Many highway and bridge projects in the United States appear to be behind schedule, sunk in quagmires of delays.
Interviews with contractors and construction organizations in all regions of the United States indicate that, despite record federal and state funding, projects in many states are experiencing frustrating — and costly — difficulties reaching the actual construction stage.
Each state has is own unique situation, but the common denominator is that the delays are costing many millions of dollars.
With the construction industry fighting for appropriations close to last year’s record $32 billion, spending the money more efficiently is a critical challenge. States, such as New Jersey, have assigned high-level review teams to address the issue. And the American Road & Transportation Builders Association (ARTBA) is urging Congress to adopt a more efficient cash management system of Highway Trust Fund (HTF) revenues (see sidebar).
What are the reasons for the lost time and money? Construction Equipment Guide (CEG) interviewed people close to the action (or inaction) throughout the Country to find the answers — and possible solutions.
Attrition of Talent
One oft-cited problem is that many DOT’s (departments of transportation) throughout the country are losing talented people due to retirement or downsizing.
“We have taken a serious hit because of early retirements,” Michael Rasmussen, a spokesperson of the NJDOT in Trenton, NJ, told CEG. “We have lost over 500 people — over 10 percent of the workforce — since a new early retirement policy took effect on July 1. We have to reorganize the department to perform our functions and move projects through the pipeline.”
“Legislators are cutting DOT staffs and there are a lot of early retirements,” concurred Tom Walker, executive director of the Wisconsin Transportation Builders Association in Madison, WI, the state chapter of ARTBA. “Many people who knew how to do the job effectively and efficiently are just not there any more. They have been replaced by bright young engineers who simply don’t have the experience. As you would expect, they are not as efficient as those who were there before.”
As highway funding has increased, DOTs haven’t been able to add staff to deliver the programs, Walker said, adding, “Basically they’re asking key people to do more than what is reasonable; that’s part of the problem.”
One result is that overworked staffers want out.
“In our state, if you have 30 years and are at least 55 years old, you can retire with full benefits,” Walker said. “They say, ’I don’t need this’ and decide it’s better to retire and look for part-time work as a consultant.”
How critical is the talent shortage?
“It’s kind of like one of those undercurrents; you know it’s real,” Walker told CEG. “We’re kind of limping along. It’s not so bad that everything grinds to a halt. The first contracts will be let in about a year for rebuilding the Marquette Interchange in downtown Milwaukee, which will be a major project worth about $1.2 billion.”
Approval Holdups
Although their objectives may be laudable, an increasing number of environmental and other regulations, and needed approvals, delay many projects and drive everyone, from project managers to contract administrators, up the wall.
“Our major problem by far is all the environmental and local consent rules that the Minnesota DOT (MNDOT) has to comply with,” said Wayne Murphy, executive director of the Highway/Heavy Division of the Associated General Contractors of America (AGC) in St. Paul, MN. “For example, Minnesota has 47 statutes or laws on the environment. Some conflict with federal rules and laws, of which there are 50.
“In the local consent area, any municipality in the state has veto power over MNDOT on state highway or bridge projects. This can be a terrible problem; it can hold up a project forever. The DOT may just walk away from the project, refusing to mitigate for the municipality. The point is, this [strict local control] destroys your economic development. The city or municipality says ’You do it our way or no way.’”
Murphy has first-hand experience. He worked with MNDOT for 40 years before joining AGC four years ago.
David Martin, president of the Arizona Chapter of AGC in Tucson, AZ, said requirements for environmental studies are the chief reason for delays.
“The bottom line is that it takes us far too long between the conceptual stage and putting a contract out to bid due to extreme environmental laws that have severe reporting requirements and hoops to go through,” he asserted. “The requirements are both on the federal and state level. The bulk of the slowdown comes from the federal regulations, less so from the states, though the states may also hold up projects to comply with historic preservation laws.”
Wisconsin’s Tom Walker said the increasing complexity of the decision-making process at the state level has caused “a disconnect between the level of funding and the level of work on the ground.
“If funding increases 18 percent, you would think work should increase 18 percent, but that’s not true,” Walker said. “Projects now have to go through a very complicated decision process with DOT’s spending a long time getting through the political consensus on what to do. Say a highway is needed from A to B. The DOT gives a solution, but the public may not agree. The project then has to go through a very patient public involvement process. Everyone puts an imprint on the process — for environmental mitigation, protection of historical sites and many other issues. The DOT then has to spend project dollars to fix the problem, increasing costs and delaying actual construction.”
Walker said such red tape obstacles severely penalize project efficiency.
“I would estimate that the complexity of approvals has penalized transportation projects from 10 percent to 20 percent over the last 25 years,” he said. “In other words, funding is buying 10 to 20 percent less in actual construction.”
Bureaucracy
One of the most severe criticisms of the present system is that some of the state DOT staffs work to protect their jobs and have no incentive to make projects more efficient.
“I think that, speaking very generally, the bureaucratic staffs need to think that time is money and work smarter, faster and harder,” said a highway industry source in the Southeast, who did not wish to be identified. “They get paid on the first or the fifteenth of the month and don’t have to make the payroll that private industry does, so they don’t have to put in overtime, with the accountability of private industry, and it doesn’t make that much difference whether the work is done in three months or a year.”
