PMOC REPORT

2018 Risk Refresh
(Workshop Held February 27, 2018)

Honolulu Rail Transit Project
Honolulu Authority for Rapid Transportation (HART)
City and County of Honolulu
Honolulu, HI

June 2018 (FINAL)

PMOC Contract Number: DTFT60-14-D-00012
Task Order No. 1: Programmatic
Project No: DC-27-5274
Work Order No. 22
OPs Referenced: OP 1, 21, 32C, 32D, 33, 34, and 40
Jacobs Engineering Group, Inc.
319 E. Warm Springs Road, Suite 200, Las Vegas, Nevada 89119
William Tsiforas, (702) 938-5400, william.tsiforas@jacobs.com
Length of Time Assigned: Five Years (February 18, 2015 through February 17, 2020
Disclaimer
This Project Management Oversight Contractor (PMOC) report and all supporting reports and back up materials contain
the findings, conclusions, professional opinions and recommendations stemming from a risk-informed evaluation and
assessment, prepared solely for the Federal Transit Administration (FTA). This report should not be relied upon by any
party, except FTA or the project Sponsor, in accordance with the purposes of the evaluation and assessment as described
below. For projects funded through FTA’s Major Capital Investment (New Starts) program, FTA and its PMOCs use a
risk-informed process to review and reflect upon a Sponsor’s scope, schedule, and cost, and to analyze the Sponsor’s
project development and management. This process is iterative in nature. The results represent a “snapshot in time” for a
particular project under the conditions known at that point. The evaluation or assessment and related results may
subsequently change due to new information, changes in circumstances, additional project development, specific measures
a Sponsor may take to mitigate risks, Sponsor’s selection of strategies for project execution, etc.

 TABLE OF CONTENTS
TABLE OF CONTENTS .............................................................................................................. i 
LIST OF TABLES ....................................................................................................................... iii 
LIST OF FIGURES ..................................................................................................................... iii 
1.0 

EXECUTIVE SUMMARY .............................................................................................. 1 
1.1 
Introduction ..............................................................................................................1 
1.2 
PMOC Review .........................................................................................................1 
1.3 
Findings....................................................................................................................1 
1.3.1  Management Capacity and Capability (MCC) Review ...............................2 
1.3.2  Project Scope and Project Delivery Review ................................................4 
1.3.3  Project Schedule Review .............................................................................5 
1.3.4  Schedule Risk Analysis................................................................................6 
1.3.5  Project Cost Estimate Review ......................................................................8 
1.3.6  Cost Risk Analysis .....................................................................................10 

2.0 

INTRODUCTION........................................................................................................... 16 
2.1 
Project Sponsor ......................................................................................................16 
2.2 
Project Description.................................................................................................16 
2.3 
Project Status .........................................................................................................18 
2.4 
Project Budget ........................................................................................................18 
2.5 
Project Schedule.....................................................................................................19 
2.6 
Project Timeline .....................................................................................................19 
2.7 
Project Management Oversight Contractor (PMOC) ............................................19 
2.8 
Evaluation Team ....................................................................................................20 

3.0 

MANAGEMENT CAPACITY AND CAPABILITY REVIEW ................................. 21 
3.1 
PMOC Assessment ................................................................................................21 
3.1.1  Staff Retention ...........................................................................................21 
3.1.2  Management Plans .....................................................................................23 
3.1.3  Operations and Maintenance......................................................................24 
3.2 
Recommendations ..................................................................................................24 

4.0 

PROJECT SCOPE AND PROJECT DELIVERY REVIEW .................................... 26 
4.1 
PMOC Assessment of Project Scope .....................................................................26 
4.2 
PMOC Assessment of Project Delivery.................................................................27 
4.3 
PMOC Recommendations .....................................................................................28 

5.0 

PROJECT SCHEDULE REVIEW ............................................................................... 29 
5.1 
Documents Reviewed ............................................................................................29 
5.2 
Schedule Management ...........................................................................................29 
5.2.1  Project Management Capacity and Capability ...........................................30 
5.2.2  Systems, Tools and Software .....................................................................30 
5.2.3  Project Control Plans, Procedures, and Contractual Requirements ...........32 
5.3 
Technical Review...................................................................................................33 

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

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 5.4 
5.5 

5.3.1  Mechanical Soundness Check....................................................................33 
5.3.2  Fundamental and Reasonableness Soundness Check ................................43 
5.3.3  Schedule Contingency ...............................................................................47 
5.3.4  Readiness to Perform FTA OP 40 Risk Assessment .................................47 
Conclusion .............................................................................................................47 
Recommendations ..................................................................................................48 

6.0 

SCHEDULE RISK ANALYSIS .................................................................................... 49 
6.1 
PMOC Assessment ................................................................................................49 
6.1.1  Methodology ..............................................................................................49 
6.1.2  Schedule Risk Analysis..............................................................................51 
6.2 
Schedule Contingency Review ..............................................................................58 
6.2.1  Adjusted Project Schedule for Risk and Contingency Analysis ................58 
6.2.2  Contingency Analysis ................................................................................58 
6.2.3  Findings......................................................................................................59 
6.2.4  Recommendations ......................................................................................59 

7.0 

PROJECT COST ESTIMATE REVIEW .................................................................... 60 
7.1 
PMOC Assessment ................................................................................................60 
7.2 
Estimate at Completion (EAC) Review .................................................................60 
7.3 
Findings..................................................................................................................61 
7.4 
PMOC Recommended Adjustments ......................................................................62 
7.5 
Recommendations ..................................................................................................67 

8.0 

COST RISK ANALYSIS................................................................................................ 68 
8.1 
Purpose ...................................................................................................................68 
8.2 
Methodology ..........................................................................................................68 
8.3 
Risk Identification ..................................................................................................69 
8.4 
Cost Risk Assessment ............................................................................................70 
8.4.1  Methodology ..............................................................................................70 
8.4.2  SCC Adjustments .......................................................................................71 
8.4.3  Baseline Beta Values .................................................................................72 
8.4.4  Beta Value Adjustments ............................................................................76 
8.4.5  Cost Risk Analysis .....................................................................................77 
8.4.6  Cost Contingency .......................................................................................79 
8.5 
Risk Mitigation ......................................................................................................80 
8.5.1  Primary Mitigation .....................................................................................80 
8.5.2  Secondary Mitigation .................................................................................80 
8.6 
Conclusion .............................................................................................................81 
8.7 
Recommendations ..................................................................................................82 

9.0 

LIST OF ACRONYMNS ............................................................................................... 83 

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

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 LIST OF TABLES
Table 1. 
Table 2. 
Table 3. 
Table 4. 
Table 5. 
Table 6. 
Table 7. 
Table 8. 
Table 9. 
Table 10. 
Table 11. 
Table 12. 
Table 13. 
Table 14. 
Table 15. 
Table 16. 
Table 17. 
Table 18. 
Table 19. 
Table 20. 
Table 21. 
Table 22. 
Table 23. 

Adjusted Stripped BCE ......................................................................................... 10 
Risk Model Data ................................................................................................... 12 
Cost Comparison by SCC ..................................................................................... 14 
Key Project Events................................................................................................ 19 
PMOC Evaluation Team ....................................................................................... 20 
HART Management Plans .................................................................................... 23 
Remaining Construction Contract Packages ......................................................... 26 
Schedule Document Submittal History................................................................. 29 
Calendars within Remaining Activities in HART MPIS ...................................... 35 
Software Settings .................................................................................................. 39 
Technical Data Summary ...................................................................................... 41 
CPS to APS Milestone Comparison (Data Date 27-APR-18) .............................. 52 
Proposed Adjustments .......................................................................................... 63 
SCC 80 Adjustments ............................................................................................. 64 
2018 Adjusted Base Cost Estimate ....................................................................... 65 
Adjusted Stripped BCE ......................................................................................... 67 
PMOC Adjustments to HART Estimate $YOE .................................................... 72 
Imported Beta Values for Risk Profile 1............................................................... 73 
Imported Beta Values for Risk Profile 2............................................................... 73 
Imported Beta Values for Risk Profile 3............................................................... 73 
Imported Beta Values for Risk Profile 4............................................................... 74 
Beta Values Risk Refresh ..................................................................................... 75 
Risk Model Data ................................................................................................... 78 
LIST OF FIGURES

Figure 1. 
Figure 2. 
Figure 3. 
Figure 4. 
Figure 5. 
Figure 6. 
Figure 7. 
Figure 8. 
Figure 9. 
Figure 10. 
Figure 11. 
Figure 12. 
Figure 13. 
Figure 14. 
Figure 15. 
Figure 16. 
Figure 17. 

Project Completion Date Confidence Level ........................................................... 7 
Cost Risk Model Results ....................................................................................... 13 
Project Line Segments .......................................................................................... 17 
Project Map ........................................................................................................... 18 
Project Staff Turnover........................................................................................... 21 
CCUR Electrical Crew Resource .......................................................................... 36 
CCUR Partial Crew Resource Reports ................................................................. 37 
HART Basis of MPIS Schedule: Example Cost Curve ........................................ 38 
Longest Critical Path (Opened Projects Total Float Setting)................................ 44 
Risk Assessment Process ...................................................................................... 51 
Risk Assessment Steps and Schedule Types ........................................................ 51 
BetaPert Three Point Estimation Technique ......................................................... 53 
RSD - Estimate Uncertainty Model on APS ......................................................... 54 
IRM Risk Register ................................................................................................ 55 
Project Completion Date Confidence Level ......................................................... 57 
Timeline of Schedule Risk Analysis Dates ........................................................... 58 
Cost Risk Model Results ....................................................................................... 79 

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

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 1.0

EXECUTIVE SUMMARY

1.1

Introduction

The Honolulu Authority for Rapid Transportation (HART) continues to advance the Honolulu
Rail Transit Project (“Project”) in accordance with the Federal Transit Administration (FTA)
New Starts requirements.
FTA assigned Jacobs as a Project Management Oversight Contractor (PMOC) on September 24,
2009, to monitor the Project and provide FTA with “information and well-grounded professional
opinions regarding the reliability of the scope, cost, and schedule” of the Project. That effort
continues with this update report, which represents the PMOC’s assessment of Risk and
Contingency Management.
1.2

PMOC Review

The 2018 risk refresh is an update of the risk assessment that was completed in advance of the
Full Funding Grant Agreement (FFGA) in 2012. Risk Refresh workshops were held in April
2014 and April 2016. For this current effort, the PMOC reviewed any Project changes since
2016 that may affect the management capacity and capability of the project sponsor as well as
changes associated with Project’s current FFGA scope, schedule, cost estimate, and risk and
contingency management.
A workshop was held on February 27, 2018 that included representatives from HART, FTA, and
the PMOC. A FINAL DRAFT of the risk refresh report was provided to HART on April 10,
2018 with HART providing comments on April 26, 2018. Subsequently, HART provided
updated cost and schedule documents. This final report is based on the updated project
information that was provided by HART through May 2018.
This assessment is governed by the following FTA Oversight Procedures (OP):

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
1.3

OP 21 – Management Capacity and Capability Review
OP 32C – Project Scope Review
OP 32D – Project Delivery Method Review
OP 33 – Capital Cost Estimate Review
OP 34 – Project Schedule Review
OP 40 – Risk and Contingency Review
Findings

Based on the outcome of the reviews conducted, the PMOC presents the following findings:



The revised Revenue Service Date (RSD) should be no earlier than September 2026,
which represents the 65% confidence level in the Schedule Risk Model.
The predicted FTA model outcome at the p50 level is $8.299 billion (excluding $855
million in finance costs). With $855 million in finance costs the total project cost would

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

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 

1.3.1

be $9.154 billion. However, this report does not analyze any potential changes to finance
costs based on the higher capital costs.
HART’s current Estimate at Completion (EAC) of $8.165 billion falls short of the p50
predicted FTA model outcomes by $134 million.
Management Capacity and Capability (MCC) Review

HART has experienced frequent organizational changes since the FFGA was executed in
December 2012. There are still concerns regarding HART’s Management Capacity and
Capability and its ability to retain experienced key staff (internal and consultant) on the Project.
The PMOC has tracked a trend of frequent turnover of key staff since the FFGA was executed,
which has resulted in “management capacity” issues. HART continues to have difficulty filling
positions due to challenges stemming from the project’s geographic location and salary
restrictions. HART must ensure their consultants have sufficient “bench strength” to backfill
positions with qualified personnel.
HART executive management has implemented some staffing changes with a goal of
streamlining the organization and becoming more efficient in its decision making. HART can
transition some of the key positions from consultants to its own organization, resulting in the
agency having greater ownership and control of the project. However, before HART can
transition some key positions from consultants to its organization a classification and
compensation study should be completed to bring HART salaries on par with other transit
agencies.
There are currently several key positions that remain vacant. The most critical positions that
HART must diligently work to permanently fill include:




Project Controls Manager – Manager resigned effective the end of March 2018 and has
been filled on interim basis. This is a critical position and HART must make it a priority.
Director of Readiness & Activation – Current manager will be resigning effective June
30, 2018. This will be a critical vacancy given the transition of Operations &
Maintenance responsibilities to the Department of Transportation Services (DTS).
Director of Planning, Permitting and ROW – Manager resigned effective May 11, 2018.
Position will be filled on interim basis until a permanent replacement is identified.

There are several positions that HART should consider staffing either through existing resources
or new resources including:




Senior Construction Claims Specialist or a Specialized Claims Consultant
Transit Planning Manager
Rail Activation/System Testing & Integration Manager

HART’s update of the management plans must incorporate any organizational changes that have
occurred or are proposed. It is critical that any changes be documented in the various
management plans immediately.

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

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 HART and DTS have begun planning for the transfer of responsibilities per Charter Amendment
4. There are numerous items for which a resolution must be obtained and properly addressed in a
transition plan including:







Source of funding for Operations & Maintenance
Transfer of HART staff to DTS (where applicable)
Staffing needs for DTS
Safety and Security approach and staffing during testing and operations (interim and full)
Long gap between proposed interim opening and full RSD
Development of a detailed roadmap for transition of Operations & Maintenance
responsibilities

DTS is developing an organizational chart and staffing plan. Their initial plan consists of a
hybrid organization that pulls staff from each of the four DTS divisions and other City
departments. The FY2019 proposed budget includes 10 DTS positions dedicated to rail.
However, a new position of Deputy Director of DTS position will be created that will be the lead
for rail operations and maintenance. This will not occur until FY 2020.
The projected Interim Opening is scheduled for December 2020. The PMOC has expressed
concern that the transition plan may not be adequately developed, and sufficient resources may
not be allocated, to support pre-revenue testing and revenue operations.
Recommendations
(1)
Project Management Plan (PMP) and supporting plans and procedures must be
updated to reflect any recent organizational changes.
(2)
Reevaluate the Staffing Plan to be more effective and fill any gaps in technical
capability of the organization.
(3)
Where applicable, HART must strive to transition the key management positions
currently occupied by the PMSC and General Engineering Consultant (GEC) to
HART, in order to have greater ownership and stronger control of the project.
(4)
Actively monitor the management of the program to ensure that project staff and
all consultants/contractors implement the approved plans and procedures.
(5)
Develop an effective process to preserve critical technical capabilities during any
significant reduction in force.
(6)
Provide training to key existing staff members through the National Transit
Institute (NTI) or other similar organizations to enhance their transit project
management skills.
(7)
Move “Change Order” Authority to the Project Team and establish strict budget
controls to be enforced by HART Procurement and Chief Financial Officer.
(8)
HART’s Project Director, Deputy Directors, Project Managers, PMSC, GEC, and
Construction Engineering & Inspection (CE&I) consultants must focus more
heavily on meeting construction project schedules and cost containment of the
project.
(9)
HART and DTS must develop a detailed roadmap for transition of Operations &
Maintenance responsibilities.
Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

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 1.3.2

Project Scope and Project Delivery Review

The general scope of the project has remained largely intact since the FFGA, although changes to
the method of contracting and outside influences on the execution of the scope have been
significant. Construction of the West Oahu/Farrington Highway Guideway Segment (WOFH),
Kamehameha Highway Guideway Segment (KH) and Maintenance and Storage Facility (MSF)
are complete. Construction of the Airport Guideway and Stations (AGS) has begun under a
Design-Build (DB) Contract. Procurement of the City Center Guideway and Stations (CCGS)
DB Contract is anticipated to begin in July 2018. However, HART has begun evaluating the
potential for Public-Private Partnership (P3) that could affect the City Center Guideway and
Stations (CCGS) procurement. A decision on whether P3 will be utilized is expected to be
rendered in June 2018. The cost estimate and schedule provided by HART for review are based
on DB methodology for CCGS. Therefore, this report does not consider any potential for P3 at
this time.
The following observations were made regarding the project scope review:










Several third-party agreements have yet to be finalized.
Design issues that affect the interface with other contracts, including the Core Systems
Contract (CSC), must be resolved.
Detailed cost estimates have not yet been prepared for several potential Contract Change
Orders (CCO).
HECO’s imposition of further restrictions on work near high-voltage lines, including
requirements for undergrounding them, may cause further delays and costs. HART’s
award of CCUR will help mitigate some of these concerns, but full mitigation will not
occur until all applicable task orders under the CCUR contract are issued.
The amount of rework that will be needed to bring the City Center design to completion
may be considerably more extensive than HART anticipated, since the new DB
contractors will likely plan on using only the concept design; their responsibility for the
final design may mean that they will not be able to use any of the essentially-complete
elements of the earlier design-bid-build (DBB) packages.
Real estate acquisition to support construction in the City Center Segment will continue
to require significant coordination and effort by HART.
HART has actively interfaced with the Hawaii Department of Transportation (HDOT)
State Oversight Agency (SOA). This has proven to be beneficial to the project. HART
must continue to be proactive with regard to planning and implementation associated
with the interim revenue service to ensure they meet the HDOT Safety and Security
Program Plan requirements for start-up activities.

The following observations were made with regard to the project delivery review:


The change in strategy for the City Center Segment has had a significant impact on the
Master Program Integrated Schedule (MPIS) and has contributed to the erosion of the
schedule contingency. However, the implementation of CCUR will help mitigate some
of the concern with additional potential float erosion.

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

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 



Any delay to the CCGS DB Contract now has a direct impact on the target RSD and
could impact the project cost.
HART’s Contract Packaging Plan (CPP) will continue to require significant management
effort to ensure proper interface coordination.
There is concern whether bidding competition for the remaining packages will be strong
enough to assure pricing within budget.

Recommendations
(1)
HART must take a more proactive approach to ensure contractors establish and
meet schedules.
(2)
Site access and permitting issues must be resolved early to avoid delays and
extras.
(3)
HART must continue to review and proactively vet all potential Contract Change
Orders (CCO). Detailed cost estimates must be prepared early in the process to
ensure the individual contract budgets will not be adversely impacted.
(4)
Continue to review all post-Record of Decision (ROD) changes to ensure they do
not have an impact on the environmental documentation, the project scope,
project cost, project schedule, or future operations.
(5)
Prioritize resolution of required third-party agreements, real estate acquisitions,
and coordination between various contractors and designers.
1.3.3

Project Schedule Review

The PMOC reviewed HART’s Master Program Integrated Schedule (MPIS) with a Data Date of
April 27, 2018.
Summary of PMOC Findings
It is the PMOC’s professional opinion that HARTs MPIS is mechanically sound and meets the
technical requirements of fundamental soundness.
The PMOC has identified several recommendations HART should strongly consider and
incorporate into their project control functions and deliverables including a few
recommendations that will also improve their management capability and streamline
management capacity performance.
Recommendations
(1)
HART should focus on filling all open project control positions.
(2)
HART should enforce consultant project control conformance to schedule
management plans and procedures (timely CEI Technical Schedule Reviews) and
respective fundamental roles and responsibilities for those individuals who fail to
perform.
(3)
HART should increase the prioritization of completing the transition of document
management systems from the obsolete Contract Management System.
(4)
HART should continue to improve change control procedures. This is directly
related to claims avoidance and dispute resolution techniques.
(5)
MPIS and Basis of Schedule (BoS) must be synchronized with the WBS. The
current WBS is under revision and is incomplete.
Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

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 (6)

(7)

(8)
1.3.4

Schedule File Log (F9 Report) – HART should further reduce the amount number
of activity logic ties that contain an excessive amount of lag due to Start-Start
(SS), Start-Finish (SF), and Finish-Finish (FF) relationship types, as well as
continue improvements by reducing or eliminating out-of-sequence progressing
and the use of constraint dates.
HART should re-evaluate the use of certain activities beyond the RSD and
consider alternative schedule management methods to provide cost or resource
loading in their schedule, whereas, they have already encountered resource
loading technical issues.
HART should improve the real estate acquisition activity descriptions for more
clear translation to the parcel identification numbering system in the BoS.

