GAO-01-347R Restructuring the District’s Division of Transportation

United States General Accounting Office

Washington, DC 20548

March 16, 2001

The Honorable Joe Knollenberg

Chairman, Subcommittee on the

 District of Columbia

Committee on Appropriations

House of Representatives

Subject: Restructuring of the District of Columbia Department of Public Works’

Division of Transportation

This letter responds to the Subcommittee’s request for information on how the

government of the District of Columbia (District) is addressing two factors—a

staffing shortage and an increased workload—that may be affecting the ability of the

Department of Public Works (DPW), Division of Transportation (DDOT), to contract

for work. In June 2000, we briefed the Subcommittee that as of April 30, 2000, $530.5

million in unexpended federal-aid funds was available to DDOT for projects that date

back to at least fiscal year 1993. Of that amount, at least $282 million was for projects

for which contracts had not been awarded.1

 We also reported that DDOT’s

processing times for design and construction projects were lengthy—25.7 months and

21.6 months, respectively, from the date the Federal Highway Administration (FHWA)

notified DDOT of its obligation ceiling to the date when the contractor was sent the

notice to proceed with the work. At that time, the new Acting Director of DDOT said

that problems with staffing and procedures, such as those for internal and external

project review and approval, were delaying the award of contracts for projects.

As agreed with the Subcommittee, the objectives of our work were to provide

information on (1) how state and other engineering and construction organizations

were handling staffing shortages and increased workloads and (2) the status of the

District’s efforts to reorganize DDOT to improve service. As further agreed, we

provided the District with the information we gathered on what others, including two

 1

The $530.5 million refers to obligated, unexpended federal-aid funds. Under the federal-aid highway

program, the federal government’s obligation to pay the states and the District of Columbia for the

federal share of a project’s eligible costs occurs when the project is approved and the project

agreement is executed. See 23 U.S.C. § 106. The term “obligation” can also refer to the commitment

the government makes when it awards a contract.
2 GAO-01-347R Restructuring the District’s Division of Transportation

state highway departments, were doing to address staffing shortages. This

information should aid DDOT in its efforts to refocus and reorganize to more

effectively carry out its mission and improve its productivity and responsiveness to

the highway improvement needs of the District. Enclosure I lists the reports and

documents that we provided to DDOT officials.

Results in Brief

To handle staffing shortages and increased workloads, states and other engineering

and construction organizations have been relying increasingly on contractors to

perform functions that were previously done in-house. This trend was reflected in

two state highway departments, identified by FHWA, that we visited. Both Arizona

and South Carolina were relying extensively on consulting engineers to handle major

portions of their workloads. Two recent studies also identified ways in which

organizations acquiring design and construction services have dealt with staffing

shortages and increased workloads. A September 1998 report by the American

Association of Highway and Transportation Officials (AASHTO) identified 24

different strategies that state highway departments have used to cope with these

challenges. In addition, a January 2000 report by the Federal Facilities Council

(FFC),2

 formerly the Federal Construction Council, identified 18 best practices being

used by federal construction agencies and the construction industry in general to

provide adequate management and oversight for design review functions in an era of

limited resources. These practices include team building, partnering, and involving

all stakeholders in the early stages of a project’s development and in design review

activities throughout the project.

The Acting Director of DDOT has started to reorganize DDOT to improve

performance. Specifically, he has developed plans to increase the use of contractors

to supplement DDOT’s staff and has established cooperative relationships with other

governmental agencies by adopting strategies and best practices that others have

found to be effective. For example, to address understaffing, he plans to increase the

use of contractors in various areas, including project management, and start using

random materials testing to better utilize his inspection staff. The Division currently

contracts for most of its design work and is using such organizations as FHWA’s

Eastern Lands Division (ELD) and the Washington Metropolitan Transit Authority

(WMATA) to supplement its staff. The Director also plans to reorganize staff into

four project teams, each of which will have all the disciplines necessary to be

responsible and accountable for assigned projects from beginning to end.