The source said that state DOTs, though they are experiencing tremendous staffing cuts, “have been reluctant to turn projects loose to the private sector, preferring to use their own design engineers.”
“If they let out the work and the private sector can do it faster and cheaper, there’s a job threat,” he said. “You have a [DOT] review staff that’s designed for failure. The process is slow because they make it slow.
Instead, they should review all policy and regulations, structure them to protect the public interest, look for ways to cooperatively work rather than ways to block work, adopt a proactive concept to make things happen, and outsource more work to get it done cheaper.”
Funding Problems
Some states haven’t come up with adequate funding to implement a full program.
One notable example is Missouri, where taxpayers recently (Aug. 6, 2002) defeated Proposition B to increase the gas tax by four cents and the sales tax by one-half cent to help meet transportation needs. This proposal would have increased transportation funding by $485 million per year.
“We have a lot of needs but we don’t have the state money to meet them,” commented Duane Kraft, president of AGC’s Missouri Chapter in Jefferson City, MO. “Our interstate system is one of the worst in the country.”
“Funding is our main problem; we certainly have a lot of projects out there that are not funded,” said another construction industry source in the state, who did not wish to be identified. “Studies show that Missouri has the second-highest percentage of deficient bridges, and the second-worst road pavements, in the country. Taxpayers know our system is not in good shape, but that doesn’t translate into their willingness to spend tax dollars to fix it.”
Design-Build Solutions
A number of states, including Ohio and Utah (due to the Olympics), have successfully utilized the design-build approach to speed-up projects. This process, which integrates design and construction activities, generally reduces engineering by the state, giving more responsibility to the private sector. Once the RFP outlines the requirements, the contractor not only builds concrete and steel but also designs, engineers, and comes up with concepts to value-engineer the program, making it more economic to deliver.
“Design-build can help states get projects on-line more efficiently, utilizing the advantages which private industry offers,” said Len Toenjes, president of the AGC of St. Louis. “Many states are having trouble because of a shortage of engineering students. Private companies have a lot more flexibility in what they can pay engineers.”
The Missouri State Legislature this year authorized the state DOT to undertake some pilot design-build projects to see how they work out.
“In light of our severe funding shortfall, I think these projects will happen sooner rather than later,” said Toenjes. “Now that the enabling legislation has passed, Missouri can dip its toe in that water, though we don’t yet know what projects will be involved, or where or when they will start.”
Design-build doesn’t necessarily solve all problems. “Safeguards have to be put into place so it’s not a beauty contest,” Toenjes said. “The winning contractor should be selected based on design, costs, and overall ability to meet the project goals. This part of the process may be a little tougher than the traditional low-bid job.”
New Jersey
Beset by retirements, the New Jersey DOT is completing a 60-day “Project Pipeline Study” to identify ways to streamline its project development and delivery process. It is expected to announce specific recommendations shortly.
“A cumbersome process translates into higher costs and an inability to react to change,” said Transportation Commissioner James P. Fox. “Quite simply, this review will reinvent the way NJDOT does business.”
Fox said the DOT is trying to reduce timeframes for smaller projects, such as resurfacing projects that include curbing, lights and shoulders, and in-kind bridge replacements, which can take three to five years to deliver.
Bob Briant, chief executive officer of the Utility and Transportation Contractors Association (UTCA) in Allenwood, NJ, said that “although New Jersey has been able to meet demand in terms of utilizing federal and state money, the study should help us meet the challenge when we hopefully receive greater federal money.”
Briant told CEG that “a lot of delays involve metropolitan planning organizations (MPOs) and consultants, on activities like acquiring right of ways.
“The TEA-21 Transportation Equity Act requires DOTs to consult with MPOs,” Briant said. “In New Jersey, the DOT has to work with three different MPOs on many aspects of design and development.”
NJDOT Spokesperson Rasmussen said some DOT projects can take five to seven years.
“From the estimates I’ve heard, we think a project which takes seven years could be cut to three to five years,” he told CEG. “The study includes how we can move more quickly on everything from design studies to contract engineering and the bidding process. We would like to move projects through the pipeline faster, if we can. If we can get all the approvals, all the eyes looking at the project that need to look at it, then we could let work sooner.”
New Jersey’s Project Pipeline review team is headed by Jack Lettiere, deputy commissioner of transportation. It consists of officials from NJDOT, the Federal Highway Administration (FHWA) and the consulting and contracting industries.
The NJDOT went through a similar pipeline review six years ago, but Fox said There’s a big difference in the kind of capital program the department now oversees.
“In the mid 90s, there was a push to expand our highway system,” he said.
“Our projects today are smaller in nature and more focused on maintaining and repairing our transportation infrastructure. The other big difference was that in the mid-90s we paid a consultant $7 million to do the review. We’re doing this one with in-house resources.”
Future Efficiencies?
The increased focus on efficiency could payoff in projects going to the construction phase much sooner, and being completed faster, saving millions of dollars and greatly improving the nation’s infrastructure.
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