25-30027-06

Purpose of the Report

In accordance with Title 24 of the Alaska Statutes and a special request by the Legislative Budget and Audit Committee, we have conducted a review of the Department of Transportation and Public Facilities’ (DOTPF) performance on highway construction projects. The objectives were to:

• Identify existing relevant highway construction benchmarks and related data.
• After identifying relevant benchmarks, apply them to DOTPF’s highway construction projects. As part of this performance evaluation, we reviewed documentation related to the design, bidding, and construction of selected projects.
• Develop a narrative describing how highway projects are identified, reviewed, approved, funded, and built.

Report Conclusions

We were directed to identify any widely recognized cost and operational “benchmark” standards related to highway construction. After identifying such standards we were to use them to evaluate state highway design and construction operations of DOTPF.

We determined that there were no such benchmark standards in wide use. Since most states maintain highway project cost and performance data in nonstandard formats, no existing data or studies were found which could efficiently and economically provide readily useful information for comparisons. As a result, highway construction efforts were evaluated using various applicable performance objectives from DOTPF’s “missions and measures” information prepared for Office of Management and Budget.

For the projects reviewed, we determined DOTPF consistently did a good job of meeting benchmarks aimed at restraining what are typically thought of as overhead costs. However, the projects reviewed had less success when it came to measures reflecting how project costs were managed during construction. There may be a relationship between the department’s good performance at meeting overhead benchmarks and its lesser performance involving management of direct construction costs and bid design.

In addition we concluded that DOTPF’s lack of certain design procedures limit opportunities for evaluation and improvement; specifically, decisions were not reviewed or documented. DOTPF also has no formal process is in place to incorporate construction experience into the design phase of future projects.

Findings and Recommendations

1. DOTPF should continue restructuring how it reports performance measurement information.
2. DOTPF should provide more specific guidance regarding records and documentation related to design of highway projects.There are gaps in the DOTPF design process for highway projects. As a result, projects may not be managed as effectively as could be during the design phase. Specifically, there is little standardization in the recordkeeping requirements for design. This results in key aspects of the design processes, either, not being completed or not adequately documented.
3. DOTPF should develop a formal process to ensure construction experience has more of an effective impact on the design and construction process for future projects.For the projects reviewed, we saw no evidence where DOTPF was using actual construction experience to perhaps modify design procedures or processes for future projects.