 2

FFC is a continuing activity of the Board on Infrastructure and the Constructed Environment of the

National Research Council (NRC). It is a cooperative association of 20 federal agencies with interests

and responsibilities related to all aspects of facility design, acquisition, management, maintenance, and

evaluation. FFC is convened under the aegis of NRC, the operating arm of the National Academies of

Sciences and Engineering. Its mission is to identify and advance technologies, processes, and

management practices that improve the performance of federal facilities over their entire life cycle,

from planning to disposal. While its study addressed facility design and construction, the best

practices identified were drawn from research on all types of construction, including highways and

other infrastructure, and can be applied to any process that involves design and construction.
3 GAO-01-347R Restructuring the District’s Division of Transportation

Since the reorganization is just beginning, it is too early to tell whether it will be

successful. However, relying heavily on contractors for needed services and granting

staff greater responsibility for projects and holding them accountable for

performance were among the strategies that both Arizona and South Carolina

officials said they had adopted to improve their staffing and workload situations.

These and other strategies included in the Director’s plans—such as team building,

partnering, and involving all stakeholders early—are among the best practices

identified in the FFC study as ways to improve the design review process with limited

resources.

Background

The federal-aid highway program, overseen by FHWA, provides federal

reimbursement to a state (or, in this case, the District) for a portion of the costs

actually incurred. This program makes funding available to construct, reconstruct,

and improve highways and bridges on designated federal-aid routes and for other

special-purpose programs and projects. To start a project, a state uses its own money

to finance the initial stages and receives reimbursement for the federal government’s

share of the project’s cost as work is completed. For most federal-aid highway

projects, the federal government pays 80 percent of the cost and the state pays 20

percent.

DPW is responsible for managing the District’s transportation program, which

includes roads, bridges, sidewalks, streetlights, and signalized intersections. It

maintains over 1,400 miles of public roads and 215 bridges. About 32 percent of the

District’s public road inventory—about 450 miles of public roads and 202 bridges—

are eligible for federal support and can be maintained using FHWA and District

matching funds. The remaining 68 percent of the inventory—more than 970 miles of

local roads and alleys and 13 bridges—is considered local and therefore must be

maintained under the local transportation program using only District funds.

In its April 1996 report, FHWA stated that the District’s transportation program was

understaffed by about 124 positions. This calculation was based on the size of the

program and assumed the preservation of the program’s conventional transportation

organizational structure and functions. DDOT’s current staffing is about the same as

it was in 1996. DDOT’s Acting Director told us that the District’s financial crisis,

downsizing, and early retirements have all adversely affected the Division’s ability to

increase its staffing. Even now, the District is offering early-out retirement

opportunities that may affect the Division’s staffing position. As noted, DDOT’s

Acting Director said that staffing and procedural problems were delaying the award

of contracts for projects, resulting in lengthy processing times for design and

construction projects. Specifically, t was taking an average of 25.7 months for design

projects and 21.6 months for construction projects from the date FHWA notified

DDOT of its obligation ceiling to the date the contractor was sent the notice to

proceed to begin the work.

Although DPW has been unable to increase DDOT’s staffing, it has submitted projects

to FHWA that have been approved, allowing FHWA to obligate all but $2.2 million of
4 GAO-01-347R Restructuring the District’s Division of Transportation

the grant funds made available to the District for fiscal years 1989 through 1999.3

However, as we noted when we briefed the Subcommittee in June 2000, at least $282

million of $530.5 in unexpended federal-aid funds was for projects for which as of

April 30, 2000, contracts had not yet been awarded.4

 Still, the total annual

expenditures of federal-aid and District matching funds reported by the District have

steadily increased since fiscal year 1996, reaching an 11-year high of an estimated

$165 million in fiscal year 2000.5 Tables 1 and 2 show the breakdown between

projects involving the District’s unexpended balance of federal-aid funds for which

contracts had and had not yet been awarded as of April 20, 2000.

Table 1: Unexpended Federal-Aid Funds for Projects for Which Contracts Were Not Yet Awarded

Dollars in millions

Category of projects

Number

of

projects Dollar value Explanation

Barney Circle project 1 $143.3aThese funds were to be deobligated and

reobligated to fund other approved local and

federal-aid projects.

Major construction projects in the

procurement process

11 24.2These projects are in various stages of the

procurement process.

Major construction projects awaiting

completion of other projects

2 24.5Two projects are being delayed intentionally

because of other major work in the same area.

Major construction projects not in the

procurement process

17 63.0bFunds for these projects have been obligated, but

the procurement process has not begun.

Local projects funded by previously

deobligated Barney Circle moneys

2 21.3One project was in the procurement process; the

other was in the design process.

Old right-of way project 1 6.0 A decision was needed on the sale of property;

funds were to be deobligated and reobligated in

August 2000.

