Performance Audit, Department of Transportation, construction staffing levels

              Q DOLJGLAS R NORTON. CPA
AIJDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
September 28, 1990
Members of the Arizona Legislature
The Honorable Rose Mofford, Governor
Mr. James S. Creedon, Acting Director
Department of Transportation
LINDA J. BLESSING. CPA
DEPUTY AUDITOR GENERAL
Transmitted herewith i s a report of the Auditor General, A Performance
Audit of Department of Transportation's construction s t a f f i n g levels.
This report i s in response to the requirements of Chapter 68 of the 1989
Session Laws.
We found that the Department has strengthened management of i t s
construction s t a f f since our 1987 audit. Construction engineering costs
for ADOT- managed projects were within one percent of departmental goals
between January 1, 1987 and April 30, 1990. However, s t a f f i n g costs for
consul tant- managed projects exceeded goals by approximately $ 3.6 mi l l ion,
or 18 percent, during the same period. ADOT needs to review consultant
projects to determine why costs are above goals.
In addition, we found that the Department's e f f o r t s to improve methods
for estimating the need for construction s t a f f have not been successful
to date. Without corrective measures, ADOT's computer- based s t a f f i n g
projections w i l l continue to be unreliable.
My s t a f f and I w i l l be pleased to discuss or c l a r i f y items in the report.
Sincerelv.
DRN : l mn
STAFF: William Thomson
Mark Fleming
Anthony James Guarino
Lucy Kennedy Brad l ey
Roberta A. teighton
as R. Norton
2700 NORTH CENTRAL AVE. SUITE 700 PHOENIX, ARIZONA 85004 ( 602) 255- 4385
SUMMARY
The Office of the Auditor General has conducted a performance audit of
the Arizona Department of Transportation's ( ADOT) construction staffing
levels in response to the requirements of Chapter 68 of the 1988 Session
Laws. This is the t h i r d and last in a series of reports addressing the
requirements of Chapter 68.
This report is a follow up to our 1987 performance audit of ADOT staffing
levels. The 1987 audit found that the Department had not adequately
controlled construction staffing levels between fiscal years 1982- 83 and
1986- 87.
Althouah ADOT Has lm~ roved Control of Staff- Related
Costs, Additional Controls Are Needed To Ensure
That The Department Meets Its Cost Goals For
Consultant- Manaaed Projects ( see pages 7 through 13)
ADOT has improved i t s management of staff- related costs since our 1987
report. Staff- related costs were very close to agency goals for projects
managed by i t s own s ta f f -- on l y $ 278,000 above goa l amounts , or l ess than
one percent-- during the period of our review. However, during the last
three fiscal years, highway projects managed by private consultants were
above the Department's staff- related goals by almost $ 3.6 mi l l ion or 18
percent.
Because the Department was unable to provide needed information in a
timely manner, we were unable to complete further analysis regarding
ADOT1s staffing levels, or determine the reasons the Department has been
unable to meet i t s cost goals for consultant- managed projects. Data
sufficient to perform our analysis was not provided u n t i l seven weeks
after the scheduled end of our audit fieldwork.
Department Efforts To Improve Construction
Staffina Estimates Have Been lnadeauate ( see pages 15 through 20)
The Department's attempt to improve computer estimates of construction
staffing needs has been, thus far, unsuccessful. Upgrading this
capability would benefit ADOT. Because current computer forecasts are
poor, Department managers have to re l y heav i l y on the i r own judgment and
experience in estimating and controlling staffing. For example, in
almost one- half of the cases we reviewed, Department managers adjusted
system forecasts, up or down, by 40 percent or more. Estimates made by
ADOT managers, however, have not been much better than the computer
estimates. Actual staff u t i l i z a t i o n has ranged from 97 percent higher to
200 percent lower than that predicted by ADOT managers.
Shortcuts taken by ADOT have undermined the agency's efforts to upgrade
computer estimates. A key element in ADOT's computer forecasts is i t s
planning values. These values, expressed in terms of labor hours needed
per roadway mi le for a construction a c t i v i t y ( i . e., 1,000 man hours per
mile of earthwork), have never been updated. Attempts by ADOT to update
i t s planning values have been unsuccessful due to a variety of factors,
ranging from poor sampling techniques to self- imposed deadlines.
Consequently, unless corrective measures are taken, the Department's
computer- based staffing projections w i l l continue to be unreliable.
TABLE OF CONTENTS
lNTRODUCTlON AND BACKGROUND. . . . . . . . . . . . . . . . . .
FINDING I: ALMWGH ADOT HAS IMPROVED CONTROL
OF STAFF- RELATED COSTS, ADDITIONAL CONTROLS
ARE NEEDED TO ENSURE THAT THE MPARTUENT
MEETS ITS COST GOALS K) R CONSULTANT- UANAGEDPROJECTS. . . . . . . . . . . . . . . .
ADOT Has Improved Efficiency of In- House Staff,
But Consultant Costs Are Well Above Goals. . . . . . . . .
AWT's I n a b i l i t y To Provide Timely Data Impeded
Our Analysis and Limited Follow Up On Staff- Related Costs. . . . . . . . . . . . . . . . . . . .
Recommendation . . . . . . . . . . . . . . . . . . . . . .
FINDING I I : DEPARTMENT EFFORTS TO IMPROVE
CONSTRUCTION STAFFING ESTIMATES HAVE
BEEN I NADEWATE . . . . . . . . . . . . . . . . . . . . . .
AWT's Attempts to Improve I t s
Manpower Management System
Have Been Unsuccessful . . . . . . . . . . . . . . . . . .
Corrective Measures Needed for ADOT's
New Manpower Management System To Work Effectively. . . . . . . . . . . . . . . . . . . .
Recommendations. . . . . . . . . . . . . . . . . . . . . .
AGENCY RESWNSE
LlST OF FIGURES
Pane
FlGUW 1 Highway Operations Group . . . . . . . . . . . . 2
LlST OF TABLES
TABLE 1 Staff- Related Cost Analysis
For ADOT- Administered Projects
By Project Category
January 1, 1987-- April 30, 1990. . . . . . . . .
TABLE 2 Staff- Related Cost Analysis
For ADOT- Administered Projects
JBay nFuaisryc a1l , Y e1a9r8 7-- April 30, 1990. . . . . . . . .
TABLE 3 Staff- Related Cost Analysis
For Consultant- Administered Projects
By Project Category
January 1, 1987-- April 30, 1990. . . . . . . . .
Pane
INTRODUCTION AND BACKGROUND
The Office of the Auditor General has conducted a performance audit of
the Arizona Department of Transportation's construction staffing levels
in response to the requirements of Chapter 68 of the 1988 Session Laws.
This is the third and last in a series of reports addressing the
requirements of Chapter 68.
The Arizona Department of Transportation ( AWT) is organized into five
divisions: Administrative Services, Transportation Planning,
Aeronautics, Motor Vehicles, and Highways. This report focuses on the
a c t i v i t i e s and staffing costs of the Highway Operations Group within the
Highways Division.
The Highway Operations Group manages a l l highway construction in
~ r i z o n a . ( ' ) The actual construction of roads is performed by private
contractors selected through a competitive bidding process. The specific
a c t i v i t i e s performed within the Highway Operations Group, called
construction engineering, include the following:
a inspection and materials testing of roadway construction to ensure
procedures and materials meet plans and specifications;
surveying;
reviewing roadway design drawings;
approving a l l payments to contractors for labor and materials;
a monitoring force accounts;
processing contractor claims; and
reviewing and approving change orders.
