Center Identification Number: 77602
Project Title: Finding Ways to Reduce Insurance and Bonding Costs for Major Transit Projects
Janet L. Davis
Center for Urban Transportation Research
University of South Florida
External Project Contact:
Public Transportation Office / Transit Planning
I. Project Objective
This project would investigate the reasons behind the recent rising costs in insurance and bonding for transit projects and identify ways that transit agencies can minimize these costs in their major capital programs. The Federal Transit Administration (FTA) has expressed its concern over the escalating costs of major transit capital projects, particularly as the demand for federal capital transit dollars increases dramatically while available funds for such projects grow only modestly at best. It is also anticipated that there will be major transit capital projects undertaken in a number of Florida communities in the next five years, and results of this study can help to minimize the amount of state and local dollars required for insurance and bonding.
II. Project Abstract
The study will examine the history of several major transit construction projects and analyze the variables to identify the cost drivers. More importantly, it will provide best practices on how the costs for bonding and insurance for major transit capital projects can be lowered.
III. Task Descriptions
The proposed scope of services for this project consists of the following tasks.
Task 1 Literature Review
A comprehensive literature review shall be
conducted that will identify all articles that have been written on the
subject of insurance and bonding expenses associated with major transit
capital projects. Relevant literature pertaining to this subject shall be
compiled and summarized. The principle investigators shall explore all
sources available through the Internet as well as through traditional TRIS
sources. Additionally, the investigators also will take advantage of its
extensive connections to the transit community through its numerous
listservs, including the 190 transit managers who are part of the Leadership
APTA program, the 1500+ names that are on the Transportation Demand
Management listserv, and the 200+ people who subscribe to the National Bus
Rapid Transit Institute to help secure information on major transit capital
projects that are experiencing challenges in obtaining reasonable insurance
and bonding rates.
The research team shall stay in close touch
with the Federal Transit Administration offices at both the Washington and
regional levels throughout the course of the project. Staff members of FTA
are expected to be peer reviewers of the report and to offer guidance
throughout the project. The FTA staff will help to identify the projects
that have been most troublesome, and to identify the local transit managers
who have worked most closely with the issues associated with bonding and
insurance requirements and costs. In addition, the CUTR research team shall
work with the most appropriate official identified by FDOT who is familiar
with the costs associated with major capital projects to ensure that that
agency’s concerns are addressed through the report. With the consent of FTA
staff, CUTR researchers shall invite stakeholders identified in this project
to meet at the offices of the FTA to discuss preliminary findings of the
research and to share from their perspectives their ideas on how the costs
of insurance and bonding could be reduced.
The information gathered from industry contacts and FTA staff will make a formal survey instrument unnecessary. Surveys are often burdensome to the transit industry and often submitted in incomplete fashion. The information sought is not “yes or no” in nature, and more in depth questions need to be asked. Through direct contact, the project staff shall gather information regarding the types of transit projects undertaken, the circumstances and environment that the project was built in, the total project costs, the cost of insurance and bonding, and whether there were issues regarding the costs of insurance and bonding.
CUTR project staff shall attempt to
determine if the costs for insurance and bonding were disproportionate, and
if so, identify the reasons for the higher-than-expected costs. This task
will also include discussions with financial representatives of loaning
institutions in the area and with construction management firms to gain a
broader understanding and perspective of the causes for high insurance and
bonding. If enough positive responses are received, CUTR project staff will
visit FTA and shall organize a round table discussion with representatives
of transit project managers, insurance agencies, bonding agencies,
construction contractors, and the FDOT project manager to bring as many
issues out in the open as possible to see if common understandings and
solutions can be identified. Most importantly, this task will identify
techniques that transit agencies have used to minimize the costs of bonding
and insurance, or new methods that have been suggested by others that have
been contacted through this project. If necessary, experience gained through
other transportation projects, such as road or bridge construction, will
also be sought if the issues are similar, to gain additional insight into
the dynamics of the costs of bonding and insurance.
A final report shall be compiled that will include an introductory section, and separate chapters summarizing all data compilation/analysis and findings from Task 3. A concluding section will provide an overall summary and insight gained from the project as a whole. Drafts of the report shall be reviewed by the project panel throughout the project, with a month at the end of the project for final review. A PowerPoint presentation shall be developed summarizing the findings of the study. In addition, invitations will be extended to professionals with special insights into the issues of bonding and insurance to submit white papers that can be included as appendices to the report.
There will be four deliverables for this project. The first three deliverables will be progress reports for Tasks 1,2 and 3. The fourth deliverable will be the “Final Report”, in both draft and final forms. Once approved by the FDOT Project Manager and the Research Office, fifty copies of the final report and technical memorandums shall be provided on compact discs to the FDOT Project Manager.
IV. Project Schedule
V. Project Budget
Notes: The project team will include faculty, students, and secretarial and other support staff who will work directly on the project and whose costs are reflected in the direct costs of the project as listed above. Budget request includes salary for clerical and administrative staff, postage, local telephone service, office supplies, general purpose software, subscriptions, and/or memberships.
Domestic travel is budgeted to include 5 person trips at $300 each to meet with various parties regarding survey design and access to driver information. Travel will be in state.
VI. Student Involvement
Graduate students may provide assistance with the literature review, research and data collection, qualitative and quantitative analyses, and/or report writing.
VII. Technology Transfer Activities
VIII. Potential Benefits of the Project
IX. TRB Keywords
National Center for Transit Research · at the Center For Urban Transportation Research · University of South Florida · 4202 E. Fowler Ave., CUT100 · Tampa, FL 33620-5375 · (813) 974-3120 · (813) 974-5168 · www.nctr.usf.edu · Comments: email@example.com