Total $282.3

a

The Barney Circle moneys totaled $173 million. Some of these funds have already been deobligated and reobligated to other

projects.

b

Of the $63 million, $27.9 million was awaiting a decision by the Washington Metropolitan Area Transit Authority and the

National Park Service on whether a garage will be built at the Anacostia Metro Station.

Source: DDOT.

 3

DDOT received $2.4 million in additional obligation ceiling from FHWA during the August

redistribution period for fiscal year 1994, but a project was dropped from DDOT’s plans.

Consequently, DDOT could not obligate $2.2 million in funds.

4

Of the $530.5 million in unexpended federal-aid funds, about $248.5 million was for projects for which

contracts had been awarded or that involved funding provided to other agencies. This $248.5 million

includes all $41.7 million that is in design or design contract negotiations for which specific details

were not available when we did our initial assignment. The remaining $282 million was for projects for

which contracts had not been awarded, including contracts whose procurement process had not yet

begun and others whose procurement process was under way.

5

As of December 2000, DDOT was still in the process of reconciling its accounts for FHWA funds for

fiscal year 2000.
5 GAO-01-347R Restructuring the District’s Division of Transportation

Table 2: Unexpended Federal-Aid Funds for Projects Under Contract or Being Transferred to Another

Agency

Dollars in millions

Category of projects Number

of

projects

Dollar value Explanation

Major projects under construction 60 $130.0These projects are being constructed.

Major design projects 83 41.7These projects were in design or negotiation for a

design contract.

Funds transferred to other agencies 8 19.3These include moneys transferred to other

agencies. For example, federal-aid funding for

the Washington Area Metropolitan Transit

Authority was transferred through the District.

The District does not control the expenditure of

these funds.

Funds passed through to other

agencies

8 8.7The agencies bill the District for the funds as they

are expended. For example, the Council of

Governments receives planning funds in this

manner.

Final voucher not submitted to FHWA c 13.6The final voucher was been completed but not

yet submitted to FHWA.

Awaiting federal reimbursement 1 1.1The final voucher has been submitted to and is

awaiting reimbursement from FHWA.

Other c 33.8These include many small projects that had

unexpended balances, such as change orders to

projects, bicycle improvements, traffic and safety

improvements, and special projects to improve

air quality.

Total $248.2

c

According to a District official, this was made up of a group of projects, but the system that generated the report did not give

the number.

Source: DDOT.

The District has not been the only recipient of federal-aid highway funds to have

problems with staffing shortages and workload increases. In its 1998 report,

AASHTO stated that individual states were struggling to meet their staffing needs

because of downsizing, expanded work programs, and early retirements.6

 It stated,

for example, that Missouri’s Department of Transportation project inspection staffing

ratio had dropped from seven employees for every $1 million in construction in 1978

to only one employee per $1 million in 1997.

As FFC has reported, in both state and private organizations, in-house engineering

has almost disappeared, and engineering contractors are increasingly more involved

in projects. Private-sector owners and government agencies traditionally have

maintained some level of internal planning and design oversight capability to ensure

that construction projects acceptably balance the factors of cost, schedule, quality,

and performance. Until the 1990s, federal agencies often maintained an in-house

engineering organization, consisting in part of architects and engineers, that was

responsible for the technical aspects and oversight of planning, design, and

construction processes. Over the last decade, as a result of efforts to reduce the size

 6

Strategies for Coping With Construction Project Staffing Demands, Construction Administration Task

Force, AASHTO, Subcommittee on Construction (Sept. 1998).
6 GAO-01-347R Restructuring the District’s Division of Transportation

of the federal government, agencies have downsized their design and engineering

staff and relied more on outside consultants for technical expertise. Although

agencies have generally retained their design oversight responsibilities, fewer staff

resources are now devoted to design review. Furthermore, in 1997, The Business

Roundtable stated that virtually all major firms had reduced the size of, and scope of

work performed by, their engineering organizations.

Strategies Being Used to Cope With Staffing Shortages and Workload

Increases

The states are using a variety of strategies and best practices to handle staffing

shortages and workload increases. The two states we visited, Arizona and South

Carolina, and other states are increasing their use of consulting engineer contracts

and are using other methods, such as sampling instead of full testing and increasing

compensation levels for in-house engineers. The Arizona Department of

Transportation (ADOT) uses consulting engineers for tasks such as surveying,

construction contract administration, and materials testing. During fiscal year 1999,

the South Carolina Department of Transportation (SCDOT) issued two 5-year

contracts for projects totaling roughly $1.5 billion. The contractors are to augment

SCDOT’s staff by doing many of the tasks normally done by in-house staff. In

addition, AASHTO’s 1998 report identified 24 strategies that state highway

departments were using to cope with staffing demands. Moreover, in January 2000,

FFC identified 18 best practices being used by the construction industry as a whole to

provide adequate management and oversight of design and construction projects.

