Alternative Quality Organizations in Highway Design and Construction. of Colorado, Boulder, CO

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1 2231 Alternative Quality Organizations in Highway Design and Construction Elizabeth KRAFT 1 and Keith MOLENAAR 2 1 Graduate Assistant, Civil, Architectural and Environmental Engineering, University of Colorado, Boulder, CO elizabeth.kraft@colorado.edu 2 Professor, Civil, Environmental and Architectural Engineering, Univ. of Colorado, Boulder, CO Molenaar@colorado.edu ABSTRACT A common dissent to alternative project delivery has been that the quality will not be equal to that of the traditional design-bid-build delivery method. One of the reasons for this concern is that the quality roles and responsibilities change when implementing an alternative delivery method due to early involvement of the contractor, a single contract for design and construction, and/or private funding being utilized for the project. While the fundamental quality activities remain the same, the overall project organization defining who is responsible for the activities and roles changes. Due to a lack of guidance and research the project quality organization shifts in an ad-hoc manner due to the time constraints of the project. This research determines the five fundamental quality management organizations based on the agency s quality responsibilities within the project quality management organization. INTRODUCTION A quality management organization (QMO) assigns the specific roles and responsibilities associated with the quality management of a project in both design and construction to a particular project participant (agency, contractor, designer, and/or consultant). Within a highway project the QMO can consist of the following roles: design quality assurance (QA), design quality control (QC), construction quality assurance, construction quality control, project quality assurance (PQA), independent assurance (IA) and verification. Historically highway projects have assigned all but the construction quality control to the agency. This is changing due to the reduction of agency staff sizes and the implementation of alternative delivery methods. In the 1990s, many state highway agencies (SHAs) experienced downsizing and that trend has continued. These downsizing efforts not only reduced the number of people able to manage increasing workloads but also impacted the expertise level within the SHA (Smith et al. 1998). No department within the SHA, including design, testing and inspection, was exempt from the downsizing. As a result, the testing and inspection that had previously been the responsibility been the responsibility of the agency started to shift to the contractor and the agency took on a role of acceptance. Personnel losses have been a major factor in the changes influencing the materials and construction acceptance process (Smith et al. 1998). In

2 2232 response, 23 Code of Federal Regulations 637 B was revised in 1995 to allow contractor QC test results to be used by the agency for acceptance. The industry is continuing to expand the use of alternative delivery methods within the industry because of the need to delivery projects in a shorter timeframe, while at the same time reducing the level of the DOT staff. Project delivery systems define the roles and responsibilities of the parties involved in a project, this includes design and construction (Oyetunji and Anderson 2006; Molenaar and et al. 2008; Touran et al. 2009). The project quality roles and responsibilities are also directly impacted by the project delivery method. Gransberg et al. states that the issues of alternative project delivery method and project quality management have become interrelated (Gransberg et al. 2010). Project QMOs have been adjusting to the needs of the alternative delivery methods on a project-by-project basis because of a lack of guidance available. In order for a consultant or a contractor to appropriately and accurately respond to a request for proposal (RFP) the clear identification of the quality responsibilities for the responder. There is a significant amount of investment and risk in agencies creating project-by-project QMOs and if it is not clearly thought out and communicated within the RFP then the agency does not get the best proposals possible. This research provides needed guidance for the highway industry by identifying the fundamental QMOs within the industry. It provides a novel definition of five QMOs that have been developed through a triangulation of literature review, contract document analysis and practitioner evaluation. The result is a consistent and efficient approach to QMO planning in the highway sector. While the model was derived from the highway sector, it has applications to other civil and building sectors that employ alternative delivery methods with owner agencies who have been traditionally involved in QA functions. QUALITY MANAGEMENT ORGANIZATION ROLES Quality management is the totality of the system used to manage the ultimate quality of the design as well as the construction encompassing the quality functions described previously as QA,QC, IA and verification (Gransberg et al. 2008) The project QMO identifies and assigns the quality management roles and responsibilities at the project level, from design through completion of construction. The roles that are included within a highway project QMO are project acceptance, quality assurance for design and construction, quality control for design and construction, project quality assurance (PQA), independent assurance, and verification. Overall QA is the planning and systematic actions required for a product to meet the quality requirements and QC is process control. However quality terminology can be frequently interchanged, therefore this research uses the TRB Glossary of Highway Quality Assurance Terms (TRB 2009) definitions for Quality Assurance (QA), quality control (QC), acceptance and independent assurance (IA) and the definitions for quality management (QM) and project quality assurance (PQA) from Gransberg et al (Gransberg et al. 2008). The project QMO also identifies the responsible party for deciding when the design can be released for construction and when construction can be released for final payment. The Integrated Quality Management Model (IQ2M) framework