( 1) I n addition to managing construction, the Highway Operations Group i s also responsible
for maintaining a l l State highways.
Although most of these activities continue to be the responsibility of
full- time ADOT personnel, the Department contracts with private
eng i nee r i ng f i rms , and h i r es temporary and seasona I per sonne l to augmen t
in- house staff. ADOT has also begun transferring some quality control
and surveying responsibilities to the contractors.
Oraanization and Staffing
The Highway Operations Group carries out its responsibilities through
staff in four engineering districts and its central office. ( See
Figure 1)
FIGURE 1
HIGHWAY OPERATIONS GROUP
STATE ENGINEER
HIWAYS DIVISION
H I W A Y S OPERAT l ONS
DISTRICT ENGINEER tA T./ TATE " ENGlNEE= R ]
DISTRICT ENGINEER
P L MATERIALS SECTION
, ASST. STATE ENGINEER
DISTRICT I l l
DISTRICT ENGINEER
Source: Arizona Department of Transportation
-
District construction staff, organized into areas encompassing several
construction units, oversee construction activities, and provide on- site
DISTRICT ENGINEER
inspections. Construction units t y p i c a l l y include engineering
specialists, quality control technicians, survey personnel, materials
testing s t a f f , and records clerks.
Construction staff are funded primarily from the AWT construction budget
established each year by the Transportation Board. Construction funds
are derived from the Highway User Revenue Fund ( HURF) which consists of
revenues from the gasoline tax and other transportation- related fees.
HURF funds and construction staff positions are not appropriated by the
Legislature; both are determined by the Department, based on total
construction a c t i v i t y . The five- year construction program adopted by the
Transportation Board in June 1990, projects construction costs of $ 2.4
b i l l i o n for fiscal years 1990- 91 through 1994- 95. During the previous
three years ( January 1, 1987 through April 30, 1990) construction
engineering costs were approximately $ 110 m i l lion, or 10 percent of total
construction costs. As of June 30, 1990, the Highway Operations Group
had budgeted 650 full- time employees ( FTEs), 581 of which are f i l l e d .
Most of these positions are allocated to the four construction d i s t r i c t s .
Our 1987 performance audit of ADOT's construction management function
found that the Department had not adequately controlled construction
staffing levels. We also found that the Construction Engineering
Manpower Management System ( CEMMS) was not be i ng e f f ec t i ve l y u t i l i zed .
Although repeatedly informed of problems with the system, Department
managers took l i t t l e action to correct deficiencies, or ensure system
u t i l i z a t i o n .
Based on our findings, we recommended AWT consider other options, such
as using more consulting engineers and contracting more construction
engineering functions, before increasing i t s construction staff to meet
the needs of i t s growing construction program. We also recommended that
the Legislature establish and monitor construction staffing levels to
ensure staffing patterns reflect the Department's fluctuating workload.
We recommended that ADOT upper management make a f i rm comm i tmen t to
address its problems with the manpower management system to ensure that
staff and other resources are used efficiently and effectively.
In its response to our audit, ADOT strongly disagreed with the Finding
that it was overstaffed, and submitted information indicating
construction engineering staffing levels were generally less than needed,
rather than too high. The Department acknowledged the need to improve
CEMMS utilization and correct system deficiencies.
Since the 1987 audit, ADOT has taken several actions to improve control
of construction engineering staffing. The Department currently limits
the number of construction engineering staff to 585 FTEs rather than at
its authorized level of 650. The Department uses consultant
administrators to manage some projects, and has contracted with
engineering firms to provide technicians on an as needed basis to handle
activities when ADOT staff are not available. ADOT management issued a
memorandum stating its expectations that all staff would utilize CEMMS
and other Departmental systems in managing their construction staff. In
addition, the Department is in the process of revising its manpower
management system.
Audit Scope
and Purpose
Our audit focused on the staffing levels required by ADOT's Highway
Operations Group to effectively and efficiently manage Arizona's highway
construction program. The report presents findings in two areas:
the extent to which ADOT has met its construction staffing goals in
recent fiscal years, and
ADOT's ability to estimate its needs for construction engineering
staff .
Our audi t was conducted in accordance wi th general ly accepted
governmental auditing standards. However, our ability to complete our
audit work was limited because ADOT could not provide us with reliable
financial information in a timely manner ( see page 12).
The Auditor General and staff express appreciation to the Director and
staff of the Arizona Department of Transportation for their cooperation
and assistance during the audit.
FINDING I
ALTHOUGH THE ARIZONA DEPARTMENT OF TRANSPORTATION
HAS IMPROVED CONTROL OF STAFF- RELATED COSTS,
ADDITIONAL CONTROLS ARE NEEDED TO ENSURE THAT THE
DEPARTMENT MEETS ITS COST GOALS FOR
CONSULTANT- MANAGED PROJECTS
The Arizona Department of Transportation ( ADOTI has made improvements in
managing staff- related costs. Although the Department has a l l but
eliminated excess costs for projects managed by i t s own s t a f f ,
consultant- administered projects substantially exceeded cost goals during
the last three fiscal years. We were unable to complete further analysis
regarding ADOTts staff levels or determine why consultant- administered
projects exceeded cost goals, due to time constraints as a result of the
Department's i n a b i l i t y to provide timely financial information.
ADOT construction staff are engaged primarily in Construction Engineering
( CE) a c t i v i t i e s . ( ' ) The Department also hires consultants to perform
Construction Engineering on some projects, either because of staff
shortages when construction begins or because of the projects'
complexity. Thus, CE costs are an important measure for determining the
Department's efficiency in controlling both construction and consultant
staffing. The Department establishes CE cost goals as a means of
evaluating i t s a b i l i t y to control staff- related costs. These goals are
based on a percentage of the contractor payments for each project, and
vary according to the size of the project. For example, the goal for
smaller projects ($ 25,000 and under) is 25 percent of contractor
payments, whi le for larger projects ( over $ 20 mi l l ion) the goal is much
lower-- 6 percent. Our 1987 report on construction management ( Report
number 87- 11) used construction engineering costs as a measure of
staffing efficiency, and a similar approach has been taken in this report.
( 1) These a c t i v i t i e s , such as t e s t i n g the density of concrete or weighing aggregate
materials, allow the Department t o ensure that the construction work performed by
private contractors conforms to ADOT's requirements and specifications and to gather
documentation f o r contractor payments.
ADOT Has lrn~ roved Efficiency of In- House
Staff But Consultant Costs Are Well Above Goals
ADOT has reduced i t s in- house construction s t a f f , but exceeds cost goals
for projects managed by consultants. Even though the highway
construction program has grown substantially, construction staff levels
are lower than previous years. Overall, ADOT's in- house
construction- related staffing costs were within $ 278,000 or less than 1
percent of i t s goals during the last three years. However, the cost of
using consultants to manage projects exceeded Departmental goals by 18
percent, or almost $ 3.6 m i I l ion during the same period.
We analyzed staff related costs for the period January 1, 1987 through
April 30, 1990.(') A comparison of CE costs with cost goals presented in
Table 1 ( see page 9) and Table 3 ( see page 11) estimates the efficiency
in which staff- related expenditures are made by ADOT during a given time
period. The analysis included construction projects which accrued costs
during the period and compared actual CE costs to the costs that would be
expected i f the Department met i t s CE goals.( 2) Since our analysis
included some projects started prior to January 1, 1987 and completed
during the review period, as well as projects started during the review
period and s t i l l underway as of April 30, 1990, we applied the
appropriate CE cost goals only to project costs incurred during our
review period.
