Talking Michigan Transportation
The Talking Michigan Transportation podcast features conversations with transportation experts inside and outside MDOT and will touch on anything and everything related to mobility, including rail, transit and the development of connected and automated vehicles.
Talking Michigan Transportation
How MDOT’s major projects office gets things done
On this week’s Talking Michigan Transportation podcast, a conversation with Ryan Mitchell, marking the one-year anniversary of the Michigan Department of Transportation’s (MDOT) Office of Major Projects.
The Federal Highway Administration (FHWA) categorizes major projects as those with a price tag of $500 million or more.
Mitchell helped establish and refine the alternative delivery and critical project delivery programs of numerous U.S. transportation agencies, including the state transportation departments of Nevada, Texas, Alaska, and now Michigan. In our conversation, he explains the various types of alternative delivery of projects and the benefits.
Other links and references:
Innovative contracting at MDOT
www.Michigan.gov/MDOT/Business/Contractors/InnovativeContracting
MDOT’s Modernize 75 project
www.Modernize75.com/
Hello, welcome to the Talking Michigan Transportation Podcast. I'm Jeff Cranson. Ryan Mitchell is the manager of MDOT's Office of Major Projects. It was established a year ago, and I've been eager to talk with him about why there is such an office, how it all helps MDOT stretch its dollars to deliver big projects that affect all of us the traveling public, so I hope you enjoy the conversation. So, Ryan, before we jump into the topic at hand, what you're doing now trying to establish and create and manage an office of major projects, which, by definition, means big things Remind us a little bit of your background and your trajectory and what brought you to MDOT.
Ryan Mitchell:Sure. Thanks, Jeff. It's an honor to be here, as always, and especially good timing, as we have just hit the one-year anniversary of the Office of Major Projects. So great question. I came to MDOT about five years ago, in June of 2019, defecting from the private sector. I was a consultant in transportation, working for an engineering firm for 10 years before I came to MDOT, and I worked all across the country on large, complex projects, mostly as an expert with alternative delivery, non-traditional project delivery, so the opportunity to manage the innovative contracting unit opened up at MDOT, and it was the perfect role at the perfect time for me. I'd moved to Michigan as a private consultant and my children were getting to the age where things were getting very busy, and so MDOT offered a great work-life balance, very, very interesting work and the opportunity to make a big impact, and so I jumped at it and it's been a great experience.
Jeff Cranson:Well, I always appreciate your willingness to explain complicated things and I think you're a very good communicator and that's one of the reasons why I want to talk to you. So, before we jump into major projects for the uninitiated, talk about alternative delivery and innovative contracting, and you know, somebody might say well, you know, why does that have to be a separate category? Shouldn't all contract be innovative?
Ryan Mitchell:So talk about that. Great question, great question, Jeff, and I always like to take the opportunity to explain it because it can be a little bit mysterious and, as a result of it being mysterious, it can kind of create suspicion. Alternative delivery, or innovative contracting as we call it at MDOT, is just essentially a different way to develop and deliver a project. Every project that MDOT is going to construct will be designed right and it'll have specifications and requirements. The main difference with alternative delivery or innovative contracting is the role of the private sector, and the most notable difference between traditional and alternative delivery is when we engage the private sector and the amount of involvement that they have In innovative contracting projects. I use construction manager, general contractor, as an example. We engage the contractor team very early in the development of design plans, and that's ordinarily because the project has been evaluated and is considered very, very complex, and so how the project will be constructed is really important to the feasibility and the risk of the project being reduced so that it can be delivered, of the project being reduced so that it can be delivered on the expected budget and on the expected schedule. That's one example.
Ryan Mitchell:A recent trend with project delivery has been the introduction of progressive design build. MDOT has actually developed and is delivering two progressive design build projects right now. It's a very similar model to CMGC construction manager general contractor, the difference being that in the case of progressive design build, the designer, instead of directly contracting with MDOT, with the contractor team, so they collaborate and actually work together as a single entity, reporting to MDOT. The same incremental, iterative design development that is kind of a distinguishing factor for construction manager general contractor delivery is true with progressive design build but the design is done on the contractor team within the contractor team. So some slight nuanced differences, but the main feature there that's important to remember is that we bring the private experts into the project and those that will be assuming risk for design and construction and cost and schedule of the project will actually be under the tent, as they say, with MDOT developing the design.
Jeff Cranson:So what do you say to a skeptic who thinks that this seeds too much, I guess, authority or discretion to the private sector? I know from watching what you guys do and watching these projects how much oversight there is and how much back and forth there is and sometimes it gets pretty tense dealing with contractors. There is, and sometimes it gets pretty tense dealing with contractors, but there are others that don't see that and think and you know there were people you know in high levels at the state that didn't like any kind of innovative contracting for that reason. So I'm sure you've wrestled with that. How do you talk about that?