3 2233 graphically represents all of the project quality roles, their relationships, and the surrounding project quality activities for both design and construction, as shown in Figure 1. Figure 1 Integrated Quality Management Model Framework METHODOLOGY Through three distinct phases of research, five fundamental QMO models were identified for the highway industry. A thorough literature review and national survey were used to identify a theoretical framework with 14 potential QMOs. The second phase employed a content analysis of 66 contract and policy documents to identify the QMO s that are currently in use by industry. The third phase reduced the identified industry QMO s down to the five fundamental QMOs based on the roles of the agency and three most common alternative project delivery methods: design-bidbuild (DBB); design-build (DB); construction manager/general contractor (GCCM); and public-private partnerships (PPP). The literature review was focused on construction, highway industry, quality, and design. The national survey was completed by state Departments of Transportation (DOTs), other public transportation agencies, design-builders, and DB design and construction consultants. A total of 63 complete responses and 13 partial responses were received from 47 states (Gransberg et al. 2008). The resulting primary roles making up the highway design and construction QMO framework are design QA, design QC, construction QA and construction QC. The assignment of the different quality roles to the agency, designer, contractor, and/or concessionaire resulted in 14 different theoretical QMOs.

4 2234 The second phase of the research studied the QMOs that the industry is currently using. The industry was broken into DBB, DB, CMGC and PPP. The literature review identified the QMOs utilized in the DBB delivery method and CMGC. The contracting relationships in CMGC are closely related to DBB and the applicable QMOs are the same as DBB. (Gransberg et al. 2010) Next to DBB, DB is the most prevalent project delivery method within the highway industry and has the most opportunity for change to the quality roles. Design-build also has the most industry documentation available with specified QMO organizations. Therefore, the content analysis focused on DB request for proposals (RFPs) and policy documents. The content analysis reviewed project solicitation documents (RFPs) and policy documents for 66 different projects from 26 transportation agencies from 23 states, the District of Columbia, the U.S. DOT Eastern Federal Lands Highway Division, and one Canadian Province, totaling $11.5 billion in contracted work. The QMOs identified by the research were then analyzed based on which quality roles and responsibilities were held by the agency. If the agency shared a role, directly contracted the role out to an independent firm, or had sole responsibility, it was considered an agency project quality role and responsibility. Many of the previously identified QMOs became variations of the fundamental QMOs because of the variation in how the agency performed the role and/or if the non-agency quality roles and responsibilities were contracted to a single party or multiple parties. This final analysis resulted in five fundamental QMOs utilized within the highway industry. FUNDAMENTAL HIGHWAY QMOS The five fundamental QMOs for the highway construction and design industry identified by this research are listed below: Deterministic The traditional approach to quality within the highway industry. The owner agency retains all control except for the construction QC, which is assigned to the contractor Assurance The owner agency is responsible for all aspects of the quality management except for QC. Variable Design and construction take different approaches to quality. One will either have a proactive approach by assigning both QA and QC to the party contracted to perform the scope of work, while the other will be a reactive approach by only having responsibility for QC. The version of this seen in industry is when all design QC/QA and construction QC is assigned to a design-builder Oversight the owner agency takes on an oversight role by assigning design QA, design QC, construction QA and construction QC to the parties that are contracted to perform these scopes of work. Acceptance Currently only used in a PPP arrangement, the owner agency is responsible for verification testing and final acceptance. All other quality roles and responsibilities are assigned to the concessionaire. Table 1 shows a summary of the roles and responsibilities associated with the five fundamental QMOs. Any role or responsibility held by the agency can either be performed with in-house resources or can be outsourced to a third party consultant, but ultimately the responsibility is Agency s.