Arizona

ADOT uses consulting engineers for tasks such as surveying, construction contract

administration, and materials testing. It uses both full-service and on-call consulting

engineer contracts to provide needed services. Full-service consulting engineers

provide all the services required to monitor a specific project. These could include

the services of a resident engineer, chief inspector, field office supervisor, materials

laboratory supervisor, survey party chief, traffic control specialist, and/or landscape

inspector. ADOT appoints a project monitor-in-charge to oversee the contractor’s

work. On-call consulting engineers provide needed services on a task-order basis.7

According to an ADOT official, using on-call contracts enables ADOT to negotiate a

task order in 15 to 30 days, compared with the 60 to 90 days needed to advertise, sign

a contract, and issue a notice to proceed on a specific-project basis. Consequently,

needed work can begin more quickly with a task order. ADOT also hires consulting

engineers to serve as project managers with responsibility for an entire project from

beginning to end. These engineers may assume many of the responsibilities normally

handled by ADOT staff.

In an effort to retain professional employees, the State Engineer told us, ADOT

restructured its pay system for engineers. Engineers received an initial 10-percent

 7

On-call contractor contracts do not identify specific projects but rather the services to be provided as

needed on projects assigned by task order.
7 GAO-01-347R Restructuring the District’s Division of Transportation

pay raise the first year, followed by a 5-percent pay raise in each of the 2 subsequent

years, in exchange for giving up their job protection and agreeing to work at the

pleasure of the ADOT Director. In addition, ADOT put in place a program called

Partnering—a teamwork-oriented construction management method that attempts to

eliminate the adversarial relationship between owners and construction contractors

that is inherent in traditional design and construction processes. The purpose of

partnering is to develop a proactive spirit of cooperation through a structured,

systematic methodology for developing teamwork and cooperation through shared

goals, open communication, problem identification and resolution, conflict escalation

procedures, and monitoring of team performance. This program was developed to

improve ADOT’s relationships with contractors, obtain fair interpretations of

specifications, and reduce contractors’ claims, project time, and cost growth. One of

the ADOT officials we spoke with told us that the program has been successful in

reducing litigation and claims, improving operations, and saving money.

South Carolina

SCDOT is accelerating its efforts to compress the time needed to execute its

workload without increasing its in-house staffing levels. To accomplish this, it has

initiated a program called Construction and Resource Manager (CRM). Through this

program, SCDOT competitively hired two CRM contractors to provide support staff

to assist SCDOT program managers in delivering projects on time and within budget.

CRM staff act as extensions of the regular SCDOT staff, who still make all final

decisions, since this authority has not been given to contract personnel. CRM staff

are assigned to various tasks, including project and program management,

preliminary engineering, design supervision and review, acquisition of rights-of-way,

construction engineering and inspection, financial management, and disadvantaged

business enterprise use. Each CRM contractor is to assist in approximately $750

million worth of road and bridge projects, as well as design work up to the

environmental impact stage. Other contractors are to undertake the design work

beyond the environmental impact stage through the construction of these projects. If

SCDOT staff were to do the work planned for the two CRM contractors, SCDOT

estimates that it would have to hire about 500 staff—200 for preliminary engineering

and 300 for construction-related services. SCDOT did not estimate the cost

difference between contracting for and hiring the increased staff.

Furthermore, as part of its implementation of the CRM contracts, SCDOT established

11 Work Process teams: Executive, Strategic Planning, Disadvantaged Business

Enterprise (DBE), Financial, Procurement, Environmental/Design, Utilities, Program

Development, Right-of-way, Construction, and Information Technology/WEB.

