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Case Study: Tren Urbano Project

Case Study: Tren Urbano Project. Definitions. WHAT Light Rail Transit Line in San Juan, Puerto Rico Completion of the First Phase by November 2001 at a Cost of $1.5 Billion WHO Puerto Rico’s Department of Transportation and Public Works (DTPW) Parsons DeLeuw, Inc

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Case Study: Tren Urbano Project

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  1. Case Study: Tren Urbano Project

  2. Definitions • WHAT • Light Rail Transit Line in San Juan, Puerto Rico • Completion of the First Phase by November 2001 at a Cost of $1.5 Billion • WHO • Puerto Rico’s Department of Transportation and Public Works (DTPW) • Parsons DeLeuw, Inc • Federal Transit Administration (FTA) • Siemens Transit Team • US Partners : Daniel, Mann, Johnson and Mendenhall (DMJM) and Frederic R.Harris, Inc • Local Partners: Eduardo Molinary and Associates (Architects), Barret and Hale and Associates (Consulting Engineers) • WHY • Real-Life Application of DART • HOW • Understand Project Circumstances • Identify and Analyze Potential Conflicts • Design Conflict Management Plan • Review and Revise the Plan Based on Project Data

  3. Outline • Tren Urbano Project Story • Project Description • Procurement Strategy • Conflict Management in Tren Urbano • Partnering • Change Order Process • Dispute Resolution Contract Language • Analysis of Tren Urbano Components • Partnering Analysis in Tren Urbano • Enhance the Pros of Duplication • Form a Unified Management Team • STTT Contractor’s Fiduciary Relationship With Owner • Aid Non-Contractual Relationships • Improve Communication and Understanding Between the Multi-Cultures • Initial Meetings • Follow-up Meetings • General Analysis of Partnering Components • General Analysis of Conflict Resolution

  4. Tren Urbano Project Story • 1989: Conceptual Design of Tren Urbano January 1993: Review of Developed Concept by a New Executive Team • February 1993: Tren Urbano Designated as One of the Four Turnkey Demonstration Projects in the Nation • January 1994: Submittal of Successful Bid for Federal Assistance to the US Congress • April 1994:$42-Million Contract for GMAEC Services Between DTPW and Joint Venture

  5. Tren Urbano Project Story • Tren Urbano Office (TUO): Planning and Environmental Permitting Process, Partial Plans and Systems Specifications, Structuring Procurement Process • November 1995: Approval on Publication of Final Environmental Impact Statement (FEIS) • February 1996: FTA’s Approval on FEIS and Record of Decision • March 1996:$307.5 million Full Funding Grant Agreement Between DTPW/HTA and FTA • August 2, 1996: Groundbreaking for Phase I Alignment

  6. Outline • Tren Urbano Project Story • Project Description • Procurement Strategy • Conflict Management in Tren Urbano • Partnering • Change Order Process • Dispute Resolution Contract Language • Analysis of Tren Urbano Components • Partnering Analysis in Tren Urbano • Enhance the Pros of Duplication • Form a Unified Management Team • STTT Contractor’s Fiduciary Relationship With Owner • Aid Non-Contractual Relationships • Improve Communication and Understanding Between the Multi-Cultures • Initial Meetings • Follow-up Meetings • General Analysis of Partnering Components • General Analysis of Conflict Resolution

  7. Project Description

  8. Phase I Alignment

  9. Outline • Tren Urbano Project Story • Project Description • Procurement Strategy • Conflict Management in Tren Urbano • Partnering • Change Order Process • Dispute Resolution Contract Language • Analysis of Tren Urbano Components • Partnering Analysis in Tren Urbano • Enhance the Pros of Duplication • Form a Unified Management Team • STTT Contractor’s Fiduciary Relationship With Owner • Aid Non-Contractual Relationships • Improve Communication and Understanding Between the Multi-Cultures • Initial Meetings • Follow-up Meetings • General Analysis of Partnering Components • General Analysis of Conflict Resolution

  10. Procurement Strategy • Phase I Project Divided into Six Design/Build Contracts for Civil Structures and One System and Test Track Turnkey (STTT) Contract • STTT Contract • Construction of Two Stations and 2.6 Km of Test Track, Maintenance and Storage Facility, Operations and Control Center • Delivery of train Vehicles and Systems • Systems Integration • System Operations and Maintenance for a Minimum of Five Years