Schedule Risk Analysis

The Revenue Service Date (RSD) identified in the FFGA is January 31, 2020. HART’s current
target date for the start of full revenue operations is December 2025 (per MPIS with Data Date of
April 27, 2018).
Summary of PMOC Findings
Using the estimate uncertainty model and risk events, an Impacted Risk Model (IRM) was
generated and represented in the probability distribution histogram. The probability percentage
points for the IRM are:





50% Confidence level completion date – June 17, 2026
65% Confidence level completion date – September 01, 2026
80% Confidence level completion date – November 20, 2026
100% Confidence level completion date – May 14, 2027

FTA OP 40 states that a confidence level of at least 65% of reaching the proposed RSD should
be considered. The IRM RSD P65 date of 01-SEP-26 takes into account threat risk events that
are in the risk register. The IRM RSD may be improved by applying potential mitigation efforts
to reduce, avoid or eliminate such risks. Figure 1 presents the histogram for the IRM. The
yellow arrow indicates HART’s current MPIS RSD date of December 31, 2025.

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

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 Impact Risk Model
Entire Plan : Finish Date
100% 14-May-27
95% 03-Mar-27
14.0

90% 20-Jan-27
85% 24-Dec-26
80% 20-Nov-26

12.0
75% 23-Oct-26
70% 25-Sep-26
10.0

60% 07-Aug-26
55% 14-Jul-26

Hits

8.0
50% 17-Jun-26
45% 20-May-26
40% 24-Apr-26

6.0

Cumulative Frequency

65% 01-Sep-26

35% 13-Apr-26
30% 05-Mar-26
4.0

25% 18-Feb-26
20% 05-Jan-26
15% 05-Dec-25

2.0
10% 27-Oct-25
5% 20-Aug-25
0.0

0% 17-Jun-25
08-Jul-25

16-Oct-25

24-Jan-26

04-May-26

12-Aug-26

20-Nov-26

28-Feb-27

Distribution (start of interval)

Figure 1.

Project Completion Date Confidence Level

The following observations were made with regard to schedule risk review:






The HART MPIS does not contain a sufficient amount of time contingency as activity
total float continues to erode. Several schedule deficiencies attributable to unrealized total
float depletion such as ambiguity in activity calendars is noted in the OP-34 Schedule
Review Report. HART addressed the PMOC’s comments and provided a subsequent
MPIS in early May 2018, which was used to conduct this final schedule risk assessment.
Most risk uncertainty exists within the City Center alignment and longest critical path
Core System activities.
HART’s delays to procurement of the of the City Center contract may adversely impact
the project critical or near critical paths if not resolved soon.
The PMOC Impacted Risk Plan (IRM) distribution of P65 for RSD is 01-SEP-26.

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

7

 

Time and effort extending beyond the project RSD date for contract closeout activities is
not included within this schedule risk analysis.

Recommendations
The revised RSD should be no earlier than September 2026, which represents the 65%
confidence level in the Schedule Risk Model utilizing an MPIS with data date of April 27, 2018.
1.3.5

Project Cost Estimate Review

The original FFGA Project Budget was $5.122 billion, including $644 million in allocated and
unallocated contingency and $173 million in financing costs.
HART’s current Estimate at Completion (EAC) of $9.020 billion includes $904 million in
contingency and $855 million in financing cost. The capital cost is $8.165 billion (including
contingency but excluding financing). HART has expended $3.125 billion through April 2018.
The major documents provided to the PMOC to support the cost review include:








December 2017 Contract Packaging Plan (CPP)
April 2018 SCC Spreadsheet (HART_FFGA_HRTP SCC Cost Workbook_2018.05.17)
April 2018 Forecast (Summary FFGA EAC Monthly Trend_2018.04.27_Final.xlsm)
April 2018 Expenditures (2018.04.27 Actuals CPP by SCC.xlsx)
DB550 – CCGS ICE (DB 550 CCGS Estimate_2017.09.12.pdf)
DB275 – PHPG ICE (DB 275 PHGT Estimate_2017.02.09.pdf)
Staffing Plans for HART, PMSC, GEC 3, CE&I East, CE&I West, CSC Support, and
Safety & Security Support

Subsequent to the risk workshop and FINAL DRAFT report, HART provided updated forecast
information. It must be acknowledged that some cost reductions had occurred since original data
date for Risk Refresh of December 2017. Additionally, there were new or increased cost
exposures identified since the time of the risk workshop. The PMOC incorporated all additive
and deductive changes to the forecast that were identified by HART.
The PMOC evaluated the cost estimates for each SCC for mechanical soundness and
consistency. These mechanical checks were used to determine if there are any material
inaccuracies within the estimate. Components of the estimate were found essentially to be
mechanically correct in the tabulation of the unit cost, application of factors, and translation to an
SCC spreadsheet for most of the direct cost and soft cost contracts. However, the PMOC did
identify some discrepancies with specific estimate amounts.
Summary of PMOC Findings
The following specific observations were made with regard to the cost estimate review:


The total amount of contingency identified in HART’s EAC was $904.4 million. The
PMOC did not identify any “latent” contingency.

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

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


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








Some variances had been noted between contract amounts as shown in various
documents provided by HART in December 2017. These inconsistencies were discussed
with HART during the February 2018 workshop. HART’s updated documents reconcile
most of the PMOC’s concerns about traceability and the potential for errors or omissions
in the budget. However, HART staff has noted that additional effort is required to
reconcile all inconsistencies between the various documents. The PMOC does not
anticipate that there are any significant discrepancies that would adversely impact the
project budget.
HART’s April 2018 forecast includes all potential Change Orders and issues identified by
HART.
HART expended $3.125 billion through April 2018. The expended costs are categorized
by contract and segregated into FTA SCCs. The PMOC noted there are variances
between expended amounts in the April 2018 Forecast and the April 2018 SCC
Spreadsheet. Specifically, HART has expended costs coded to SCC line items in the
April 2018 Forecast, but there is no corresponding budget associated for those line items.
The PMOC used a pro rata approach to distribute any discrepancies for input into the cost
risk model.
Some components of the cost estimate are still undergoing refinement by HART (e.g.
right-of-way, CCGS, PHPG).
The individual Basis of Estimate (BoE) were updated for the Independent Cost Estimate
(ICE) for the CCGS and Pearl Highlands Parking Garage DB Contract (PHPG).
However, there is some lack of uniformity across the individual BoEs:
o The application of markups was inconsistent.
o The application of the General Excise Tax (GET) varied.
o Escalation rates varied between contracts.
The PMOC utilized the “Direct Cost” from HART’s Independent Cost Estimate for
CCGS and PHPG and applied markups at percentage rates where appropriate based on
our professional opinion. The PMOC recommends adjustments associated with the
percentages for markups for items such as Engineering costs, GET application,
Escalation, and General Conditions/Overhead. This is the same methodology that was
used for the 2016 Risk Refresh.
Escalation is not separately and fully addressed in the various cost documents provided
by HART such as the Basis of Estimate (BoE). It was included in the ICE for the CCGS
and PHPG, but it was not consistently applied. Additionally, HART did not provide an
update of the full FTA SCC Workbook. The full FTA SCC workbook would provide
detail on escalation being used to develop a project estimate.
The PMOC believes HART’s April 2018 Forecast may not be fully reflective of the
sequencing identified in the current MPIS. The MPIS was recently revised, but the ICE
for the CCGS and PHPG were prepared prior to the schedule update. Based on these
findings, the PMOC recommends adjustments to account for this potential shortfall
associated with escalation.
Due to extension of the RSD, there may be some potential costs associated with
maintenance of already constructed work. This scope is not specifically included in the
current EAC. The PMOC did not include an adjustment for this item.
Contract closeout continues to be an issue for HART, which can add significant soft costs
to a project.

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PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

9

 Following is a summary of the Adjusted Stripped Base Cost Estimate (BCE):
Table 1.

Adjusted Stripped BCE

HART Estimate
Allocated Contingency (PMOC Calculation)
Unallocated Contingency
Financing
TOTAL

7,260,645
$822,602
$81,807
$855,000
$9,020,054

Stripped Cost
HART Forecast Change Orders
PMOC Adjustments
Adjusted Stripped BCE
Incurred Costs (through April 2018)
All values in $1,000

$7,260,645
Included
$203,900
$7,464,545
$3,124,705

Recommendations
(1)
Prepare detailed cost estimates for all identified potential or possible contract
change orders.
(2)
Update CCGS estimate to allow for potential mitigation measures.
(3)
Refresh ROW estimate to reflect current property costs and include costs for
Temporary Construction Easements and other impacts, specifically for CCGS.
(4)
Update manpower charts to account for new positions and reflect current MPIS to
validate SCC 80 costs are accurate.
(5)
Verify budgets and any ongoing estimate refreshes include adequate funds for
escalation.
(6)
Revise any budgets or contracts impacted by the revised RSD as shown in the
update to the MPIS.
(7)
Reconcile coding of SCC line items. This effort will ensure budget, contract and
EAC forecast utilize the same “base” information and are appropriately coded to
ensure accurate monthly reporting and for inclusion in Before & After Study
Report.
1.3.6

Cost Risk Analysis

In February 2018, the PMOC participated in a risk refresh workshop with HART, the purpose of
which was to discuss HART’s progress in its risk management efforts and PMOC’s observations
and reflections from its initial review of HART’s updated scope, cost, schedule, and risk
information. The PMOC has subsequently performed regular monitoring visits to the project and
has refreshed its earlier risk assessment based upon an updated understanding of project risks and
updated schedule and cost information provided by HART.
For the purposes of its risk refresh, the PMOC considered the project in four separate elements,
which are termed here as “risk profiles”:
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PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

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 




Risk Profile 1 is associated with direct work contracts that are 90% or more complete.
Risk Profile 2 is associated with contracted and in progress direct cost work less than
90% complete.
Risk Profile 3 is associated with yet-to-be-contracted direct cost work.
Risk Profile 4 is associated with “soft costs.”

During and subsequent to the February 2018 risk workshop, information was provided indicating
that HART was aware of additional costs or deduction that should be included, which the PMOC
incorporated along with its own independent estimate adjustments. The PMOC has prepared this
risk refresh based upon additional information provided by HART through May 2018.
The PMOC has reviewed HART’s updated risk register and has found that HART has
represented risk directly related to the work. The risk register includes magnitude and likelihood
estimates that are based on much improved risk management techniques since the prior 2016
PMOC review. The HART Risk and Contingency Management Plan (RCMP) has been updated
to provide an improved description of risk management policies that if fully implemented should
act as a safeguard to proactively determine whether current and future risk threatens the project.
Full implementation of this effort will require strong management priority, especially to prevent
concerns over budget increases from influencing the candid exposure of project risk.
The PMOC separated the project into four distinct risk profiles to better model the effect of risk
upon the project. The cost risk assessment recognized general reductions in risk due to
advancement of construction and design. However, concerns that relate to historically
experienced issues of management capability and capacity, market conditions, and construction
complexities—especially as the project proceeds toward downtown Honolulu—are expected to
continue and are factored into the risk analysis.
It is recognized that efforts have been made to recover contingency levels through cost reduction
measures, value engineering, and revised project delivery strategies. However, these types of
changes are increasingly less likely and less effective.
Table 2 presents the corresponding numeric data results from the risk model.

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

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 Table 2.

Risk Model Data

YOE Sponsor values

Part 1

Part 2

Sponsor total estimate (SCC 10-90) (42%ile)
Sponsor exposed contingency
Sponsor stripped estimate (SCC 10-80)
Latent Contingency
EAC stripped estimate

Mostly complete
>90%
1,321,868
46,414
1,275,454
0
1,275,454

In construction
<90%
3,268,891
465,598
2,803,293
0
2,803,293

Not bid
1,388,045
247,052
1,140,993
0
1,140,993

Soft costs
2,186,250
145,345
2,040,905
0
2,040,905

0
0
1,275,454

0
75,800
2,879,093

0
69,073
1,210,066

0
59,027
2,099,932

Overall
8,165,054
904,409
7,260,645
0
7,260,645

Secondary mitigation
YOE PMOC values
Inflation Adjustment
Adjustments
Adjusted estimate

Risk analysis
Lower report range value (40%ile)
Median value (50%ile)
Upper mid value (65%ile)
Upper range reporting amount (80%ile)

Part 4

0

0
203,900
7,464,545

Percent complete
Funding value @ (50%ile) &
Secondary Mtigation Level (65%ile)
Funding value (50%ile)
Base Funded Contingency amount
Contingency %
Secondary Mtigation Level (65%ile)
Secondary mitigation target amount
Secondary mitigation %
Secondary mitigation provided

Part 3

98%

26%

0%

54%

8,298,555
834,010
11%
8,575,587
277,032
4%
0

1,291,726
16,272
1%
1,297,130
5,405
0%

3,266,924
387,831
13%
3,395,750
128,825
4%

1,568,601
358,534
30%
1,687,694
119,094
10%

2,344,654
244,722
12%
2,425,943
81,289
4%

8,138,317
8,298,555
8,575,587
8,944,814

1,288,599
1,291,726
1,297,130
1,304,334

3,192,410
3,266,924
3,395,750
3,567,447

1,499,716
1,568,601
1,687,694
1,846,422

2,297,635
2,344,654
2,425,943
2,534,284

All values in $1,000; excludes finance costs.

The risk analysis indicates a recommended budget of $8.299 billion (excluding finance) to
maintain a project protect level at p50, compared to the current HART EAC of $8.165 billion
(excluding finance), which falls at p42. HART’s current EAC falls short of the p50 predicted
FTA model outcome by $134 million. Figure 2 shows these values graphically.

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

12

 Probability distrbution
100%
90%
80%
70%
60%
50%

Modeled p50
HART EAC p42

40%
30%
20%
10%
0%
7,000.00

8,000.00

Figure 2.

9,000.00

10,000.00

11,000.00

12,000.00
Millions

Cost Risk Model Results

The recommended estimate represents the p50 value from the FTA risk assessment model, when
adjusted for the specifics of this project. The historic-trended model indicates 40%-likely to
80%-likely range of $8.138 billion to $8.945 billion (excluding finance).
Secondary mitigation is difficult to cost-effectively obtain at this stage where major portions of
the project are already contracted for construction and design is largely complete. However, the
upcoming major City Center work provides a significant opportunity for Secondary Mitigation
items that may be priced at market levels. It is recognized that Secondary Mitigation
opportunities have been proposed, but of many items have not been fully vetted by executive
management and many indicate target decision dates that are immediately upcoming or past. In
order to preserve these opportunities, the items must be defined before the procurement and
identified as potential future deductive alternates. A potential level of Secondary Mitigation
protection is the p65 level; should this level be desired, the amount of Secondary Mitigation to
be developed would be $277 million.
Table 3 presents the comparison of costs by SCC for the FFGA budget, current HART EAC, and
PMOC p50 and p65 Targets.

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PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

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 Table 3.

SCC

SCC
Description

10
20
30
40
50
60
70
80

Guideway & Track Elements
Stations, Stops, Terminals, Intermodal
Support Facilities
Sitework & Special Conditions
Systems
Row, Land, Existing Improvements
Vehicles
Professional Services

90
90

Allocated Contingency
Unallocated Contingency
Sub-Total
Financing Cost
Total Project Cost

Cost Comparison by SCC
2012
FFGA
Budget

2016
HART
EAC

2018
HART
EAC

1,275,329
506,166
99,425
1,103,867
247,461
222,188
208,501
1,183,826

1,525,967
631,094
115,478
1,272,832
357,180
208,798
191,475
1,517,800

1,369,701
747,048
100,807
2,239,662
311,132
240,000
211,390
2,040,905

1,397,670
770,009
100,807
2,257,805
311,132
315,800
211,390
2,099,932

2018
PMOC
p65
Target
1,397,670
770,009
100,807
2,257,805
311,132
315,800
211,390
2,099,932

(Incl. above)
101,871

613,478

822,602
81,807

(Incl.below)
834,010

(Incl.below)
1,111,042

4,948,635

6,434,102

8,165,054

8,298,555

8,575,587

173,058

393,058

855,000*

855,000*

855,000*

5,121,693

6,827,160

9,020,054

9,153,555*

9,430,587*

2018
PMOC
p50 Target

All values in $1,000
*The report uses the existing $855 million in finance costs. Total finance costs and total project costs may differ based on
revisions that would be required to the finance plan to cover the increased project costs.

During the February 2018 risk workshop, it became clear that HART had begun to advance it’s
cost and risk tracking procedures to become more aware of the cost implications and to begin to
develop a more robust system to respond to and resolve known risks. In the prior major
FTA/PMOC risk review, these measures were severely lacking. These improved efforts are a
positive development toward project cost-risk protection. The project has experienced and is
expected to experience significant challenges as it moves toward the next phase of completion.
Continuation of integration of visible and independent risk management into the project is an
important safeguard.
Recommendations
(1)
At this risk refresh, the PMOC recommends a funded contingency at p50 of
approximately 11%, or $834 million, be added to the stripped and adjusted
estimate of $7.465 billion equating to an overall recommended budget of $8.299
billion (excluding finance).
(2)
HART has committed to develop an effective contingency drawdown control
curve and has committed to tracking remaining contingency against that control
curve. It is strongly recommended that this system be fully implemented as soon
as feasible.
(3)
The recommended amount of budget increase reflects the condition of no viable
Secondary Mitigation being presented. However, the upcoming major City
Center work provides a significant opportunity for Secondary Mitigation items
that may be priced at market levels. In order to preserve these opportunities, the
items must be defined before the procurement and identified as potential future
Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

14

 (4)

(5)

deductive alternates. A potential level of Secondary Mitigation protection is the
p65 level; should this level be desired, the amount of Secondary Mitigation to be
developed would be $277 million.
The HART Risk and Contingency Management Plan (RCMP) has been updated
to provide an improved description of risk management policies that if fully
implemented should act as a safeguard to proactively determine whether current
and future risk threatens the project. Full implementation of this effort will
require strong management priority, especially to prevent concerns over budget
increases from influencing the candid exposure of project risk.
It is recommended that continued emphasis be maintained to manage and track
the actions needed to pro-actively assess and resolve risks once they are
identified.

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

15

 2.0

INTRODUCTION

The Honolulu Authority for Rapid Transportation (HART) continues to advance development of
its Honolulu Rail Transit Project (“Project”) in accordance with the Federal Transit
Administration (FTA) New Starts requirements. The Project is intended to provide improved
mobility in the highly-congested east-west corridor along Oahu’s south shore between Kapolei
and the Ala Moana Center.
FTA assigned Jacobs as the Project Management Oversight Contractor (PMOC) on September
24, 2009, to monitor the Project and provide FTA with “information and well-grounded
professional opinions regarding the reliability of the scope, cost, and schedule” of the Project.
That effort continues with this update report, which represents the PMOC’s assessment of Risk
and Contingency Management.
The 2018 risk refresh is an update of the risk assessment that was completed in advance of the
Full Funding Grant Agreement (FFGA) in 2012. Risk Refresh workshops were held in April
2014 and April 2016. For this current effort, the PMOC reviewed any Project changes since
2016 that may affect the management capacity and capability of the project sponsor as well as
changes associated with Project’s current FFGA scope, schedule, cost estimate, and risk and
contingency management.
A workshop was held on February 27, 2018 that included representatives from HART, FTA, and
the PMOC. A FINAL DRAFT of the risk refresh report was provided to HART on April 10,
2018 with HART providing comments on April 26, 2018. Subsequently, HART provided
updated cost and schedule documents. This final report is based on the updated project
information that was provided by HART through May 2018.
2.1

Project Sponsor

The City and County of Honolulu (“City”) is the overarching FTA grantee (“project sponsor”).
The City’s Department of Transportation Services (DTS) and HART have executed a
Memorandum of Understanding, which delineates each agency’s roles and responsibilities so as
not to jeopardize the City’s standing as an FTA project sponsor. HART is responsible for the
New Starts grants for the Project and may share responsibilities with DTS for grants using
Section 5307 or other FTA funding sources.
2.2

Project Description

The Project is an approximately 20-mile elevated fixed guideway rail system along Oahu’s south
shore between East Kapolei and Ala Moana Center in Honolulu, Hawaii. The alignment is
elevated, except for a 0.6-mile at-grade portion near Leeward Community College. The Project
includes 21 stations (20 elevated and 1 at-grade), 80 “light metro” rail transit vehicles,
administrative/operations facilities, surface and structural parking, and maintenance facilities.
HART plans to deliver the Project in four guideway segments:


Segment I (West Oahu/Farrington Highway) – East Kapolei to Pearl Highlands (7 miles/6
stations)

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PMOC Report – 2018 Risk Refresh
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 



Segment II (Kamehameha Highway) – Pearl Highlands to Aloha Stadium (4 miles/3
stations)
Segment III (Airport) – Aloha Stadium to Middle Street (5 miles/4 stations)
Segment IV (City Center) – Middle Street to Ala Moana Center (4 miles/8 stations)

Figure 3.

