21-03 — Successful Approaches to Setting Project Development Budgets

Original Scope: A perpetual challenge facing state transportation agency planners formulating the state’s transportation capital program is developing a reliable project development budget for each candidate project. While years of experience and analytical tools inform estimation of projects’ construction costs, current practices for estimating costs of internal staff salaries and external consultant services for pre-construction activities such as scope development, environmental documentation, site investigation and analyses, preliminary engineering and plan development, public engagement, and project management tend to be much more susceptible to uncertainty and therefore much less reliable. The uncertainties and unreliability of estimates can have substantial impact of an agency’s ability to communicate effectively with stakeholders and decision-makers, as well as to ensure that budgets can be met and capital program’s formulated to yield the greatest benefit for available resources.

This scan team will examine how project development budgets are set for activities occurring during a project’s development phase, such as the NEPA clearance process, surveys, preliminary traffic studies, preliminary engineering analyses and design, preliminary plan preparation, associated project management, site investigations, and the right-of-way acquisition process.  Projects funded by government programs as well as innovative funding strategies (e.g., PPP, Design-build, DBOM) will be examined.

Implementation and Impact

Following the two virtual scan team workshops in 2021 and 2022, the scan team worked at the state, regional and national levels to advance scan findings. Highlights of these activities include:

At the state and regional levels, scan findings and/or the scan’s final report were shared at the Washington State DOT Project Engineering Managers’ statewide meeting, with Washington DOT staff, Texas Community of Practice, Minnesota DOT executive leadership, Georgia DOT Estimating Group, Georgia DOT Planning Office, Georgia DOT Delivery Teams, Georgia American Council of Engineering Companies (ACEC) and Michigan DOT Project Management Community of Learning.

At the national/international levels, the scan team presented the scan outcomes to the AASHTO Committee on Design, PIARC International Workshop on Bridge Inspection, Transportation Estimators Association, Maine DOT Engineering Council, and at an AASHTO Technical Committee on Design and Project Management webinar.

TRB hosted a webinar based on the outcomes of this scan titled, Successful Approaches to Setting Project Development Budgets. The content of this webinar documented improved processes for setting and maintaining project development budgets through improvements in estimation, risk management and tracking of project development costs. The webinar demonstrated how agencies can establish and manage budgets for program delivery using methods and tools implemented by other states and featured a project estimating tool used by Nevada DOT.

Scan chair, Scott Pedersen, provided perspectives on the scan outcomes:

Please login to access additional content for scan members only.