  11. Types of Procurement Party Also referred to as Tren Urbano Hybrid Approach 1 2 Turnkey DBOT Siemens Transit Team (STT) Turnkey Contractor 3 Construction Management (at no risk) GMAEC Owner’s Consultants 4 5 Multiple Primes Design-Build Alignment Section Contractors (ASC) Civil Contractors

  12. Organizational Chart

  13. Outline • Tren Urbano Project Story • Project Description • Procurement Strategy • Conflict Management in Tren Urbano • Partnering • Change Order Process • Dispute Resolution Contract Language • Analysis of Tren Urbano Components • Partnering Analysis in Tren Urbano • Enhance the Pros of Duplication • Form a Unified Management Team • STTT Contractor’s Fiduciary Relationship With Owner • Aid Non-Contractual Relationships • Improve Communication and Understanding Between the Multi-Cultures • Initial Meetings • Follow-up Meetings • General Analysis of Partnering Components • General Analysis of Conflict Resolution

  14. Partnering • Objectives • Promotion of Working Relationships Among Participants • Promotion of Cooperation and Trust • Achievement of Common and Individual Objectives on a Non-confrontational Basis • Initial and Periodical Follow-up Workshops • Facilitators Retained Though the Partnering Program of the American Arbitration Association

  15. Outline • Tren Urbano Project Story • Project Description • Procurement Strategy • Conflict Management in Tren Urbano • Partnering • Change Order Process • Dispute Resolution Contract Language • Analysis of Tren Urbano Components • Partnering Analysis in Tren Urbano • Enhance the Pros of Duplication • Form a Unified Management Team • STTT Contractor’s Fiduciary Relationship With Owner • Aid Non-Contractual Relationships • Improve Communication and Understanding Between the Multi-Cultures • Initial Meetings • Follow-up Meetings • General Analysis of Partnering Components • General Analysis of Conflict Resolution

  16. Change Order Process

  17. Outline • Tren Urbano Project Story • Project Description • Procurement Strategy • Conflict Management in Tren Urbano • Partnering • Change Order Process • Dispute Resolution Contract Language • Analysis of Tren Urbano Components • Partnering Analysis in Tren Urbano • Enhance the Pros of Duplication • Form a Unified Management Team • STTT Contractor’s Fiduciary Relationship With Owner • Aid Non-Contractual Relationships • Improve Communication and Understanding Between the Multi-Cultures • Initial Meetings • Follow-up Meetings • General Analysis of Partnering Components • General Analysis of Conflict Resolution

  18. Negotiation Steps • The Contractor Asserting a Claim if not Satisfied with the Outcome of the Change Order • Five Negotiation Steps Before a Claim Becomes a Dispute • Technical Personnel of the Parties Attempting to Resolve Claims in the Partnering Sessions With Impartiality (At Most 60 Days) • Claim Submitted to Contractor’s Project Manager and Contracting Officer (At Most 10 Days) • Claim Referred to Contractor’s Project Executive and Executive Director (At Most 10 Days) • Claim Determination Submitted within 10 Days by the Contracting Officer to Contractor • Notice of Disagreement Submitted Within 10 Days by the Contractor to the Contracting Office

  19. Dispute Review Board • DRB Consisting of Three Members • Each of the Authority and the Contractor Selecting Three Nominees • Each of the Parties Selecting One Individual From the Other’s List of Nominees • Third Member: Qualified and Impartial Chairperson selected by Mutual Agreement Within 21 Days • Foundation of The DRB May Take More Than Two Months

  20. Processing Disputes • Step 1 : Contractor’s Request for Meeting and Supporting Statement • Step 2: Authority Submitting to the DBR and Contractor, Response to Dispute and Counterclaims • Step 3: Contractor’s Statement Setting Factual and Legal Defense to the Counterclaim • Step 4: DRB Setting Date of Initial Meeting on Dispute • Step 5: DRB Issuing Draft Findings and Recommendations to Both Parties • Step 6: Notification of Miscalculation or Error in the Draft • Step 7 : Final Findings and Recommendations Submitted to Executive Director and Contractor • Step 8 : Executive Director Issuing A Written Decision to Accept or Reject Recommendations