Project Line Segments

Additional Project information:








Additional Facilities: Maintenance & Storage Facility (MSF) and parking facilities
Vehicles: 80 vehicles, supplied by the Core Systems Contractor (CSC), which is also
responsible for systems design, construction, and operations. The CSC is a DesignBuild-Operate-Maintain (DBOM) contract.
Ridership Forecast: Weekday boardings – 104,300 (2020); 119,600 (2030)
FFGA Budget: $5.122 billion
HART’s Recovery Plan Budget: $9.020 billion
FFGA Revenue Service Date (RSD): January 31, 2020
HART’s Recovery Plan RSD: December 2025

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

17

 Figure 4.
2.3

Project Map

Project Status

The FFGA was executed on December 19, 2012. Construction of the West Oahu/Farrington
Highway (WOFH) guideway segment, Kamehameha Highway (KH) guideway segment, and
Maintenance & Storage Facility (MSF) are complete. Construction of the stations within the
WOFH and KH segments has begun under three separate construction contracts. Design under
the Core Systems DBOM Contract is nearing completion, and the first two railcars have been
delivered to the MSF. Construction of the Airport Guideway and Stations (AGS) has begun
under a Design-Build (DB) Contract. Procurement of the City Center Guideway and Stations
(CCGS) DB Contract is anticipated to begin in July 2018. However, HART has begun
evaluating the potential for Public-Private Partnership (P3) that could affect strategy and timing
of the CCGS procurement. A decision on whether P3 will be utilized is expected to be made by
June 2018. The cost estimate and schedule provided by HART for review are based on DB
methodology for CCGS. Therefore, this report does not consider any potential for P3 at this
time.
2.4

Project Budget

The original FFGA Project Budget was $5.122 billion, including $644 million in allocated and
unallocated contingency and $173 million in financing costs.
HART’s current Estimate at Completion (EAC) of $9.020 billion includes $904 million in
contingency and $855 million in financing cost. The capital cost is $8.165 billion (including
contingency but excluding financing). HART has expended $3.125 billion through April 2018.
Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

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 2.5

Project Schedule

The Revenue Service Date (RSD) identified in the FFGA is January 31, 2020. HART intends to
begin interim revenue service from East Kapolei Station to Aloha Stadium Station in 2020.
HART’s current target date for the start of full revenue operations is December 2025. The
current Master Project Integrated Schedule (MPIS) includes approximately 12 months of
contingency.
2.6

Project Timeline

The following table presents some of the key events that have occurred since the 2016 Risk
Refresh.
Table 4.
Key Project Events
Date
March 2016
March 2016
July 2016
October 2016
November 2016
April 2017
July 2017
August 2017
September 2017
September 2017
November 2017
December 2017
– March 2018
February 2018
April 2018
May 2018

2.7

Event
First Light Rail Vehicle (LRV) arrives in Honolulu
2016 Risk Refresh Workshop
AGS DB Contract awarded
HART submits Interim Recovery Plan with forecast of $8.6 Billion to complete the project
Charter Amendment 4 passed that transferred responsibility for Operations & Maintenance of
rail system from HART to DTS effective July 1, 2017.
HART submits Recovery Plan that addresses Plan A (full build-out) and Plan B (partial
build-out)
DTS assumes responsibility for Operations & Maintenance of rail system from HART.
CCGS procurement cancelled.
State Legislature passes Act 1, which provides additional funding through an extension of
GET and an increase of Transient Accommodations Tax (TAT)
HART submits updated Recovery Plan
LRV dynamic testing begins on the guideway
HART provides updated cost and schedule information based on CCGS procurement
cancellation
2018 Risk Refresh Workshop
FINAL DRAFT report provided to HART. HART subsequently provided comments and a
conference call was held to discuss the FINAL DRAFT report
Updated cost and schedule project information provided by HART.

Project Management Oversight Contractor (PMOC)

This report represents an update of the PMOC’s assessment at the time of FFGA of HART’s
management capacity and capability as well as an assessment of the Project’s current FFGA
scope, schedule, cost estimate, and risk and contingency management. This assessment is
governed by the following FTA Oversight Procedures (OP):







OP 21 – Management Capacity and Capability Review
OP 32C – Project Scope Review
OP 32D – Project Delivery Method Review
OP 33 – Capital Cost Estimate Review
OP 34 – Project Schedule Review
OP 40 – Risk and Contingency Review

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PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

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 2.8

Evaluation Team

The following table presents the PMOC Evaluation Team and their respective roles associated
with the assessment of the Project.
Table 5.

PMOC Evaluation Team

Name
Timothy Mantych
William Tsiforas
Charles Neathery

Firm
Jacobs Engineering Group
Jacobs Engineering Group
Jacobs Engineering Group

Timothy Morris
Alvin Nakamura
Arun Virginkar
Bob Merryman
David Sillars

Jacobs Engineering Group
Jacobs Engineering Group
Virginkar and Associates
ORC Training LLC
Independent Contractor

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

Role
Program Manager
Task Order Manager
Construction Management, Project Controls,
Schedule Risk Assessment
Cost Estimating
Construction Management
Vehicles, Systems
Real Estate
Risk Manager

20

 3.0

MANAGEMENT CAPACITY AND CAPABILITY REVIEW

The PMOC reviewed HART’s organization, policies and procedures in accordance with FTA OP
21: Management Capacity and Capability Review dated September 2015, to determine whether
there were any significant changes that would affect management of the Project.
3.1

PMOC Assessment

HART has experienced frequent organizational changes since the FFGA was executed in
December 2012. There are still concerns regarding HART’s Management Capacity and
Capability and its ability to retain experienced key staff (internal and consultant) on the Project.
HART continues to have difficulty filling positions due to challenges stemming from the
project’s geographic location and salary restrictions. HART must ensure their consultants have
sufficient “bench strength” to backfill positions with qualified personnel.
The following chart graphically represents the turnover of key positions on the project since the
start of Preliminary Engineering in 2008. The chart identifies the tenure and transition of staff
with the number of individuals that have held the position since 2008. It must be noted that the
amount of turnover in these key positions is atypical for many Major Capital Projects.
Staff
Since
2008

Position
Executive Director

5

Deputy Executive Director

2

Chief Financial Officer

2

Project Director

1

Risk Manager

5

Director Design and Construction

4

Design Manager

1

Construction Manager

7

Project Controls Manager

4

Director of Planning, Permitting, ROW
Quality Manager

4
1

Safety & Security Manager

3

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

Note:  White indicates position is/was vacant.

Figure 5.
3.1.1

Project Staff Turnover

Staff Retention

Challenges attracting and retaining experienced staff and key management positions was always
anticipated. However, such challenges are far greater than expected. It was recommended that
HART update its staffing plan to address transition of staff from the Program Management
Support Consultant (PMSC) to HART during the construction phase. Staffing plans form a basis
for the recruitment, development and deployment of technical personnel in the organization.
Career path planning and succession planning are effectively used to facilitate the retention of
technically capable personnel. This remains a critical recommendation that HART has yet to
fully adopt.

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PMOC Report – 2018 Risk Refresh
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 The PMOC also recommends that HART be proactive in transitioning key management positions
currently occupied by the Program Management Support Consultant (PMSC) and General
Engineering Consultant (GEC) as early as possible. This transition is necessary for HART to
have more ownership and maintain stronger continuing control of the project.
HART executive management has implemented some staffing changes with a goal of
streamlining the organization and becoming more efficient in its decision making. HART can
transition some of the key positions from consultants to its own organization, resulting in the
agency having greater ownership and control of the project. However, before HART can
transition some key positions from consultants to its organization a classification and
compensation study should be completed to bring HART salaries on par with other transit
agencies.
There is a sense that critical decisions continue to be rendered “by committee” within the Project
Management organization; although this process appears to be less pervasive than it had been.
However, it must be eliminated altogether since it is not an effective means for management on a
capital project of this size.
HART has recently implemented a significant change in their Construction Management Plan
(CMP) that has provided the Construction Engineering and Inspection (CE&I) consultants more
autonomy to make decisions related to the contracts they manage. The PMOC agrees that
eliminating redundancy in construction oversight and requiring that the CE&I consultants be
held accountable for schedule and cost compliance is positive improvement. However, HART
has also recently moved the change order authority to the Procurement Department. The PMOC
believes this has removed decision making authority from the project team and could affect the
decision-making autonomy provided to the CE&I consultants, HART Construction Managers,
Director of Engineering and Construction, and the Project Director. The PMOC recommends that
change order authority be given back to the project team with strict budget controls developed
and enforced by HART Procurement and the Chief Financial Officer.
There are currently several key positions that remain vacant. The most critical positions that
HART must diligently work to permanently fill include:




Project Controls Manager – Manager resigned effective the end of March 2018 and has
been filled on interim basis. This is a critical position and HART must make it a priority.
Director of Readiness & Activation – Current manager will be resigning effective June
30, 2018. This will be a critical vacancy given the transition of Operations &
Maintenance responsibilities to the Department of Transportation Services (DTS).
Director of Planning, Permitting and ROW – Manager resigned effective May 11, 2018.
Position will be filled on interim basis until a permanent replacement is identified.

There are many positions that HART should consider staffing either through existing resources
or new resources, including:



Senior Construction Claims Specialist or a Specialized Claims Consultant
Transit Planning Manager

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

22

 

Rail Activation/System Testing & Integration Manager

One of the key recommendations from the 2014 Risk Refresh was that HART hire a Project
Director. HART hired a Project Director in the fall of 2014, which has resulted in some positive
changes in the way the Project is managed. However, the Project Director has not been provided
the autonomy necessary to make the changes required or to lead the project effectively.
3.1.2

Management Plans

Although HART’s Executive Management team has implemented staffing changes in order to
optimize and streamline the agency, the most recent update of the PMP does not fully address
these changes (e.g. identification of two Deputy Executive Directors). All of HART’s
management plans must incorporate any organizational changes that have occurred or are
proposed where applicable. Table 6 provides the status of the management plans.
Table 6.

HART Management Plans

Plan
Before-and-After Study Plan
Bus Fleet Management Plan (BFMP)
Buy America Plan (BAP)
Configuration Management Plan (CFMP)
Construction Management Plan (CMP)
Construction Safety and Security Plan (CSSP)
Contract Packaging Plan (CPP)
Force Account Plan
HART Procurement Manual
Interface Management Plan (IMP)
Mitigation Monitoring Plan (MMP)
Operation and Management Plan (OMP)
Preliminary Hazard Analysis (PHA)
Project Financial Plan (PFP)
Project Management Plan (PMP)
Public Involvement Plan (PIP)
Quality Management Plan (QMP)
Rail Activation Plan
Rail Fleet Management Plan (RFMP)
Real Estate Acquisition Management Plan (RAMP)
Risk and Contingency Management Plan (RCMP)
Safety and Security Certification Plan (SSCP)
Safety and Security Management Plan (SSMP)
Sensitive Safety Information Plan
Staffing and Succession Plan
System Integration and Test Plan (SITP)

Rev.
0.0
4.0
2.0
2.0
3.0
4.0
5.0
2.0
0.0
3.0
2.0
1.0
3.0
0.0
6.0
1.0
3.0
1.0
1.0
6.0
2.0
6.0
6.0
1.0
5.0
1.0

Date Approved
January 4, 2018
January 4, 2018
December 6, 2017
February 28, 2018
December 11, 2017
December 7, 2017
December 13, 2017
December 7, 2017
December 13, 2017
January 12, 2018
January 4, 2018
February 28, 2018
December 7, 2017
December 24, 2012
February 28, 2018
December 6, 2017
February 23, 2018
January 4, 2018
December 11, 2017
March 14, 2016
March 6, 2018
January 11, 2018
February 28, 2018
December 13, 2017
May 25, 2012
December 7, 2017

Status
Approved/Baselined
Approved/Baselined
Approved/Baselined
Approved/Baselined
Approved/Baselined
Approved/Baselined
Approved/Baselined
Approved/Baselined
Approved/Baselined
Approved/Baselined
Approved/Baselined
Approved/Baselined
Approved/Baselined
Under internal Review
Approved/Baselined
Approved/Baselined
Approved/Baselined
Approved/Baselined
Approved/Baselined
Under internal review
Approved/Baselined
Approved/Baselined
Approved/Baselined
Approved/Baselined
Under internal review
Approved/Baselined

It is critical that HART actively monitor the management of the program to ensure that project
staff and all consultants/contractors implement the approved plans and procedures.

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 A Decision Milestone Matrix was previously developed by HART, and staff had begun updating
the matrix on a regular basis. However, this practice was not continuously implemented. The
HART Risk Manager has recently resumed updating the Decision Milestone Matrix.
The PMOC continues to hold Cost Containment Workshops with HART monthly to review Cost
Reduction Measures. HART must make quick decisions and implement cost reduction
measures. The Chief Financial Officer and Director of Procurement must develop strict
budgetary controls to contain costs and the HART Project Director, Deputy Directors, Project
Managers, PMSC, GEC, and CE&I consultants must be more concerned with the cost
management side of the project's status than any other element of project execution. It is
imperative that HART maintain control of project costs and that HART maintain control of
elements likely to impose changes to the project that could introduce additional cost.
3.1.3

Operations and Maintenance

HART and DTS have begun planning for the transfer of responsibilities per Charter Amendment
4. There are numerous items for which a resolution must be obtained and properly addressed in a
transition plan including:







Source of funding for Operations & Maintenance
Transfer of HART staff to DTS (where applicable)
Staffing needs for DTS
Safety and Security approach and staffing during testing and operations (interim and full)
Long gap between proposed interim opening and full RSD
Development of a detailed roadmap for transition of Operations & Maintenance
responsibilities

DTS is developing an organizational chart and staffing plan. Their initial plan consists of a
hybrid organization that pulls staff from each of the four DTS divisions and other City
departments. The FY2019 proposed budget includes 10 DTS positions dedicated to rail.
However, a new position of Deputy Director of DTS position will be created that will be the lead
for rail operations and maintenance. This will not occur until FY 2020.
The projected Interim Opening is scheduled for December 2020. The PMOC has expressed
concern that the transition plan may not be adequately developed, and sufficient resources may
not be allocated, to support pre-revenue testing and revenue operations.
3.2

Recommendations
(1)
(2)
(3)

Project Management Plan (PMP) and supporting plans and procedures must be
updated to reflect any recent organizational changes.
Reevaluate the Staffing Plan to be more effective and fill any gaps in technical
capability of the organization.
HART must strive to transition the key management positions currently occupied
by the PMSC and GEC to HART, to ensure greater ownership and stronger
control of the project.

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 (4)
(5)
(6)
(7)
(8)

(9)

Actively monitor the management of the program to ensure that project staff and
all consultants/contractors implement the approved plans and procedures.
Develop an effective process to preserve critical technical capabilities during any
significant reduction in force.
Provide training to key existing staff members through the National Transit
Institute (NTI) or other similar organizations to enhance their transit project
management skills.
Move “Change Order” Authority to the Project Team and establish strict budget
controls to be enforced by HART Procurement and Chief Financial Officer.
HART’s Project Director, Deputy Directors, Project Managers, PMSC, GEC, and
Construction Engineering & Inspection (CE&I) consultants must focus more
heavily on meeting construction project schedules and cost containment of the
project.
HART and DTS must develop a detailed roadmap for transition of Operations &
Maintenance responsibilities.

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 4.0

PROJECT SCOPE AND PROJECT DELIVERY REVIEW

The PMOC reviewed the Project in accordance with FTA OP 32C: Project Scope Review and
OP 32D: Project Delivery Method Review, both dated September 2015, to determine whether
there had been any significant changes regarding the scope or delivery method of the Project.
4.1

PMOC Assessment of Project Scope

The general scope of the project has remained largely intact since the FFGA, although changes to
the method of contracting and outside influences on the execution of the scope have been
significant. Construction of the West Oahu/Farrington Highway Guideway Segment (WOFH),
Kamehameha Highway Guideway Segment (KH) and Maintenance and Storage Facility (MSF)
are complete. Construction of the Airport Guideway and Stations (AGS) has begun under a
Design-Build (DB) Contract. Procurement of the City Center Guideway and Stations (CCGS)
DB Contract is anticipated to begin in July 2018. However, HART has begun evaluating the
potential for Public-Private Partnership (P3) that could affect the City Center Guideway and
Stations (CCGS) procurement. A decision on whether P3 will be utilized is expected to be
rendered in June 2018. The cost estimate and schedule provided by HART for review are based
on DB methodology for CCGS. Therefore, this report does not consider any potential for P3 at
this time.
Since the workshop in February 2018, HART has awarded DBB511 – City Center Utility
Relocation (CCUR) contract. This utility work was separated from CCGS to control costs,
potentially reduce overall time to construct, reduce contract interfaces, and leverage innovation
by the contractors. HART had previously included $408 million (excluding contingency) in their
forecast. HART awarded the contract with a not-to-exceed amount of $400 million (excluding
contingency). This award has been incorporated into the PMOC’s risk analyses.
The PMOC primarily focused its scope and cost reviews on those contract packages that have
not yet been awarded or have significantly changed since the 2016 Risk Review. These contract
packages include:
Table 7.
Contract ID
DB550
DB275

Remaining Construction Contract Packages

Contract Description
City Center Section Guideway and Station Group (CCGS) DB
Pearl Highlands Parking Garage (PHPG) and H2 Ramp DB

The scope of the Project is still well-defined. However, overall progress of the project is delayed
due to legal action, delays with third party agreements (as with HECO over actions regarding
parallel high-voltage power lines), and decisions to repackage contracts.
HART could begin procurement in the summer of 2018 for the PHPG and H2 Ramp. However,
it is likely HART will delay this procurement until there is more certainty with the project
budget. It is also possible this contract could be included in a P3 option.

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 The drawings for all four line segments include right-of-way plans, drainage plans and details,
demolition plans, guideway plans and profiles, typical cross sections, utility plans, roadway
plans, signing and striping plans, maintenance of traffic plans, traffic signal plans, street lighting
plans, structural drawings, landscaping plans, station drawings, and contact rail installation plans.
The following observations were made regarding the project scope review:










4.2

Several third-party agreements have yet to be finalized.
Design issues that affect the interface with other contracts, including the Core Systems
Contract (CSC), must be resolved.
Detailed cost estimates have not yet been prepared for several potential Contract Change
Orders (CCO).
HECO’s imposition of further restrictions on work near high-voltage lines, including
requirements for undergrounding them, may cause further delays and costs. HART’s
award of CCUR will help mitigate some of these concerns, but full mitigation will not
occur until all applicable task orders under the CCUR contract are issued.
The amount of rework that will be needed to bring the City Center design to completion
may be considerably more extensive than HART anticipated, since the new DB
contractors will likely plan on using only the concept design; their responsibility for the
final design may mean that they will not be able to use any of the essentially-complete
elements of the earlier design-bid-build (DBB) packages.
Real estate acquisition to support construction in the City Center Segment will continue
to require significant coordination and effort by HART.
HART has actively interfaced with the Hawaii Department of Transportation (HDOT)
State Oversight Agency (SOA). This has proven to be beneficial to the project. HART
must continue to be proactive with regard to planning and implementation associated
with the interim revenue service to ensure they meet the HDOT Safety and Security
Program Plan requirements for start-up activities.
PMOC Assessment of Project Delivery

HART has significantly revised its strategy for delivery of the utilities, guideway and stations on
the east segments of the alignment. HART had intended to utilize multiple DBB contracts for
these elements. HART’s consultant advanced the design of the utilities and guideway for the
Airport and City Center Segments to near 90%. HART awarded the Airport Section Utility
Relocation Contract in July 2014 to complete some advanced utility work prior to award of the
Airport and City Center Guideway and Utilities DBB Contract. HART began procurement of
the Airport and City Center Guideway and Utilities DBB Contract in mid-2014. The stations
within the Airport and City Center Segments were to be built under a separate DBB contract.
However, following the opening of the WSSG bids, a thorough review of its Contract Packaging
Plan (CPP), and the realization that the engineer’s estimate for Airport and City Center
Guideway and Utilities DBB Contract was trending significantly higher than budgeted. HART
made the decision in 2015 to switch to DB and award two separate contracts. By making this
procurement change, HART hopes to control costs, potentially reduce overall time to construct,
reduce contract interfaces, and leverage innovation by the DB contractors.
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 The following observations were made regarding the project delivery review:






4.3

The change in strategy for the City Center Segment has had a significant impact on the
Master Program Integrated Schedule (MPIS) and has contributed to the erosion of the
schedule contingency. However, the implementation of CCUR will help mitigate some
of the concern with additional potential float erosion.
Any delay to the CCGS DB Contract now has a direct impact on the target RSD and
could impact the project cost.
HART’s Contract Packaging Plan (CPP) will continue to require significant management
effort to ensure proper interface coordination.
There is concern whether bidding competition for the remaining packages will be strong
enough to assure pricing within budget.
PMOC Recommendations
(1)
(2)
(3)
(4)
(5)

HART must take a more proactive approach to ensure contractors establish and
meet schedules.
Site access and permitting issues must be resolved early to avoid delays and
extras.
Continue to review and proactively vet all potential Contract Change Orders
(CCO). Detailed cost estimates must be prepared early in the process to ensure
the individual contract budgets will not be adversely impacted.
Continue to review all post-Record of Decision (ROD) changes to ensure they do
not have an impact on the environmental documentation, the project scope,
project cost, project schedule, or future operations.
Prioritize resolution of required third-party agreements, real estate acquisitions,
and coordination between various contractors and designers.

