Panel praises work on $4.6B upgrade to Hetch Hetchy Water System

SAN FRANCISCO, CA, Jan. 26, 2010 -- A report issued by an independent panel of nationally recognized engineers and experts commended the San Francisco Public Utilities Commission (SFPUC) for its progress and management of the $4.6 billion Water System Improvement Program (WSIP) currently underway...

• Independent review panel calls progress, systems, processes and staffing "impressive" and "reasonable" for a multi-year, multi-billion dollar program

SAN FRANCISCO, CA, Jan. 26, 2010 -- A report issued by an independent panel of nationally recognized engineers and experts commended the San Francisco Public Utilities Commission (SFPUC) for its progress and management of the $4.6 billion Water System Improvement Program (WSIP) currently underway. The five-member Independent Review Panel, convened by the SFPUC in late 2009, also praised the SFPUC's smart investments made "in state-of-the-art systems, standardized procedures and streamlining of business processes." Report findings were presented at a Commission meeting of the SFPUC by Panel Chair Russell J. Stepp P.E., president and program manager of R.W.Beck Inc., headquartered in Seattle.

"We believe the SFPUC has put a lot of thought into the organization, systems and processes to accomplish the work," Stepp told the Commission. He also cautioned that this program faces "challenges that are orders of magnitude larger than any typical public works construction project."

Stepp noted that the next few years are critical as this "mega project" enters its most expansive construction phase and "ramps up from the current monthly expenditures to a five-fold increase in the coming year." The SFPUC plans to solicit bids for an estimated $1 billion in 2010.

SFPUC General Manager Ed Harrington responded: "I believe the report accurately reflects the significant work that the WSIP staff has accomplished in implementing this program as well as the potential challenges that may arise."

"I am directing WSIP staff to develop a plan to address each recommendation and update the Commission as part of regular briefings on WSIP progress," added Harrington.

Panel Chair Stepp led the independent engineering review of this Capital Improvement Program in 2002, the same year voters approved the revenue bonds to repair, replace and seismically retrofit the Hetch Hetchy regional water delivery system.

Currently the SFPUC has completed or is in construction on 40 of 47 water infrastructure upgrades in San Francisco and has ongoing construction projects in six counties in the Bay Area. Overall, the program is 83% complete in the area of project design.

The independent panel was tasked with reviewing the entire improvement program and answering six key questions:

1) Is the WSIP organization adequate to deliver this program?
2) Are the necessary systems, procedures and businesses processes in place?
3) Is the program status and delivery being reported adequately and accurately?
4) Is the progress to date reasonable?
5) What are the greatest challenges and risks that might impede delivery?
6) What steps or actions are recommended?

The panel found the organization quite adequate and commended its custom-designed Construction Management Information System (CMIS) as "the leading edge for managing programs of this type." The report also highlighted the talent in key SFPUC positions and noted that consultants have put their top staff on these projects.

The report suggested that SFPUC review its Quarterly Reports, saying they are "too lengthy and do not clearly convey progress and challenges." The panel also had recommendations for working with the Commission. For example, orienting new members about this massive infrastructure program and keeping them abreast of current conditions as well as challenges and developments ahead for the program.

The panel cautioned the SFPUC about the current competitive bidding environment among contractors. "Contractors could potentially be very aggressive in attempting to recover costs through change orders," the report noted.

The panel also commented that the extraordinary number of water operations shutdowns required to complete this program should not be underestimated. "The WSIP is further complicated by the need to make substantial improvements to facilities while maintaining water service…"

The entire report is posted at sfwater.org/WSIP and available for viewing at the SFPUC's Public Records office. To make an appointment to review the document, please call 415-554-3274.

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