  21. Legal Action • Court Action Filed By Contractor Within 90 Days After Receipt of the Executive Director’s Decision • Negotiation Time Frame • 20 Weeks For Claim Resolution Process • 6 Months for Dispute Resolution Process

  22. Outline • Tren Urbano Project Story • Project Description • Procurement Strategy • Conflict Management in Tren Urbano • Partnering • Change Order Process • Dispute Resolution Contract Language • Analysis of Tren Urbano Components • Partnering Analysis in Tren Urbano • Enhance the Pros of Duplication • Form a Unified Management Team • STTT Contractor’s Fiduciary Relationship With Owner • Aid Non-Contractual Relationships • Improve Communication and Understanding Between the Multi-Cultures • Initial Meetings • Follow-up Meetings • General Analysis of Partnering Components • General Analysis of Conflict Resolution

  23. Enhance the Pros of Duplication

  24. Example of Duplication • Parsons Brickerhoff (in Siemens Group), Responsible of the Management Functions in Terms of Interface Between Systems to Fixed Facilities and Interface Between Fixed Facilities • GMAEC, Owner’s Consultants, Responsible of Schedule and Design Reviews of the ASC’s Work • Result: More Complete Review and a Superior Project

  25. Outline • Tren Urbano Project Story • Project Description • Procurement Strategy • Conflict Management in Tren Urbano • Partnering • Change Order Process • Dispute Resolution Contract Language • Analysis of Tren Urbano Components • Partnering Analysis in Tren Urbano • Enhance the Pros of Duplication • Form a Unified Management Team • STTT Contractor’s Fiduciary Relationship With Owner • Aid Non-Contractual Relationships • Improve Communication and Understanding Between the Multi-Cultures • Initial Meetings • Follow-up Meetings • General Analysis of Partnering Components • General Analysis of Conflict Resolution

  26. Form a Unified Management Team

  27. Outline • Tren Urbano Project Story • Project Description • Procurement Strategy • Conflict Management in Tren Urbano • Partnering • Change Order Process • Dispute Resolution Contract Language • Analysis of Tren Urbano Components • Partnering Analysis in Tren Urbano • Enhance the Pros of Duplication • Form a Unified Management Team • STTT Contractor’s Fiduciary Relationship With Owner • Aid Non-Contractual Relationships • Improve Communication and Understanding Between the Multi-Cultures • Initial Meetings • Follow-up Meetings • General Analysis of Partnering Components • General Analysis of Conflict Resolution

  28. STTT Contractor’s Fiduciary Relationship With Owner • Two Contrasting Perceptions of STTT: Owner Representative and Contractor • As Owner Representative • Operations and Maintenance for 5-10 Years  Reduced Lifecycle Costs. • Overseeing the ASC’ s Interface With Each Other & Interface With Systems • Reviewing ASC ’s Design & Schedule • Partnering With PRHTA/GMAEC • As Contractor • Design and Construction of Systems and Vehicles (Major Cost Component of STTT Contract) • Design and Construction of One Fixed Alignment Section

  29. Outline • Tren Urbano Project Story • Project Description • Procurement Strategy • Conflict Management in Tren Urbano • Partnering • Change Order Process • Dispute Resolution Contract Language • Analysis of Tren Urbano Components • Partnering Analysis in Tren Urbano • Enhance the Pros of Duplication • Form a Unified Management Team • STTT Contractor’s Fiduciary Relationship With Owner • Aid Non-Contractual Relationships • Improve Communication and Understanding Between the Multi-Cultures • Initial Meetings • Follow-up Meetings • General Analysis of Partnering Components • General Analysis of Conflict Resolution

  30. Aid Non-Contractual Relationships • ASC ’s Partnering With Owner Improving Costs and Schedule • ASC ’ s Partnering with STTT Without Contractual Commitment

  31. Outline • Tren Urbano Project Story • Project Description • Procurement Strategy • Conflict Management in Tren Urbano • Partnering • Change Order Process • Dispute Resolution Contract Language • Analysis of Tren Urbano Components • Partnering Analysis in Tren Urbano • Enhance the Pros of Duplication • Form a Unified Management Team • STTT Contractor’s Fiduciary Relationship With Owner • Aid Non-Contractual Relationships • Improve Communication and Understanding Between the Multi-Cultures • Initial Meetings • Follow-up Meetings • General Analysis of Partnering Components • General Analysis of Conflict Resolution