In- House s t a f f levels - Overal I, ADOT has reduced in- house staff even as
i t s construction program grew significantly. During fiscal year 1985- 86
the Department had 614 f i e l d staff supervising $ 184.7 m i l l i o n i n
construction a c t i v i t y . By the end of fiscal year 1988- 89, when the
construction program peaked at $ 303.6 million, the Department's permanent
construction staff was 578.
( 1) We obtained expenditure information from the ADOT Transportation Accounting System
( TRACs) general ledger and memo ledger f i l e s f o r July 1, 1988 through A p r i l 30, 1990
and from pre- TRACs accounting systems f o r January 1, 1987 through June 30, 1988.
January 1, 1987, was purposely selected as the s t a r t date f o r our analysis because i t
corresponded t o the approximate end date of the s t a f f analysis i n our 1987 report on
construction management.
( 2) CE cost goals used i n t h i s report were derived from over $ 1 b i l l i o n i n contractor
payments. A t o t a l of $ 828,265 i n payments withheld from contractors by ADOT, as a
r e s u l t of l i q u i d a t e d damages assessed f o r exceeding scheduled construction end dates,
were not included i n our calculation.
In- House Staff Related Costs - Between January 1, 1987 and
April 30, 1990, ( Table 11, staff- related costs for projects managed by
ADOT were $ 278,000, or less than one percent above the Department's CE
cost goals for the period. The CE cost analysis shows costs were above
goals in a l l but two categories, notably in projects over $ 20 m i l lion,
where the Department's CE costs were more than $ 1 million over cost
goals. However, the Department was well below i t s staffing goals in
projects of $ 5 to $ 10 m i l lion, achieving CE costs of 7 percent of total
project costs, well below i t s 9 percent goal. ADOT was also under i t s
goal by approximately $ 492,000 for projects between $ 1 mi l l ion and $ 2
mi I lion.
TABLE 1
STAFF- RELATED COST ANALYSIS
FOR ADOT- ADMINISTERED PROJECTS
BY PROJECT CATEGORY
JANUARY 1,1987-- APRIL 30,1990
Project
Cat eao rv
Favo rab l e
CE Goal Actual ( Unfavorable)
Amount CE Costs Var i ance
$ 500- 1 million 7,313,477 7,548,729 ( 235,252)
$ 1- 2 million 11,151,866 10,660,249 491,617
$ 2- 5 m i l l ion 21,804,675 22,133,098 ( 328 ,423 )
$ 5- 10 mi I I ion 13,759,636 11,368,505 2,391,131
$ 10- 20 mi l l ion 10,680,438 10,771,371 ( 90,933)
Over $ 20 mi l l ion 11,976.706 13.071.496 ( 1.094.790)
A l l Categories $ 86,434.024 $ 86.712.124 ($ 278,100)
Source: State of Arizona, Office of the Auditor General staff analysis
of construction and construction engineering expenditures for
the period January 1, 1987-- April 30, 1990.
As indicated in Table 2, the Department has shown steady progress in
reducing the overall staffing costs for projects managed by in- house
staff during the period of our review. Costs f e l l from almost 11 percent
of contractor payments in January- June 1987 to 8.96 percent in the f i r s t
ten months of fiscal year 1990. This reduction occurred during a time
when ADOT1s construction program was increasing-- total contractor
payments rose to a peak of $ 303.6 mi I I ion in fiscal year 1988- 89.
Fiscal
Year
TABLE 2
STAFF- RELATED COST ANALYSIS
FOR ADOT- ADMINISTERED PROJECTS
BY FISCAL YEAR
JANUARY 1.1987-- APRIL 30.1990
Contractor Actual CE Percent
Pa- men t s CE Costs Ach i eved
( a) January 1. 1987-- June 30, 1987, only.
( b) July 1, 1989-- April 30, 1990, only.
Source: State of Arizona, Office of the Auditor General staff analysis
of construction and construction engineering expenditures for
the period January 1, 1987-- Apri l 30, 1990.
Consultant- administered proiects - Total staff- related costs for
consul tant- administered projects exceeded goals by approximately $ 3.6
million during the period of our review ( Table 3, page 11). The
Department's policy of hiring consultants was instituted as a means of
addressing peak construction requirements or obtaining special expertise
without increasing permanent staffing levels. Although the use of
I,
consultants may have enabled ADOT to l i m i t the number of i t s in- house
construction s t a f f , the Department has incurred higher costs-- 18 percent
above i t s staffing goals-- on projects managed by consultants.
TABLE 3
STAFF- RELATED COST ANALYSIS
FOR CONSULTANT- ADMINISTERED PROJECTS
BY PROJECT CATEGORY
Januarv 1.1987-- A~ ril 30.1990
Project
Cateaory
Favo rab l e
CE Goal Actual ( Unfavorable)
Amount CE Costs Va r i ance
$ 500- 1 m i l l ion 599,564 941,770 ( 342,206)
$ 1- 2 m i l l ion 207,720 164,246 43,474
m $ 2- 5 mi I 1 ion 1,514,558 2,727,804 ( 1,213,246)
$ 5- 10 million 931,781 1,105,104 ( 173,323)
$ 10- 20 m i l l ion 2,864,293 4,638,914 ( 1,774,622)
Over $ 20 m i l l ion 13.528.443 13,512.111 16.332
A l l Categories $ 19,977,386 $ 23,566.813 J$ 3.589,428)
Source: State of Arizona, Office of the Auditor General staff analysis
of construction and construction engineering expenditures for
the per iod January 1 , 1987-- Apr i l 30, 1990.
CE costs in excess of the Department's established goals for
consu I tant- administered projects(') occurred in al I but two project
( 1) Cost goals f o r consultant- administered projects are generally higher than f o r those
projects managed by ADOT s t a f f . For example, the CE goal f o r consul tant- admi ni stered
projects over $ 20 m i l l i o n i s 10 percent compared t o 6 percent f o r ADOT- administered
projects.
categories. Costs were below goals for projects with total contracted
costs of $ 1 to 2 m i l lion and those with t o t a l costs over $ 20 m i l l ion.
However, costs exceeded goals in the other five project categories,
particularly for those with total costs of $ 2- 5 mi l lion and $ 10- 20
m i l l ion.
ADOT believes it may have underestimated the costs needed by consultants
for project administration. The Department noted that the goals used for
consultant- administered jobs were based on fewer than 20 projects and
" good judgement.'' ADOT further noted that many of the projects contained
in our review were of a " highly specialized nature," resulting in many
" nonstandard construction condition^.'^ For example, during our review
period CE costs of $ 720,875 were incurred by one consultant for
inspecting structural steel components at the fabrication m i l l s which
were located out of state. According to ADOT these types of charges are
unusual and were not included in the original goals.
ADOT's lnabilitv To Provide Timelv Data lm~ eded
Our Analvsis and Limited Follow Up On
Staff- Related Costs
Because the Department did not provide reliable data in a timely manner,
we could not complete our analysis to determine whether ADOT is
maintaining appropriate staff levels, or to determine the reasons ADOT
has been unable to meet i t s staff- related cost goals. We requested
financial data beginning in April 1990, but received incomplete and
unreliable data tapes over a four- month period. The Department was able
to submit financial information with sufficient documentation of i t s
r e l i a b i l i t y only on August 16, 1990, seven weeks after the scheduled
conclusion of our audit fieldwork. In addition, project records
submitted by the Department did not contain key information such as the
dates projects began and ended, and total contract amounts. A one- month
delay in obtaining reliable data on labor distribution further hampered
our review.
