Federal square 138/4KV substation as an example of modern distribution substation constructed on a design/build basis


Design-build is the most popular project delivery system in the modern design and construction industry. Its main advantage is a single point of responsibility by the design-builder for all project components. This paper presents successful application of design-build approach for a complex multidiscipline project— construction of modern electrical substation. The following major key success factors of the project are described:

  • Safety
  • Motivation Commitment and Teamwork
  • Project Management
  • Communication
  • Engineering and Design
  • Personnel Issues
  • Supply Chain Management
  • External Coordination.

Exhibit 1. Federal Square Substation One Line Diagram

Federal Square Substation One Line Diagram


Public Service Electric & Gas Company (PSEG) is one of the major utility companies in the North-East of USA. In 1999 its Distribution department underwent reorganization that combined Electric Distribution Engineering and Construction Group with Gas Distribution, Construction Group and allowed for the selection of highly skilled engineering, design and construction personnel to form a reconstituted Design Build Group. In establishing a new culture within the Group, the sharing of Best Practices was given the highest priority when establishing new Processes and Procedures for implementation. As a result, we believe we were able to produce the best possible organization to handle construction projects.

The first major project assigned to the new organization was the Federal Square Project, which includes the construction of a new 138/4 kV Substation to provide reliable electric service to some of PSEG most important customers in the city of Newark, NJ, most notably: Penn Station, NJ Transit, the Gateway Complex of office buildings, Rutgers University campus and various Federal Agencies.

The station was planned to be fed off the existing 138 kV transmission line. It consists of three 138/4kV transformers, five 138kV circuit breakers and 4kV switchgear for the 42 outgoing 4kV feeders. All feeders are equipped with breakers, reactors and voltage regulators. Total station's capacity is 44 MVA. The station has three transformers in service with a spare located on property. Any two of the three transformers in service are adequate to handle the entire load of the station. Hence, the station can continue to supply the full customer load in the event of a single transformer outage. Station One line diagram is shown in Exhibit 1.

The Project was a significant investment of approximately $42 million dollars, initially scheduled to finish in 2001. But due to 4kV cable failures during the heat storm of 1999, resulted in significant outages, this project was drastically accelerated to eliminate the potential hazards prior to the 2000 peak summer load.

In 1999 when the need to accelerate the project was identified, it was clearly evident that conventional methods would not enable the completion within the desired time frame. As a result, a “clean sheet of paper” approach was taken to explore every possible avenue to compress the time for completion without adversely impacting the overall project cost. The design of the substation is unique in itself. It is the first 138 to 4kV substation ever built by PSEG. The radical compression in schedule was accomplished by utilizing state of the industry equipment, design, engineering and construction techniques, as well as fast tracking technique (PMBOK® Guide, 1996) that allowed for the simultaneous manufacturing of equipment in conjunction with phased engineering, design and construction. The processes that were established will be retained and utilized as a template for future projects when applicable.

Key Success Factors

The following is a summary of the activities, initiatives and best practices that were identified as contributing to the successful completion of the Federal Square Project.


• Safety was given the highest priority at all times. All safety rules and regulations were constantly stressed and strictly adhered to. Even with a small-congested worksite, the fast tracking of the project, working long hours, and the dramatic acceleration, safety was never compromised. The project was completed without a single lost time accident or OSHA recordable injury (i.e., contractor or PSEG employee).

Motivation, Commitment, and Teamwork

• Subsequent to the project's approval in 1999, a clear sense of urgency and importance was imparted to all members of the Project Team. Everyone understood the importance of the project to PSEG and our customers. All personnel involved were totally committed to the success of the project. They exhibited a high degree of professionalism, sacrificed their personal time, put aside their egos and personal interests to reach the common goal.

• Support and direction from Senior Management was evident and unwavering. There was clear and concise direction on the mission of the project and what was to be achieved and by when.

• The commitment and buy-in to the objectives of this project was requested and obtained from all PSEG associates. This included the Leadership and Brothers of IBEW Local 94 who actively supported the project.

• Commitment was requested and obtained from all the contractors working directly for PSEG, and the “A” Local Construction Union Personnel working for them. They partnered with us and with each other to ensure the success of the project.

