Report suggests PennDOT can manage itself better
If just one-quarter of the time extensions PennDOT has granted in the past three years were not justified, and the department had imposed penalties for them, it would have generated about $44 million, according to a legislative study.
By MARK SCOLFORO
The Associated Press
7/2/2008
HARRISBURG, Pa. — Tolls on Interstate 80 or a long-term lease of the Pennsylvania Turnpike may soon be pumping out billions of dollars to pay for stepped-up repairs on state roads and bridges.
But a new legislative study suggests there are other steps the state Department of Transportation can take to make its existing maintenance and operations more efficient.
The Legislative Budget and Finance Committee report says it regularly takes too long for contracts to be awarded, companies that blow deadlines usually are not fined and the state can often pave highways more cheaply than private firms — and should think about doing more of it in-house.
The committee found that it takes an average of 324 days between the time a typical contract is advertised and when the deal is firmed up.
The lengthy lag time creates logistical problems for companies that deal with PennDOT and means motorists have to wait that much longer to reap the benefits that they’re paying for.
“It’s much too long a time to get a project designed and built,” says Brian McMearty, an engineer with Deloitte Financial Advisory Services LLP, the firm that produced the study.
Transportation Secretary Allen D. Biehler isn’t arguing the point, describing the problem as a cultural issue that his work force needs to address.
“It’s a process that we’re not at all happy with,” he told lawmakers.
More than half the projects finished in the last three years have been granted time extensions. But the rate at which PennDOT has imposed financial penalties for going over the deadline has dropped — from 5.9 percent in 2005 to 4.2 percent last year.
The potential taxpayer savings from imposing stricter deadline rules could be considerable. If just one-quarter of the time extensions PennDOT has granted in the past three years were not justified, and the department had imposed penalties for them, it would have generated about $44 million, according to the report.
But PennDOT spokesman Rich Kirkpatrick says the state isn’t underusing the imposition of late fees.
“It’s usually the case that, when we try to impose liquidated damages, it triggers all kinds of lawsuits and contests,” he said.
In other states, the report says, highway officials automatically impose blown-deadline fines. But Kirkpatrick says the department feels “it’s best to make specific judgments case by case,” and that can limit the ability to automate the process.
Only 30 of PennDOT’s 67 county maintenance offices perform their own paving, but those that do have been able to complete the work more cheaply than outside contractors.
“Given the stagnant funding levels and increased cost of construction materials, PennDOT should consider the effects of a bolstered paving operation,” the report concludes.
But Richard Hogg, PennDOT’s deputy secretary for highway administration, says such a decision “is a much more global decision than just paving” and must take into account other maintenance priorities and differences in labor markets and weather in different parts of the state.
The consultants also recommend that PennDOT expand its use of creative bidding and construction processes to speed up and lower the cost of work, address its “disjointed” information-technology system and develop ways to group similar projects located near one another.
An enormous transportation funding windfall is potentially on the way. The question is, is PennDOT willing to make some changes to get the most out of it?