  32. Improve Communication and Understanding Between the Multi-Cultures • Multi-Cultural Environment : Puerto Rican Contract Managers and North American Design Managers (Different Contract Languages, Priorities in Objectives) • Multi-Phase Environment: Planning of Next Phases, Design and Construction of Phase I, Preparation for Operation and Maintenance of Phase I • Initial Partnering Meetings and Follow-up Meetings

  33. Outline • Tren Urbano Project Story • Project Description • Procurement Strategy • Conflict Management in Tren Urbano • Partnering • Change Order Process • Dispute Resolution Contract Language • Analysis of Tren Urbano Components • Partnering Analysis in Tren Urbano • Enhance the Pros of Duplication • Form a Unified Management Team • STTT Contractor’s Fiduciary Relationship With Owner • Aid Non-Contractual Relationships • Improve Communication and Understanding Between the Multi-Cultures • Initial Meetings • Follow-up Meetings • General Analysis of Partnering Components • General Analysis of Conflict Resolution

  34. Initial Meetings • Held Between Owner and Each Party With Whom the Owner Has Signed a Contract • 2-3 Day-Meetings in a Neutral Location, Facilitated by a Member of the AAA • Objectives • Discussions of Risks, Concerns, Goals • Development of Trusting Relationships

  35. Quality Summit • Meeting Between All the Parties, Ran By the Tren Urbano Office • Results of Observations From Quality Summit • Improve Cross-cultural and Communicational Relationships • Improve in Drive and Belief in Partnering by Some of the Contractors • Need Some Human Infrastructure in a very Compressed Time • Lessons Learned from Quality Summit • Need for a Third Party Facilitator • Focus on Working Together in Small Groups Instead of Numerous Presentations • More Interactions Between Parties

  36. Outline • Tren Urbano Project Story • Project Description • Procurement Strategy • Conflict Management in Tren Urbano • Partnering • Change Order Process • Dispute Resolution Contract Language • Analysis of Tren Urbano Components • Partnering Analysis in Tren Urbano • Enhance the Pros of Duplication • Form a Unified Management Team • STTT Contractor’s Fiduciary Relationship With Owner • Aid Non-Contractual Relationships • Improve Communication and Understanding Between the Multi-Cultures • Initial Meetings • Follow-up Meetings • General Analysis of Partnering Components • General Analysis of Conflict Resolution

  37. Follow-up Meetings • Monthly Partnering Meetings Between Project Principals Parties Presenting Status Reports and Meetings Run by Owner’s Top Management • Issues Resolution at a Micro-Management Level • Reduced Now to Quarterly Meetings Preventing Shortcutting the Regular Resolution Process and Focusing on Partnering Relationship Issues

  38. Evaluation of Partnering • A Clear Champion For Partnering Was not Clearly Identified in the Pre-Planning Stage • More Faith and Genuine Commitment Need to Be Elicited in the Partnering Process • Follow-up Meetings Could Be Improved if Run by a Third Party • More Emphasis Should Be Done on the Need and Value of Partnering • Need For More Meetings in an Informal Setting • All Management Parties Should Form One United Management Team • Partnering At All Levels (Example, in Field Inspection)

  39. Outline • Tren Urbano Project Story • Project Description • Procurement Strategy • Conflict Management in Tren Urbano • Partnering • Change Order Process • Dispute Resolution Contract Language • Analysis of Tren Urbano Components • Partnering Analysis in Tren Urbano • Enhance the Pros of Duplication • Form a Unified Management Team • STTT Contractor’s Fiduciary Relationship With Owner • Aid Non-Contractual Relationships • Improve Communication and Understanding Between the Multi-Cultures • Initial Meetings • Follow-up Meetings • General Analysis of Partnering Components • General Analysis of Conflict Resolution

  40. General Analysis of Partnering Components • Lessons Learned Divided into Three Categories • Initial Factors : Set at the Beginning of the Project, Impact Seen at the End of the Project • Operational Factors: Occurring Throughout the Project, Affected by Initial Factors • Resulting Factors : Product of Other Factors