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 5.0

PROJECT SCHEDULE REVIEW

The PMOC followed the requirements outlined in the FTA OP 34: Project Schedule Review,
dated September 2015 to assess and evaluate the project sponsor’s project schedule. The PMOC
Schedule Review report format is consistent with FTA OP 34 and addresses all the subcategories
included under the categories listed below:



5.1

Schedule Management Review
o Project Management Capacity and Capability
o Systems, Tools, and Software
Technical Review
o Mechanical Soundness Check
o Fundamental and Reasonable Soundness Check
o Schedule Contingency
o Readiness to Conduct FTA OP 40 Risk Assessment
Documents Reviewed

The PMOC used the following information to support the FTA OP 34 review. The PMOC
provided preliminary findings and recommendations to FTA and HART during the months of
April and May 2018. One of the action items stemming from the meetings was for HART to
provide a more updated and revised MPIS to more accurately reflect progress made since
November 2017. The table includes a revised MPIS and Basis of Schedule (BoS) HART
transmitted to the PMOC May 2018 and provided a technical correction to the Oracle P6
schedule file on May 23, 2018:
Table 8.

Schedule Document Submittal History

Document Name
First Review Package
MPIS 2017.11.24.xer
INTERIM OPENING CPM – NOV 2017.PDF
RSD-LONGEST PATH NOV 2017.PDF
HRPT-Project Basis of Schedule
DRAFT171017.pdf
May 23 Revised Documents
Basis of Schedule
2017.12.20_Addendum1_180517r1.docx
1804 P6 Export revB.xer
1804 RSD Critical Path revB.PDF
1804-RevB Schedule Log.PDF

5.2

Transmitted
to PMOC

Status
(PMOC Comments)

12/07/17
12/07/17
12/07/17
10/20/17

Submittal Package – Data date 24NOV17
Attachment to Submittal Package email
Attachment to Submittal Package email
Basis of Schedule

05/17/18

Basis of Schedule

05/17/18
05/17/18
05/17/18

Oracle P6 Schedule
Critical Path Report
Schedule File Log (F9 Report)

Schedule Management

The following section includes review topics as listed in the FTA OP 34 “Schedule
Management” subcategories followed by PMOC findings and recommendations as appropriate.
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 5.2.1

Project Management Capacity and Capability

Organization, Experience and Qualifications
HART has realized significant turn-over and retention challenges since the FFGA was executed
in 2012. Although, the PMOC and HART acknowledge that the overall management and
technical capability has improved since then, most notably the schedule and cost reporting
deliverables. The current project control manager and Lead Scheduling Manager are highly
qualified and are leading the project controls team in the correct direction.
The PMOC has observed some project control functional disconnect between the CEI project
staff and the HART project control management staff. For example, HART staff noted that it is
not receiving Technical Schedule Review (TSR) Reports from one or more CEI project
schedulers in the field even though this task is a primary function of their roles and
responsibilities. The PMOC suggested HART impose accountability repercussions if need be to
improve the overall functionality of required project control tasks and deliverables.
Unfilled project control positions combined with underperforming consultant project control
staff certainly weaken management capacity on this challenging project.
HARTs previous PMP has partially addressed the position roles and responsibilities but not to
the level recommended by the PMOC over time. Many factors can contribute to the
underperformance of a team, but, unless responsibilities and accountabilities are clear, there is a
significant risk that problems will arise. More definitive position descriptions, roles, and
responsibilities will prevent staff member ambiguity and misunderstanding, and benefit new
employee orientation.
HART has an opportunity to greatly improve its PMP and training materials with improvements
and enforcement of Responsibility Assignment Matrix (RAM).
HART has satisfied the requirement, although staff positions must be immediately filled and
consultant staff must either conform to schedule management process and procedures or be
replaced. Furthermore, HART must find a permanent replacement for the recently vacated
Project Controls Manager.
5.2.2

Systems, Tools and Software
5.3.2.1 Schedule Format: Is the schedule format consistent with relevant,
identifiable industry or engineering practices?
HART is using the latest version of Oracle’s Primavera Project Manager (P6) scheduling
software and is requiring all scheduling parties involved on the Project to use the same
software. The schedule format is acceptable. The schedule software is more than
acceptable and is considered the leading industry schedule management tool.
PMOC Determination
HART has satisfied the requirement.

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 5.3.2.2 Does the Sponsor’s project scheduling software and IT infrastructure have
the capabilities and scalability to manage the project and the consultants,
suppliers and contractors?
HART’s computer hardware, server, supporting software packages, and interfaces with
HART's existing repositories that support the project controls and project management
reporting are adequate for the Project. HART intends to intertwine the Project Controls
and Document Management systems with its existing system after the project is
completed.
HART is currently replacing the current document management systems as it is no longer
supported by the Vendor which has been in the works for almost two years now. The
PMOC recommends HART place more emphasis on this initiative because document
control is one of the most important and fundamental components of a program control
system.
PMOC Determination
HART has satisfied the requirement.
5.3.2.3 Describe the control methods used by the Sponsor
The PMOC conducted a detailed review and evaluation of the HARTs management
control system to determine whether HART was efficient and effective in implementing
the project. The PMOC also evaluated HART's project control system and organization
as part of its Management Capacity and Capability Review and Technical Schedule
Review which is routine on PMOC monthly project control meetings and site visits.
These reviews included an evaluation of the tools, procedures, organization, and roles
and responsibilities of the project control positions.
PMOC Determination
HART has satisfied the requirement.
5.3.2.4 Are the Sponsor schedule update procedures during Project Development,
Engineering, and Construction phases commensurate with the challenges of
the project?
HART has provided consistent MPIS monthly progress updates for more than two years
now since replacing their Project Controls Manager and Scheduling Manager. The
PMOC has noted that HART must continue to enforce consultant conformance to the
project control plans and procedures to more efficiently and effectively measure, track
and control project work performance. Overall HART staff is implementing good

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 progress update procedures and should continue focusing such conformance to similar
requirements by the construction contractors.
PMOC Determination
HART has satisfied the requirement.
5.3.2.5 Describe how the Sponsor incorporates change control (scope, schedule and
budget) into the schedule management process.
HARTs implementation and conformance to their change control and configuration
management control procedures has been less than satisfactory for quite some time. This
observation is also evident with the outcome of disputed change orders across many
contracts including the excessively delayed outcome of closing some contracts that have
been completed more than one year. HART must significantly improve implementation
and conformance of its change control procedures. Although the PMOC finds this
category insufficient, the PMOC has witnessed improved oversight of the disputed
change order process by HART management and project control staff.
PMOC Determination
HART has satisfied the minimal requirements and should place more emphasis on
improving tasks and deliverables associated with this category.
5.3.2.6 Has the Sponsor incorporated claims avoidance techniques into their
schedule management process? How have they developed a dispute
resolution, peer review or change control board, time impact analysis or
claims mitigation processes?
This process initially begins with the development of project controls plans and
procedures which were reviewed in several previous PMP revisions, especially during
HARTs application for an FFGA in 2011-2012. Such procedures are incorporated into
the schedule management process so the emphasis is more about implementing and
ensuring conformance to the procedures. HART has experienced many disputed change
orders and settled them with the construction contractors preventing claim litigation in
the court system. The PMOC recently emphasized the risks associated with the change
order process that require swift dispute resolution most importantly on the City Center
alignment segment. The PMOC encourages HART to take a more serious and purposeful
stance on increasing change order oversight and implementation as a means to reduce
potential claims and increase impacts to the project cost and schedule.
PMOC Determination
HART has satisfied the minimal requirements and should place more emphasis on
improving tasks and deliverables associated with this category.
5.2.3

Project Control Plans, Procedures, and Contractual Requirements

Schedule Control begins with the establishment of “standardized” project control, contractual
requirements, and conformance procedures. Requirements refer to the contract terms and
conditions, specifications, procedures, and guidelines associated with the individual contracts for
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 the vendors, contractors, and consultants on the project. Conformance refers to the assurance
that all parties abide by the contractual specifications and requirements. Standardization refers to
the approach of requiring all scheduling parties to use the same input and output forms so that all
reporting information is consistent.
PMOC Determination
HART has satisfied the minimal requirements and should place more emphasis on improving
tasks and deliverables associated with this category.
5.3

Technical Review

The following section includes review topics as listed in the FTA OP-34 Schedule Review
“Technical Review” subcategories. Each review topic includes a description explaining the
relevant information included in the MPIS and Basis of Schedule (BoS). Graphics are included
when necessary to support the PMOCs determination.
5.3.1

Mechanical Soundness Check
53.1.1 Basis of Schedule
HART always includes a BoS with every major MPIS revision or at frequent requests
made by the PMOC. HART provided a revised BoS in December 2017 to support the
MPIS Schedule Review and Schedule Risk Assessment.
The PMOC did find inconsistencies with information contained in the BoS and the MPIS
such as the WBS, Calendar Library, distinction of Federal and Hawaiian State holidays
which is currently under revision in the MPIS. HART provided a revised BoS with their
revised MPIS transmitted to the PMOC in May 2018. HART also addressed several of
the PMOCs preliminary findings and recommendations such as correcting the calendar
library and correcting the work breakdown structure. HART addressed a significant
amount of the calendar library issues and partially addressed the WBS. A considerable
amount of information provided in the BoS was used to support the PMOC OP-34
Schedule Review.
PMOC Determination
HART has satisfied the requirement.
5.3.1.2 Schedule Breakdown Structure (SBS)
The Schedule Breakdown Structure (SBS) describes the taxonomy of the various
schedule “types” which comprise the MPIS. The BoS describes the relationship between
schedule types and explains how the information is integrated between schedules and
schedule users, including the construction contractors, vendors, real estate acquisition

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 department, design consultants and the HART. HART established an SBS and has
incorporated improvements as the project has progressed well into the construction phase.
PMOC Determination
HART has satisfied the requirement.
5.3.1.3 Hierarchical Structure
The Work Breakdown Structure (WBS) is a sorting and organization of project-specific
information (budget, cost and schedule) usually determined by the owner. A WBS is
defined by activity code or WBS fields in the scheduling software. HARTs MPIS uses a
combination of WBS code fields and activity code fields.
HART is currently revising the MPIS WBS to incorporate minor improvements and
simplify data code fields. The undergoing revision actually caused the PMOC to spend
more time than expected conducting the OP-34 Schedule Review as some activity codes
used in the past were deleted making the overall WBS not as intuitive and more difficult
to organize for custom reporting. HART staff mentioned they are aware of the issue as
the they continue to revise the MPIS WBS.
PMOC Determination
HART has satisfied the minimal requirements and should place more emphasis on
improving the WBS immediately.
5.3.1.4 Standard Cost Codes (SCC)
The MPIS does not have a WBS specific to SCC and is not necessary.
PMOC Determination
Requirement not relevant for the MPIS.
5.3.1.5 Calendars
The scheduling software calendar library dictates the number of work periods and nonwork periods, usually measured in units of hours or days. The calendar(s) also can be
used to incorporate non-work periods such as holidays, weather days, or other seasonal
restriction periods such as the installation of temperature-sensitive materials. The
utilization of multiple calendars is practical and necessary during schedule development
and should be monitored and reviewed frequently to track historical information.
The HART MPIS contains an excessive amount of Calendars probably incorporated by a
multitude of scheduling parties that are not using a standard calendar library established
by HART. This is a prime example of not establishing and maintaining schedule
management architecture amongst the scheduling parties. It has created a maintenance
nightmare and the PMOC recommends HART mandate all scheduling parties use a
Project standard Calendar library immediately. The PMOC generated a MPIS scheduled
report sorted by Calendars for all remaining activities in the MPIS. A summary of the
Calendar names is provided in Table 9.
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 Table 9.

Calendars within Remaining Activities in HART MPIS

Calendar Name
7d wk- NO Hol
5 Day Workweek
xGL Std 5d wk- HI Hol
Standard 5 Day Workweek-2
2 – 5 Day w/Holidays-1
1 – 7 Day No Holidays
07-Day Workweek
KHG 7 – 7 Days per week (All Days)
GCS- 5 Day w/Holidays
9HART WOSG
5d w/Hols (State)
GCS – 7 Day No Holidays
7d wk – NO Hol-1
2 – 5 Day w/ Holidays
CCGS PLAN A 5 DAYS WITH
HOLS& WEATHER
EE 5 Day Workweek w/Holidays
Standard 5 Day w/HI Holidays
7d wk – NO Hol(Proj)
Work Week
7 Day
Standard 5 Day Workweek (KHSG)
HART 5D w/Hols
HART 7D
HART WOSG Calendar Days
HART WOSG
xStd. 5d wk-HI Hol
7d wk – NO Hol(Proj)

Description
7 work days per week with no holidays
5 work days per week and with holidays
5 work days per week with Hawaiian holidays
5 work days per week and with holidays
5 work days per week and with holidays
7 work days per week with no holidays
7 work days per week with no holidays
7 work days per week with no holidays
5 work days per week and with holidays
29OCT15 and other non-explained exception days, federal
and Hawaiian holidays
5 work days per week with State holidays
7 work days per week with no holidays
7 work days per week with no holidays
5 work days per week and with holidays
5 work days per week and holidays and random non-work
days to account for inclement weather are included in this
calendar
5 work days per week and with holidays
5 work days per week with holidays
7 work days per week with no holidays
5 work days per week with no holidays
7 work days per week with no holidays
5 work days per week with holidays and random exceptions
5 work days per week with holidays
7 work days per week with no holidays
7 work days per week with no holidays
7 work days per week with holidays
5 work days per week with Hawaiian holidays
7 work days per week with no holidays

HART has addressed several of the PMOCs preliminary findings and recommendations
such as consolidating the duplicative calendars in the MPIS.
PMOC Determination
HART has satisfied the requirements.
5.3.1.6 Resource Loading & Cost Loading
Cost and resource loading includes the planned utilization of material, labor and
equipment resources required to perform the work. The resource library may contain
material, labor and or equipment resources as a basis for determining and quantifying
activity original durations and remaining durations as work is performed, measured and
progressed in the schedule, typically interfaced with earned value management. When
resources are assigned to an activity, the quantity to complete and units per time period of
the driving resources determine the activity’s duration. In addition, the activity resources
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 can be “leveled”, “smoothed”, “squeezed” or “crunched” as analysis and management
decisions are evaluated for remaining work to be performed.
An adequately-resourced schedule combined with earned value management (backward
looking) and trending analysis (forward looking) are prudent schedule control methods,
especially during the project schedule update process, regardless of the project phase.
The MPIS resource library contains codes accounts for labor and major equipment. The
list of resource code accounts is illustrated in the far-left column of Figure 6 and the City
Center Utility Relocation (CCUR) resource assignment is represented by the histogram in
Figure 6.

Figure 6.

CCUR Electrical Crew Resource

HART also included several resource histograms in their BoS representing the various
CCUR utility crews as shown in Figure 7.

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 Figure 7.

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CCUR Partial Crew Resource Reports

37

 Likewise, HART included an example cost curve in their BoS representing the various
CCUR utility crews as provided in Figure 8.

Figure 8.

HART Basis of MPIS Schedule: Example Cost Curve

PMOC Determination
HART has satisfied the requirement.
5.3.1.7 Software Settings
Scheduling software settings must be standardized in an environment of multiple
scheduling parties. Inconsistent use, whether incidental or with purpose of manipulation,
can generate significant variances in output information. The schedule software contains
calculation settings that apply to cost and resource loading, critical path, predecessor and
successor logic connectivity, percent complete, cost and resource utilization, and actual
work performed. Many, if not all of these settings are crucial for progress update and
critical path calculation. CPM schedule specifications and related contractual
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 requirements seldom address or completely specify which scheduling software setting
conditions are required for a given project or program. This oversight may lead to
intentional manipulation of software settings to favor the end user.
Special attention is needed to ensure that schedule calculations accurately generate and
avoid distorting schedule forward and backward pass CPM data. The scheduling
software calculation settings should be monitored to ensure that they are consistently
used and not randomly changed or manipulated, especially on large programs that require
multiple design and or construction schedules. HART should make sure all software
settings are standardized and consistently used by all scheduling parties on the Project.
The contractual documents should clearly state which settings should be used.
The following table describes the standard default settings used within the MPIS schedule
software. The contract requirements do not stipulate which scheduling software settings
are to be used, although the PMOC recommends that all scheduling parties consistently
use the default settings as “marked” in Table 10.
Table 10.
Description
Logic Calculation
Start-to-Start Lag from:
Schedule Durations:
Show Open ends as:
Calculate total float as:
Inter-project relationships:
Auto Cost Rules:
% Complete link to RD

Software Settings

Retained
Actual Start
Contiguous
Critical
Most Critical
With update

Settings
Progress Override
Early Start
Interruptible
Non-critical
Start float
Without update

Yes

No

Finish float
Ignore

The PMOC reviewed the schedule and observed that all settings are in compliance with
industry standards of care. HART does not address software settings in the Project
Schedule specifications or General Conditions. However, HART should consider doing
so for any remaining contracts to be procured.
PMOC Determination
HART has satisfied the requirement.
5.3.1.8 Schedule File Log
The fundamental element that supports the integrity of a schedule is the internal schedule
calendar structure, default settings and calculations utilized with the scheduling software.
Before schedule information can be interpreted with confidence, a check must be
performed to ensure the information in the schedule is fundamentally correct and contains
logical activity relationship connections. A fundamental soundness check must be
performed after every schedule update to ensure the information and logic contained in
the schedule is correct and properly represents actual work performed.

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 The Schedule File Log generated by the scheduling software indicates valuable technical
information that must be reviewed every time the schedule is revised or progress updated.
This procedure is a critical quality control method that must be performed.
The Schedule File Log includes data categories for:






Schedule / Leveling Settings
Statistics
Errors and Warning
Results, and
Exceptions

The most common scheduling mistakes are usually indicated in the Errors and Warnings
and Exceptions categories. During schedule development and updating, it is common to
accidentally omit relationship connections or inaccurately enter progress update
information; this report is the best method to prove and correct such integrity issues.

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 Table 11.