According to an SCDOT official, these teams—made up of representatives from

SCDOT, the CRM contractors, and FHWA—have developed, to date, 83 initiatives to

improve SCDOT’s current procedures and practices. Of these initiatives, 32 have

been implemented, 14 require additional executive approval before work can

continue on them, and the remainder range in completion from 0 to 98 percent. Some

highlights of the completed initiatives include streamlining the contractor submittal

processes including value engineering proposals, developing a comprehensive quality

assurance/quality control manual for preconstruction activities, improving and

shortening the DBE certification process, improving utility relocation and payment
8 GAO-01-347R Restructuring the District’s Division of Transportation

procedures, making the right-of-way acquisition process more efficient and reducing

the condemnation rate, and posting SCDOT’s strategic plan on its Web site.

Other States

Many other states deal with staffing shortages by using contractors to handle tasks

ranging from surveying and staking construction sites to providing unstaffed

computer-controlled scales for weighing materials. AASHTO’s 1998 report identified

24 different strategies that various states were using to cope with staffing shortages.

Three of the most frequently used strategies identified in the report were contracting

for inspection and contract administration services (15 states), contracting for

construction surveying and job-site staking (15 states), and requiring contractors to

provide quality assurance (13 states).

For example, the AASHTO report said that New Mexico had awarded two contracts

for consultants to provide complete construction management services for work

assigned. Each consultant managed two construction contracts. Florida used

consultant construction engineers and inspectors to handle about 60 percent of its

work. According to the report, these efforts were working well in both states.

Additionally, Arkansas reported that contractors were performing acceptance testing

for construction work at roughly the same rate as its in-house inspectors previously

did. Meanwhile, its in-house inspectors were sampling and testing roughly one of

every four acceptance tests performed by the contractors. Colorado was working to

set up a quality system that would eventually make contractors responsible for all

quality control and one level of quality assurance.

Other strategies identified in the AASHTO report included prioritizing inspections,

reducing testing frequencies, phasing inspections (inspecting work at predetermined

stages), reducing paperwork requirements, using student technical assistants and

construction aids, implementing automated construction management systems, and

using various innovative contracting procedures such as construction warranties and

the design-build concept.8

 DDOT already uses design-build contracts.

FFC Has Identified Best Practices to Improve Project Management and Oversight

When Resources Are Limited

In January 2000, FFC published a study that presented five key findings and identified

best practices and technologies that federal agencies and other owners can use to

provide adequate management and oversight of design reviews throughout the facility

acquisition process.9

 8

AASHTO has issued a report entitled Primer on Contracting 2000, 2nd ed. (Oct. 1998), that discusses

innovative contracting procedures, but neither AASHTO nor FHWA fully supports all the identified

techniques. Furthermore, AASHTO advises agencies to consult their legal counsel to verify the legal

sufficiency of using these techniques. For these reasons, we have not discussed these techniques in

our report, but we have provided DDOT with a copy of the report.

9

The term “facility,” as used here, includes buildings and other constructed facilities and associated

infrastructure (roads, utility plants, distribution systems, and the like).
9 GAO-01-347R Restructuring the District’s Division of Transportation

Two of the key findings in the report are directly relevant to the design review issues

discussed in this letter. First, the FFC study concluded that the team responsible for

design oversight should include representatives of all project stakeholders: the

owner, user, architect/engineer (A/E), construction contractor, operation and

maintenance staff, and major equipment vendors. The report said that this team

should participate in and contribute to design-related activities associated with each

phase of the acquisition process, from conceptual planning through start-up. Second,

the report concluded that the owner’s interests are best served when the in-house

staff can function as “smart buyers.”

FFC defined a smart buyer as one who retains an in-house staff that understand the

organization’s mission, requirements, and customer needs and can translate those

needs and requirements into appropriate direction. FFC further said that a smart

buyer retains the ability and technical knowledge to lead and conduct teaming

activities, accurately define the technical services needed, recognize value during the

acquisition of such technical services, and evaluate the quality of the services

ultimately provided. According to FFC, as long as the owner retains the in-house

ability to operate as a smart buyer, contracting for a broad range of design-reviewrelated functions does not appear to increase the owner’s risk, as long as such

functions are widely available from a competitive commercial marketplace. If the

owner does not have the capacity to operate as a smart buyer, the owner risks delays,

cost overruns, and facilities that do not meet performance objectives.

In developing a list of 18 best practices, FFC relied heavily on research conducted by

the Construction Industry Institute, The Business Roundtable, NRC, FFC, and similar

organizations. The study organized the best practices into five categories related to

the role of the owner, teamwork and collaboration, advance planning, process, and

benchmarking. The 18 best practices are described in detail in enclosure II. These

practices include team building, partnering, and involving all stakeholders in the early

stages of a project’s development and the design-review-related activities associated

with each phase of the project.