As a result, no time was avai lable to complete our analysis or determine
the reasons for the seemingly excessive consultant costs, and s t i l l meet
our October 1, 1990, reporting deadline set by statute. For example,
reviewing compliance with cost goals was not the only method by which we
intended to evaluate current staffing levels. We had also planned to
track staffing levels over time within each of the four districts to
determine whether individual districts were using temporary workers and
consultant administrators rather than permanent employees to meet peak
construction demands; and not using temporary workers or consultant
administrators when in- house staff were available.
RECOMMENDATION
1. ADOT should investigate the reasons why CE costs for
consul tant- managed projects were above its goals ($ 3.6 mi l l ion). I f
ADOT determines the goals for consultants have underestimated the
costs needed, ADOT should revise the goals accordingly. Otherwise,
AWT should take steps necessary to ensure that excessive costs are
curtailed in the future.
FINDING II
DEPARTMENT EFFORTS TO IMPROVE
CONSTRUCTION STAFFING ESTIMATES
HAVE BEEN INADEQUATE
Recent efforts by the Arizona Department of Transportation ( ADOT) to
improve computer estimates of i t s construction staffing needs have been
unsuccessful. Shortcuts taken in efforts to upgrade i t s manpower
management system have undermined the r e l i a b i l i t y of key elements of the
system. I f ADOT is to more effectively plan and control staff- related
expenditures, corrective measures are necessary.
Our Office concluded in 1987 that ADOT's manpower management system, the
Cons t ruct ion Eng i neer i ng Manpower Management Sys tem ( CEMMS) , was not
being effectively u t i l i z e d . The system, which uses a computer model to
project staffing requirements, was developed, in part, as a result of
Legislative concern over the Department's control of nonappropriated
staff resources.(') A t the time of our last review, we found that
c r i t i c a l system elements were outdated, data was miscoded, and ADOT
management did not f u l l y support the system. Since then, ADOT has worked
to improve the sys tem. The Department spent approx i mate l y $ 700,000 to
enhance the system's reporting capabilities, and make it more user
friendly by replacing the computer software component. Considerable time
and e f f o r t has also been expended in upgrading system planning values.
ADOT's Attern~ ts to lm~ rove
Its Man~ ower Manaaernent System
Have Been Unsuccessful
Departmental actions toward improving manpower management through
computer- based staffing projections have been inadequate. Although ADOT
( 1) Funding f o r construction s t a f f i s not appropriated by the Legislature, but comes
instead from the Highway User Revenue Fund. S t a f f i n g levels are determined by the
Department, based on i t s assessment of construction a c t i v i t y .
needs accurate manpower projections, a variety of factors, ranging from
se l f - imposed dead l i nes to poor samp l i ng t echn i ques , have unde rm i ned the
Department's attempts to improve the system.
Improved manpower ~ r o i e c t i o n s need4 - Computer- based projections are an
integral part of ADOT's decision- making process, as indicated by the
following examples:
the Department's Deputy State Engineer incorporates manpower
projections in assessing Statewide staffing requirements;
@ D i s t r i c t Engineers use manpower projections in deciding staff
deployment within their jurisdictions; and
0 Area and Resident Engineers review manpower projections in assessing
staffing requirements for individual construction projects.
However, current system forecasts have been poor and of limited value in
decision making. As a result, Department managers have had to rely more
heavily on their own judgment and experience in estimating and
controlling the size of Construction Engineering s t a f f . A review of the
in- house monitored construction projects completed since fiscal year
1987, demonstrates this lack of faith in current forecasting.
Considerable routine adjustments to projections have been made by
supervising engineers during that time. For almost one- half of a l l
projects reviewed, system projections were modified, up or down, by 40
percent or more.
However, estimates made by ADOT's supervising engineers have not proven
much better at projecting or controlling staff u t i l i z a t i o n than current
computer forecasts. The relationship between project staffing plans
based primarily on engineers' judgment and actual staff u t i l i z a t i o n is
weak. Actual staff u t i l i z a t i o n has ranged from 97 percent higher to over
200 percent lower than that predicted by supervising engineers. In 40
percent of a l l projects CEMMS recorded as completed since fiscal year
1987, engineerst original estimates were o f f by more than 25 percent from
actual hours worked. Because various factors can disrupt anticipated
staff arrangements, it is apparent that more re1 iable computer- based
projections would assist ADOT in exerting more control over i t s staffing
resources .
Key svstm element remains flawed - The Department's attempt to upgrade
i t s computer- based staffing projections has, thus far, been
unsuccessful. A principal cause of discrepancies in the computer
projections is inaccurate planning values. These values, expressed in
terms of labor hours needed for a construct ion a c t i v i t y per roadway mi le
( i . e., 1,000 man hours per mile of earthwork) had not been updated since
the system's implementation in 1982. To date, ADOT has not been able to
develop an adequate data base from which to accurately derive these key
elements.
I n i t i a l l y , ADOT attempted to gather data on each construction project
completed since 1983 ( estimated to be approximately 660 projects). As
AWT assumed future staffing requirements would be related to past
performance, analysis of historical data was appropriate. One method to
ensure the val i d i ty of future project ions is to analyze the appropriate
population in i t s entirety, as ADOT attempted.
ADOT abandoned this original strategy. The Department's central office
construction section began s o l i c i t i n g project data on labor distribution
from the four ADOT d i s t r i c t s " Late in 1987 or early in 1988 ..." However,
due to the following factors, a complete set of data on manpower usage
for the various kinds of construction projects was never assembled.
D i s t r i c t Res~ onse Was Untimely
The ADOT employee coordinating the data collection project reported
that, despite repeated requests, " d i s t r i c t response was s t i l l slow or
incomplete ..." Therefore, ADOT was unable to meet either i t s
original deadline or i t s revised deadline of March 31, 1988, for
collecting the necessary data.
Data Quality Was Poor
A second reason for abandoning the original plan was related to data
quality. Miscoding time charges have h i s t o r i c a l l y plagued the CEMMS
data base. Miscoded time charges were documented during our Office's
1987 audit, and coding errors continue to compromise the system's
data base. The extent of the data quality problem was never f u l l y
explored by ADOT, and though i t may have been possible to correct
errors through additional research, according to a Departmental
manager ADOT decided that the time needed to identify and correct
errors would be prohibitive. Given the poor qua1 i ty of project data
available, the v a l i d i t y of any results would have been questionable.
Time Constraints Were Prohibitive
The Department's objective was to complete renovation of i t s manpower
management system in time for our Office's current audit. A
significant delay in information would have affected ADOT's a b i l i t y
to meet this goal.
ADOT undermined the u t i l i t y of i t s new planning values for predicting
staffing needs by using unsound methodological shortcuts. In July 1988,
with time running out, ADOT decided to calculate new planning values from
a limited sample of data from completed projects. I f done correctly,
sampling is a legitimate way to reduce data requirements, while s t i l l
achieving j u s t i f i a b l e results. However, the sample techniques employed
by ADOT were deficient.