5 2235 Quality Management Organization Table 1- Fundamental QMO roles and responsibilities Design QA Design QC Const. QA Const. QC PQA (agency) Deterministic Agency Agency Agency Contractor N/A Assurance Agency Designer Agency Contractor N/A Variable Designer Designer Agency Contractor Design Oversight Designer Designer Contractor Contractor Design and const. Acceptance *Concess. *Concess. *Concess. *Concess. Design and const. *Concess. = Concessionaire Deterministic Quality Management Organization The Deterministic QMO is the traditional quality organization on highway construction projects and is well understood by the primary parties involved on a project: agency, contractor and designer. The agency s roles in the Deterministic QMO include design QA, design QC, and construction QA. Project QA is not required because the agency is responsible for all QA (design and construction) on the project. The agency s role in the deterministic is one of control. In this QMO, the agency develops the designs, specifies the materials to be used, and watches over the construction (Gransberg et al. 2008). The lack of any sort of collaboration in the Deterministic approach contributes to the frequently contentious relationship between the owner and the contractor. There is no place for collaboration because the contractor and the designer have no input in the QA of their own product, they are merely responding to what the agency dictates within the RFP, plans, specifications, and bidding documents. Difficulties can arise when there are conflicts because the quality expectations are not explicitly called out in the bidding documents and/or when contract change orders are needed. The Deterministic QMO is most often implemented on DBB projects, especially when the design is performed within the agency, rather than outsourced to a design consultant. Gransberg and Shane concluded that the quality systems used in DBB pertain to CMGC because the owner still occupies the same contractual position with respect to the designer and builder (Gransberg et al. 2010). The Deterministic QMO would be most appropriately applied to CMGC if the scope of preconstruction work for the contractor was limited to items not directly relating to the design: cost estimates and project scheduling. In contrast, the Deterministic QMO is not well suited for a DB project. This is because one of the benefits of the DB delivery method is that the agency can transfer some of the risks associated with the quality of design and construction, which requires a shift in authority for each of these tasks. Applying the Deterministic QMO to a DB project would mean the agency would

6 2236 retain the quality authority for design and construction which no longer allows the design builder to manage and assume the risks associated with those tasks (Gransberg et al. 2008). Assurance Quality Management Organization In the Assurance QMO, the agency has the responsibility for QA in design and construction and the decisions to release the design for construction and to release construction for final payment. The designer and the contractor are responsible for performing QC of their respective fields. Because the agency is still responsible for all QA on the project, project QA is not necessary. While the contractor and the designer perform their own QC, typically the agency will perform independent assurance and testing to verify the QC tests results (Gransberg et al. 2008). Because the agency is still responsible for all QA on the project without input from either the designer or contractor, the owner still has a very controlling role in the project. The quality responsibilities have not shifted very far from the Deterministic QMO and there is still a focus on inspections and materials testing as the way to assure quality, rather than emphasizing building quality into the project. Because the agency s high level of control over the quality, the designer and the contractor assume less ownership for the quality of the project and collaboration between the agency and the designer and contractor regarding quality is not possible. The Assurance QMO has been applied to both DBB and DB projects. When applied to the DB delivery method all QC activities are the responsibilities of the design builder. Gransberg et al. speculated that agencies which have limited experience with the DB method apply quality management policies and procedures which are still evolving from the DBB method in which the contractor controls construction QC and the DOT has control over all QA functions and over design QC (Gransberg et al. 2008). While no evidence of CMGC employing the assurance QMO, there is no fundamental reason preventing it use for a CMGC project. Variable Quality Management Organization The Variable QMO differs from the four others because it is described by the function of the model rather than by the role of the agency. The Variable QMO is defined as having a mixed approach to quality between the design and the construction phases. An example of this method has been found on a DB project when the agency is responsible for the construction QA but not design QA. Because the agency is no longer responsible for design QA, the agency must perform project QA on the design side of the project (Gransberg et al. 2008). As a result, the agency has minimal control of quality on the design phase yet still retains a high level of control over the construction quality. This results in implementing two different approaches to quality across not only the agency but also the design builder, which can complicate attempts at creating continuity across the project. A critical element for the agency relieving its high level of control over the quality and successfully shedding the QA responsibility is the agency s identification of the quality requirements to be included in the RFP, rather than the detailed technical details of the project. Agencies must provide enough guidance so that respondents can include the appropriate services and approach to quality in their