Planned Reorganization of DPW’s DDOT Includes Several of the

Construction Industry’s Best Practices

The Acting Director of DDOT said that he is reorganizing the Division to improve

performance. He told us he recognizes that some of the problems to be addressed

include understaffing, an increased workload, and a lack of systems that give staff

responsibility and accountability for projects. He believes that the Division can deal

with these problems better if a restructuring occurs that allows teamwork and

collaborative processes to be implemented.

The Division uses contractors for design work. In addition, DDOT has entered into

partnerships with other government agencies, such as FHWA, WMATA, and the

Navy’s Chesapeake Public Works Center. FHWA is providing support by managing

more than $50 million in projects and is helping DDOT to develop its first-ever designbuild contract for street reconstruction and upgrade, and WMATA is providing such

services as quality control of design and inspection. Navy Public Works is providing

project management oversight on the second phase of the M Street SE rehabilitation.
10 GAO-01-347R Restructuring the District’s Division of Transportation

The Acting Director indicated that he is considering contracting under these

partnering arrangements for more project management and inspection services and

internally using random materials testing to make more efficient use of his in-house

inspection staff. In addition, he is beginning to employ more job-order and open-end

contracting devices to increase production. Moreover, he is talking with AASHTO

about implementing AASHTO-WARE project management software, currently

employed in 37 states, to improve project status management and cost control.

He also plans to reorganize the staff into four ward-based project teams that will have

responsibility and accountability for specific projects from beginning to end.10 He

believes that using this team approach will help improve both internal and external

communications. He also believes that, with more support from contractors and

other government agencies as part of a broader effort to refocus and reorganize

DDOT, the Division’s responsiveness and performance can be improved.

With FHWA, WMATA, and the Navy providing support, the Acting Director believes it

is a good time to reorganize DDOT. Under the present structure, he said, there is no

system in place to encourage staff to become responsible or accountable for projects.

Consequently, staff do not need to take responsibility for more than their assigned

tasks as a project moves through the design and construction process. In other

words, their responsibilities do not extend beyond their assigned jobs to the

successful completion of the project.

Through team building, the Acting Director wants to create a culture of responsibility

and accountability that extends to the process, as well as to individual projects. He

wants teams to know the status of their projects and the problems that have been

identified and to work together to resolve any problem that may arise. However, he

has pointed out that for teams to be successful, they need everything necessary to

accomplish projects, such as dedicated technical, procurement, financial, and legal

support.

Under the current plan, which is in the early stages of implementation, four project

teams would be made up of individuals from the entities involved in the process. A

DDOT official said that as of February 2001, DDOT was interviewing internal

candidates to lead the project management teams and hoped to have team leaders

identified by the end of the month. Each team would be responsible for moving a

project all the way through the process. For example, as proposed, engineers,

contract specialists, financial specialists, and lawyers would all be members of a

project team. There would also be a group of experts in various fields of engineering

to provide additional support to the project teams for specific problems. The project

teams would oversee the work of contractors hired to design and build the projects.

Under this system, more design-build and project management could be used to

expedite the process According to the Acting Director, the project team would be

responsible for holding the design firm accountable for its design—something that is

not being done now.

 10The District is divided geographically into eight wards for representation, electoral, and

administrative purposes.
11 GAO-01-347R Restructuring the District’s Division of Transportation

In addition, the Acting Director has expanded the reorganization by creating the

position of Neighborhood Infrastructure Officer (NIO). If the reorganization is fully

implemented (funded), there would be 32 of these positions, 4 for each ward in the

city. The new positions, with two shifts of work, would first be offered to qualified

inspectors who already work for DDOT. The NIOs would be responsible for

inspecting for and reporting on the condition of roads in their assigned ward, as well

as for monitoring utility cuts in the roads and any other projects in their assigned

ward. The NIOs would serve as DDOT’s “eyes and ears” in the wards, continually

evaluating the condition of their transportation infrastructure and developing

priorities both for street maintenance activities and for street construction and

rehabilitation. The Acting Director also plans to modify the role of DDOT’s asphalt

and concrete inspectors, making them responsible for quality assurance, much as

every other state in the local region has done. Specifically, he would move these

inspectors out of asphalt and concrete plants and have them randomly check the

quality of asphalt and concrete at locations where these materials are being installed.