The sample was not randomly selected; i t was handpicked by d i s t r i c t
personnel. In addition, i t was too small: the planning values were
derived from labor usage obtained from, at the most, 16 projects. Some
planning values were based on data from only a single project.( 1)
Follow- up analysis performed by ADOT clearly demonstrated the weaknesses
of the newly derived values as predictive tools. ADOT tested i t s new
values on a second sample of 40 completed construction projects. The
differences between staff projections and actual staff usage were
substantial, varying by thousands of hours in many cases. For example,
in one case, the projection was under the actual figure by almost 3,000
hours, a 1,558 percent difference. In an attempt to correct this
problem, ADOT revised the planning values so that projected hours
conformed more closely to the actual hours in i t s second sample of 40
projects. However, ADOT had no way of knowing whether the second sample
was more valid than the f i r s t . The Department approved these revised
values in August 1989.
( 1 ) One- hundred- thi rty- seven projects ( approximate1 y 21 percent of the number avai 1 able)
were used to calculate planning values for 17 d i f f e r e n t types of construction
projects. To ensure more credible results, a larger sample would have been required.
Of note, an outside consultant hired by ADOT has confirmed that the sample drawn by
ADOT, even including the additional projects from the validation sample, was marginal .
Corrective Measures Needed for ADOT'S
New Manpower Manaaement Svstem
Unless corrective action is taken, ADOT's updated manpower management
system, renamed the Construction Management Plan ( CMP), w i l l not function
as intended. The Department should consider postponing implementation of
CMP1s revamped computer forecasts u n t i l i t can reliably assess
construction staffing needs.
Despite some setbacks, implementation of the updated manpower management
system is scheduled for the near future. Problems in the implementation
of CMP's software component, ARTEMIS, have caused delays of several
months. However, i n i t i a l training on ARTEMIS has been completed, and the
Department plans to implement the new system sometime during the Fall of
1990. The system is scheduled to be operational in January 1991.
ADOT should consider delaying implementation of CMP1s revamped computer
forecasts u n t i l the problems associated with staffing projections can be
resolved. It is important the new system demonstrate r e l i a b i l i t y early
on. The present system lost c r e d i b i l i t y with the Districts, in part,
because of i t s i n a b i l i t y to accurately predict staffing requirements. At
the time of our last audit, ADOT personnel described the present system's
projections as " only s l i g h t l y effective'' and " nearly uselessn. Some
D i s t r i c t personnel have already expressed skepticism about the new
system, and i f i t fai Is to perform according to expectations, we be1 ieve
it too could rapidly lose c r e d i b i l i t y .
By continuing to update planning values as new projects are completed,
ADOT believed that it would be able, in the near future, to improve
staffing projections generated through CMP. Our analysis suggests that
even i f staffing projections could be made more reliable through
0 continued updating, it might take several years to correct the problem.
Additionally, other aspects of the computer model, aside from i t s
planning values, have not been tested by either our Office or by ADOT,
and could also be invalid. For example, as part of the system upgrade,
D i s t r i c t productivity has recently been factored into the computer model;
however, these productivity factors have not been validated.
Consequently, it is possible that even i f the system's planning values
were valid, staff projections would continue to be inaccurate. The
Department should consider obtaining expert advice regarding the testing
of other aspects of the model.
Finally, ADOT should take steps to ensure that the data on labor usage
are accurately reported. Without accurate data, the computer model w i l l
not work effectively, and the adage " garbage in- garbage out" w i l l apply.
Since accurate reporting i s apparently s t i l l a significant problem, A N T
should consider options to ensure time is recorded correctly. One option
would be for ADOT to use trainers to work with f i e l d staff as the new
system i s implemented. ADOT's Highway Maintenance Group used this with
some degree of success when the new highway maintenance system was
implemented.
RECOMMENDATIONS
1. The Department should postpone implementation of i t s new manpower
management system's revamped computer forecasts u n t i l i t can
reasonably assure the staffing projections made by CMP are valid.
2. The Department should also consider options such as employing
trainers to address problems related to the accurate reporting of
labor u t i l i z a t i o n .
0
ARIZONA DEPARTMENT OF TRANSPORTATION
206 South Seventeenth Avenue Phoenix, Arizona 85007
0 James S. Creedon
Acting Director
ROSE MOFFORD - Governor HmMm
September 28, 1990
Mr. Douglas R. Norton
Auditor General of Arizona
2700 North Central Avenue, Suite 700
Phoenix, Arizona 85004
Dear Mr. Norton:
My staff and I have completed our review of the audit report on ADOTs construction staffing levels; some
of the conclusions contained in the report give me serious concern. ADOT does not concur with the recom-mendation
to postpone the full implementation of the Construction Management Plan ( CMP).
ADOT throughout the past years has demonstrated clearly its ability to reduce and control both construction
staffing and construction engineering ( CE) costs. The conclusions of the audit are misleading, because three
very important elements were omitted in the analysis:
SPECIALTY ENGINEERING COSTS
While the auditor's report acknowledges that many projects contained in the review were of a " highly special-ized
nature" resulting in many non- standard construction conditions, no adjustments were made for these non-standard
projects. The audit team should have included in its analysis and comparisons adjustments of
$ 720,000 for specialty engineering costs on consultant- managed projects.
LIOUIDATED DAMAGES
Liquidated damages is " the daily amount set forth in the contract price to cover additional costs incurred by
a state highway agency because of the contractor's failure to complete the contract work within the number
of calendar days or workdays specified." The audit team did not include in its analysis and comparisons
adjustments of $ 1.7 million for inhouse- managed projects and $ 2 million in consultant- managed projects for
liquidated damages.
TIME PERIODS OF THE CONTRACTS
While ADOT understands the Auditor General's desire to cover the time period from the close of the last
audit through April 30, 1990, the only accurate method is to evaluate all costs upon completion of a project.
ADOT has met its goals in the control and management of a tremendously large and complex highway con-struction
program. An accurate comparison of the consultant- administred engineering costs, taking into
account the three issues not addressed in the audit, to the goals set by ADOT for all projects managed by
private consultants reflects a figure of $ 1.2 million ( or 6%) less than the ADOT goal.
As a result of questions raised regarding the audit during the data sampling procedure, ADOT sought the
assistance of an independent consultant to evaluate the validity of the method used. That evaluation found
HIGHWAYS . AERONAUTICS . MOTOR VEHlCLE PUBLIC TRANSIT ADMINISTRATIVE SERVICES TRANSPORTATION PLANNING
Mr. Douglas R. Norton September 28, 1990
the methods to be sound. Further, the Federal Highway Administration ( FHWA) approves ADOTs
construction engineering costs on all federal- aid projects, and they found ADOTs costs, staffing and
construction management system to be appropriate.
FHWA, the American Association of State Highway and Transportation Officials ( AASHTO) and member
departments, all recognize the need for engineering judgment in the application and use of any construction
management program. The role of the registered professional civil engineer in the management of the
construction program is vital to its success. The exercise of this engineering judgment was not given
consideration by the audit team, although it is an integral part of the program.
The audit report states that the system's planning values have not been updated since the system's implemen-tation
in 1982. This is incorrect; the planning values were updated in 1988.
The circumstances leading to delays in the audit staffs receiving information in a timely manner was
unfortunate. Clearer communications between the audit staff and ADOTs staff would have prevented most
of these problems.
In summary the Arizona Department of Transportation is a much more professional orgnization than your
report reflects.
Attached to this letter is a detailed response to the audit report. Included are several attachments which
address various issues raised in the report.