7 2237 proposals (Gransberg et al. 2008). While the traditional skills and responsibilities of the agency resources focus on the testing and inspections required to perform construction QA when the agency retains a high level of control over quality. This requires the traditional skills possessed by a transportation agency, focused on checking all the technical details of the project. The Variable QMO can be difficult for an agency to manage because the project team must have the abilities to manage both low level of agency control over quality as well as a high level of agency control over quality within one project team. The Variable QMO construction assurance variation has been implemented on Design-Build projects. There are many possible variations for this QMO, however no others have currently been observed in industry. No examples have been found of the Variable QMO being applied to either DBB or CMGC projects; however, there is nothing fundamentally preventing it from being implemented on a dual contract (DBB or CMGC) project. Oversight Quality Management Organization In the Oversight Quality Management Organization, the agency is responsible for the decisions to release the designs for construction and to release construction for final payment and project quality assurance. The designer is responsible for design QA and design QC, while the contractor is responsible for construction QA and construction QC. Because the agency does not have any responsibility for the design QA or construction QA, it is responsible for performing project QA. While the agency always ultimately has the risk for quality on a project, in the Oversight QMO, risk is shifted to the designer and the contractor. The agency no longer has direct control over the day-to-day quality management of the project and is no longer dictating how to produce the quality required by the project; rather the agency s role is to approve the designer and contractor created quality management plans based on meeting the agency s quality requirements stipulated in the contract and that the plans are being implemented. Because the Oversight QMO shifts the responsibility for QA to the designer and the contractor the level of integration between the agency, designer and contractor increases and requires a higher level of collaboration amongst the three in order to meet the quality requirements for all parties. In this QMO, all parties are involved in the quality management of the project and the designer and contractor also have contractual accountability for not only the quality of the final product that they deliver to the agency, but the actual processes of delivering that product. Because of the high level of collaboration required by the Oversight QMO, it would be difficult to implement on a project with a linear approach where the designer and the contractor are not involved early in the project; as a result, the Oversight QMO would not be a good choice for a DBB project. However, in project delivery methods when the designer and contractor are brought in early on a project, such as DB and CMGC, the Oversight organization would be complimentary to the collaborative nature of these methods. Acceptance Quality Management Organization The Acceptance QMO has only been found in PPP project. The owner only has responsibility for the final project acceptance and owner verification testing while

8 2238 the party contracted to complete the project is responsible for all other quality responsibilities on the project. Since the agency is no longer providing 100% of the financing for design, construction, operations, and maintenance, there is a shift in financial liabilities which also pertains to the shift of the quality responsibilities (Gransberg et al. 2008). The Acceptance QMO provides the agency with the least amount of direct control over the QM of the project. The agency s primary focus, as required by FHWA Technical Advisory , is to perform design and construction quality oversight to satisfy their legal responsibilities to the public.(gransberg et al. 2008) This requires the agency to perform owner verification testing commonly performed by an independent engineer. Additionally, the agency s involvement in the quality of the project is establishing the quality requirements, approving submitted quality management plans and ensuring that quality plans are being implemented. The designer, contractor and/or concessionaire create the quality plans required by the contract and as long as they meet the requirements of the contract, the agency approves them. Meeting the quality requirements for the project is placed in the hands of the concessionaire, while the agency performs enough of an oversight role to ensure that they are meeting the federal requirements for due diligence and making sure the concessionaire is following their own project quality management plan. CONCLUSION The quality roles and responsibilities on a project are shifting on highway projects due to the use of different project delivery methods, the needs of the industry for faster and better projects, and the growing acceptance of the utilization of consultants by DOTs for traditional DOT tasks. The five fundamental QMOs for the highway design and construction industry range from the agency having sole responsible for all quality functions except construction QC, to the agency only being responsible for final acceptance and meeting federal requirements. Table 2 summarizes the level of owner control, the project delivery methods and states that associated with each of the five QMOs. Table 2 Summary of the five fundamental quality management organizations QMO Level of owner control Identified delivery methods Potential delivery methods States using QMO Deterministic High DBB, CMGC None ALL Assurance High DB CMGC, DBB NM, SD, LA, MS, NC, AK, FL Variable Medium DB CMGC NC,FL,MN,VA,UT,ME,CA Oversight Low DB CMGC CA, CO, MN, MO, NV, OR, TX, UT, VA, WA, WASH DC, EFLHD, ALBERTA Acceptance Low PPP None TX, FL During the reduction process there were some common traits/factors observed amongst all of the QMO models:

