Pipe Bursting Project Risk Management: Contractor s Perspective. Mike Woodcock Portland Utilities Construction Company, LLC

Transcription

1 Pipe Bursting Project Risk Management: Contractor s Perspective Mike Woodcock Portland Utilities Construction Company, LLC

2 IPBA Classification System Dilemma Promote Benefits of Pipe Bursting for Typical Applications Advance Capabilities of the Pipe Bursting Technology Through Experimentation Promote Benefits of Pipe Bursting for A-typical Applications Curb Unrealistic Expectations Maintain Credibility for the Technology Solution Educate Owners, Engineers, & Contractors of the Key Variables that Affect Success Bring Perspective to how those Variables Affect Success Classify/Qualify Associated Risks Risk Assesment

3 IPBA Classification System IPBA Classification System Diagram

4 IPBA Classification System Risk Assessment Tool The purpose of the IPBA Classification system is to classify the types of projects by the probability or predictability of success for various pipe bursting scenarios based on a few key variables Risk Assessment Tool Key Variables Depth Existing Pipe ID New Pipe Diameter In Relation to Existing Pipe ID Size On Size One Up-size Double/Triple Up-size Burst Length Original Trench Width Soil type Degree of Difficulty = Probability/Predictability of Success = Risk

5 IPBA Classification System Definitions Degree of Difficulty Probability/Predictability of Success Risk of Failure Success Bursting from Planned Entry Point to Planned Exit Point Manhole to Manhole No Un-planned Excavations Failure Inability to Burst from Planned Entry Point to Planned Exit Point Un-planned Excavations

6 Hope For the Best Plan For the Worst The Level/Degree of Risk is Defined by the Potential Cost of the Worst Case Scenario Even with the Best Job Site Risk Reduction Techniques Employed Every Pipe Burst Has the Potential of Failure Due to Known & Un-known Hazards Known Hazards Mechanical Problems Hole In Hoses Winch Cable Breaks Unknown Hazards Concrete Encasement Casing Pipe Solid Rock Pinch Point UNKNOWN?

7 IPBA Classification System IPBA Classification System Diagram

8 Class A Minimal Difficulty/Risk of Failure These are the Every Day, Bread & Butter, Typical Projects Small Diameter Fairly Shallow Size on Size Good Soil Conditions Example Pipe bursting a fairly shallow 8 pipe to an 8 pipe in good soil conditions

9 IPBA Classification System IPBA Classification System Diagram

10 Class B Moderate Difficulty/Risk of Failure These are the slightly more difficult/risky projects because they have one or two of the more challenging scenarios Larger Pipe Slightly Deeper One Up-size More Challenging Soils Not as compactable Water Example Pipe bursting a 15 clay pipe to 18

11 IPBA Classification System IPBA Classification System Diagram

12 Class C Comprehensive Difficulty/Risk of Failure These projects are fairly difficult because they have one or more variables that put the probability of success in doubt. Fairly Deep Large Diameter Double or Triple Up-size Challenging Soil Conditions Running Sand Rock Trench

13 IPBA Classification System IPBA Classification System Diagram

14 Class D Developmental Unpredictable/Risk of Failure High These projects have some variable or characteristic that make the probability of success unpredictable - and/or - the consequences of failure are unacceptable Probability of Success Unpredictable Extremely Deep Large Diameters Extremely Challenging Soil Conditions Running Sand Water Rock Trenches Existing Pipe is Non-fracturable Ductile Iron Or Corrugated Metal

15 Class D Developmental Unpredictable/Risk of Failure High or Consequences of Failure High Class D Projects - Probability of Success Unpredictable Class A, B, & C Project with High Consequences of Failure = Cost of Failure is High/Unacceptable Under Structures Under Highways or Interstates Under Railroads Near Major Utility/High Pressure Gas Line Unacceptable $Cost

16 Level of Financial Risk IPBA Classification System Provides Guidance on Probability of Success/Failure Two Typical Risk Assessment Models for Pipe Bursting 1. Risk = Cost of Failure X Probability of Failure 2. Risk = Cost of Failure Which Model Do You Subscribe To? The Level/Degree of Risk is Defined by the Potential Cost of the Worst Case Scenario

