, during this phase, the Virginia Department of Transportation (VDOT)

estimated that the cost of the project would be $700 million. Overall, during this phase, the

organization collects information and inputs its implementation plans.

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 Implementation Phase

The implementation phase is vital in managing contract performances, managing different

relationships across the project, documenting changes, and managing correction to contract s.

According to PMI 2013, p.379, “The implementation phase ensures that both seller and buyer

performances meet procurement requirements according to the contracts and agreements in place.”

During the implementation phase of the Springfield Interchange Improvement Project (SIIP), there

were many good things that came out this phase as well as room for improvement. In a decision within

scope management, project managers displayed prudent decision making on eliminating exit and

entrance ramps for carpool lanes, which was done out of the uncertainty of there being carpool lanes

added in the future. Cost management suffered early on in the project due to errors in cost estimates,

which was reflect in their procurement mishaps by increased expenditures of raw materials and skilled

labor. This was apparently caused by lack of inflationary factors within the original estimates. Other

issue that plagued the project was with the people of the community, who own land VDOT needed to

acquire was in disputes of how much their properties were worth. With the implementation of change

in administration, they were able to turn this problem around by recalculating the entire cost estimate in

the project which resulted in an accurate reflection of costs. Time management was generally excellent

with great planning and handling of scheduling changes. Performance drastically improved due to the

implementation of importance of a formal risk management program. Another issue encountered was

the quality index which was shown to be widely inaccurate, which prevented the project from

benefiting from strong quality insurance program. Overall, the implementation phase was very

productive and ensured that buy and seller both met the requirements stated in the contract.

Close-Out Phase

One major area of strength in the management of the Close Out phase is that the team continued

to learn from past mistakes by incorporating lessons learned from previous stages in the subsequent

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 stages. It is so important in Project Management (PM) to be adaptable and flexible. Project teams must

learn as they continue from one milestone to the next; incorporating lessons learned as they continue

through the project; not just wait until the end of the project.

The project performed well in scope because the team was willing to incorporate the lessons

learned so they avoided scope creep. They could stick with the scope baseline and WBS and many

project management tools that help keep a scope in line. Anabari et al reported that” …contractual

incentives that were ineffective and caused cost increases in the first stage were changed for stages 2

and 3 resulting in those stages finishing six months ahead of schedule” (2002, pg. 15). Finishing ahead

of schedule and below costs is phenomenal.

The project also performed well in cost close out; any time you close ahead of schedule and the

work is done satisfactorily you are going to reduce costs. Here again this was from continuous learning

which so many of quality experts assert that training is at the core of reducing the learning curve and

thus reducing costs. In addition, the project could convince VDOT to change its estimating procedures

in the process so that they could get create accurate estimates; not only for this project but to improve

estimating throughout the state of Virginia.

In contract Close Out the project team did well because they used a punch list effectively and

maintained an automated list of closeout requirements; ensuring that all details were completed prior to

declaring a project finished and paying vendors. The project performed adequately in risk close out

because they convinced VDOT of the value of early risk management planning; VDOT used risk

management in future projects early stages, not just mega-projects. The team also did well in the

quality close out for future stages in projects such as the pre- constructability review of the design

before it's released for bids. This aids in getting better qualified bidders and bids.

One of the major opportunities for improvement in the management of the Close Out phase

would be to work with the disconnect between the project system and the VDOT system. Projects must

be technically capable to manage organizational assets and communicate across platforms. The lack of

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 a more computerized Knowledge Management System that easily to shares lessons learned throughout

the organization caused some challenges for them and is something they should remedy. Continuous

learning relies on being able to retrieve and apply lessons learned effectively and in a timely manner.

Another opportunity for learning was the week performance of risk management that caused

some problems in the initial stages of the project and cost some lives. They should use risk

management effectively in the early stages of project planning and not be so response oriented in

fighting the challenges that come up later due to poor risk planning. Risk should be identified early

and either accepted with a risk response, transferred or mitigated. Risk management would help

eliminate the delay in initiating the project or the quick fix that cost a lot of good will. Hopefully it

would also help to eliminate the gap that remained between the initial political cost estimate and the

actual cost of the project.

Summary

The SIIP initially consisted of a seemingly sluggish effort to develop the necessary momentum

to get the project started. Bogged with political dramatics, the stated business case lacked the necessary

input to convince the local populace that the project would bring about positive financial results. As

evidenced in the case study “Local businesses were worried about losing customers because drivers

would want to avoid the area.” (Kwak, Doherty, Manbelli, Mourad, Speranzo, 2002. pg.5). The

appropriate business case sets the necessary conditions for successful project management practices to

occur without undue internal/external influences impacting the project in a less than desirable fashion.

Furthermore, a key advantage of an appropriate business case is the early key identification of key

project stakeholders which drives factors such as project governance. Stakeholder Identification can

become impactful in identifying unnecessary factors that ultimately cause changes/delays to the

baselines. The Project Management Body of Knowledge (PMBOK, 5th Edition), illustrates that

“Project Governance enables organizations to consistently manage projects and maximize the value of

the project outcomes and align the projects with business strategy” (PMBOK, pg. 30).

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 As the project began to grow in momentum it became marred by estimation inaccuracies that

reflected VDOT’s lack of experience in dealing with mega-projects. However, VDOT was able to

change its existing estimation procedures mid-course by instituting an overall organizational change to

the method in which they approached their estimation procedures. This change served two important

purposes, established accuracies in monetary values, and the collection of historical records necessary

for the continuous improvement in estimation techniques.

Additionally, the lack of an analytical approach to risk identification measures severely

hampered the project as risk identification was not dealt with in terms of probability and impact. This

became especially evident during the construction of a rail bridge system that increased both costs and

schedule delays.

In conclusion, the SIIP project was complete and it paved the way for VDOT to take advantage

of the numerous historical lessons learned during all phases of the project. Furthermore, at a minimum,

the lessons learned could potentially serve as a baseline to the pitfalls of improper estimation which

invariably will benefit VDOT as a value-added organization for the Commonwealth of Virginia.

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 References

Anbari, F. T., PhD,PMP. (2002). Springfield interchange improvement project. Project Management

Institute Case Studies in Project Management, 1-23.

Kwak, Doherty, Manbelli, Mourad, Speranzo, (2002). Springfield interchange improvement project.

Project Management Institute Case Studies in Project Management, 1-23.

Shear, M. (2002, October 20). VDOT Crisis Worsened Even as Gilmore Boasted. Washington Post.

Shear, M., & Shaver, K. (2002, November 23). Mixing Bowl's Cost Has Tripled, U.S. Audit Says.

Washington Post.

Project Management Institute, Inc. (PMI).(2013). Control Procurement . A guide to the project

management body of knowledge (p. 379-380). (PMBOK guide)(5th ed.) Newtown Square, PA:

PMI.

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