Bacon's Rebellion

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Ahead of Time and Under Budget

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by

James A. Bacon
in

A Virginia Department of Transportation team has won plaudits from Gov. Timothy M. Kaine for delivering the engineering of a Rt. 5 bridge over the Chickahominy River ahead of schedule and under budget. Writes Matt Sabo with the Daily Press:

The total cost for preliminary design and right-of-way acquisitions amounted to 5 percent of the cost of construction. Usually the design and right-of-way costs account for 12 percent or more of the project fees.

The state estimated that had the project been developed over three or more years, as is typical, inflation would have bumped the total construction cost significantly. The savings generated by the bridge team came to $5.3 million, plus cutting off two years of waiting for a new bridge to be built.

VDOT has been improving its on-time/on-budget performance, but this project was unusual. There was a special sense of urgency because, without the deteriorating bridge, motorists would have encountered a 63-mile-long detour.

Said VDOT spokesman Dawn Eischen: “What helped us to ‘fast-track’ this project was the fact that everyone from all levels recognized the critical need for a new bridge and resources were dedicated to move the project to advertisement as quickly as possible.”

Now that we know what VDOT is capable of, we should expect more of it. At the same time, the state should be able to reward superior performance with more than an “attaboy” from the Governor. When VDOT employees save that much money and time, they should get money in their pockets. Of course, state personnel policy makes that impossible. Until that policy is modernized, such spectacular performance will remain the exception rather than the rule, and VDOT will never be all that it can be.

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5 responses to “Ahead of Time and Under Budget”

  1. Larry Gross Avatar
    Larry Gross

    “….What helped us to ‘fast-track’ this project was the fact that everyone from all levels recognized the critical need for a new bridge and resources were dedicated to move the project to advertisement as quickly as possible.”

    Translation: everyone dropped what they were currently working on and prioritized this project.

    More on this below….

    “Now that we know what VDOT is capable of…. VDOT employees save money and time, they should get money in their pockets…personnel policy makes that impossible. “

    I have a different take on this.

    I don’t want to take away from individual VDOT employees going above and beyond normal duty but the basic problem is with regard to the size of the VDOT workforce being primarily fixed and focused in ways that are not flexible – nimble and agile – as a necessary institutional behavior.

    The article said it all.. it stated that projects that take a while – cost a lot more because of inflation – and we also know from the article that in terms of process – that projects CAN move much faster.. if the right kind of resources are put forth in the right timeframe.

    You only have to ask yourself how a private company would handle these kinds of issues – that would directly affect THEIR BOTTOM LINE – their profit.

    They would go out into the marketplace and hire consultants and/or temporary resources that would be required to deliver a certain product within a certain timeframe – for a fixed amount of money.

    So .. if folks want to know why private investors should design/build/operate TOLL roads rather than VDOT – THIS is the reason.

    In fairness to VDOT – this is not a VDOT problem per se – although with 9000 permanent employees they really do illustrate how slothful government agencies are – as compared to profit-motivated companies whose individual employees know with great certainy that their individual performance to deliver cost-effective products – on time and on budget affects their career longevity.

    If you think about this – what happened was that VDOT was given “attaboys” for DROPPING and delaying OTHER projects.

    Is this REALLY the reward system that should be used?

  2. Anonymous Avatar
    Anonymous

    It will be nice to see what corners private firms cut (such as safety or materials or inspection) to maximize profit and how engineers for design capabilities are supplemented or replaced with state contract administrators (because there is an artifical limit on how big VDOT should or shouldn’t be… 9,000 agents of the state to oversee $9 B?) who are not engineers and won’t ever know the state is being duped by these design build contracts…. exciting!

    It’s the state capitol construction project all over again… Remember when the tunnel leaks, it too was on time!

  3. E M Risse Avatar
    E M Risse

    Anon 11:06:

    You nailed it!

    Contemporary, technologically advanced civilization costs money, a lot of money.

    Dysfunction adds to the cost and attempts to pay for dysfunction driving projects with “effeciency” is just whistling past the graveyard.

    I think of this every time I travel past / though the under budget and “on time” (due to the years and years in the contract to do a nine month job) on I-66. Poor maintaintance-of-way requirements, cutting safety and storm management requirements, etc., etc.

    EMR

  4. Larry Gross Avatar
    Larry Gross

    if you build a tunnel or a road or a school or name your project – it is the job of government to establish standards and to insure that those standards are met.

    This is no excuse for contracting with a company who produces a substandard project – no more than it would be okay for VDOT to produce a substandard product.

    If anyone thinks that we are assured of better projects if we only let the government build them and not contract them out – then the obvious answer would be to raise taxes and expand government and stop all contracting by the government.

    The thing that absolutely kills VDOT is project delay and inflation.

    Any private company knows this and this is why you see .. say a Home Depot get built pretty darn quick -because they know.. the longer that project goes on.. the more it will cost.

    VDOT, on the other hand, has no dog in that hunt at all – and it shows sometimes.

    Projects in the 6 yr plan go on for a decade or more and can cost twice as much as the original estimate because of delays.

    A good example is the estimated cost of improving I-81 or I-73 – which are estimated in TODAYS’s dollars – because they don’t have an anctipated build date.

    So to say that I-73 is estimated to cost 3.5 billion dollars is totally bogus when they don’t have a start date.

    By the time I-73 is started and actally finished, it could cost 8 billion dollars.

    This is the problem.

    You can’t raise taxes and promise 300 million dollars a year in new road projects – if they don’t get built for a decade and by that time they cost twice as much.

    The cost of inflation on road projects is profound.

    Folks need to ask – can we afford for VDOT to NOT be able to move ALL projects along as quickly as possible?

    I’m not advocating that we cut corners on safety but if you think about it – what happens when a project is estimated at one price and by the time you get around to building it – it costs twice as much? Well.. you end up cutting corners…. OR you dealy the project even more.

    No amount of money – will fix this – until you fix the basic problem. All you end up doing is throwing good money after bad.

  5. Anonymous Avatar
    Anonymous

    First, I’ll remind (or perhaps inform) you all that VDOT is the 3rd largest DOT in the nation since all but two counties’ roads are managed by VDOT. So all of the constant references to bloated bureaucracy, sloth, etc ought to take that into consideration.

    Secondly, government can be run with business principles, but to assert that government should be run as a business is to fail to understand the dynamics of govt. Government is not in the business of making money. Further, there will always be more needs than money, so putting costs on projects and then claiming that they are remiss in not bunding/building them is a bit absurd. There are constantly competing interests on what gets built and it is not as simple as choosing a project and building it. Imagine a corporate board w/ 200+ members; that is effectively what happens in govt, and in fact with local govt demanding their “fixes” then that number gets compounded.

    Running govt w/ sound fiscal and mgmt principles, much like business is imperative, but that is where the analogy stops.

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