Ryan Mitchell:Absolutely. It's a great question and anything new can can cause suspicion and and kind of anything new can be challenging and we understand that that's a big part of what we do in Office of Major Projects and Innovative Contracting Unit is to try and kind of expound upon the benefits and certainly point to the risks because there are risks and the risks are different with alternative delivery but also to make sure that we're getting the engagement level that we need to understand and deliver these projects because they are different. So, what I would say is we're not ceding authority to the private sector in any circumstance. We are transferring risk in many cases, whether it be financial risk, as in the I-75 Segment 3, P3 project, where the contractor actually went and got secured debt for the project through federal credit assistance and then took on financial responsibility and long-term payment responsibility for the project and will be paid out over a very long term by traditional project delivery standards. So, they took on quite a bit of risk.
Ryan Mitchell:They are empowered to kind of take ownership of the project schedule in a way that is not typical, but we do not see any control of decision making and we certainly don't see any ownership of the project in any way. So, that may be a misconception that I'm happy to clear up. MDOT is always in charge of its own projects and always has final decision-making authority and quite a bit of discretion in making decisions on its projects. We do negotiate certain terms and conditions related to these projects in order that the private sector can get comfortable with the risk and actually make sure that their delivery of the project is feasible, and that always retains full discretion and decision-making authority so that it can ensure that it's representing the public interest. That's the number one thing.
Jeff Cranson:Would you say that the contractor is willing to take on that risk and basically gamble that they'll still be money ahead years from now, because they knew what they were getting into and this incentivizes them to build it in such a way that it's not going to need a lot of expensive maintenance? It absolutely does.
Ryan Mitchell:Yes, yeah, it's a great point, Jeff. The big benefit of long-term contracting is that lifecycle perspective that it brings when you are developing and delivering a project that has a long term and a maintenance term involved. You're absolutely right. The contractor will design and construct it in such a way that it ensures a long lifecycle for the project to minimize future maintenance costs.
Jeff Cranson:So, what does an office of major projects bring to the department that wasn't in the previous structure? You know? What does that allow you and your office to do, I guess?
Ryan Mitchell:Great, great question, Jeff. If you look at our org chart, what you will see is a bunch of very senior and experienced expert project managers that were previously, from you know, organized into different areas of MDOT. What the Office of Major Projects does is bring these very senior, expert project managers together into one place to allow them to learn from each other, share resources and then develop operating procedures and best practices for future MDOT PMs to benefit from. So, with the goal being that we'll have more consistent and efficient delivery of major projects and more consistent accountability and communication from the major project teams, so it's really about it's kind of creating a culture to focus on innovation and leveraging resources, economies of scale, I mean.
Jeff Cranson:is it all those things I?
Ryan Mitchell:I think it is, Jeff, and I'm glad you mentioned the word culture. That's been one of the most rewarding things of this new position disparate groups that had disparate leadership and disparate cultures together and saying, hey, folks, we've got an opportunity of a lifetime here. It's not every day that we get to create a new place within this agency and essentially develop our own culture, but that's exactly what we've done, and we focused on those things that you mentioned innovation, leveraging our common resources and trying to do things efficiently. That is absolutely what we focused on, and together we've kind of agreed on what the goals are, which are to create this cohesive team with the expertise and resources to deliver transformational projects efficiently and equitably, and so that's kind of what we all agreed was, you know, kind of the North Star for this group, and we've put into place a strategy for us to achieve that goal.
Jeff Cranson:So, the Federal Highway Administration uses some of these terms and they have categories for our purposes. What makes a project major?
Ryan Mitchell:So, Federal Highway makes it very easy for us with respect to the definition. It is a project with a total project cost, meaning anything from the feasibility, all the way through CEI, of the implementation stage et cetera, through maintenance whatever, although they don't pay for maintenance. That equals $500 million or more. As you know, particularly in recent years, with kind of unusually high cost escalation and inflation, $500 million doesn't go as far as it used to. But that is currently the definition of a major project, and we have several that fit within that.
Jeff Cranson:It's just so hard to fathom, I imagine. Even though I've been dealing with these numbers for a while, I still think the general public just can't even get their head around these gigantic amounts that you're talking about. It's that Everett Dirksen quote right A million here, a million there.
Ryan Mitchell:So, I think he said a billion here, a billion there.
Jeff Cranson:Yeah, that's right. You're talking about real money. Yeah, he did and that was in the early 60s.
Ryan Mitchell:So, exactly, exactly.