Thank you again for the opportunity to make comments on your findings. I appreciate the fine working
relationship we have with your staff and commend them for their conduct while visiting this agency.
Sincerely,
L/ James S. Creedon
Acting Director
JSCm
Attachments
ARIZONA DEPARTMENT OF TRANSPORTATION
Response to the Performance Audit
of the
Construction Staffing Levels
RESPONSE TO FINDING I
ADOT does not concur with the conclusions or recommendation contained in Finding I. ADOT is managing
construction engineering ( CE) costs effectively and efficiently. As indicated in the Auditor General's Report,
CE costs on ADOT- administered projects have decreased from 10.95% in 1986- 87 to 8.%% in 1989- 90. This
decrease resulted from efforts to monitor and control construction staffing levels and other CE costs.
The report indicates that on consultant- administered projects, CE costs exceeded ADOTs goal and implies
that ADOT is incurring seemingly excessive consultant costs. The report's conclusions and recommendation
regarding this charge are erroneous. Three important elements were omitted from the analysis of these costs:
SPECIALTY ENGINEERING COSTS
The consultant working at the Roosevelt Bridge incurred costs of $ 720,875 for inspecting structural
steel components at the fabrication mills throughout the United States. Although mentioned in the
audit report, this $ 720,875 was not reduced from the $ 3.6 million difference. Correction for this ele-ment
alone reduces this amount to $ 2.9 million. These specialty engineering and inspection charges
were incurred but were not added to the goals, although they were required and established by supple-mental
contract agreements.
The auditor's report acknowledges that many projects contained in the review were of a " highly speci-alized
nature', resulting in many " non- standard construction conditions." More specifically, 16 of 33
projects ( or 48%) of the projects were unique as follows: four multilevel interchanges; Roosevelt
Lake Bridge; three small, rural, remote bridges; four rest areas and state parks, and four tunnel
projects.
LIQUIDATED DAMAGES
Liquidated damages are defined as " the daily amount set forth in the contract to be deducted from
the contract price to cover additional costs incurred by a state highway agency because of the con-tractor's
failure to complete the contract work within the number of calendar days or workdays
specified." ( Ref. CFR 630.302i)
A total of $ 2 million in liquidated damages should have been accounted for in the analysis of con-sultant-
administered projects. This correction would reduce further the reported differences between
the CE goal and actual costs from the $ 2.9 million figure indicated above to $ 900,000. Inclusion of
liquidated damages for ADOT- administered projects also changes the reported overage to a difference
of $ 1,425,750 under the goal.
On August 23, 1990 a letter documenting liquidated damages was sent to the Auditor General for
consideration. Final payment vouchers were also furnished as verification of these assessments.
Distribution of liquidated damages between ADOT- administered projects and consultant projects is
as follows:
ADOT CONSULTANT
Assessed $ 817,390.00
Pending 886,360.00
$ 1,703,750.00
TIME PERIODS OF THE CONTRACTS
ADOTs analysis, using total costs for the entire period on consultant- administered projects, finally
reduces the above $ 900,000 overage by an additional $ 2.1 million ($ 1.2 million under the goal). The
method of analysis used by the auditors of partially analyzing incomplete projects caused the largest
amount of reported overruns.
Attachment 1 shows how the method applied by the auditors of using a time period to compare goals
and costs provides an approximate, inaccurate picture of CE cost differences. This is due to the time
lag in the billing cycle of the accounting process. The most accurate method of determining CE costs
is to evaluate 4c osts upon com~ letiono f a project. The grand total of all projects shows a CE cost
of 8.1% prior to January 1, 1987; a CE cost of 13.0% between January 1, 1987 and April 30, 1990,
and a CE cost of 11.8% after April 30, 1990. This misrepresents the CE cost as being 1.2% higher
than actual costs during the sample time.
Based upon the $ 179,713,231 million construction costs sample audited during the time period, multi-plied
by the 1.2% difference in CE costs, the audit method used contains approximately $ 2.1 million
more costs than when total project costs are used. Therefore, ADOT disagrees that additional controls
are needed, as ADOT has met and exceeded cost goals for consultant- managed projects when allow-ances
are made for specialty engineering charges, liquidated damages and time periods for contracts.
In estimating engineering costs for construction projects, goals are established as guidelines. These guidelines
provide a tool and " target value" to use in establishing approximate costs for construction engineering. When
using the tightest management control methods, engineering costs still will vary from project to project due
to individual characteristics of the job.
The audit team recognized dynamic situations encountered during the course of almost any highway con-struction
project. As a result, during the course of the audit a list of " Factors Affecting Staffing", which
ultimately affects goals, was developed by the auditors and concurred in by all ADOT Construction Manage-ment
personnel. These factors, beyond ADOTs direct control which ultimately affects goals, were developed
by the auditors and concurred in by all ADOT Construction Management personnel. These factors cause con-struction
engineering staffing levelss and costs to vary outside estimates or " goals". Some examples of these
factors are:
The adequacy of the contractor's original work schedule.
The contractor's ability to maintain predictable and reasonable productivity rates.
Claims filed by the contractor.
EnvironmentaVarchaeological issues arising after start of construction.
Weather.
The availability of materials.
Accidents encountered at the project's site.
The original CEMM system was established following the guidelines and recommendations of the
" Construction Engineering Manpower Management, System Design Manual." This was prepared under the
national p l e d fund study administered by the Federal Highway Administration and several sponsoring state
agencies. The manual states: " Engineering judgment can and should always be used as a means of overriding
any distribution regardless of method used." We have applied this guideline to all aspects of the CEMMS
program.
Attachments 2, 3 and 4 present further evidence of ADOTs continual effort in reducing CE costs, whether
managed by ADOT or by consultant engineers.
Attachment 2 shows a five- year increase in the construction program from $ 1% million per year to $ 375 mil-lion
per year, while the construction staff has remained at an average of 580 people.
Attachment 3 shows the effect of the construction cost index on ADOT and consultant CE costs and how the
cost figures shown on Page 10 ( Table 2) of the audit report are affected by this cost index During the time
period of this audit, between 1986- 87 and 1989- 90, the construction cost index has reduced from 100 to 90,
indicating ten percent ( 10%) more work is being accomplished for the dollars expended. Also, during this same
period inspectors' and technicians' salaries have increased by 12.75%, thus indicating less inspection hours are
available for this increased dollar amount of work. These factors further show ADOTs progress in reducing
overall staffing costs.
Attachment 4, the " Survey of Western Association of State Highway and Transportation Officials' Construction
Engineering Costs", shows only four western states with costs lower than Arizona's. The Federal Highway
Administration allows fifteen percent ( 15%) CE costs; ADOTs 9.2% is well below this value.
RESPONSE TO TIMELINESS OF DATA IMPEDING FURTHER ANALYSIS
Although ADOT recognizes that there were difficulties associated with obtaining selected data, it is the
Department's opinion that data availability issues could have been resolved at a much earlier point in the audit
process if appropriate communication channels had been established between the Auditor General's staff and
ADOTs senior management. Information requests by the Auditor General's staff were fragmented among
many areas within ADOT. ADOT senior management was not made aware of any significant issues related
to the timeliness of data until late in the audit.
All requests for information by the Auditor General were addressed promptly, and every effort was made to
provide accurate and timely data. The Department placed a high priority on respmding to the Auditor
General's requests.