17 Consequences/Costs of Failure Costs of Failure (Examples) No Billings for the Cost of the Attempt Alternative Design Costs Costs of Alternative Completion Methods can be Much Higher Bypass Pumping While Alternative Method is Designed/Decided Upon and Completed Retrieval/Loss of Equipment Damage to Surface Improvement Structure/Asphalt/Concrete Cost of Alternative Method Open Cut Replacement If Feasible Move Over and Bore Install New MH s and New Pipe to Tie-in Drive Casing Over Existing Pipe

18 Examples of Worst Case/Risky Scenarios Class D Pipe Bursting Under Rail System Pipe Bursting Under Structure Pipe Burst Across Major Highway or Interstate Pipe Burst Near Major Utility/High Pressure Gas Line These would be considered Class D Projects The Cost of Failure is Too High or Unacceptable

19 Class D Project Under Rail Road Tracks

20 Class D Project Under a Structure

21 Class D Project Under a Highway

22 Class D Project Near High Pressure Gas

23 Risk Mitigation Techniques For Class D Projects Financial Risk Stems From The Contract Contracts Are For When Things Go Wrong Two Primary Scenarios Contract Does Not Allow Conditional or Qualified Bids Bid To Owner Bid to Contractor Where Conditional and Qualified Bids Are Allowed Bid To Owner Bid To Contractor

24 Risk Mitigation Techniques Financial Risk Stems From The Contract Contracts Are For When Things Go Wrong Two Primary Risk Mitigation Techniques Risk Avoidance Risk Transfer Site Risk Mitigation Techniques

25 Risk Mitigation Techniques Contract Does Not Allow Conditional or Qualified Bids Bid To Owner Risk Avoidance Bid to Contractor Risk Avoidance

26 Risk Mitigation Techniques - Non-Qualified Bids Raise the issue with the Owner, Engineer, Contractor prior to bid Explain the Potential Risks Often the Designer Does Not Recognize the Potential Risks Involved Discuss the Potential Consequences of Failure Cost of Bypass Pumping While Alternative Method is Designed Cost of Potentially Lost Equipment If Irretrievable Cost of Alternative Method Bore In New Location Driving Casing Over Existing Pipe Open Cut Replacement Discuss Who Will Assume the Risk of These Costs Get High Risk Segment Removed from the Original Bid Scope - Risk Avoidance It Can Be Added as a Negotiated Change Order Later Risk Transfer Time & Material Risk Transfer Sometimes the best job is the one you don t do Risk Avoidance

27 Risk Mitigation Techniques Contract Does Allow Conditional or Qualified Bids Bid To Owner Risk Transfer Bid to Contractor Risk Transfer Time & Material Bids Are Sometimes the Solution All Parties Can Live With Risk Transfer

28 Risk Mitigation Techniques - Qualified Bids The pipe belongs to the owner If there is an alternate way to solve the problem that is within the range of similar cost and without the same level of risk Choose that Option If there is no other reasonable alternative the owner should be willing to assume the risks to receive the benefit of the solution If the contractor had to absorb the risk; likely the owner couldn t afford the price. If there is no other way and this is the owner s problem why should the contractor(s) assume the risks If the benefit is not worth the risk for the owner; is it for the contractor Consider Time & Material Option

29 Risk Mitigation Techniques - Qualified Bids The Level/Degree of Risk is Defined by the Potential Cost of the Worst Case Scenario Even with the Best Job Site Risk Reduction Techniques Employed Every Pipe Burst Has the Potential for Failure Due to Known & Un-known Hazards Known Hazards Transfer Risk/Site Mitigation Techniques Mechanical Problems Transfer Risk/Site Mitigation Techniques Hole In Hoses Transfer Risk/Site Mitigation Techniques Winch Cable Breaks Transfer Risk/Site Mitigation Techniques Unknown Hazards Transfer Risk Concrete Encasement Transfer Risk Casing Pipe Transfer Risk Solid Rock Pinch Point Transfer Risk Other Transfer Risk For The High Consequence of Failure Scenarios Each of These Risks Should Be Transferred

30 The Role of Experience & Experience Qualifications Experience/Experience Qualifications Risk Recognition Risk Mitigation Contractual Mitigation Techniques Site Mitigation Techniques Even with the most experienced contractor, the known hazards still exist and therefore risks associated with high/unacceptable consequence/cost should be avoided or transferred. Contractors should take their own experience or lack thereof into consideration and not get in over their heads The Contractor that doesn t know or doesn t discuss the risk factors is the contractor that we don t want to do the project

31 Questions?