  41. Initial Factors • Initial Meetings • Start Early With a Full Partnering Initialization • Don’t Cut on Time and Cost at this Stage • Develop Trust • Education • Use Experienced Employees • Educate and Train People • Numerous Cultures • Recognize Cultural Differences • Delivery Method • High Commitment to partnering in the Presence of Different Non-contractual Relationships

  42. Operational Factors • Follow-up Partnering Meetings : Maintaining the Initial Trusting Partnering Relationship • Knowledge Transfer: Open Communication for Knowledge Transfer Between Various Cultures • Evaluations: Soft Measures Such as Problem Solving Methods and Hard Measures Such as Number of Claims • Champions for Objectives: Champions for Quality, Cost, schedule and Partnering • Benefits of Duplication: Extra Cost Versus Greater Quality-Preventing Adversarial Positions and “All is Responsible, Nobody is” Syndrome • Unified Management Team • Turnkey Contractor Acting as Part Owner

  43. Resulting Factors • Site Transfer Conflicts: Monitoring Hand-Over Between Contractors in the Absence of Direct Contractual Links • Micro-Management: Effective Partnering Saving on the Resources Needed for Micro-Management • Claim Management

  44. Outline • Tren Urbano Project Story • Project Description • Procurement Strategy • Conflict Management in Tren Urbano • Partnering • Change Order Process • Dispute Resolution Contract Language • Analysis of Tren Urbano Components • Partnering Analysis in Tren Urbano • Enhance the Pros of Duplication • Form a Unified Management Team • STTT Contractor’s Fiduciary Relationship With Owner • Aid Non-Contractual Relationships • Improve Communication and Understanding Between the Multi-Cultures • Initial Meetings • Follow-up Meetings • General Analysis of Partnering Components • General Analysis of Conflict Resolution

  45. General Analysis of Conflict Resolution • Insights From Interviews Regarding Conflicts in the Rio Piedras Section • Conflicts and Disputes Are Inherent to the Construction Industry • Owner and Contractor Are Disagreeing Concerning How the Project Is Running • Mitigation Actions Are Most Effective if Taken early • Managers Have A Lot of Experience Regarding Conflict Management and They Feel Pretty Confident About Their Negotiation Skills • Decision-makers Are Not Aware of the Long Term Effects of Their Actions

  46. Outline • Tren Urbano Project Story • Project Description • Procurement Strategy • Conflict Management in Tren Urbano • Partnering • Change Order Process • Dispute Resolution Contract Language • Analysis of Tren Urbano Components • Partnering Analysis in Tren Urbano • Enhance the Pros of Duplication • Form a Unified Management Team • STTT Contractor’s Fiduciary Relationship With Owner • Aid Non-Contractual Relationships • Improve Communication and Understanding Between the Multi-Cultures • Initial Meetings • Follow-up Meetings • General Analysis of Partnering Components • General Analysis of Conflict Resolution

  47. Summary • Partnering and the Success of Innovative Delivery Methods in a Global Market • Importance of Partnering in Multi-Cultural, Multi-Phase Projects • Partnering Embodied in Initial Meetings, Quality Summit, Follow-Up Meetings • Conclusions and Recommendations • Contract Language Regarding Conflict Resolution Is Not the Source of Problems • Inter-phase Conflicts Require Additional efforts

  48. References • [DTOP, 2000] : Puerto Rico’s Department of Transportation and Public Works home page (http://www.dtop.gov.pr/english/tu/history.htm) (2000). • [Harpoth, 1999] : Harpoth, Nina. Effective Partnering in an Innovative Procured, Multi-Cultural Project, MS Thesis. MIT Deaprtment of Civil and Environmental Engineering. 1999. • [Peña-Mora et al, 2002] : Peña-Mora, F., Sosa, C., and McCone, S. Introduction to Construction Dispute Resolution. Prentice Hall, New Jersey, 2002 • [Rio Piedras Contract, 1997] : Rio Piedras Design-Build Agreement, Phase I of Tren Urbano, Contract No. AC-500083, Rio Piedras Contract: Alignment Section 7, Puerto Rico Highways and Transportation Authority. • [TUI, 1997-8] : Tren Urbano Interviews with Project Participants, (1997-8). Tren Urbano Office and Siemens Transit Team Office, San Juan, Puerto Rico. • [TUQS, 1997] :Tren Urbano Quality Summit, 10/6/97 & 10/7/97, San Juan, Puerto Rico (1997).

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