9 Construction QC is the responsibility of the contractor. Project quality assurance is always performed by the agency. 2. Final project acceptance is always performed by the agency. 3. The contract verbiage regarding the roles and responsibilities for quality has to be very concise and documented to be successful. 4. The decision as to the QMO of a project has to be determined at the time of the first request for proposal, whether it is design, construction, or both at the same time. The quality management responsibilities have to be clearly laid out in the Request for Proposals in order for the designer and/or the contractor to be able to appropriately provide for quality management activities commensurate with the amount of risk they will be assuming for project quality. What this research has provided is the identification of the fundamental QMOs for the highway industry. This research also provides a basic understanding of the individual QMOs. However there needs to be further research as to how to select an appropriate project QMO. Also, there is still a need to better understand the impact of each of the QMOs on all of the project stakeholders as well as the projects quality level. This research provides a springboard for the continued research on QMOs that is needed within the industry. Having a pool of QMOs to select from for the start of a new project is a great improvement to re-creating the QMO wheel for every project start, but without a method to select the appropriate QMO for a project the ad-hoc manner of implementing project quality management continues. In order to provide guidance as to the project QMO selection research needs to be conducted. Additionally People have a difficult time with change. The introduction of a non-traditional project QMO is a huge change for all the project stakeholders. The QMOs all have a different impact on the stakeholders of the project. There is research needed to identify the appropriate project stakeholder training and education required for each of the QMOs. This training is not only to provide the skills required to perform the responsibilities successfully, but also on breaking down the barriers to non-traditional QMOs and the overall quality philosophy of each QMO. Without this research the implementation of the non-traditional QMOs will be very difficult and frustrating. Lastly, there needs to be research conducted to identify how these QMOs impact the final quality of the project. Within the area of alternative project delivery, there was research conducted as to resulting level of quality as compared to a DBB project. The same sort of analysis needs to be conducted regarding the non-traditional QMOs in comparison to the deterministic QMO (the traditional). If these do not provide quality at least as good as the deterministic QMO, then the value of the implementation of alternative QMOs may have to be re-evaluated. REFERENCES Gransberg, D. D., Datin, J., Molenaar, K., National Research Council, National Cooperative Highway Research Program, American Association of State Highway and Transportation Officials, and United States. (2008). "Quality assurance in design-build projects." Rep. No. 376, Transportation Research Board, Washington, D.C.

10 2240 Gransberg, D. D., Shane, J. S., National Research Council, National Cooperative Highway Research Program, American Association of State Highway and Transportation Officials, and United States. (2010). Construction Manager-at- Risk Project Delivery for Highway Programs. Transportation Research Board, Washington, D.C. Molenaar, K. R., and et al. (2008). AASHTO Guide for Design-Builde Procurement. American Association of Highway Transportation Officials, Washington D.C. Oyetunji, A. A., and Anderson, S. D. (2006). "Relative effectiveness of project delivery and contract strategies." J.Constr.Eng.Manage., 132(1), Smith, G. R., National Cooperative Highway Research Program, National Research Council, American Association of State Highway and Transportation Officials, and United States. (1998). State DOT management techniques for materials and construction acceptance. National Academy Press, Washington, D.C. Touran, A., Gransberg, D. D., Molenaar, K. R., Ghavamifar, K., Mason, D. J., and Fithian, L. A. (2009). "A Guidebook for the Evaluation of Project Delivery methods." Rep. No. TCRP Report 131, TRB,. TRB. (2009). "Glossary of Highway Quality Assurance Terms." Rep. No. E-C137, Transportation Research Board, Washington D.C.