Technical Data Summary

Schedule Log Categories with Data
Statistics
# of Projects
# of Activities
# of Activities Not Started
# in Progress
# Completed
# of Relationships
# of Constraints
Settings
Scheduling
Leveling
Ignore relationships to / from other projects
Make open-ended activities critical
Use expected finish dates
When scheduling progressed activities
Calculate start-to-start lag from
Define critical activities as
Compute total float as
Calculate float based on finish date of
Calendar for scheduling relationship lag
Errors and Warnings
# without Predecessors
# without Successors
Out-of-sequence Activities
# with Actual Dates > Data Date
Milestone Activities with invalid Relationships
Scheduling/Leveling Results
# of Projects Leveled
# of Activities Leveled
Data date
Latest calculated early finish (postconstruction/RSD)
Exceptions
Critical Activities (*based on various software settings)
Activities with unsatisfied constraints
Activities with unsatisfied relationships
Activities with external dates

MPIS
16
20814
2213
363
18238
50440
15
Yes
No
No
No
Yes
Retained Logic
Early Start
Longest Path
Finish Float
Each Project
Predecessor
24
25
35
0
12
16
20814
April 27, 2018
April 09, 2030
*1
0
0
15

Open-ended Activities
Typically, open-ended activities should only include the first start activity and the last
finish activity. Although, it is acceptable to also include milestone activities, usually
finish milestone, open ended without a successor. Generally open-ended activities are
caused by an oversight wherein an activity is missing a predecessor or successor. This
usually occurs during schedule development and when activity relationships are revised
during routine progress updating. Caution should be used during schedule progress
updating because a minor oversight can create an unintentional open-ended activity. It
only takes one incorrect logic connection, or open-ended activity, to severely undermine
the integrity of a schedule. Routine quality control procedures include the review of
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 open-ended activities to ensure they are properly used and connected to the appropriate
relationship chains.
The MPIS contains forty-nine (49) open-ended activities. Besides the schedule start and
project completion milestone, other open-ended activities are summary level of effort and
a non-construction related activity for Owner Controlled Insurance Program (OCIP)
Brokerage services. Some of these activities are used for cost loading purposes.
Out-of-Sequence Progressing
Out-of-sequence progressing is an important indicator because it identifies errors,
omissions, and other potential problems that can distort milestone dates and general
progress information, thus affecting the schedule as a whole. Proper activity progress
updating and review will prevent out-of-sequence progressing problems. In addition,
maintaining a minimal amount of open-ended activities is conducive to “good
housekeeping” practices and overall a more manageable task during schedule updating.
For this reason, many schedule specifications require that only the start and end activities
can be open-ended.
The Schedule File Log indicate thirty-five (35) activities containing out-of-sequence
progress. After investigation, the PMOC determined these activities do not cause adverse
impact to the schedule forward and backward pass calculations. The PMOC does
however, recommend HART continue to reduce the amount of out-of-sequence progress
activities during routine progress update reporting.
Activities with Actual Dates > Data Date
When activities are progressed, the early start date is changed to an “Actual Start” date
indicated by the letter “A” next to the date. During progress updating, a common mistake
is progressing activities beyond the Data Date. Other common mistakes include entering
a percent complete in an activity without entering an Actual Start date.
There are no activities containing actual dates beyond the data date of 27-APR-18.
Milestone Activities with invalid relationships
This refers to certain types of milestones containing invalid predecessor or successor
relationships. There are no issues identified at this time.
Settings – Critical Path
The critical path can easily be distorted by excessive use of constraint dates, out-ofsequence progressing, open-ended activities, and other improper progress update
procedures. A common oversight is the misinterpretation of a schedule’s true critical
path. Sometimes a schedule calculation caused by the excessive or improper use of
constraint dates may adversely impact the critical path software calculation. Consistent
monitoring of the critical path during progress updates and variance reporting is crucial
and reconciled by evaluating the Schedule File Log.

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 The Settings category in the Schedule File Log indicates a critical path setting for
“Longest Path.” There are also different settings related to multiple projects within the
MPIS and HART must be careful when using the setting for calculating “critical path for
each project” versus calculating “critical path for opened projects” because both settings
provide difference critical paths.
The HART MPIS includes several activities that extend into year 2030 for OCIP, fare
collection operation and maintenance, and other administrative and program management
tasks. These activities can severely confuse a reporting audience if they are unfamiliar
with the purpose of said activities. HART must clearly communicate with its reporting
audiences and also better clarify the use of such activities in the Basis of Schedule as
well.
Constraint Dates
The Schedule File Log indicates the use of fifteen (15) constraint dates. The current use
of constraint dates does not adversely impact the schedule forward and backward pass
calculations. The PMOC will remove most of the constraint dates in order to perform the
schedule risk analysis.
Relationship Ties
The MPIS does not contain a fatal amount of improper relationship ties considering the
amount of activities is greater than 20,000.
PMOC Determination
HART has satisfied the requirement although continuation of improvements is needed.
5.3.1.9 Critical Path Analysis
PMOC review and comments are provided in the section above.
5.3.2

Fundamental and Reasonableness Soundness Check
5.3.2.1 Schedule Quality and Detail
Quality
The MPIS quality and detail has significantly improved over the past two years. HART
project control staff has been very collaborative with the PMOC and open to
incorporating improvements and recommendations provided by the PMOC. Likewise,
HART staff have included schedule management best practices and improvements over
the course of the construction phase. Such improvements include revisions to schedule
management procedures and change control procedures as well.
Detail
The MPIS is presented in a logical manner through the use of an intuitive WBS and
descriptive activity tasks and milestones. The MPIS does not contain many complex or
multiple activity relationships. Most of the MPIS activities do not contain multiple
predecessors or successors as the schedule logic is predominately linear in nature. The

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 MPIS activity detail is sufficient and traceable to the individual construction contractor
detailed schedules.
PMOC Determination
HART has satisfied the requirement.
5.3.2.2 Scope Inclusivity
The MPIS scope inclusivity is aligned well with HARTs Contract Packaging Plan using
the scheduling software WBS and activity coding specific to the corridor segments and
individual contracts. The primary unknown, though not detrimental to scope inclusivity,
is a final decision on the contract delivery method for the City Center guideway and
stations contract. It is currently a Design-Build although HART is considering a PrivatePublic Partnership (P3).
PMOC Determination
HART has satisfied the requirement.
5.3.2.3 Discernible Critical Path and Near Critical Paths
Oracle P6 utilizes various critical path software calculation settings by identifying critical
activities either by Total Float or by longest path. The “Longest Path” calculation is the
truest indication of a project’s critical path because it discriminates between near-critical
activities and the most critical activities. The HART MPIS is composed of 16 individual
projects within one “.XER” P6 electronic file. The software settings can be changed to
calculate float base on “Each Project” or by “Opened Projects”. The longest path is
drastically different when applying and comparing these to settings.
For instance, the PMOC typically uses the “Opened Projects” setting to calculate the
overall “program” longest critical path. The major flaw using this setting is that it
generates only two activities on the longest path, and one is a summary level of effort
activity [see Figure 9].

Figure 9.

Longest Critical Path (Opened Projects Total Float Setting)

The longest path using the “Each Project” total float calculation setting produces several
dozen activities however, the PMOC cautions HART to be careful as to not misinterpret
the overall program critical path as many of the activities on the “Each Project” setting
are truly not most critical to the overall completion of the full alignment. This is further
compounded by the excessive use of constraint dates, and errors and warnings such as
open-ended activities, and out-of-sequence progress activities. This of course is one of
many downfalls of using very powerful scheduling software which requires an
experienced team of schedulers and project control reporting specialists.
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 The HART MPIS does generate a discernible critical path by project but the PMOC has
verified that more MPIS schedule revisions are necessary to more accurately portray the
overall program longest critical path.
HART should re-evaluate the use of certain activities beyond the RSD and consider
alternative schedule management methods to provide cost or resource loading in their
schedule, whereas, they have already encountered resource loading technical issues.
Near Critical Paths
Near critical paths are, simply put, the chains of activities that contain the least amount of
total float other than the longest critical path. It is possible for these activity chains to
overtake the critical path activities if the critical path activities are progressed and
completed more rapidly than its near critical paths. Management should always focus on
the critical path but not lose sight of the near critical paths as they could eventually
become more critical towards the end of the project than the critical path. The result is
referred to as merge bias, due to excessive logic density and total float proximity of near
critical paths. This typically occurs when schedule compression pushes an excessive
number of activity chains against the project completion milestone, thereby exceeding
resource availability and causing project delay.
PMOC Determination
HART has satisfied the requirement.
5.3.2.4 Durations
HART has significantly improved the BoS which contains activity duration buildup and
production factors for major items of work including guideway substructure and
superstructure activities.
PMOC Determination
HART has satisfied the requirement.
5.3.2.5 Schedule Sequencing
The MPIS, the Basis of Schedule, and the Contract Packaging Plan address the current
design and construction packaging strategy. The MPIS WBS also separately identifies
construction activity by project segment, which illustrates the sequencing among
construction segment procurement and installation. A majority of the alignment is on an
overhead guideway structure requiring very repetitive construction installation of piers,
columns, bent caps, precast units, deck work and track work.
Construction contractor crewing requirements are based on the optimization of gantry
erection systems for construction of the aerial guideway structure. The sequencing
proceeds in an easterly direction starting at the Farrington/West Oahu segment.

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 The schedule WBS is organized and clearly segregated by the Project segments.
Optimization of aerial guideway structure gantry equipment and coordination with the
Core Systems Contract seems intuitive and is a reasonable work sequence approach.
This category predominately focuses on the construction phase and the optimization of
equipment and labor forces for similar and consecutively executed work elements. The
Basis of Schedule includes logical assumptions for crew sizing and optimization related
to pier, bent, and aerial structure installation, much of which is based on production
factors supplied by the construction contractor.
Reviews
The MPIS contains a sufficient amount of activities that represent review periods for
permitting, real estate acquisition, and final design review. Some of these activities and
review tasks will increase in detail as the MPIS is expanded and refined.
Agreements
The MPIS contains a sufficient amount of activities that represent agreement tasks
including interagency and third party agreements. The FTA and PMOC have suggested
that the activity durations for various department agreements should be carefully
evaluated, as the varying department resources may be too limited and constrained to
meet the project’s peak demands. The PMOC remains concerned, though, that HART
has not completed all project third party agreements.
Material and Equipment Procurement
The MPIS does not contain activity detail describing equipment and material
procurement mainly because these work items are incorporated into the more detailed
construction contractor schedules as the MPIS is more summary in nature.
Professional and Engineering Service Agreement Procurement
The MPIS contains a sufficient number of activities that represent the procurement of
professional services for planning, consultant services, general engineering consultant,
final design, and program and construction management.
Delivery Methods
The MPIS contains a sufficient number of activities that represent the procurement of
professional services for both design-build and design-bid-build project delivery
methods.
Construction processes and durations and contingency buffer
The MPIS has improved justification of activity durations as documented in the BoS.
Real Estate and Easements
The MPIS contains a sufficient amount of activity detail for real estate acquisition and
easements. The PMOC does recommend HART improve the activity descriptions for
each parcel as there is no traceability to the identification numbering system used within
the current activity descriptions. This should be included in the BoS as well. The PMOC
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 remains concerned, though, that HART has not completed more acquisitions on the
easterly end of the project alignment.
PMOC Determination
HART has satisfied the requirement.
5.3.3

Schedule Contingency

HARTs MPIS contains one activity to represent “Buffer Float”, ACT ID PRGCTG-1 “Program –
Testing Reserve” of 377 calendar days with a completion date eight (8) years and one month
from the MPIS data date of 27APR18. HART revised their stance on the inclusion of latent float
by revising their Basis of Schedule and including a list of activities that include a portion of
contingency in each activity duration as listed below:







ACT ID DBOM-9615 “CSC Component Testing – Kapalama Sta. (7 days contingency)
ACT ID DBOM-9620 “Full System Testing City Center (23 days contingency)
ACT ID DBOM-9631 “Pre-Revenue Service Operations testing (18 days contingency)
ACT ID DBOM-9265 “Final Demonstration Test Period (10 days contingency)
ACT ID DBOM-9615 “CSC Component Testing – Kapalama Sta. (7 days contingency)
Total contingency = 57 days

Otherwise stated, the MPIS contains a contingency amount of 13% total float. The most
probable cause of total float depletion will be associated with construction activity taking longer
than planned, actual duration greater than original duration. This is also a metric known as
activity pacing (AD/OD) where a factor greater than 1.00 indicate delays associated with poor
production or poor estimates of original durations. This metric is very important and is a
determining factor of how much estimate uncertainty factor the PMOC applies to the schedule
risk analysis pre-mitigated model.
The MPIS contains several calendars ranging from 5-day work weeks to 7-day work weeks.
Most of the construction activities contain a 5-day work week meaning weekend work, night
time work, and double or triple shift work could be implemented as a means to mitigate delays if
excessive float depletion occurs.
PMOC Determination
HART has satisfied the requirement.
5.3.4

Readiness to Perform FTA OP 40 Risk Assessment

The PMOC has determined HARTs MPIS April 2018 update is fundamentally and mechanically
sound enough for the PMOC to conduct a Schedule Risk Analysis.
5.4

Conclusion

It is the PMOC’s professional opinion that HARTs Master Project Integrated Schedule (MPIS) is
mechanically sound and meets the technical requirements of fundamental soundness. This
determination is based on the latest FTA OP 34 guidelines.
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 5.5

Recommendations
(1)
(2)

(3)
(4)
(5)
(6)

(7)

(8)

HART should focus on filling all open project control positions.
HART should enforce consultant project control conformance to schedule
management plans and procedures (timely CEI Technical Schedule Reviews) and
respective fundamental roles and responsibilities for those individuals who fail to
perform.
HART should increase the prioritization of completing the transition of document
management systems from the obsolete Contract Management System.
HART should continue to improve change control procedures. This is directly
related to claims avoidance and dispute resolution techniques.
MPIS and Basis of Schedule (BoS) must be synchronized with the WBS. The
current WBS is under revision and is incomplete.
Schedule File Log (F9 Report) – HART should further reduce the amount number
of activity logic ties that contain an excessive amount of lag due to Start-Start
(SS), Start-Finish (SF), and Finish-Finish (FF) relationship types, as well as
continue improvements by reducing or eliminating out-of-sequence progressing
and the use of constraint dates.
HART should re-evaluate the use of certain activities beyond the RSD and
consider alternative schedule management methods to provide cost or resource
loading in their schedule, whereas, they have already encountered resource
loading technical issues.
HART should improve the real estate acquisition activity descriptions for more
clear translation to the parcel identification numbering system in the BoS.

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 6.0

SCHEDULE RISK ANALYSIS

The PMOC assessed the Project Schedule in accordance with FTA OP 40: Risk and Contingency
Review dated September 2015.
6.1

PMOC Assessment

The purpose of the FTA OP 40 is “to describe the review, analysis, recommendation procedures
and reporting requirements expected by the FTA from the PMOC as regards the risks associated
with the Grantee’s project and the Grantee’s plan for mitigating and managing risk through
various means including the use of cost and schedule contingencies.” This review focuses on
the elements of schedule uncertainty associated with the effectiveness and efficiency of the
project sponsor’s project implementation, the project scope, and surrounding project conditions.
6.1.1

Methodology

The PMOC’s OP40 schedule analysis output data is generated from Oracle’s Primavera Risk
Analysis (PRA). The PMOC risk analysis process conforms to the software user manual and
intent of the FTA OP40 as described below:
There are two kinds of project risk; risk uncertainty and risk events:



Uncertainty risks are inherent variability that makes it impossible to predict exactly how
long an activity will take. For instance, you can estimate how long it will take within a
range of uncertainty, but you can never predict how long exactly.
Risk events are events separate from an activity that can disrupt or otherwise impact the
activity.

PRA handles risk events by using a Risk Register to enter potential risk events and estimates of
the probability and impact of the risks on activity duration, costs, and project quality. Once
uncertainty and risk event impact estimates have been entered for all tasks within a project, PRA
performs a high number of project simulations using “Monte Carlo” or “Latin Hypercube”
sampling of the estimates to select random task duration and cost values for every run-through of
the simulation. These simulations generate a range of outcomes that can be used to predict
project duration and costs with statistical confidence.
The Critical Path Method (CPM) is the traditional means for determining a project finish date.
However, because CPM only determines a single date and does not consider potential risks,
results are not always comprehensively reliable. Risk Analysis uses risk inputs to determine a
range of project finish dates with more confidence and reliability. PRA is based on the risk
management process outlines in Chapter 11 of the Project Management Institute’s “A Guide to
the Project Management Body of Knowledge” and consists of the components shown below.
The process is not strictly linear; there may be considerable doubling back and repetition of
certain steps before moving on.

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 (1)

Schedule Review

The purpose of the Schedule Review “Characterization” is to check the grantee project schedule,
referred to as the Current Probable Schedule (CPS) for logic errors, open-ended tasks, negative
lags, start-to-finish links, and other potential problems which could compromise the risk
analysis. This step ensures the integrity of the schedule and improves the chances for a
meaningful analysis. If mechanical or fundamental revisions are necessary based upon the
schedule characterization, the risk management team makes the necessary adjustments and
creates a revised schedule file, called the Adjusted Project Schedule (APS).
(2)

Pre-Analysis Check

A rudimentary analysis of the schedule is performed to identify activities that drive project
duration and costs. These activities merit the closest attention during subsequent detailed risk
analysis.
(3)

Build a Risk Model

Estimates for duration, cost, and resource uncertainty for each project task are identified by the
PMOC relying on industry statistics and experience. The estimate uncertainty duration ranges
are incorporated into a copy of the project schedule called the Estimate Uncertainty Model
(EUM).
The PMOC then brainstorms a list of potential risk events, evaluates the risk events as to how
likely they may occur, and the potential impact they may have. The list of risk events is then
entered into a risk register and each risk event is assigned a probability and impact resulting in a
risk degree factor which is scored by the risk modeling software. At this point, a copy of the
EUM is made, and PRA then applies the uncertainty and maps the risk events to the appropriate
task to build a risk model, called an Impacted Risk Model (IRM).
(4)

Analyze and Review

A “Monte Carlo” or “Latin Hypercube” sampling analysis is run on the IRM. The risk analysis
output can be viewed and evaluated in a wide variety of reports. The review options allow the
risk management team to focus of areas of the schedule that pose the greatest risk to the overall
program. This in-turn helps with the creation of an efficient and cost-effective risk mitigation
plan. The IRM schedule risk analysis reports and graphics are provided in the PMOC’s OP40
report. All reports and graphics indicate probability factors which are pre-mitigated meaning,
the probability factors and dates can be greatly improved by the project management team
applying risk mitigation.
(5)

Mitigate and Report

Based on the preliminary analysis, the risk management team reviews and evaluates alternative
scenarios with varying reductions to duration, resource and cost uncertainty. Ultimately the most
cost-effective risk mitigation strategy is chosen and formalized into a risk mitigation plan.

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 Step

Description
Risk assessment begins by identifying potential project
risk events, usually from “brainstorming” session.

Assessment

Identification

Analyze the risk probability and impact, and score “rank”
identified risk. Risk Degree = Probability X Impact.

Qualitative Analysis

Risk
Register

Quantitative Analysis

Transform risk data into decision making information by
assessing probability and impact on a risk register.
Develop risk mitigation plan against identified and
analyzed risk factor based on risk information.

Mitigation

Tracking residual risks, identify new risks, and accumulate
risk information throughout the project life cycle.

Tracking

Figure 10.

Risk Assessment Process

Figure 11describes the various schedules that are created once the PMOC commences the FTA
OP34 Schedule Review of the grantee’s project schedule, called the CPS. The final product is
the Impacted Risk Model (IRM) which the PMOC uses for the risk analysis in PRA.

Schedule Types

Risk Assessment Steps
Schedule
Review

Pre-Analysis

Current
Project
Schedule
(CPS)

Adjusted
Project
Schedule
(APS)

Figure 11.
6.1.2

Schedule Risk Analysis

(1)

Project Schedule Review

Build a Risk Model

Analyze
and Review

Mitigation

Mitigation
Plan

Estimate
Uncertainty
Model
(EUM)

Impacted
Risk
Model
(IRM)

Impacted
Risk
Model
(IRM)

Best Case,
Most Likely,
Worst Case

Risk Register

1. Histogram
2. Tornado Graph
3. Distribution
Analyzer

Risk Assessment Steps and Schedule Types

The format, quality, and detail contained within HARTs program schedule and Basis of Schedule
Reports has improved over the past year since the program controls manager and lead scheduler
were replaced on the program.
The PMOC concentrated its efforts on ensuring that a mechanically and fundamentally sound
schedule was used for both the risk assessment and the contingency analysis. HART and the
PMOC collaboratively worked through MPIS refinements to ensure adequate detail and logic
sufficiently support the PMOC risk analysis. The PMOC made a backup copy of the HART
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 MPIS (Current Project Schedule) file and renamed it “APS.xer”. A summary of the PMOC
adjustments are listed below:













Remove ACT ID RSD Revenue Service Date constraint date
Dissolve ACT ID PRGCTGC Program Testing Reserve (OD 377 days)
ACT ID IO interim opening. Remove constraint date and add 700 days lag to Succ
Remove Latent Contingency per HART Basis of Schedule:
o ACT ID DBOM-9615 “CSC Component Testing – Kapalama Sta.” – change
remaining duration -7 to 23 days
o ACT ID DBOM-9260 “Full System Testing City Center” – change remaining
duration -23 to 67 days
o ACT ID DBOM-9631 “Pre-Revenue Service Operations testing” – change remaining
duration -18 to 52 days
o ACT ID DBOM-9265 “FINAL Demonstration Test Period” – change remaining
duration -10 to 30 days
ACT ID SSC1000 delete PRED ACT ID IO
Delete ACT ID ES-OCIP-00025 ”MM-951 OCIP Brokerage Services”
Delete ACT ID ES-OCIP-00030 ”MM-951 OCIP Brokerage Services”
Delete “Fare Collection” activities extending beyond RSD date
o ACT ID MI900-1000 “Fare Systems Contract”
Dissolve ES-SSC-00020 “MM964 – Safety and Security Support Contract Incl
Procurement – future”
Dissolve ES-HART-00040 “Program Management Support” in order to not disrupt the
critical path
Remove constraint DBB600-2590

The PMOC adjustments to the HART MPIS (Current Project Schedule) combined with removing
all patent contingency and latent contingency listed in HART’s Basis of Schedule results in a
calculated RSD date of 02-MAY-25.
Table 12.