Ryan Mitchell:It is hard to imagine. And I remember when I first started working on large, complex projects I worked, I was an employee of the Nevada DOT and previous to this, this project that I worked on, you know, I thought a few million dollars was a very large project, and it was, and it is. And then I started working on a project that was about $80 million, a reconstruction of Interstate 80 in downtown Reno, and that was a really large project. No, and that was a really large project. Maybe five years later I was in Austin, texas, working as a consultant to TxDOT and I literally thought that they had. You know, I was like well, this has too many zeros. No, things are bigger in Texas. And it's absolutely true, I was shocked at the scale of the projects, but I learned how to you know, I learned that that scale is possible and it can be very well and efficiently done with the right kind of programmatic approach to how you deliver those projects.
Jeff Cranson:We'll be right back, stay tuned.
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Jeff Cranson:Well, talk about. And you came back to Michigan and so you know I mean especially because you worked in a place like Texas, which is a growth state, and you can't spend money fast enough I know I mean friends of mine, counterparts in Florida, texas, utah, have told me that their problem isn't getting enough funding, it's how to keep up with the funding they have and spending and building. So you come to Michigan, you come back to Michigan and find out that we've been in this chronically underfunded environment for decades. So how do you set expectations? I mean, you have to plan for when there is money.
Jeff Cranson:You know whether it's the 131 project in Grand Rapids. There's some big ideas there and a lot of people are very excited about it. Some big ideas there and a lot of people are very excited about it. But you have to and I talked to the various, you know, local MDOT officials about this, about how to engage the community so we're ready when money is there, but also remind them that right now there isn't money. You know, how does that challenge fit into your portfolio?
Ryan Mitchell:That is the question right now, jeff, and it's a very important one. I think it's twofold. It's what you said it's being prepared for, not if, but when money becomes available for these kind of just anchor transportation assets. These are the arteries that move people and goods, that form, as you've heard it said, the backbone of our economy and our way of life. Right, and they have to be replaced. It's not a matter of if, it's when. So there's two things.
Ryan Mitchell:One is, as you mentioned, being prepared, and when I came to Michigan, as you mentioned, when I came back to the Midwest and I started working in Michigan, back to the Midwest and I started working in Michigan, and particularly when I came to MDOT, I knew that bringing that programmatic rigor that I learned about in Texas and Nevada, having, you know, very efficient business practices, things, you know, not rocket science, but just standard operating procedures and templates for common practices. One example is our initial financial plans or project management plans that are required on major projects. Instead of rewriting those every time brand new, just create a template that ensures compliance with federal requirements and allows repeatable kind of make the life of a PM easier, you know, and we just started to implement that type of work in the innovative contracting unit Standard risk management procedures, standard procurement document templates and just kind of that sort of approach. It was absolutely necessary. To your point about those other states where they have massive congestion problems and their programs are growing every year. They have money to spend. It's just a matter of how you spend it efficiently and get the projects out the door. Those are the challenges that I faced on those other programs and so we put that into place in the Innovative Contracting Unit and we were continuing that in the Office of Major Projects at a steady pace. So that's number one be ready, and we're starting to have the tools and the resources within the Office of Major Projects to do that and we're being called upon.
Ryan Mitchell:The second thing is, yes, chronic underfunding. And in Michigan you know we've done some important things. We did a tolling study, statewide tolling study that says, hey, if and when decisions are going to be made about new revenue for transportation, here are some options. Similarly, we want to have the credibility by delivering good projects and making progress on these major projects to make sure that the public sees that they're credibly moving projects forward with the funding that they have. I-94 in Detroit is a very good example. We don't have the $6 or $7 dollars that it's estimated it will take to complete the entire modernization, but we do have a considerable amount of funding, and so what we're doing is we're doing our best to move that project forward, remove roadblocks to its delivery and get the project completed with the funds that we have. We think that showing progress and showing excellent work being done on the project will allow for credibility and continued coalition building so that we can get the funds secured in place and get the projects built.
Jeff Cranson:I mean, it's just difficult. Sometimes I've faced this, and I'll bet you have too when you're in conferences or peer exchanges and you're dealing with your counterparts in some of these other states and again you know, I think of Texas and Utah and Florida especially and they're talking about what they're doing and say, oh, you should just do this. You know, yeah, you should do it like we do it. It's like no, no, no, folks, you guys have money, we don't, yeah, so how do you keep that from getting you down?
Ryan Mitchell:Yeah, well, it's a great question, and I think I was at a conference earlier this week and I said you know, we we're not going to have the money tomorrow. We're not going to have, you know, the FTEs. For those that don't know, that's a full time equivalent. You know we don't have enough money, we don't have enough staff, but we have excellent resources, we have each other.
Ryan Mitchell:That's what I said at this conference, and I know that sounds a little corny, but the truth is one thing that I was struck by no, we don't have enough money, no, we don't have enough people, but we have some really expert folks and a very common sense attitude to getting things done, and MDOT has always done. It has a reputation, probably almost to a fault, of doing less with more. We've always made do and we're going to continue to do that. We also need to really look to the future and begin to advocate for doing things that will get our message out there. We don't have enough funding, right, we have chronically underfunded assets. We need to create new revenue streams in order to deliver large and complex transformational projects so that you know we can continue to grow our economy in this state.