The requested data spanned two complex systems and required the creation of multiple, customized computer
programs and reports, plus the manual review of over 1,000 project files for non- computerized data. Normally,
when new computer programs are created to extract information from automated data files, there should be
an early validation process by the user of the data. The responsible user area in ADOT was not contacted by
the Auditor General's staff to validate data until late July-- one month after the scheduled completion date for
field work.
The circumstances leading to delays in the Auditor General's staffs having all the information needed for
further analysis was unfortunate. Most of these difficulties could have been avoided if the Auditor General's
team had advised ADOTs senior management of the precise data requirements and time line at the initiation
of the audit, coordinated data requests among the appropriate areas, and requested ADOTs assistance with
data validation earlier in the process. In recent audit efforts the Auditor General's staff met with the re-
sponsible senior administrator at an earlier stage of the audit to outline information needs. This important
step would have ensured that the Auditor General's requirements were fully met within the required time
frames.
RECOMMENDATION RESPONSE
ADOT has investigated CE costs for consultant- managed projects and disagrees that they are above goals. In
fact, CE costs were approximately $ 1.23 million under goals. However, ADOT will continue to monitor
carefully and evaluate each individual project to assure goals and guidelines are reasonable.
In accordance with the recommendations of the 1987 audit report, the Department used more consulting
engineers to administer projects. Twenty- one percent of the CE costs represented in this audit were paid to
consultant engineers, and as anticipated by ADOT, costs were higher than on those administered by in- house
staff.
RESPONSE TO FINDING I1
ADOT disagrees with this finding. The results of this audit show ADOT has successfully used the CEMM
system and engineering judgment to exceed the established goals. The use of the words " inadequaten,
" unsuccessful", and " flawed" is totally misleading and misrepresentative of the system. It is difficult to
comprehend how a system can be judged as " unsuccessful" when it has not yet been fully implemented, and
how values are judged to be " inaccurate" when they have not been fully tested.
Attachment 5 is from a Federal Highway Administration's review of ADOTS Construction Manpower
Management System. The summary and comments state:
" ADOT is to be commended on their use of their Construction Management Program by all
facets of their construction personnel. They have made improvements to their construction
program in their goal to administer construction related activities on a statewide basis to
assure quality construction is achieved in the most economical manner."
The improvement to the system is adequate and as accurate as practicality permits. The sampling techniques
were carefully executed to represent the best data within the database. Dr. John P. Zaniewski, P. E., Professor
of Engineering Mathematics at Arizona State University, in his report dated July 19, 1990, entitled: " EVALU-ATION
OF CONSTRUCI'ION MANPOWER ESTLMATE, for the Arizona Department of Transportation",
on page 31 states: " Overall the construction manpower planning process seems to be reasonable ..." He
continues on page 32 under the same heading: " Considering the limitations of the raw data base, ADOT has
done a good job in the development of the data bases used to establish the standard planning values."
Feedback received from users in the field indicates that manhours obtained from the new planning values are
predicting much closer to the staffing hours than were the manhours obtained by using the old planning values.
Furthermore, the users expressed great satisfaction with the new planning method for its ease of application
and simplicity. It is not clear what is meant by the statement, " The Planning valu =... had not been updated
since the system's implementation in 1982." They were, in fact, updated in 1988.
Again, Dr. Zaniewski states on page 9 of his report: "... the number of projects required for a complete factorial
design would be 1792." He continues on page 13: " Since the services that ADOT contracts change from time
' to time, e. g. the use of contractor staking, traffic control requirements, and end product specifications, it is
unlikely that the Department will ever be able to establish a truly statistically sound data base for estimating
the manpower requirements for all of the factors. This level of detail is probably not warranted even if the data
were available."
The methodology used by ADOT to develop the new planning values was very sound, considering the quality
of the data, as stated by Dr. Zaniewski. The sampling technique was chosen to compensate for the size of the
sample, i. e., the users were asked to provide projects that were as free of error as possible.
The number of activities were reduced from 63 to 26 to simplify the process and to ensure accurate reporting
of manhours. In addition, the Construction Management staff will soon be engaged in an extensive and contin-uous
job- site training program, leading to a successful implementation and proper maintenance of the system.
It should be noted that the Arizona Department of Transportation is on the cutting edge of technology
development with its efforts to develop a state of the art manpower management system.
RECOMMENDATION RESPONSE
The Department does not agree with postponing implementation of its new manpower management system
and revamped computer forecasts. The revamped planning values ( computer forecasts) are presently in use
and are producing satisfactory results. As additional information is added to the data base, the accuracy of the
forecast values will be checked constantly and revised as needed. If necessary, ADOT may engage Dr.
Zaniewski to assist in further refinements of our forecasting methods.
The Arizona Department of Transportation will provide " hands on" training at the user locations to address
problems related to the accurate reporting of labor utilization.
ARIZONA DEPARTMENT OF TRANSPORTATION
CONSTRUCTION MANAGEMENT BRANCH
RILITIONS33IP OF CONSTRUCTZON ST- G TO PROGRESS P A n U N T S
800
- PAYMENTS
- FrE'S
800
600 - I
h! B2- m9I W O--. ...... ....... -- roo zcss! 8
.. f... .\ ......& ., .........
01
.6M- * e9.
Y
Y k-
670
3 cii
a8.7
0- t- 400
83 84 86 86 87 88 89 90
FISCAL YEAR
a 0- .......................................................................-
076.0
Attachment 3
COST
FOR AWT ADMINISTERED PROJECTS -
Construction Costs and CE Costs Adjusted to Equivalent 1986- 87
Construction and Salary Levels.
Adjusted
Fiscal Contractor Adjusted CE Percent
Year Pament s - Achieved
1986- 87 ( a) $ 105,911,174 $ 11,602,456 lo. 95%
1987- 88 ( b) 289,133,379 25,373,585 8.789
1988- 89 ( c) 348,080,647 27,297,270 7.84%
1989- 90 ( d) 265,769,642 20,760,401 7.819
a) Actual values January 1, 1987 - June 30, 1987,
only.
b) Adjusted using Const. Index of 92 compared to
100 for 1986- 87. CE costs adjusted using 1.5%
salary increase.
c) Adjusted using Const. Index of 87. CE costs
adjusted using 5% accumulated salary increase.
d) Adjusted using Const. Index of 90. CE costs
adjusted using 6.259 accumulated salary
increase. July 1, 1989 - April 30, 1990, only.
Attachment 4
a
YISHSRT: At) ARIZONA DEPARTMWT OF TRMSWRTATIM
CONSTRUCTIW OPERATIOIIS SERVICES - FIELD REVIEW B W
SURVEY OF WASHTO STATES CONSTRUCTION EN6INEERIIIG CRTS
SEPTEMBER 10, 1990
WASHTO STATES I OVERALL CE % 1 BREAKDOHU OF CE % I ITEMS INCLUDED IN CE COSTS
___________._._.._._.. I. ...............................................................................................................