CPS to APS Milestone Comparison (Data Date 27-APR-18)
Activity Description

RSD

HART CPS
RSD
25-DEC-25

PMOC APS
RSD
02-MAY-25

The CPS and APS are specific to the RSD milestone. They do not account for a significant
amount of contract closeout activities that may very well extend one year beyond the RSD.
(2)

Pre-Analysis Check

The PMOC performed a pre-analysis check by applying a quick risk distribution range across all
schedule activities and reviewing the confidence level range, duration sensitivity, and criticality
index. Preliminary notes and observations were made for specific schedule drivers. Note that
this pre-analysis check was performed as a pre-impacted risk analysis, meaning that the schedule
does not have risk events “built-in” the schedule at this point of the risk analysis process.
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 (3)

Build a Risk Model “Impacted Risk Plan”
a. Estimate Uncertainty Model (EUM)
The Estimate Uncertainty Model (EUM) accounts for uncertainties associated with the
original duration assignments to each CPM network activity. HARTs MPIS does not use
resource units and production factors to mathematically calculate the original durations
rather they are assigned by “best guess”, professional opinion and judgement based on
experience and historical information taken from the westerly alignment contracts, and
application of new HART consultant analysis and opinion as documented in their Basis
of Schedule. The EUM process accounts for such duration uncertainties by applying
triangular duration distribution using a three-point triangle of best case, worst case, and
most likely duration assignment for each activity.
The PMOC reviewed the activity original durations (OD) in the CPS and made a
determination of the adequacy of each OD.




EUM Best Case – The best case durations were calculated as 20% less (.80) than
the activity remaining duration (RD) amount, or (-.80 x RD).
EUM Most Likely – The most likely durations were calculated at 5% greater than
the activity RD durations, or (1.05 x RD).
EUM Worst Case – The worst case durations were calculated at 35% greater than
the activity RD amounts, or (1.35 x RD).

The value ranges (differences in activity durations) reflect levels of uncertainty. Based
on the three-point durations, a BetaPert triangular distribution was assigned to each
activity duration calculation. BetaPert is similar to triangle three-point estimation
technique but more weight is given to the most likely duration resulting in a beta
distribution more uniform and normal distribution. BetaPert is more forgiving to the
extremes points of best case and worst case [see Figure 12].

Figure 12.

BetaPert Three Point Estimation Technique

The EUM RSD milestone calculation at the P65 level is 12-DEC-25 as illustrated in the
figure below.

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53

 APS - .80 / 1.05 / 1.35
Entire Plan : Finish Date
100% 13-Aug-26

22.0

95% 23-Apr-26
20.0

90% 10-Apr-26
85% 23-Mar-26

18.0
80% 20-Feb-26
75% 20-Jan-26
16.0
70% 05-Jan-26

60% 26-Nov-25
55% 30-Oct-25

Hits

12.0

50% 10-Oct-25
10.0

45% 29-Sep-25
40% 09-Sep-25

8.0

Cumulative Frequency

65% 12-Dec-25

14.0

35% 20-Aug-25
30% 03-Aug-25

6.0
25% 15-Jul-25
20% 26-Jun-25
4.0
15% 13-Jun-25
10% 23-May-25

2.0

5% 12-May-25
0.0

0% 26-Feb-25
30-Mar-25

08-Jul-25

16-Oct-25

24-Jan-26

04-May-26

12-Aug-26

Distribution (start of interval)

Figure 13.

RSD - Estimate Uncertainty Model on APS

b. Impacted Risk Model (IRM)
The PMOC conducted a review and evaluation of all risks in the Main Risk Register in
order to decide which risk events should be used for the schedule risk analysis. Once the
risks were culled and prioritized, the PMOC summarized several similar risks into one
risk event per category. Each risk in the risk register is assigned a probability and impact
factor for schedule impact, not cost impact. Each risk event is logically tied to
appropriate successor activities in the MPIS CPM network. HART staff provided some
successor activities specific to City Center property acquisition for verification purposes.
The risk register risk events (threats) have remained constant since initial FTA PMOC
risk assessments were performed on the program in 2009. The risk register threat events
are concentrated on the Airport alignment but primarily on the City Center Alignment.
Each risk event was scored based on a risk degree factor. The risk degree factor is
calculated by the risk event probability and impact factors. The probability and impact
Honolulu Rail Transit Project
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54

 factors for each risk event are objectively determined by the PMOC risk management
team. The PMOC risks used in the schedule risk assessment are listed below and as
shown in Figure 14:









ID 1.0 - Bid delays to achieve construction NTP (CC)
ID 2.0 - Pier obstructions (AGS/CC)
ID 3.0 - Utility & HART response delays (AGS & CC)
ID 4.0 - Dillingham Rd. utility delays (CC)
ID 5.0 - MOT/congestion disrupts production (AGS/CC)
ID 6.0 - CSC, Station, Guideway interface issues (CC)
ID 7.1 - ROW & permit delays (AGS)
ID 7.2 - ROW & permit delays (CC)

Figure 14.

IRM Risk Register

The risk event results are produced by running a schedule analysis using the impact risk
model (IRM) which contains qualitative risk events within the software risk register. The
true indication of how sensitive each risk event ultimately becomes is not realized until
the analysis is performed. For example, a risk event with a very high score does not
necessarily mean it will be highly sensitive to the schedule as it may only affect nonHonolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
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55

 critical activities containing total float. The schedule drivers that contain the most impact
potential contain a high risk degree and are on the longest critical path or near critical
path. A significant amount of the APS and IRM longest critical path activities are
associated with the Core Systems activities and interface with the completion of the City
Center guideway and station items.
(4)

Analyze and Review
a. Summary Results
The final schedule risk analysis generated using the PMOC APS with application of
estimate uncertainty and pre-mitigated risk register threats events result in the probability
distribution histogram [see Figure 15]. The yellow arrow indicates HART’s current
MPIS RSD date of December 31, 2025.

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PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

56

 Impact Risk Model
Entire Plan : Finish Date
100% 14-May-27
95% 03-Mar-27
14.0

90% 20-Jan-27
85% 24-Dec-26
80% 20-Nov-26

12.0
75% 23-Oct-26
70% 25-Sep-26
10.0

60% 07-Aug-26

Hits

55% 14-Jul-26
8.0
50% 17-Jun-26
45% 20-May-26
40% 24-Apr-26

6.0

Cumulative Frequency

65% 01-Sep-26

35% 13-Apr-26
30% 05-Mar-26
4.0

25% 18-Feb-26
20% 05-Jan-26
15% 05-Dec-25

2.0
10% 27-Oct-25
5% 20-Aug-25
0.0

0% 17-Jun-25
08-Jul-25

16-Oct-25

24-Jan-26

04-May-26

12-Aug-26

20-Nov-26

28-Feb-27

Distribution (start of interval)

Figure 15.

Project Completion Date Confidence Level

The probability percentage points for the IRM are:





50% Confidence level completion date – June 17, 2026
65% Confidence level completion date – September 01, 2026
80% Confidence level completion date – November 20, 2026
100% Confidence level completion date – May 14, 2027

The IRM RSD P65 date of 01-SEP-26 is pre-mitigated, meaning it takes into account
threat risk events in the risk register without applying the multitude of potential
mitigation efforts to reduce, avoid, transfer (with costs) or eliminate such risks.
Figure 16 illustrates the milestone dates generated for each schedule risk analysis stepprocess. The P100 (100% probability percentile) extends significantly beyond the
Honolulu Rail Transit Project
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June 2018 (FINAL)

57

 grouping of the 50, 65, and 80 percentiles due to merge bias, which is a common result
from using large CPM networks with thousands of progressed activities.
RSD

Schedule Risk Analysis Step  2024
Dates
N D J F M A

31DEC25

CPS (Data Date 27‐APR‐18)

24DEC24

APS  (Data Date 27‐APR‐18)

16DEC25

EUM: .80/1.05/1.35 Bp

17JUN26

IRM ‐ P50

01SEP26

IRM ‐ P65

20NOV26

IRM ‐ P80

14MAY27

IRM ‐ P100

Figure 16.

M

2025
2026
J J A S O N D J F M A M J J A

S

2027
O N D J F M A M J J

Timeline of Schedule Risk Analysis Dates

6.2

Schedule Contingency Review

6.2.1

Adjusted Project Schedule for Risk and Contingency Analysis

The APS was used for both the schedule risk assessment and the Contingency Analysis Review.
The APS is a backup copy of HARTs MPIS with minor adjustments made by the PMOC.
Because the APS is pre-analysis, not containing estimate uncertainty or risk events, it is
considered most optimistic and is stripped of all latent and patent time contingency.
6.2.2

Contingency Analysis

The objective of the contingency analysis, pursuant to FTA OP40 “Risk and Contingency
Review” is to estimate the minimum amount of schedule contingency required to complete the
project on schedule. The FTA guidance states that the contingency recommendations shall be
developed using the following assumptions:


“At the Revenue Operations Date, schedule contingency requirements have been reduced
to a minimum requirement or possibly eliminated; and



“At the point of 100% complete with bid, the project should have sufficient schedule
contingency available to absorb a schedule delay equivalent to 20% of the duration from
Entry into Final Design through Revenue Operations.”

The PMOC did not use the 20% duration calculation method to determine time contingency due
to the unique circumstances associated with this project such as the hybrid nature of various
contract delivery methods and the previous year and one half delay stemming from the
archaeological inventory process court ruling.
The PMOC noted during the risk workshop that time and effort extending beyond the project
RSD date for contract closeout activities is not included within this schedule risk analysis.
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58

 Delays with contract closeout beyond the RSD may adversely impact schedule and costs
associated with project management and consultant staff for a period most likely greater than 12
months beyond the RSD. Closeout of completed contracts has progressed slower than initially
anticipated. The PMOC has encouraged HART to re-evaluate their contract Closeout Plan as a
means to better manage unwarranted schedule and cost impacts if not well planned and executed.
6.2.3
(1)

(2)
(3)
(4)
(5)

6.2.4

Findings
The HART MPIS does not contain a sufficient amount of time contingency as activity
total float continues to erode. Several schedule deficiencies attributable to unrealized
total float depletion such as ambiguity in activity calendars is noted in the OP-34
Schedule Review Report. HART addressed the PMOC’s comments and provided a
subsequent MPIS in early May 2018, which was used to conduct this final schedule risk
assessment.
Most risk uncertainty exists within the City Center alignment and longest critical path
Core System activities.
HART’s delays to procurement of the of the City Center contract may adversely impact
the project critical or near critical paths if not resolved soon.
The PMOC Impacted Risk Plan (IRM) distribution of P65 for RSD is 01-SEP-26.
Time and effort extending beyond the project RSD date for contract closeout activities
is not included within this schedule risk analysis.
Recommendations

The revised RSD should be no earlier than September 2026, which represents the 65%
confidence level in the Schedule Risk Model utilizing an MPIS with data date of April 27, 2018.

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PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

59

 7.0

PROJECT COST ESTIMATE REVIEW

The PMOC reviewed the Project in accordance with FTA OP 33: Capital Cost Estimate Review,
dated September 2015, to assess and evaluate HART’s current Estimate at Completion (EAC).
7.1

PMOC Assessment

The original FFGA Project Budget was $5.122 billion, including $644 million in allocated and
unallocated contingency and $173 million in financing costs.
HART’s current Estimate at Completion (EAC) of $9.020 billion includes $904 million in
contingency and $855 million in financing cost. The capital cost is $8.165 billion (including
contingency but excluding financing). HART has expended $3.125 billion through April 2018.
The major documents provided to the PMOC to support the cost review include:








December 2017 Contract Packaging Plan (CPP)
April 2018 SCC Spreadsheet (HART_FFGA_HRTP SCC Cost Workbook_2018.05.17)
April 2018 Forecast (Summary FFGA EAC Monthly Trend_2018.04.27_Final.xlsm)
April 2018 Expenditures (2018.04.27 Actuals CPP by SCC.xlsx)
DB550 – CCGS ICE (DB 550 CCGS Estimate_2017.09.12.pdf)
DB275 – PHPG ICE (DB 275 PHGT Estimate_2017.02.09.pdf)
Staffing Plans for HART, PMSC, GEC 3, CE&I East, CE&I West, CSC Support, and
Safety & Security Support

The PMOC evaluated the cost estimates for each SCC for mechanical soundness and
consistency. These mechanical checks were used to determine if there are any material
inaccuracies within the estimate. Components of the estimate were found essentially to be
mechanically correct in the tabulation of the unit cost, application of factors, and translation to an
SCC spreadsheet for most of the direct cost and soft cost contracts. However, the PMOC did
identify some discrepancies with specific estimate amounts.
7.2

Estimate at Completion (EAC) Review

The PMOC utilized the April 2018 SCC Spreadsheet provided by HART that distributed the
project budget into FTA SCC Categories. Contingency was stripped from the estimate as it was
identified in the revised SCC distribution (HART’s Input tab). By utilizing the April 2018
Forecast as a check, the PMOC verified if any of HART’s “Not Yet Executed” outstanding
Change Orders were missing from the various contracts. The potential changes are separated
and updated monthly by contract into three categories: Pending, Probable, and Issues. The
PMOC’s check did not identify any missing or not yet incorporated change order costs in
HART’s April 2018 SCC Spreadsheet.
HART has increased its budget since the 2016 Risk Refresh. The most significant increases are
due to the schedule delay to obtain project funding, the result of bids for the AGS, incorporation
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PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

60

 of HECO-related costs, increases to the real estate budget, and the additional soft cost because of
the RSD delay.
A significant setback occurred with the federal/state lawsuits for most of 2013. The cost
associated with these delays has been mostly captured by HART change orders or adjustments
included in the EAC. In general, this delay was a factor in the erosion of the previously available
project contingency. The delay also pushed back the remaining construction bids when the
market was peaking. The CCGS, UTIL2, Park & Ride Lots, and PHPG are still in procurement,
so there is significant uncertainty with regard to bidding market for some of the most difficult
construction contracts associated with the program.
Approximately two-thirds of the construction work is awarded, and the remaining work is
“estimated” from various sources. Many of the potential change orders for the awarded
construction are estimated at a high-level and do not yet have detailed cost estimates developed.
The costs for the remaining large construction contracts (CCGS, UTIL2, and PHPG) are based
on Independent Cost Estimates (ICE).
Since the workshop in February 2018, HART has awarded DBB511 – City Center Utility
Relocation (CCUR) contract. This utility work was separated from CCGS to control costs,
potentially reduce overall time to construct, reduce contract interfaces, and leverage innovation
by the contractors. HART had previously included $408 million (excluding contingency) in their
forecast. HART awarded the contract with a not-to-exceed amount of $400 million (excluding
contingency). This award has been incorporated into the PMOC’s risk analyses.
7.3

Findings

The following specific observations were made regarding the cost estimate review:






The total amount of contingency identified in HART’s EAC was $904.4 million. The
PMOC did not identify any “latent” contingency.
Some variances had been noted between contract amounts as shown in various
documents provided by HART in December 2017. These inconsistencies were discussed
with HART during the February 2018 workshop. HART’s updated documents reconcile
most of the PMOC’s concerns about traceability and the potential for errors or omissions
in the budget. However, HART staff has noted that additional effort is required to
reconcile all inconsistencies between the various documents. The PMOC does not
anticipate that there are any significant discrepancies that would adversely impact the
project budget.
HART’s April 2018 forecast includes all potential Change Orders and issues identified by
HART.
HART expended $3.125 billion through April 2018. The expended costs are categorized
by contract and segregated into FTA SCCs. The PMOC noted there are variances
between expended amounts in the April 2018 Forecast and the April 2018 SCC
Spreadsheet. Specifically, HART has expended costs coded to SCC line items in the
April 2018 Forecast, but there is no corresponding budget associated for those line items.

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PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

61

 











7.4

The PMOC used a pro rata approach to distribute any discrepancies for input into the cost
risk model.
Some components of the cost estimate are still undergoing refinement by HART (e.g.
right-of-way, CCGS, PHPG).
The individual Basis of Estimate (BoE) were updated for the Independent Cost Estimate
(ICE) for the CCGS and PHPG. However, there is some lack of uniformity across the
individual BoEs:
o The application of markups was inconsistent.
o The application of the General Excise Tax (GET) varied.
o Escalation rates varied between contracts.
The PMOC utilized the “Direct Cost” from HART’s Independent Cost Estimate for
CCGS and PHPG and applied markups at percentage rates where appropriate based on
our professional opinion. The PMOC recommends adjustments associated with the
percentages for markups for items such as Engineering costs, GET application,
Escalation, and General Conditions/Overhead. This is the same methodology that was
used for the 2016 Risk Refresh.
Escalation is not separately and fully addressed in the various cost documents provided
by HART such as the Basis of Estimate (BoE). It was included in the ICE for the CCGS
and PHPG, but it was not consistently applied. Additionally, HART did not provide an
update of the full FTA SCC Workbook. The full FTA SCC workbook would provide
detail on escalation being used to develop a project estimate.
The PMOC believes HART’s April 2018 Forecast may not be fully reflective of the
sequencing identified in the current MPIS. The MPIS was recently revised, but the ICE
for the CCGS and PHPG were prepared prior to the schedule update. Based on these
findings, the PMOC recommends adjustments to account for this potential shortfall
associated with escalation.
Due to extension of the RSD, there may be some potential costs associated with
maintenance of already constructed work. This scope is not specifically included in the
current EAC. The PMOC did not include an adjustment for this item.
Contract closeout continues to be an issue for HART, which can add significant soft costs
to a project.
PMOC Recommended Adjustments

Once all contingency was stripped and the potential change orders were added, the PMOC
incorporated various adjustments into the base cost of the project prior to completing the cost
risk analysis. The adjustments identified in this report were discussed with HART staff during
the workshop and in a subsequent meeting.

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

62

 Table 13.
CPP

Contract

Adjustment Description

DB550

CCGS DB

General Conditions & Miscellaneous

DB550
DB550
DB550

CCGS DB
CCGS DB
CCGS DB

Bond/Insurance
Overhead & Profit
Added Escalation

DB550

CCGS DB

Engineering and Design

DB275

PHPG

MM290
MM596
MM902
MM913
MM962
MM596
MM913
ROW

CE&I West
CE&I East 2
PMSC 3
GEC 3
CSC Support
CE&I East
GEC 3
ROW

Inflation adjustment to unbid
Construction Contracts
Extended time for contract closeout
Extended time for contract closeout
Extended time for contract closeout
Extended time for contract closeout
Extended time for contract closeout
Increase due to extension of RSD
Increase due to extension of RSD
Revaluation of ROW and Temporary
Construction Easements for CCGS

TOTAL

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

Proposed Adjustments
Amount
(M)
$80
$1
$6
$8
<$28>
$11.5
$2.6
$9.5
$17.1
$2.6
$5.1
$4.7
$7.8
$75.8

Comment
Includes additional costs for mobilization/demobilization plus
additional General Conditions to include the higher percentage of
Subcontractors work versus self-performed work.
Result of adjustment for additional General Conditions
Result of adjustment in Overhead & Profit for other line items
Based on 4% compounded annually for Construction and 1% for
Design as it will be mostly spent at the front end of the DB effort.
Additional component is factor of other adjustments.
PMOC used 9.0% compared to the approximate 11% included in
HART’s estimate. Some advanced Engineering is already complete for
CCGS and some design will be completed for CCUR under FD530.
Based on 4% compounded annually compared to the 2.5% rate utilized
by HART.
See Table 2
See Table 2
See Table 2
See Table 2
See Table 2
See Table 2
See Table 2
Corresponds to amount that was originally in HART’s forecast but was
moved to contingency.

$204

63

 Adjustment 1 below considers likely additional costs to account for extended time for contract
closeout. Adjustment 2 considers likely additional costs due to extension of RSD to December
2026.
Table 14.

SCC 80 Adjustments
Adjustment 1

Contract

HART EAC
Completion
Date
Mar-20
Mar-26
Dec-25
Dec-25
Jun-26
Dec-27

Monthly
Burn Rate
(M)
$0.87
$1.58
$1.43
$0.87
$0.85
$1.18

Months

Amount
(M)

Adjustment 2
Months

CEI West
3
$2.60
CEI East
6
$9.50
PMSC
12
$17.10
GEC 3
3
$2.62
CSC Support
6
$5.07
HART Labor & ODC
0
$0.00
TOTAL
$36.89
Notes:
(1) SCC 80 forecast is dated 10/27/17.
(2) Proposed adjustments were based on 50% of Average Monthly Burn Rate.

0
3
0
9
0
0

Amount
(M)
$0.00
$4.74
$0
$7.83
$0
$0
$12.57

Table 15 presents the 2018 Adjusted Base Cost Estimate in SCC format.

