Less Risk, More Value with Alternative Delivery feat. Doug Gransberg (Ep. 7)

4M Utility Strategy Podcast Episode 7: Douglas Gransberg

Our seventh guest on the 4M Utility Strategy Podcast is Dr. Douglas Gransberg, an advocate for early collaboration and risk management to solve our complex infrastructure projects.

Douglas Gransberg, Ph.D., PE, M.ASCE is the president of Gransberg & Associates, Inc., a management consulting firm that specializes in structuring scope, cost, and schedule risk on complex infrastructure projects. His firm has worked on mega-projects throughout the US, as well as in Canada, Latin American, the Mideast, Europe, and Australasia. He is a retired US Army Corps of Engineers officer and an Emeritus Professor of Construction Engineering at the University of Oklahoma. His firm is currently providing risk management and alternative project delivery services to public agencies and private companies in California, Minnesota, Oregon, Texas, and Virginia, including nationwide infrastructure risk management contracts for the US Department of the Interior and Amtrak. He is the author of the NCHRP report Utility Coordination Using Alternative Contracting Methods, which provides guidelines for developing utility strategies for complex infrastructure projects.‍

Our conversation dives into the challenges we face to maintain and improve our current infrastructure, and how we can change our approach for better structural, financial, and social project outcomes. Dr. Gransberg talks about moving from design-centric to construction-centric planning through alternative project delivery. By bringing together project owners, designers, and contractors early in the process, we can address the huge risk factors posed by utilities to construction processes and minimize them or avoid them entirely. That also means rethinking our terms of efficiency and liability so that the overall project can be delivered more successfully.

Key Takeaways

The real utility risk is not the cost of fixing conflicts, it's the legal fees to determine who should pay.

Contractors are experts at dealing with tolerances, but they have very little margin for error when it comes to their bids.

Most of their budgets are based on the same material prices, wage structures, and capital costs for machinery. The main competitive differences come in the overheads, profits, and risks they calculate in their bid. The biggest risk is not whether or not they have to solve utility conflicts: it's whether or not they have to sue the project owner to recover unreasonable damages. By leaving subsurface utility conflicts up to contingency, we're wasting countless hours and dollars, and making adversaries when we could be collaborating much earlier in the project.

A reactive approach to utility conflicts is not a utility strategy.

A strategy is all about room to maneuver. It's like a football play: you can't run an offensive strategy without moving parts. So why do we settle for a losing strategy when it comes to utility coordination? It's a false economy to try to nail down a low-cost design before we have a full picture of the site conditions. If we only start to look for utilities once the design is underway, we limit our options to deal with utility conflicts. A utility strategy needs to start as early as possible in the project development to maximize our options to coordinate utilities. Ideally, we can avoid utility conflicts altogether by planning before the design has a final alignment or a final footprint. Rather than minimize the capital costs of the design, we can maximize our certainty of our schedule by investing in a little bit more scope.

It's easier to get the utility companies and contractors on board if we have a collaborative atmosphere.

A utility becomes a problem when you're out of other options. That's a significant risk for complicated projects today, with today's congested utility corridors and low-quality documentation. But what if we dealt with utilities through early collaboration rather than the blame game? Douglas talks about the benefits of alternative delivery: with early contractor involvement and designer-contractor cooperation, the owner can make a better-informed choice between thoughtfully priced alternatives based on known challenges. We can use the opportunity to negotiate our utility options in advance through planning, rather than negotiating utility problems through liability.

Co-hosts: David Horesh (Director of Marketing) and Ophir Wainer (Director of North American Business Development)

Just in case you missed it, in our previous podcast we had a fantastic talk with Geoff Zeiss on the state of utility locating and the future of utility mapping around the world.

And stay tuned! On our next utility strategy podcast, we're hosting Jim Schauer!

Questions? Suggestions? Want to nominate a fantastic guest for a future episode? Get in touch!

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