1 I I
ALASKA I NOT AVAILABLE AT THIS TIME / NONE / ALL CHARGES TO COWSTRUCTION PROJECTS
I I I
HAHAI I I NOT AVAILABLE AT THIS TIME l NONE 1 ALL CONSTRUCTION AN0 POST- DESIGN CHARGES
1 1 / TO CONSTRUCTION PROJECTS
I I I
: DAHO I 1 1
I I I
I I I
NEWMEXICO I / 1
I I I
I
UTM
/
/ NOT AVAILABLE AT THIS TIME
I
/ NONE 1 ALL FIELD PERSONNEL CHARGES WITH A 15% MAXIMUM
I 1 / LIMITATION ON ALL PWECTS
I I I
WAYIIYGTON I NOT AVAILABLE A1 THIS TIME / NONE I ALL FIELD AND HUGQUARTERS PERSOWNEL CHARGES
I 1 I TO CONSTRUCTION PROJECTS
I I I
COLORADO 1 12.7% ( 10.2% DIRECT b 2.5% OVERHEAD) ( NWE I ONLY COWSTRUCTION FIELD PERSONNEL( D1RECT COSTS)
1 1 I 6 SUPPORT HEAWARTERS STAFF ( OVERHEAD CQTS)
I I
NEVADA
I
1 12% I 0 TO 4 MIL = 158 1 ALL CHARGES TO CONSTRUCTION PROJECTS
1 / 4 MIL TO 7 MIL = 108 I
I I O V E R l M I L = 58 1
I I I
CALIFORNIA I 11% TO 12% ( ESTIMATE OWLY) I NONE I ONLY FIELD OPERATIOWS PERWINEL ONLY
I I I
r( OL11ffi 1 10.3% 1 NONE / ALL COllSTRUCTION AND AMINISTRATIOW COSTS TO
1 I I AMINISTER PROJECTS
I I I
MRTH DAKOTA 1 108 I N HOUSE - 15% CfflSULTANT ( ESTIMATE) I NONE I OWLY COWSTRUCTION EWGINEERIK COSTS AFTER
1 I I BID AWAAO DATE
I I
l Q l T A l U I 10% 1 0 TO 1 R I L * 12% 1 ALL COSTS BY LAB, SURVEY, OFFICE. MTERIALS AN0
I
I / 1 M I L L U P = 108 I INSPECTION - OTHER OVEWlEM COSTS ARE INCLUDED
I I I
ARIZONA I 9.28 I N HOUX 12.58 CCUSULTANT j VARIES BY CMTRACT MOU)( T I ALL W I N E E R I M CHARGES TO CMSTWTION
xssaaaa I x.==. ixZI=.. a... a. UX. I. XaaI I x.-~. aa.. xn.. i....~ 1 . r.. m. aa.= xx= x~== x=.. 1ln~ 1=~= 111
I I I PROJECTS AFTER BID ADVERTISEMT.
I I ( - I. J-- M. fXXII= X=-
I I I
O L 6 a ( I 9% I LESS THAN $ 100.000 108 I ALL CCUSTRUCTIOY FIELD PERSWEL MlLY
I 1 1100,000 TO 1 N I L 9 ¶ I
1 1 OVER 1 N I L 8% 1
I I I
O W O l l A 1 8 % I M E VARIES 8Y FA 1 M L Y COllSTRUCTIOll MBINEERIIW COSTS AFTER
1 I i STATE PROJECTS 1 BID MURO DATE
I I I
TMAS 1 78 ( ESTIMTE OWLY) I I ALL WWS TO COISTRUCTION PROJECTS
I I I
WITH DAKOTA 1 58 ( ESTIMTE ONLY) 1 NOYE I ONLY E# STRUCTIQ FIELD PERSWEL M D
I I I colaucrlrr pama
Attachment 5
Page 1 of 2
USDcwrmmrc
ulmaoma~ n
- mom
Mnunistmnon
Y.~*+ R n r mian -
S U O I * ~ ~ Construction Engineering Yorkforce Information oat* I 8 Lga)
System Revlew - Arizona Department o f Transportation
Rw 10
Ffan Chief, Ccnstructlon and Maintenance Dlvislon Alln Ot HHO- 31
Office of Highway Operations
' 0 . Mr. { bin M. Wood
Regional Federal Highway Administrator ( HRA- 09)
San Francisco, Cal ifornia
Attached are two copies of Ms. Melisa Rldenour's trip report which discusses a
' state- of - the- practf con rrvl en of the Constructfan Engineering Uorkforcr
Informatton System ( CEWIS) In us4 by the Arizona Oaorrtment of Transportation
( ADOT). The results of this ' fact findingY are provided I n the attached
paper.
Thls review Is part of a 1990 nationwide review of the various ncrkforcr
management systems in use by the State highway agencies. Onca this nationwldr
rrvf en is completed, r sumary report will be developed and distributed.
Please forward a copy of this report to the Arizona Olvislon. Also, please
extena our tnanks to the members of your staff, the Division Office and the
A001 for ther r hospitality and assistmer .
Yl1llaa A. Yerrwn
Attachment 5
Page 2 of 2
SUllMARY
The results of this " fac: finding' are included In the attached paoer I have
prepared on Arizona's Constructlon Management Proqram. Brttfly, ADO1 is
currently rn a transltron perioa with the mole men tat run of a revtsed
consrr~ c' 1on nanaqement system referred to as the Constructlon Management
Proqram. Therr original systefi was W e l e d after the ' Construction
Engineering Manpower ManagcfrIent Systm Design Manual ', a Natlonal pool ed fund
Study In 1978. Thls systom has been utilized since 1983.
As of July 1990, thr revlsed system should br in use state- wide. The major
changes between the original and revtsed systems art ( 1) five year projection
caoabilitles. ( 2) unit of m r s u r t w n t for the standard plannlnq values based
uoon man- hour per ratlr, ( 3 ) reductton In planning ~ ctivittes, ( 4) modifier
aopi red In an indirtc: manner, ( 5) contractor's actual work scneduir, can
automatically be taken Into cons tdrrat ton, and ( 6) ' state- of- the- art computer
1 anguaqr provrded. The ' state- of- the- art* lanquagr facil itates the ease In
obtainlnq specially tailored I n f ~ n U l t I ~ bny creating differrnt scenarios.
The use of a constructlon mlfllgeMnt systm has support from all ltvrls of the
constructlon personnel. Thls is essmtiai if the brst use of the avatla~ le
fnformatton provided by tnls management tool 1s to br obtained.
The CHP indicates the number of inSP* CtOrS nedrd but does not address they;
sk111 levels; althouqn. It does indlcatt how many aan- hours wrll 5r needed for
a spcctf:~ activrty.
At the pesrnt trme, the CnP I S not utilized to determtnr such rttfis as
rtcrul t w t 501 ic! es and training plans. The Progrw does have tne
Caoaoilities to aid in tneir developmnt,
A copy of the guid@ itnrs usrd and the notrs takm during this revleu are
attacnea to the ftle clpy of thts nport.
conrnts
a007 1s to 5~ commended on thelr use of their Constructlon Management Program
by all factts of their constructTon perso~ nrl. They hrvr made tmor? vements to
thetr construction progrrn in fhai r goal to admtntster c~ nstructlon re1 al- td
actrvittes on a statmld8 basfs : a assure quality constructlon IS achieved in
the nost tconomical aannrrn .
AOOT has not stopped there. They continue to strtve for imorovrd txcellrnce
by rev1 sing thrir prevtous Construct ton Manpower Management System. The
future loakt br~ ght for their new systm. It has the powrr to aid : hem in
develooing future pollcles and programs pertaining to suc3 items as training
plm: an4 rrcruitment needs.
AOOT's Constructlon N a n a q m n t is curr@ ntly asktng for rrorrsentatlon on the
proJect schrduiing corittar, This would enable them to provrde rnput on the
effect of mvtng p m j r c t s Basad on the avatlabtllty of construction personnel.