• Team members were never let to loose sight of the mission. The need, urgency and importance of the project was constantly kept in the forefront and reinforced on a periodic basis.

• Teamwork and cooperation was identified as a critical success factor, and was emphasized from the very start of the project.

Project Management

• A project team led by the Design Build Group was assembled. It consisted of personnel from all parts of the Company and represented all parties associated with the project. The Design Build Group was assigned the overall responsibility for completing the project. Clearly defined responsibilities were assigned with specific activities and milestones. Members were held accountable for results.

• A professional project management approach was taken for the entire project. A strict project regimen was established and management tools were utilized throughout the project. Management by exception was employed. The status of all critical path activities was closely monitored.

• Risk and vulnerability assessments were made twice per month. Contingency plans to cover “what if” scenarios were made when the risk or vulnerability dictated their appropriateness.

• When the need to accelerate the project was identified, the entire project team was brought together to brainstorm and investigate every activity with the goal of reducing project duration without sacrificing quality or exceeding the budget. Radical approaches and unique ideas/solutions were encouraged.


• Communication and dissemination of information was given a high priority.

• Weekly onsite coordination meetings were conducted. All members of the Project Team met to review the current status of the project, plan upcoming activities and resolve issues. Minutes of the meetings were published and circulated to all levels of management for comment and to keep everyone abreast of ongoing activities.

• Project team members were encouraged to share concerns and ask for help when appropriate.

Engineering and Design

• A “clean sheet of paper” approach and “out of the box” thinking was utilized in all aspects of the project. Team members were encouraged to utilize nontraditional measures as appropriate. State-of-industry techniques and technology were utilized throughout all phases of the project (i.e., Engineering, Design, Equipment Selection, Material Procurement and Construction). For example, the control system for this station was based on the use of the most modern equipment available on the market, including microprocessor relays coupled with a few different types of substation data concentrators that would enable Metropolitan Field Division and the Load Dispatcher to effectively control the station from a remote location. Another example of proactive thinking was the application of computerized relay testing system. This system allowed for the testing of microprocessor relays approximately five times faster than done by traditional methods. Utilizing this computerized system, relays are tested more thoroughly, and results are archived so that they may be replayed in the future for relay performance evaluation. This significantly reduces testing time during periodic routine maintenance.

• In order to achieve the drastic compression in schedule, a great amount of time and effort was placed on working activities in parallel (simultaneously). As well as utilizing offsite prefabrication and modular construction to minimize the amount of work actually performed on property. The switchgear and control house were manufactured offsite.

• The Turn Key method of completion was utilized on certain aspects of the project. For example, the transformer firewalls were designed, material provided, and constructed by the contractor assigned that activity.

Personnel Issues

• The selection of personnel assigned to the project was given special attention. The best available talent was brought to bear on the project. The subject area experts were assigned to the team to attempt to ensure for the successful completion of the project.

• Esprit De Corps, motivation and a “Can Do” attitude were proven to be underlying strengths. All associates assigned to the project were made to feel part of the team. Team members were empowered to act in a proactive fashion. The philosophy adopted by the team was that, “We would all have to be successful, or no one would be.” All team members worked and supported each other even in areas outside their own specific area of responsibility. Recognition was provided as key milestones were achieved. Engineering, design, material/equipment procurement, vendor selection and construction was done in an integrated and collaborating effort. Team members worked in close coordination while fast tracking the project by simultaneously completing Engineering, Design and Construction across disciplines. Input from vendors and contractors working with us was also solicited and integrated into the project.

• In the Design Build Group, even associates not assigned to the team were made to feel a part of the project team. Those associates were advised that although they were not specifically assigned to the project, they were providing support to the project by freeing up project team members as a result of completing work that the team members would have normally performed. In the end, the entire Design Build Group did actually support the project. There was no in fighting, petty squabbling or competition for limited resources.

• The drastic acceleration required team members work extended hours and weekends on a continuous basis. The great amount of effort, the urgency and level of importance of the project caused a great deal of stress that took its toll on team members. Associates had to be closely monitored to ensure they were not reaching the breaking point. Relief and mandated time off was sometime necessary and proved beneficial.