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

64

 Table 15.
SCC
10
10.02
10.04
10.08
10.09
10.11
10.12
20
20.01
20.02
20.04
20.06
20.07
30
30.02
30.03
30.04
30.05
40
40.01
40.02
40.03
40.04
40.05
40.06
40.07
40.08
50
50.01
50.02
50.03
50.04
50.05
50.06
50.07

Description
Guideway & Track Elements
Guideway: Aerial At-Grade semi exclusive
Guideway: Aerial structure
Guideway: Retained cut or fill
Track: Direct fixation
Track: Ballasted
Track: Special (switches, turnouts)
Stations, Stops, Terminals, Intermodals
At-grade station
Aerial station
Other stations, landings, terminals: intermodal
Automobile parking multi-story structure
Elevators, escalators
Support Facilities: Yards, Shops, Admin.
Light Maintenance Facility
Heavy Maintenance Facility
Storage or Maintenance of Way Building
Yard and Yard Track
Sitework & Special Conditions
Demolition, Clearing, Earthwork
Site Utilities, Utility Relocation
Haz. material, contaminated soil removal/mitig
Environmental mitigation
Site structures (retaining walls, sound walls)
Pedestrian / bike access, landscaping
Automobile, bus accessways (roads, parking)
Temporary Facilities/other indirect costs
Systems
Train control and signals
Traffic signals and crossing protection
Traction power supply: substations
Traction power distribution
Communications
Fare collection system and equipment
Central Control
CONSTRUCTION SUBTOTAL (10 - 50)

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

2018 Adjusted Base Cost Estimate
HART Current
Budget
1,546,969

Allocated
Contingency
177,269

Total w/o
Contingency
1,369,701

PMOC
Adjustments
27,969

Adjusted
BCE
1,397,670

17
1,391,010
155,942
847,496
13,304
618,592
148,316
67,283
100,807
3,057
64,480
8,619
24,651
2,530,770
50,577
886,044
17,052
5,866
30,302
16,247
287,243
1,237,439
329,479
166,025
3,789
32,728
37,245
65,990
19,853
3,849
5,355,521

163,752
13,517
100,447
25
71,891
26,707
1,825
291108
5,158
156,605
1,981
347
4,248
1,561
42,340
78,868
18,347
8,948
617
331
124
599
7,690
39
587,171

17
1,227,258
142,426
747,048
13,279
546,701
121,609
65,459
100,807
3,057
64,480
8,619
24,651
2,239,662
45,418
729,439
15,071
5,519
26,054
14,686
244,903
1,158,572
311,132
157,078
3,172
32,397
37,121
65,391
12,163
3,810
4,768,350

24,730
3,239
22,961
17,540
5,421
18,143
534
5,297
12,313

17
1,251,988
145,655
770,009
13,279
564,241
127,030
65,459
100,807
3,057
64,480
8,619
24,651
2,257,805
45,952
729,439
15,071
5,519
26,054
14,686
250,200
1,170,885
311,132
157,078
3,172
32,397
37,121
65,391
12,163
3,810
4,837,423

69,073

65

 SCC
60
60.01
60.02
70
70.01
70.05
70.06
70.07
80
80.01
80.02
80.03
80.04
80.05
80.06
80.07
80.08
90
90
100

Description
ROW, Land, Existing Improvements
Purchase or lease of real estate
Relocation of existing households/businesses
Vehicles
Light Rail
Other
Non-revenue vehicles
Spare parts
Professional Services
Preliminary Engineering
Final Design
Project Management for Design/Construction
Construction Administration & Management
Professional Liability/Non-Construction Insurance
Legal; Permits; Review Fees by other agencies
Surveys, Testing, Investigation, Inspection
Start up
SUBTOTAL (10 - 80)
Unallocated Contingency
Latent Contingency
SUBTOTAL (10 - 90)
Finance Charges
TOTAL PROJECT COST (10 - 100)

HART Current
Budget
346,300
247,316
98,984
213,546
192,320
137
14,517
6,572
2,167,880
66,663
618,324
715,354
299,681
102,090
153,130
149,186
63,452
8,083,247
81,807
81,807
8,165,054
855,000
9,020,054

Allocated
Contingency
106,300
75,916
30,384
2,156
1,936
8
146
66
126,975
51,122
31,994
21,041
4,000
10,680
7,499
639
822,602
81,807
81,807
904,409
904,409

Total w/o
Contingency
240,000
171,400
68,600
211,390
190,384
129
14,371
6,506
2,040,905
66,663
567,202
683,361
278,640
98,090
142,449
141,687
62,813
7,260,645
7,260,645
855,000
8,115,645

PMOC
Adjustments
75,800
54,134
21,666
59,027
9,427
27,600
12,642
9,358
203,900
203,900
203,900

Adjusted
BCE
315,800
225,534
90,266
211,390
190,384
129
14,371
6,506
2,099,932
66,663
576,629
710,961
291,282
98,090
142,449
151,044
62,813
7,464,545
7,464,545
855,000
8,319,545

All values in $1,000

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 Table 16 presents the Adjusted Stripped Base Cost Estimate (BCE).
Table 16.

7.5

Adjusted Stripped BCE

HART Estimate
Allocated Contingency (PMOC Calculation)
Unallocated Contingency
Financing
TOTAL

7,260,645
$822,602
$81,807
$855,000
$9,020,054

Stripped Cost
HART Forecast Change Orders
PMOC Adjustments
Adjusted Stripped BCE
Incurred Costs (through April 2018)
All values in $1,000

$7,260,645
Included
$203,900
$7,464,545
$3,124,705

Recommendations
(1)
(2)
(3)
(4)
(5)
(6)
(7)

Prepare detailed cost estimates for all identified potential or possible contract
change orders.
Update CCGS estimate to allow for potential mitigation measures.
Refresh ROW estimate to reflect current property costs and include costs for
Temporary Construction Easements and other impacts, specifically for CCGS.
Update manpower charts to account for new positions and reflect current MPIS to
validate SCC 80 costs are accurate.
Verify budgets and any ongoing estimate refreshes include adequate funds for
escalation.
Revise any budgets or contracts impacted by the revised RSD as shown in the
update to the MPIS.
Reconcile coding of SCC line items. This effort will ensure budget, contract and
EAC forecast utilize the same “base” information and are appropriately coded to
ensure accurate monthly reporting and for inclusion in Before & After Study
Report.

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 8.0

COST RISK ANALYSIS

8.1

Purpose

Per FTA OP 40, the PMOC has performed “an evaluation of the reliability of the project
sponsor’s project scope, cost estimate, and schedule, with special focus on the elements of
uncertainty associated with the effectiveness and efficiency of the project sponsor’s project
implementation and within the context of the surrounding project conditions.” Through the
process of risk and contingency review, the PMOC attempts to aid the project sponsor in its
efforts to better define the project’s risks and to provide avenues for recovery should those risks
become reality.
The purpose of this report is to provide a refresh of recommendations for adjustments to scope,
cost, schedule, and project delivery options and to consider risk identification and risk mitigation
options and alternatives, particularly regarding contingencies, in order to respond to established
project risks. This report is produced to establish the Project’s ability to complete on time and
within the identified budget. This report is based on information provided by HART in May
2018.
8.2

Methodology

This section describes the review and evaluation methodology utilized by the PMOC with
regards to HART’s identification of project risk and its plans for mitigating and managing these
risks, including the use of schedule and cost contingencies.
The PMOC is required to synthesize available project information, explore and analyze
uncertainties and risks, and provide a qualitative and quantitative assessment of ranges of
forecasted cost and schedule. The PMOC reviewed risk mitigation options and alternatives,
including use of cost and schedule contingencies.
The risk refresh requires an evaluation of the reliability of HART’s project scope, cost estimate,
and schedule, with specific focus on the elements of uncertainty normally associated with the
implementation of the project. The PMOC reviewed scope, cost, and schedule documents and
presented these reviews in separate sections within this report. The objective of this refresh is to
assess changes in the project risks and uncertainties associated with project conditions and the
effectiveness and efficiency of project implementation in identifying and mitigating risks in
regard to scope, cost and schedule. This report provides a qualitative and quantitative
assessment of the ranges of forecasted cost and schedule and project management planning in
order to respond to project risk. The PMOC’s refresh is understood to be a critical input to
FTA’s decision regarding project advancement and funding.
In February 2018, the PMOC participated in a risk refresh workshop with HART, the purpose of
which was to discuss HART’s progress in its risk management efforts and PMOC’s observations
and reflections from its initial review of HART’s updated scope, cost, schedule, and risk
information. The PMOC has subsequently performed regular monitoring visits to the project and
has refreshed its earlier risk assessment based upon an updated understanding of project risks and
updated schedule and cost information provided by HART.
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 During and subsequent to the February 2018 risk workshop, information was provided indicating
that HART was aware of additional costs or deduction that should be included, which the PMOC
incorporated along with its own independent estimate adjustments. The PMOC has prepared this
risk refresh based upon additional information provided by HART through May 2018.
For the purposes of its risk refresh, the PMOC considered the project in four separate elements,
which are termed here as “risk profiles”:




8.3

Risk Profile 1 is associated with direct work contracts that are 90% or more complete.
Risk Profile 2 is associated with contracted and in progress direct cost work less than
90% complete.
Risk Profile 3 is associated with yet-to-be-contracted direct cost work.
Risk Profile 4 is associated with “soft costs.”
Risk Identification

The PMOC has reviewed HART’s updated risk register and has found that HART has
represented risk directly related to the work. The risk register includes magnitude and likelihood
estimates that are based on much improved risk management techniques since the prior 2016
PMOC review. The HART Risk and Contingency Management Plan (RCMP) has been updated
to provide an improved description of risk management policies that if fully implemented should
act as a safeguard to proactively determine whether current and future risk threatens the project.
Full implementation of this effort will require strong management priority to prevent concerns
over budget increases from influencing the candid exposure of project risk that may threaten the
current project budget. In regard to this, HART responds that “HART leadership has instituted
an improved approach of managing to budget and schedule, including incorporation of
mitigation measures, value engineering, and other actions that support effective project and
construction management.”; and “HART recognizes the challenges ahead and is therefore
vigorously employing actions to contain and/or mitigate costs, avoid “scope creep,” and make a
robust commitment to schedule adherence in order to deliver the project as stipulated with a
Revenue Service Date of December 2025 and within the established budget of $8.165 billion.”
Significant project risks include:




Management Capacity and Capability:
o Frequently changing administrative influence on the project management process
due to funding or other concerns
o Staff instability and lack of availability of replacement staff with technical
experience
o Concerns regarding effective management, contract administration,
empowerment, and training
o Contract close-out backlog threatens staffing efficiency
o Potential for reduction of active, independent risk management as the project
moves forward
Uncertainties surrounding final negotiations with HECO about scope and timing for
utility relocations.

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 






8.4

Uncertain construction bidding market conditions, especially as the project moves toward
the highly-urbanized environment of downtown Honolulu and multiple project delivery
systems are simultaneously considered for this work.
Potential delays may occur during the CCUR Contract due to continued right-of-way
easements and acquisitions and efforts to finalize design.
Cost increases due to final project acquisition negotiations.
Interferences with City Center construction process due to maintenance of traffic,
business disruption, or unexpected utilities.
Interferences by the alignment and stations contractors with the Core Systems Contractor,
or systems construction progress delays.
Contractors seeking currently unaccounted additional compensation for change orders
and claims.
Cost Risk Assessment

This section includes the PMOC refresh of the cost risk of the project, based on the PMOC’s
review of HART’s EAC. This section also describes the risk-based Beta Range Factor (BRF)
assignments and adjustments for the SCC Risk Assessment utilized in the FTA Risk and
Contingency Review Workbook. Such adjustments are the result of investigation of projectspecific information and are the result of information across many aspects of the project,
including those described in the various sections of this report. Below, the cost risk evaluation is
described, and the results are reported.
8.4.1

Methodology

Cost risk evaluation is a combination of the PMOC’s professional judgment and objective cost
data to summarize and adjust HART’s cost estimate. This is in addition to a rational and
empirical application of a risk model analysis used to simulate the magnitude of project risk and
establish the potential responses to manage the risk. In the context of the project risk evaluation,
quantitative risk assessment is utilized in the analysis of risk exposure and the corresponding
management of uncertainty. The PMOC utilized the following steps for the cost risk analysis of
the project:
(1)
(2)
(3)
(4)
(5)

Categorized the current HART project estimate (outlined in Section 7) into the
four risk profiles noted above in appropriate SCC breakdowns. Included in these
breakdowns were the expenditure amounts through May 2018
Removed all patent HART allocated and unallocated contingency; no latent
contingency was discovered in the estimate, resulting in a stripped estimate for
each profile
Adjusted each stripped estimate by adding in those cost adjustments noted in
Section 7.0, resulting in an adjusted estimate
Loaded each profile with risk range values (“Beta values”) appropriate to the
stage of completion of each risk profile, as described below
Added further global and specific risk range adjustments based upon specific
extraordinary risks noted on the project, also as detailed below.

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 8.4.2

SCC Adjustments

The PMOC used its professional judgment as well as an evaluation of objective data to develop
its assessment of the Project costs and to develop the indicated adjustments. Adjustments noted
below include changes proposed by the PMOC as well as changes proposed by HART, largely as
a result of investigation of the project during this risk review cycle and including information
provided related to the February 2018 Risk Refresh Workshop and information provided
subsequent to that workshop. See Table 17 for a summary of PMOC/HART adjusted project
costs by major SCC.
The Adjusted Estimate represents the stripped project cost in Year of Expenditure dollars
($YOE). The first $YOE column represents HART’s EAC with contingency removed and
adjusted by the PMOC for known, unexecuted changes; the second column represents further
PMOC adjustments; the final column represents the PMOC-adjusted project EAC, stripped of
contingencies. The PMOC recommends an adjustment to the base cost estimate in the amount of
$203.9 million. Details of the adjustments are discussed in Section 7 of this report. The final
(Adjusted Estimate) column forms the Lower Bound basis for the risk assessment. Note that
Finance Costs are not included in this risk assessment.

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PMOC Report – 2018 Risk Refresh
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 Table 17.

PMOC Adjustments to HART Estimate $YOE
YOE Dollars

Standard SCC codes
SCC
SCC 10
10.02
10.04
10.09
SCC 20
20.01
20.02
20.04
20.07
SCC 30
30.02
30.03
30.04
30.05
SCC 40
40.01
40.02
40.03
40.04
40.05
40.06
40.07
40.08
SCC 50
50.01
50.02
50.03
50.04
50.05
50.06
50.07
SCC 60
60.01
60.02
SCC 70
70.01
70.05
70.06
70.07
SCC 80
80.01
80.02
80.03
80.04
80.05
80.06
80.07
80.08

Category
Guideway
Guideway: At-grade semi-exclusive (allows cross-traffic)
Guideway: Aerial structure
Track: Direct fixation
Stations, Stops, Terminals, Intermodals
At-grade station, stop, shelter, mall, terminal, platform
Aerial station, stop, shelter, mall, terminal, platform
Other stations, landings, terminals: Intermodal, ferry, trolley, etc.
Elevators, escalators
Support Facilities: Yards, Shops and Admin Bldgs
Light Maintenance Facility
Heavy Maintenance Facility
Storage or Maintenance of Way Building
Yard and Yard Track
Sitework and Special Conditions
Demolition, Clearing, Earthwork
Site Utilities, Utility Relocation
Haz. mat'l, contam'd soil removal/mitigation, ground water treatments
Environmental mitigation, e.g. wetlands, historic/archeologic, parks
Site structures including retaining walls, sound walls
Pedestrian / bike access and accommodation, landscaping
Automobile, bus, van accessways including roads, parking lots
Temporary Facilities and other indirect costs during construction
Systems
Train control and signals
Traffic signals and crossing protection
Traction power supply: substations
Traction power distribution: catenary and third rail
Communications
Fare collection system and equipment
Central Control
ROW, Land and existing improvements
Purchase or lease of real estate
Relocation of existing households and businesses
Vehicles
Light Rail
Other
Non-revenue vehicles
Spare parts
Professional services and Agency costs
Project Development
Engineering
Project Management for Design and Construction
Construction Administration & Management
Professional Liability and other Non-Construction Insurance
Legal; Permits; Review Fees by other agencies, cities, etc.
Surveys, Testing, Investigation, Inspection
Start up
SCC 10-80 total

Calculate YOE adjusted estimate
HART stripped
estimate
1,369,701
17
1,227,258
142,426
747,048
13,279
546,701
121,609
65,459
100,807
3,057
64,480
8,619
24,651
2,239,662
45,419
729,439
15,071
5,519
26,054
14,686
244,903
1,158,572
311,132
157,078
3,172
32,397
37,121
65,391
12,163
3,810
240,000
171,400
68,600

YOE PMOC
Adjustments
27,969
0
24,730
3,239
22,961
0
17,540
5,421
0
0
0
0
0
0
18,143
534
0
0
0
0
0
5,297
12,313
0
0
0
0
0
0
0
0
75,800
54,134
21,666

Adjusted estimate
1,397,670
17
1,251,988
145,665
770,009
13,279
564,241
127,030
65,459
100,807
3,057
64,480
8,619
24,651
2,257,805
45,952
729,439
15,071
5,519
26,054
14,686
250,200
1,170,885
311,132
157,078
3,172
32,397
37,121
65,391
12,163
3,810
315,800
225,534
90,266

211,390
190,384
129
14,371
6,506
2,040,905
66,663
567,202
683,361
278,640
98,090
142,449
141,687
62,813
7,260,645

0
0
0
0
0
59,027
0
9,427
27,600
12,642
0
0
9,358
0
203,900

211,390
190,384
129
14,371
6,506
2,099,932
66,663
576,629
710,961
291,282
98,090
142,449
151,045
62,813
7,464,545

All values in $1,000

8.4.3

Baseline Beta Values

For each risk profile, the starting point for the Beta values in this risk assessment was based on
the Beta values appropriate to the level of development for each risk profile and is shown by
major SCC category in the tables below. These values are developed from FTA standards,
adjusted in consideration of advancements in the stage of project, and in consideration of the
current level of estimate. Table 18 through Table 21 indicates the starting Beta values.

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June 2018 (FINAL)

72

 In the following tables:





R represents requirements risk
D represents Design risk
M represents market risk
C resents construction risk

Note that each Total Beta includes the standard 0.05 increment for post-construction risk and that
the Total Beta is the sum of the individual Beta increments, plus the value of 1.
Table 18.
SCC

Imported Beta Values for Risk Profile 1
R

D

M

C

Total
Beta
1.60

SCC 10, 30-50
0.00
0.00
0.10
0.45
SCC 20
Not applicable
SCC 60
Not applicable
SCC 70
0.00
0.00
0.10
0.25
1.40
SCC 80
Not applicable
R = Requirements Risk D = Design Risk
M = Market Risk
C = Construction Risk
Total Beta = 1 + (R + D + M + C+.05)
Above SCC 10-50 values reduced by percent complete by SCC

Table 19.
SCC

Imported Beta Values for Risk Profile 2
R

D

M

C

Total
Beta
1.60

SCC 10, 20, 40,
0.00
0.00
0.10
0.45
50
SCC 30
Not applicable
SCC 60
0.00
0.25
0.50
0.25
2.05
SCC 70
0.00
0.05
0.15
0.25
1.50
SCC 80
Not applicable
R = Requirements Risk D = Design Risk
M = Market Risk
C = Construction Risk
Total Beta = 1 + (R + D + M + C+.05)
Above SCC 10-50 values reduced by percent complete by SCC

Table 20.
SCC

Imported Beta Values for Risk Profile 3
R

D

M

C

Total
Beta
2.00

SCC 10, 20, 40,
0.00
0.25
0.25
0.45
50
SCC 30
Not applicable
SCC 60
Not applicable
SCC 70
Not applicable
SCC 80
Not applicable
R = Requirements Risk D = Design Risk
M = Market Risk
C = Construction Risk
Total Beta = 1 + (R + D + M + C+.05)

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 Table 21.
SCC

Imported Beta Values for Risk Profile 4
R

D

M

C

Total
Beta

SCC 10-50
Not applicable
SCC 70
Not applicable
SCC 80.01
0.00
0.00
0.00
0.00
1.05
SCC 80.02
0.00
0.13
0.13
0.10
1.40
SCC 80.03
0.00
0.20
0.13
0.20
1.58
SCC 80.04
0.00
0.23
0.23
0.35
1.85
SCC 80.05
0.00
0.03
0.03
0.15
1.25
SCC 80.06
0.00
0.13
0.08
0.15
1.40
SCC 80.07
0.00
0.15
0.15
0.30
1.65
SCC 80.08
0.00
0.40
0.25
0.60
2.30
R = Requirements Risk D = Design Risk
M = Market Risk
C = Construction Risk
Total Beta = 1 + (R + D + M + C+.05)

Beta values for the current project were developed based on a refreshed view of the Scope, Cost,
and Schedule risks identified in the project, informed by regular PMOC site visits and project
reviews. The Beta values were adjusted by the PMOC team as indicated below. Note that the
Beta value adjustments occurred independently for each Risk Profile as applicable. These Beta
values were assigned as outlined in FTA OP 40, and generally fall within ranges expected for
this character of project. Beta values were applied at the second level SCC structure. Table 22
indicates the final Beta values included in this assessment. Detail for the SCC adjustments
follows Table 22.

