SELECTING ALTERNATIVE PROJECT DELIVERY STRATEGIES FOR PUBLIC UTILITIES - LOUISVILLE MSD “LESSONS LEARNED”
Abstract:The Louisville and Jefferson County Metropolitan Sewer District manages a capital program of over 100 million per year in support of its roles of wastewater, stormwater, and drainage management. In an effort to deliver this capital program at the lowest cost and maximum benefits to its customers, MSD has explored a wide variety of project delivery alternatives.
MSD's experience shows that a number of factors must be considered when selecting the optimal project delivery method for any given project. The willingness to accept or the desire to assign project risks is often the driving force that leads to specific decisions in this regard.
Three case histories are presented to illustrate this point. The Sodium Hypochlorite Conversion project was one where regulatory deadlines required extra-ordinary schedule performance. The risk of schedule failure was so great that MSD chose to maintain full project control and responsibility in-house. MSD implemented the project through a fasttrack construction management technique that allowed them to avoid delays due to procurement process requirements, and self perform critical work items.
The new Floyd's Fork Wastewater Treatment Plant had schedule pressures resulting from rapid growth in the service area. In addition, the project plan was based on a treatment technology that MSD had never used before. In this case the need for an accelerated schedule and the desire to assign process performance risk to others led to a decision to use a design/build approach.
The Morris Forman Wastewater Treatment Plant Alternative Solids Process (ASP) project presents the most vivid example of the effect of risk allocation on project success and project costs. After 2 failed attempts at innovative delivery approaches, MSD successfully got the ASP project underway using a design/build approach. The lessons learned during the proposal process for this project illustrate how appropriate risk allocation and risk sharing can lead to project success, while the unilateral assignment of unmanageable risks can escalate project costs beyond the point of project viability. This project also illustrates how the design/build process can maximize the creative synergy of the design/build teams to greatly improve the overall project for the benefit of all parties.
Document Type: Research Article
Publication date: 2000-01-01
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