Supply Chain Management (SCM)

• A key success factor was upfront involvement with Supply Chain Management that enabled the selection of the best procurement strategies for material and construction contracts, as well as excellent contract management oversight.

• In addition to having the right PSEG personnel assigned to the project, the right contractors with the proper commitment had to be brought on board. A critical element for success was ensuring close cooperation and mutual support of all contractors performing field construction on the project. As a result of having to overlap design with construction, a conventional Lump Sum Bid could not be performed. Supply Chain Management and Design Build developed a somewhat unique approach to vendor selection. A combination bid approach was developed. We attempted to maximize the amount of work we performed under Lump Sum (i.e., what we had designed), we utilized unit prices for activities we anticipated would be needed, and we obtained time and material rates for work that was undefined. We solicited bids in that fashion, however, we did not award strictly on cost. We developed a bid evaluation matrix that included:

Exhibit 2. Station Before Start of Construction

Station Before Start of Construction

Exhibit 3. Station Three Months Into Construction

Station Three Months Into Construction

Exhibit 4. Station Six Months Into Construction

Station Six Months Into Construction

Exhibit 5. Station Ready for Service

Station Ready for Service

1. Prior history and performance similar work in the industry.

2. Prior history and performance of performing work for PSEG.

3. Demonstrated ability to bring projects in on time in accordance to schedule.

4. Cost that included an estimated number of units (for unit priced work) and estimated number of hours (for Time and Material work).

• Material procurement and expediting proved to be a critical element to the success of the project. In order to compress the project schedule and accomplish more activities in parallel, the use of offsite prefabrication and assembly of equipment was maximized. Excellent coordination between SCM-Material Procurement and the Technical Support Group was achieved and resulted in substantial savings and the receipt of critical components to allow for schedule attainment. Site visits, providing support to the vendor and developing a partnership with our key material vendors was instrumental to the completion of the project. A “fast-track” approach to the fabrication and assembly of critical components was utilized. Numerous design modifications were made by both PSEG and vendors to meet the delivery schedule without sacrificing quality and the functionality. The “partnering” approach that was adopted ensured that PSEG's success would also result in success for our vendors.

External Coordination

• Municipal coordination was extremely helpful securing permits, obtaining police support for traffic control and site security. PSEG representatives met with the local municipal official and presented an overview of the project, as well as the benefits for the city. The City Administrator and representatives from agencies within the city were present at the meeting. Key interfaces were established, and permanent contacts were designated.


• The results of such project organization were truly remarkable. All elements of the project planned for 2000 were completed on or ahead of schedule and within budget.

• Once the decision to accelerate was made, the design, engineering equipment procurement and construction was successfully completed in less than nine months instead of eighteen months that are normally required for a project of such magnitude. Exhibits 2–5 are tracking the progress of construction from the very start (Exhibit 2) through construction worksite three months (Exhibit 3) and six months (Exhibit 4) into the project to the station ready for service (Exhibit 5).

• As a result of this project, the system reliability and Customer satisfaction in the City of Newark have been greatly improved. To date there have been no outages in Newark similar to those which occurred in 1999 and prior years.

• One of the main reasons of this success was the outstanding performance of the Project Team, which consisted of associates from various organizations within the Company. They were all focused on completing the mission in the most expeditious and cost effective way possible. The level of commitment and cooperation by all associates involved was truly outstanding. The “Can Do” spirit and dedication to completing the mission should serve as a model for all project teams the future. This team drastically raised the bar on team performance. In order to celebrate PSEG's dedication and commitment to the community, a Ceremonial Opening for the Substation was held on 27-Jun-00. Approximately 150 guests, including Newark Mayor James and PSEG's COO Al Koeppe, attended the celebration. Television Channels 2 and 12 provided Media coverage.

• Overall, the cooperation, enthusiasm, leadership, commitment, technical proficiency, construction skill and recognition exhibited throughout the completion of this project; demonstrates how successful we can be in “Working together safely to set the standard of excellence in delivering energy services to our customers.”


Project Management Institute. 1996. A Guide to the Project Management Body of Knowledge (PMBOK® Guide). Newton Square, PA: Project Management Institute.

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

Proceedings of the Project Management Institute Annual Seminars & Symposium
November 1–10, 2001 • Nashville, Tenn., USA



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