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PMOC Report – 2018 Risk Refresh
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 Table 22.

Beta Values Risk Refresh

SCC

Description

10
10.02
10.04
10.08
10.09
10.11
10.12
20
20.01
20.02
20.04
20.07
30
30.02
30.03
30.04
30.05
40
40.01
40.02
40.03
40.04
40.05
40.06
40.07
40.08
50
50.01
50.02
50.03
50.04
50.05
50.06
50.07
60
60.01
60.02
70
70.01
70.05
70.06
70.07
80
80.01
80.02
80.03
80.04
80.05
80.06
80.07
80.08

Guideway& Track Elements (Route Miles)
Guideway: Semi-exclusive
Guideway: Aerial structure
Guideway: Retained cut or fill
Track: Direct fixation
Track: Ballasted
Track: Special (switches, turnouts)
Stations, Stops, Terminals, Intermodals
At-grade station, stop, shelter, mall, terminal, platform
Aerial station, stop, shelter, mall, terminal, platform
Other stations, landings, terminals: Intermodal, ferry, trolley, etc.
Elevators, escalators
Support Facilities: Yards, Shops, Admin. Bldgs.
Light Maintenance Facility
Heavy Maintenance Facility
Storage or Maintenance of Way Building
Yard and Yard Track
Sitework& Special Conditions
Demolition, Clearing, Earthwork
Site Utilities, Utility Relocation
Haz. mat'l, contam'd soil removal/mitigation, ground water treatments
Environmental mitigation, e.g. wetlands, historic/archeological, parks
Site structures including retaining walls, sound walls
Pedestrian / bike access and accommodation, landscaping
Automobile, bus, van accessways including roads, parking lots
Temporary Facilities and other indirect costs during construction
Systems
Train control and signals
Traffic signals and crossing protection
Traction power supply: substations
Traction power distribution: catenary and third rail
Communications
Fare collection system and equipment
Central Control
ROW, Land, Existing Improvements
Purchase or lease of real estate
Relocation of existing households and businesses
Vehicles
Other
Non-revenue vehicles
Spare parts
Professional Services
Preliminary Engineering
Final Design
Project Management for Design and Construction
Construction Administration & Management
Professional Liability and other Non-Construction Insurance
Legal; Permits; Review Fees by other agencies, cities, etc.
Surveys, Testing, Investigation, Inspection
Start up

Honolulu Rail Transit Project
PMOC Report – 2018 Risk Refresh
June 2018 (FINAL)

Risk
Profile 1

Risk
Profile 2

Risk
Profile 3

Risk
Profile 4

1.05
1.07
1.06
-

1.65
1.64
-

2.49
2.49
-

-

-

1.52
1.58
1.60

2.49
2.49
-

-

1.05
1.05
1.05
1.05

-

-

-

1.06
1.07
1.12
1.09
1.07
1.06
1.07
1.06

1.37
1.65
1.75
1.58
1.73
1.74
1.54
1.37

2.49
2.49
2.49
2.49
2.49

-

1.05
1.09
1.06
1.05
1.05
-

1.76
2.10
1.74
1.57
1.64
1.51
1.28

2.49
-

-

-

2.30
2.30

-

-

1.40
-

1.40
1.50
1.40

-

-

-

-

-

1.05
1.45
1.63
1.90
1.25
1.40
1.65
2.30

-

75

 8.4.4

Beta Value Adjustments

Significant issues noted in the scope, cost, and schedule reviews are reflected in the risk
assessment model by means of adjustments to the risk Beta factors () applied to each SCC subcategory. These adjustments result in forecasts of ranges of cost for the project. Standard FTA
Beta values incorporate an expectation of common risks that occur across transit projects; Beta
adjustments below reflect those increases or decreases in risk that differ from risks occurring
within standard Beta values.
The following sections present detail regarding the basis for global and specific adjustments that
yield the final total Beta values, reflected previously in Table 22.
SCC Wide Beta Value Changes
System-wide Beta adjustments were made to several Risk Profiles:








Risk Profile 1 (contracts >90% complete):
o All partial Beta values were reduced to reflect the completion status of each SCC
sub-line item.
o Requirements risk increased by 0.15 to reflect risk related to risks due to
management capacity and capability as noted above.
Risk Profile 2 (contracts <90% complete):
o All partial Beta values were reduced to reflect the completion status of the SCC
sub-line item.
o Requirements risk increased by 0.15 to reflect risk related to risks due to
management capacity and capability as noted above.
Risk Profile 3 (uncontracted work):
o Requirements risk increased by 0.19 to reflect risk related to risks due to
management capacity and capability as noted above.
o Design risk reduced by 0.05 to reflect design status.
o Market risk increased by 0.35 to reflect increased sense of bidder risk due to
oncoming work in highly urbanized environment and nationally escalating
environment.
Risk Profile 4 (professional services):
o No global Beta adjustments applied.

SCC-Specific Beta Value Changes
The following issues determined the final resulting Beta values for the SCC sub-categories,
which are the Beta values that reflect risk across all four categories of Requirements, Design,
Market, and Construction risk, including the general Beta value increases previously noted in the
section above. Noted below are only those conditions where exceptional changes to the standard
Betas were noted. “Normal” risks associated with similar construction are accounted for in the
base risk model.
Risk Profile 1:
 SCC-10 – 70
o No Specific Beta Value Changes.
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76

 Risk Profile 2:
 SCC-10 – 40
o No Specific Beta Value Changes.
 SCC-50 – Systems
o Construction Risk, SCC 50.01 through 50.05 increase by 0.35 to reflect strong
risk of future changes resulting from interference of other contracts.
 SCC-70 – Vehicles (Risk Profile 1)
o Market Risk, SCC 70.01 & 70.07 decrease by 0.10 to reflect status that vehicles
have recently started delivery, but yet remain untested.
Risk Profile 3:
 SCC-10 – 60
o No Specific Beta Value Changes.
Risk Profile 4:
 SCC-80 – Soft costs
o Construction Risk, SCC 80.02 through 80.04 increase by 0.05 to reflect strong
risk of multiple staffing changes and inefficiencies as noted earlier.
Several concerning risks were noted, but not used as a basis for Beta value adjustments. It is
expected that—in addition to the risks noted for which cost-risk Beta adjustments were made—
these risks will receive significant risk management and mitigation focus. These risks include
the following:



Uncertainties surrounding negotiations with HECO about scope and timing for utility
relocations
Contractors seeking unaccounted additional compensation for current change orders and
claims

Failure to significantly reduce these risks may cause project cost increases above those modeled
in this report.
8.4.5

Cost Risk Analysis

This section presents the PMOC’s analysis of the model-based Project Cost Risk Assessment
based on the FTA Risk and Contingency Review Workbook (version 4.0), utilizing the projectadjusted BRFs. This workbook is based on the summary organizational structure of the FTA
SCC 10 through 80 for the capital cost elements of a project. SCC 90 (contingency) is
specifically excluded as a duplicate measure of risk. Risk for SCC 100 (finance charges) is not
covered in the standard FTA risk range factors. Project-level risk is an aggregated amount of the
risk associated with all of the SCC Ranges.
Using the Beta values in Table 22, a simulation project risk model was developed; Table 23
presents the corresponding numeric data results from the risk model.

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 Table 23.

Risk Model Data

YOE Sponsor values

Part 1

Part 2

Sponsor total estimate (SCC 10-90) (42%ile)
Sponsor exposed contingency
Sponsor stripped estimate (SCC 10-80)
Latent Contingency
EAC stripped estimate

Mostly complete
>90%
1,321,868
46,414
1,275,454
0
1,275,454

In construction
<90%
3,268,891
465,598
2,803,293
0
2,803,293

Not bid
1,388,045
247,052
1,140,993
0
1,140,993

Soft costs
2,186,250
145,345
2,040,905
0
2,040,905

0
0
1,275,454

0
75,800
2,879,093

0
69,073
1,210,066

0
59,027
2,099,932

Overall
8,165,054
904,409
7,260,645
0
7,260,645

Secondary mitigation
YOE PMOC values
Inflation Adjustment
Adjustments
Adjusted estimate

Risk analysis
Lower report range value (40%ile)
Median value (50%ile)
Upper mid value (65%ile)
Upper range reporting amount (80%ile)

Part 4

0

0
203,900
7,464,545

Percent complete
Funding value @ (50%ile) &
Secondary Mtigation Level (65%ile)
Funding value (50%ile)
Base Funded Contingency amount
Contingency %
Secondary Mtigation Level (65%ile)
Secondary mitigation target amount
Secondary mitigation %
Secondary mitigation provided

Part 3

98%

26%

0%

54%

8,298,555
834,010
11%
8,575,587
277,032
4%
0

1,291,726
16,272
1%
1,297,130
5,405
0%

3,266,924
387,831
13%
3,395,750
128,825
4%

1,568,601
358,534
30%
1,687,694
119,094
10%

2,344,654
244,722
12%
2,425,943
81,289
4%

8,138,317
8,298,555
8,575,587
8,944,814

1,288,599
1,291,726
1,297,130
1,304,334

3,192,410
3,266,924
3,395,750
3,567,447

1,499,716
1,568,601
1,687,694
1,846,422

2,297,635
2,344,654
2,425,943
2,534,284

All values in $1,000; excludes finance costs.

This analysis indicates a recommended budget of $8.299 billion (excluding finance) to maintain
a project protect level at p50, compared to the current HART EAC of $8.165 billion (excluding
finance), which falls at p42. Further analysis of these amounts is provided in sections below.
Figure 17 shows these values graphically.

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78

 Probability distrbution
100%
90%
80%
70%
60%
50%

Modeled p50
HART EAC p42

40%
30%
20%
10%
0%
7,000.00

8,000.00

9,000.00

10,000.00

11,000.00

12,000.00
Millions

Figure 17.
8.4.6

Cost Risk Model Results

Cost Contingency

In its latest EAC, HART identified YOE $904 million in allocated and unallocated contingency
included within its total EAC of $8.165 billion (excluding finance), indicating a HART stripped
estimate of $7.261 billion. The PMOC found no additional latent contingency. The PMOC
made $204 million in adjustments to the HART stripped estimate, indicating a stripped and
adjusted estimate of $7.465 billion. This amount is reflected in Table 23.
The PMOC prepared a risk assessment by Risk Profile as previously described. At this risk
refresh, the PMOC recommends a funded contingency at p50 of approximately 11%, or $834
million, be added to the stripped and adjusted estimate of $7.465 billion equating to an overall
recommended budget of $8.299 billion (excluding finance).
Project contingency has faced significant challenges, and historically the drawdown of
contingency has not been effectively tracked by the project; often in the past it has been ignored.
As of the date of this report, HART has committed to develop an effective contingency
drawdown control curve and has committed to tracking remaining contingency against that
control curve. A conference call was held on April 25, 2018 to discuss contingency drawdown
curves. The outcome of the call was positive in that HART intends to move forward with a
robust method for developing and tracking contingency drawdown (both cost and schedule). It is
strongly recommended that this system be fully implemented as soon as feasible.
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79

 8.5

Risk Mitigation

8.5.1

Primary Mitigation

HART has developed a robust risk register that includes identification of project risks and has in
recent times been updated with reasonable regularity. Development of a formal Risk and
Contingency Management Plan (RCMP) as an integral part of HART’s PMP is expected,
including establishment within HART’s organization of authority to ensure that the RCMP is
well-managed. HART has provided updated versions of its RCMP including updates to its
procedures and in response to suggestions provided by the PMOC. HART has pointed to several
instances where recent pro-active risk management has led to strategies designed to reduce risk,
including the commendable early contracting for resolving utility interferences ahead of the
contracting for the City Center Guideway and Stations contract. It is recommended that a
continued emphasis be maintained to manage and track additional actions needed to pro-actively
resolve future risks once they are identified.
Historically, this project has required significant infusions of local funding to resolve frequent
underfunding conditions. The result has been strain that bears pressure upon the project
administration and staffing to restrain cost increases. Independent reporting of project cost risk
and remaining contingency levels should remain at a management level.
8.5.2

Secondary Mitigation

Secondary mitigation consists of pre-planned potential scope or process changes that may be
triggered when risk events occur that cause overruns that cannot be resolved by available project
contingency. It is noted that Secondary Mitigation is not to be confused with a value engineering
exercise. Value engineering is a formal, systematic, multi-disciplined process designed to
optimize the value of each dollar spent.
Secondary mitigation is difficult to cost-effectively obtain at this stage where major portions of
the project are already contracted for construction and design is largely complete. However, the
upcoming major City Center work provides a significant opportunity for Secondary Mitigation
items that may be priced at market levels. In order to preserve these opportunities, the items
must be defined before the procurement and identified as potential future deductive alternates.
A preliminary list of potential Secondary Mitigation items was presented by HART during a
workshop in May 2018. The proposed list of measures included the following information: title
(description); cost reduction potential and general estimating assumption; review team comments
(e.g. impacts to environmental, operations, schedule, FFGA, etc.); and a target decision date.
However, this list has not been fully vetted by executive management and is subject to revision.
Additionally, several of target decision dates are listed as occurring between May and July 2018.
This means that these measures may be expired options if not triggered in the near term,
becoming unavailable to any future event that may require a replenishment of contingency.
Upon review and approval of the preliminary list from executive management, HART must
develop detailed scope, schedule impacts, and cost estimates for any secondary mitigation
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 measure that is deemed viable. This is critical to ensure HART has the capacity to complete the
project if there is a drawdown of contingency greater than planned per the Risk and Contingency
Management Plan.
A potential level of Secondary Mitigation protection is the p65 level, is suggested in Table 23;
should this level be desired, the amount of Secondary Mitigation to be developed would be $277
million.
8.6

Conclusion

During the February 2018 risk workshop, it became clear that HART had begun to advance it’s
cost and risk tracking procedures to become more aware of the cost implications and to begin to
develop a more robust system to respond to and resolve known risks. In the prior major
FTA/PMOC risk review, these measures were severely lacking. These improved efforts are a
positive development toward project cost-risk protection. The project has experienced and is
expected to experience significant challenges as it moves toward the next phase of completion.
Continuation of integration of visible and independent risk management into the project is an
important safeguard.
The PMOC separated the project into four distinct risk profiles to better model the effect of risk
upon the project. The cost risk assessment recognized general reductions in risk due to
advancement of construction and design. However, concerns that relate to historically
experienced issues of management capability and capacity, market conditions, and construction
complexities—especially as the project proceeds toward downtown Honolulu—are expected to
continue and are factored into the risk analysis.
It is recognized that efforts have been made to recover contingency levels through cost reduction
measures, value engineering, and revised project delivery strategies. However, these types of
changes are increasingly less likely and less effective.
The risk analysis indicates a recommended budget of $8.299 billion (excluding finance) to
maintain a project protect level at p50, compared to the current HART EAC of $8.165 billion
(excluding finance), which falls at p42. With $855 million in finance costs the total project cost
would be $9.154 billion. However, this report does not analyze any potential changes to finance
costs based on the higher capital costs. HART’s current EAC falls short of the p50 predicted
FTA model outcome by $134 million.
Secondary mitigation is difficult to cost-effectively obtain at this stage where major portions of
the project are already contracted for construction and design is largely complete. However, the
upcoming major City Center work provides a significant opportunity for Secondary Mitigation
items that may be priced at market levels. It is recognized that Secondary Mitigation
opportunities have been proposed, but of many items have not been fully vetted by executive
management and many indicate target decision dates that are immediately upcoming or past. In
order to preserve these opportunities, the items must be defined before the procurement and
identified as potential future deductive alternates. A potential level of Secondary Mitigation
protection is the p65 level, as indicated in Table 23; should this level be desired, the amount of
Secondary Mitigation to be developed would be $277 million, assumed the project is funded to
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 the p50 level indicated.
8.7

Recommendations
(1)

(2)

(3)

(4)

(5)

At this risk refresh, the PMOC recommends a funded contingency at p50 of
approximately 11%, or $834 million, be added to the stripped and adjusted
estimate of $7.465 billion equating to an overall recommended budget of $8.299
billion (excluding finance).
HART has committed to develop an effective contingency drawdown control
curve and has committed to tracking remaining contingency against that control
curve. It is strongly recommended that this system be fully implemented as soon
as feasible.
The recommended amount of budget increase reflects the condition of no viable
Secondary Mitigation being presented. However, the upcoming major City
Center work provides a significant opportunity for Secondary Mitigation items
that may be priced at market levels. In order to preserve these opportunities, the
items must be defined before the procurement and identified as potential future
deductive alternates. A potential level of Secondary Mitigation protection is the
p65 level; should this level be desired, the amount of Secondary Mitigation to be
developed would be $277 million.
The HART Risk and Contingency Management Plan (RCMP) has been updated
to provide an improved description of risk management policies that if fully
implemented should act as a safeguard to proactively determine whether current
and future risk threatens the project. Full implementation of this effort will
require strong management priority, especially to prevent concerns over budget
increases from influencing the candid exposure of project risk.
It is recommended that continued emphasis be maintained to manage and track
the actions needed to proactively assess and resolve risks once they are identified.

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 9.0

LIST OF ACRONYMNS

AD/OD
▪
Actual Duration/Original Duration
AGS
▪
Airport Guideway and Stations
AHJV
▪
Ansaldo Honolulu Joint Venture
AIS
▪
Archaeological Inventory Survey
APS
▪
Adjusted Project Schedule
BCE
▪
Base Cost Estimate
BoE
▪
Basis of Estimate
BoS
▪
Basis of Schedule
BRF
▪
Beta Range Factor
CCGS
▪
City Center Guideway and Stations
CCO
▪
Contract Change Orders
CCUR
▪
City Center Utilities and Roadway
CE&I
▪
Construction Engineering & Inspection
CMP
▪
Construction Management Plan
CMS
▪
Contract Management System
CPM
▪
Critical Path Method
CPP
▪
Contract Packaging Plan
CPS
▪
Current Project Schedule
CSC
▪
Core Systems Contract
DB
▪
Design-Build
DBB
▪
Design-Bid-Build
DBFOM
▪
Design-Build-Finance-Operate and Maintain
DBOM
▪
Design-Build-Operate-Maintain
DTS
▪
Department of Transportation Services
EAC
▪
Estimate at Completion
EUM
▪
Estimate Uncertainty Model
FF
▪
Finish-to-Finish
FFGA
▪
Full Funding Grant Agreement
FHSG
▪
Farrington Highway Station Group
FTA
▪
Federal Transit Administration
FY
▪
Fiscal Year
GEC
▪
General Engineering Consultant
GET
▪
General Excise Tax
HART
▪
Honolulu Authority for Rapid Transportation
HDOT
▪
Hawaii Department of Transportation
HECO
▪
Hawaiian Electric Company
ICE
▪
Independent Cost Estimate
ID
▪
Identification
IFB
▪
Invitation to Bid
IRM
▪
Impacted Risk Model
IRM
▪
Impacted Risk Model
KH
▪
Kamehameha Highway
LRV
▪
Light Rail Vehicle
MCC
▪
Management Capacity and Capability
MPIS
▪
Master Project Integrated Schedule
MSF
▪
Maintenance & Storage Facility
NTI
▪
National Transit Institute
OCIP
▪
Owner Controlled Insurance Program
OD
▪
Original Duration
OP
▪
Oversight Procedure
P3
▪
Public-Private Partnership
PHPG
▪
Pearl Highlands Parking Garage
PMOC
▪
Project Management Oversight Contractor
PMP
▪
Project Management Plan
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 PMSC
PPP
PRA
RCMP
RD
RFP
ROD
ROW
RSD
SBS
SCC
SOA
SS
TAT
TSR
WBS
WOFH
YOE

▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪

Program Management Support Consultant
Public Private Partnership
Primavera Risk Analysis
Risk and Contingency Management Plan
remaining duration
Request for Proposals
Record of Decision
Right-of-Way
Revenue Service Date
Schedule Breakdown Structure
Standard Cost Category
State Oversight Agency
Start-to-Start
Transient Accommodations Tax
Technical Schedule Review
Work Breakdown Structure
West Oahu/Farrington Highway
Year of Expenditure

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