easement acquisition. In the past, the Town has been able to
successfully secure easements for similar projects. However,
for a project of this magnitude it can be expected that some
easements may need to be acquired through the eminent
domain process. This process can be expensive and it is hard
to quantify a budget for such expenses because the number of
eminent domain processes that may be required over the life
of the program cannot be accurately predicted.
Construction Phase
Significant risks to the project budget are primarily found
during the construction phase. Potential risks during the
construction phase include, but are not limited to, the
following:
y y Project schedule delays can impact the budget due to
contractor delay claims. Additionally, if the schedule
impact is of a significant nature, there may also be
implications that a longer duration program becomes
more impacted by inflation in the long term.
y y Increases in material costs can also drive construction
prices higher. For example, an increase in oil prices can
drive material and equipment costs up. The cost of
petroleum based items such as asphalt as well as HDPE
74 | CHAPTER EIGHT
and PVC conduits would increase along with fuel costs for
the construction equipment with an increase in oil prices.
y y Economic and construction market conditions can also
influence project costs. When the construction industry
is busy, labor and material prices tend to be higher
than when the industry is slow and there is increased
competition which drives prices down.
y y Unforeseen sub-surface conditions including unknown/
unmarked utilities, unsuitable soils, contaminated soils,
and/or rock conditions
y y Increased restoration costs due to specific landscaping
requirements or specialized pavement and driveway
restoration costs
y y Previously unbudgeted costs for improvements that are
necessitated by the undergrounding program such as
replacement of street lighting that is currently installed on
utility poles.
y y Increasing labor and material costs that are passed on to
the Town from the utility owners.
Schedule Risk Mitigation Measures
Design / Pre-Construction Phase
Because the utility owners do not have the same contractual
obligations to the Town as the design team, it is important
to develop methods to mitigate the risk that they fall behind
schedule. We recommend that the Town initiate the design
phase of multiple project areas such that the utility companies
can get a head start on the design process. This provides
additional time not only to complete the design work but also
provides additional time to identify and procure equipment
easements. This method reduces the risk that the design of
any single phase is delayed due to storm recovery efforts in a
given year.
Additionally, the master planning process has identified
significant easement locations for equipment that has
limited flexibility in where it can be physically located. An
example would be a switch cabinet at the landfall point
of an Intracoastal crossing that is to be reused, or a switch
cabinet that marks the limit of a service area boundary that
is defined by electrical load demand. Because these pieces of
equipment must be located in certain areas, a longer duration
to acquire the easement may be necessary due to extended
property owner negotiations or an eminent domain process.
Identifying these locations during master planning provides
extended periods of time to acquire the easement based on
the timing that each project area will go to construction.
We recommend that record drawing research and soft dig
utility locates be performed for known and identifiable
utilities in order to properly plan for the installation of the
electric and communications infrastructure. This reduces
the risk of underground utility conflicts which can lead to
schedule delays and construction claims. This also increases
the clarity of the construction documents for the contracting
community which reduces risk and allows for lump sum
bidding for various scopes of work. Lump sum bidding can
be employed on infrastructure projects when the scope of
work is clearly defined and the risk of quantity overruns is
low. Unit price bidding is traditionally used on projects where
quantities are estimated because precise estimates cannot
be made.
Construction Phase
The risk that a chosen contractor fails to perform the work
within the desired schedule time frame can be mitigated in
several ways:
TOWN OF PALM BEACH