Underground Investigation and Risk Management Part 3: The Right Way to Investigate

In the last newsletter, we covered the relationship between a project’s risk and the cost of an investigation.
In this third and final instalment, we will discuss the right way to plan an investigation to manage geotechnical risk and lower the cost for high-risk projects.

Geotechnical investigation is the primary task that everyone should do first (or at least early) on any planned construction project. Therefore, it is the first and the most crucial step in managing the geotechnical risk.

SPT (Standard Penetration Test) investigation methods are a “tried-and-true,” hundred-year-old technology which has been and should be the backbone of most geotechnical investigations. Unfortunately, more often than not, SPT becomes the sole method of investigating for all soil conditions, regardless of the size or complexity of the project. It’s true that SPT is indeed an excellent way to collect some soil samples to check lithology and to provide qualitative strength data. However, it does come with some rather significant limitations when it comes to specific soil types and is unfortunately often fraught with the potential machine and human error. These include; drilling method errors, hammer efficiency errors, recording error, interpretation errors, as well as other types of potential errors.

There are numerous other investigation methods which need to be applied correctly to ensure that the investigations for the projects are done in the most thorough and risk-adverse way possible based on the unique geotechnical conditions of the area (e.g., soft soil vs. hard soil) and complexity of the project (e.g., low-rise building vs. bridge). There are methods like geophysical surveys, Piezocone (CPTu), Pressuremeter, Dilatometer, Direct Shear, Triaxial testing, consolidation testing, and others, all of which supplement a conventional investigation that is based on SPT. Dependent on the unique circumstances of a project, one or more of these methods should be included in the scope of the geotechnical investigation for a truly reliable design that mitigates geotechnical risk.

An important way to control the cost of a geotechnical investigation, while reducing risk is to undertake staged or phased geotechnical investigations, where a smaller scope initial investigation provides clarity on the second phase of an investigation that may incorporate more advanced testing techniques targeting issues highlighted in the first phase. Phase II perhaps incorporates more than one investigation technique to further study on items of interest identified in Phase I. Often early geotechnical investigations do not encapsulate the full intention of the project scope as it may still be developing. A Phase II investigation later in the project cycle can help to capture the importance of any design development that may have happened and can help instruct further investigation (i.e. larger structures with more basements may require deeper geotechnical borings in phase II).

As positive as managing geotechnical risk can be to an owner’s bottom line as discussed in previous instalments of this article, excess conservatism in design can negatively affect the bottom line as well. Unlike geotechnical risk such as cost overrun during construction, excessive conservatism usually goes unidentified, and owners often don’t have any idea how much money is wasted on this. Similar to managing the geotechnical risk, this problem (conservative design) is also connected to the geotechnical investigation. When the scale and/or quality of geotechnical investigation is low, contractors can easily over or underestimate the cost by as much as 30%! If there is not enough data to properly manage risk or accurately estimate the project’s construction, you can’t expect a cutting-edge design to lower your cost. Unfortunately, unlike geotechnical risk (e.g., cost overruns), there is no reliable study to figure out how much money is lost on overly conservative designs.

There are examples of the projects where owners ended up paying much more than what was needed due to an overly conservative design. On the other hand, there are other projects where the thorough geotechnical investigation lowered the perceived risk and allowed the owner/designer to allocate funds more effectively. A good quality investigation, for example, can lead to cost-effective solutions such as ground improvement. Solutions like this need a good engineering assessment, and a proper engineering assessment needs reliable information.

Allocation of the geotechnical risk is another tool in risk management. However, some owners do not have a realistic expectation of the concept. Increasingly owners are attempting to download all of the risks onto the contractors without truly understanding the consequences and reliability of this approach.

Contractors should always take the time to price out the risk properly. Even in an ideal scenario when adequate subsurface information is available to the contractors with plenty of time to properly analyze the information, the contractors often end up assessing the risk and then price it in their bid. Competitive bidding does not necessarily result in a lower bid or full transfer of the risk. Without proper investigation and a short bidding period, there will always be a limited understanding of the scope of the risk by the contractor. An inaccurate risk assessment at the time of bid results in skewed pricing of risk. The contractor will either (1) Accept the risk by throwing money at it, (2) Ignore the risk and claim later, or (3) Refuse to bid due to unacceptable risks.

The balance of court decisions dealing with changed soil conditions demonstrates that site investigation clauses in contracts are not always upheld. The majority of changed soil condition cases are settled without going to court and owners eventually pay something. Among the cases which end up going to court, the success rate for contractors is statistically around 40%.

In conclusion, geotechnical risk can certainly be minimized, shared, transferred or accepted – But, it cannot be ignored or ever completely eliminated. Each and every project is unique and requires specific planning for a cost-effective and thorough geotechnical investigation, coupled with background research on the site and surrounding area.

Scale or cost of the investigation is not the only issue in determining the effectiveness of a geotechnical investigation. The quality of the investigation is a key component of effectiveness. A carefully thought out engineering assessment can have a major effect on the selection of construction methodology. The best way for the owner to manage geotechnical risk is to retain only the most qualified geotechnical firms to provide quality early pre-bid data. Nothing can replace the value of good, sound engineering judgment. Quality of geotechnical data is influenced by procurement method for geotechnical services, which significantly affects risks in construction and overall project cost. It has been proven that going the cheap route when it comes to geotechnical investigation services simply ends up costing owners more in the end.

A properly planned multi-phased investigation with a budget from 0.5% to 2.2% of the project cost, depending on the type and complexity of the project, is proven by historical evidence to be very effective on most projects. It’s important to also build in some contingency costs in the event early phases of investigation unearthing something unforeseen or changes along design development warranting further investigation.

Regardless of the delivery method and whether project owner decides to keep all the geotechnical risk, transfer all the risk to the contractor, or share it with the contractors, the owners can shrink the risk by conducting a proper site investigation. Once the risk is reduced, then a decision can be made on proper risk allocation. Savings in the bid price have been achieved on the order of 4 to 15 times the cost of a thorough and proper geotechnical investigation. Remember, you pay for a site investigation whether you have one or not…

If you do not do a decent investigation, you will pay for it through overly conservative design, construction delays, contractor claims, and of course, lawyers. Eventually, litigation costs always end up being much higher than the cost of hiring competent engineers and conducting a proper geotechnical investigation in the first place.

In closing, remember, you don’t have to be afraid of risk, you just need to give your projects the due diligence they deserve. When people in all areas of a project work together to mitigate the risks involved, everyone wins.

Masoud Manzari, M.Eng, P.Eng. is a senior geotechnical and hydrogeological engineer at Thurber Engineering with over 23 years of experience. He has been involved in a wide range of civil engineering projects, specifically for structures built on challenging soil sites. Masoud can be reached at mmanzari@thurber.ca