Jeff Cranson:Yeah, I know I've talked often about how, when I first came to start to understand asset management I'm not going to say that I'm an expert even now, but when I started, roger Safford, who was the Grand Region Engineer, it was kind of his specialty and he was trying to educate me about it and nothing makes you glaze over faster than just the term right, asset management. But why is MDOT a leader? Not to take anything away from the creative minds and the innovation, but it's a leader in asset management because it had to be. Yes. So that goes to your point about necessity of invention, I guess. So, I guess. Lastly, why don't you just talk a little bit about some of the high-profile projects? You know what you're excited about. You already talked about I-75 and the modernization in Oakland County, touched on 94 in Detroit. A little bit. What else would you put in that category?
Ryan Mitchell:Well, of course we cannot forget a very important and probably nationally famous project, the I-375 Reconnecting Community Projects in downtown Detroit. It's a once-in-a-lifetime, once-in-a-generation, they say, but certainly transformational project in the city of Detroit that will change the landscape and the economics of the city forever, we think in positive ways. It's been in the news a lot because it's a large and again it's going to change a lot of the transportation network in the city and it transforms kind of an obsolete facility into a modern urban facility that will greatly benefit the city and the network. So ongoing project it's in. You know we've just awarded a rest of design build contract our first federally funded progressive design build and we're onboarding the contractor team, the contractor and designer team, so that they can begin to work with MDOT and to continue on public engagement for the project. And we're very excited about the progress that's being made and the neighborhood support that we're getting from different stakeholders within the community.
Jeff Cranson:Yeah, I've been very excited about that. I was in the earliest days. I was involved in meeting with Blue Cross and GM and Greektown to talk about that and what the possibilities were. And it's funny how things have evolved and there's still a lot of questions. But I think when we finally get there it's going to be very, very exciting for the city and fits with what's going on in a lot of other cities around the country.
Ryan Mitchell:So it's cool, yes, and we really think that the progressive design build model is a terrific opportunity for the project. We can have early contractor and designer involvement to really efficiently incorporate stakeholder input in the design and the traffic operations during construction. To ensure that the commitment that MDOT's made to the communities and to increase workforce development and minority and small business involvement during all phases of the project can really translate in the commitments made by the contractor as well.
Jeff Cranson:Yeah, absolutely well said. Anything else you'd want to mention on the projects list?
Ryan Mitchell:Well, I'd be remiss if I didn't mention the Gordie Howe International Bridge.
Ryan Mitchell:You're obviously well aware of the success of that project and the kind of transformational nature of that project. You've probably seen news, of course, and probably been part of the organization of the celebrations that have happened. On June 14th, the last girder was installed connecting the US and Canadian sides of the bridge and officially it is now an international border crossing, took place on the 24th, with, you know, dignitaries and elected officials from both sides, both state countries and provinces of Ontario and the state of Michigan. Just a lot to be proud of there, and one of those projects that you've looked back and you know what do we learn? Well, jeff, like you say, through seemingly insurmountable issues and challenges, the two governments work together. Jim Seiler and Bonnie Yu and others just persisted in continuing to develop the project in cooperation with other experts and the Canadian government, and now we have this amazing asset that we can all be very proud of, that transformed the skyline of the city of two cities and creates a new international border crossing to allow continued economic prosperity.
Jeff Cranson:So yeah, getting another country to finance a project and transfer the risk to them, that's a great model.
Ryan Mitchell:You want to talk about innovation, right? So very, very, you know notable milestone on that project.
Jeff Cranson:Yeah, no, that's true, and there's a lot to be said for the way that Canadians have handled this and the cooperation. And, as I often say, we speak the same language but sometimes we don't, and there's been a lot to work through, but I'm very happy with the relationship and how much we've gotten done together. Is there anything else you want to mention or you want to conclude this one, and we'll have a lot more to talk about in the future, I'm sure.
Ryan Mitchell:Well, always glad to come back and we'd be happy to do it again and just honored once again to touch base with you at the one year anniversary of the Office of Major Projects. We have a lot of work ahead of us. We're really gratified by the collaboration that we've seen so far from other areas of MDOT and hope that continues.
Jeff Cranson:Yeah, congratulations. Thanks, Ryan. Thank you, Jeff. I'd like to thank you once more for tuning in to Talking Michigan Transportation. You can find show notes and more on Apple Podcasts or Buzzsprout. I also want to acknowledge the talented people who help make this a reality each week, starting with Randy Debler, who skillfully edits the audio, Jesse Ball, who proofs the content, Courtney Bates, who posts the podcast to various platforms, and Jacke Salinas, who transcribes the audio to make it accessible to all.