In addition, the Acting Director said that DDOT was developing a proposed

rulemaking change that would make contractors, rather than DDOT, responsible for

ensuring the quality of construction materials. He also said that DDOT is developing

a training program for both plant and site inspectors to upgrade their skills.

The Acting Director further said that DDOT has contracted with the Office of Change

Management, within the Department of Transportation’s Volpe Research Center, to

provide support in working through the Division’s realignment and that the Mayor

and City Administrator announced they would likely include in their fiscal year 2002

budget proposal a policy initiative to create a separate District Department of

Transportation.

The Acting Director believes that the results of this reorganization, if successful, will

be improved communications, greater responsibility, and greater accountability for

projects. He also believes that, with expanded partnerships, increased contracting,

and better deployment of staff resources, projects will be completed sooner and

funds will be spent more quickly. He believes an expenditure level in excess of $200

million a year is attainable. He expects to implement the major components of the

reorganization by the spring of 2001.

The Acting Director believes that it will be important to have good communication

between the project team and project stakeholders and to get all stakeholders

involved early so that problems can be anticipated, not addressed after they occur.

He said that stakeholders would include entities outside the District government,

such as the National Park Service and the National Capital Planning Commission,

which should generally become involved in projects at an early stage. The Acting

Director believes that partnering arrangements between project teams and

stakeholders should reduce the amount of time needed for rework on projects. Such

arrangements are among the best practices identified in the FFC study.

In general, given the difficulty District organizations have had in managing change,

making the internal and external cultural changes necessary to make the planned

restructuring of DDOT successful will be challenging. As the FFC study notes, the

construction industry traditionally operates in an adversarial environment, with

owners, designers, and builders separated by formal contractual documents and
12 GAO-01-347R Restructuring the District’s Division of Transportation

backed up by teams of lawyers. The study further states that conflicting interests

among the parties have often resulted in poor communications, poor problem solving,

and poor results.

Although DDOT may have difficulty making the paradigm shift, its efforts hold

significant potential. According to the FFC study, team building and partnering,

when approached effectively, can produce impressive results. To illustrate the point,

the study quoted the following passage from a 1999 Partnering Desk Reference Guide,

prepared by the National Aeronautics and Space Administration:

“The Arizona Department of Transportation, formerly averaging $5 million annually in

litigation costs, did not have a litigated claim on any of the over 400 projects

partnered from 1991 to 1997. The Texas Department of Transportation and the U.S.

Army Corps of Engineers have both experienced decreases in litigation almost as

dramatic. For those organizations that have “Mature” partnering programs, litigation

is no longer an issue.”

When multiple organizations make a commitment to work cooperatively toward a

common objective utilizing team-building techniques, the practice is called

partnering. Partnering may be a relatively short-term relationship used to complete a

single project, or it may become a longer-term relationship with the committed

organizations cooperating for a multitude of projects. Either way, partnering is a

viable strategy for changing attitudes and the relationship between an owner and a

contractor.

According to AASHTO, partnering has often resulted in a relationship between the

owner and the contractor that has promoted the achievement of mutual and

beneficial goals. For this reason, according to AASHTO, many state departments of

transportation have promoted the partnering concept to reduce claims and expedite

projects. A January 1995 survey by AASHTO’s Subcommittee on Construction found

that 46 of 50 states had used partnering and that partnering had resulted in reduced

claims for 34 states.

DDOT’s reorganization is just beginning, and not all of the affected parties have yet

endorsed the plans. Nevertheless, the plans incorporate strategies such as team

building, partnering, and improved communications among stakeholders that have

been identified as best practices for the construction industry. Furthermore, the

plans include approaches that both ADOT and SCDOT identified in our discussions as

ways to improve operations.

Agency Comments

In February 2001, we received e-mail comments on a draft of this report from DDOT’s

Acting Director, and SCDOT’s Assistant to the State Engineer and oral comments for

ADOT’s Assistant State Engineer. All three officials generally concurred with the

information in our report and provided additional, clarifying, or updated information,

which we included in the report where appropriate.
13 GAO-01-347R Restructuring the District’s Division of Transportation

Scope and Methodology

To respond to the first objective, to provide information on how other organizations

were handling staffing shortages and increased workloads, we reviewed studies on

coping with the demand for construction project staffing and innovative contracting

procedures.11 We also drew upon information developed by FFC on best practices for

reviewing facility designs.12 In its study, FFC relied heavily on construction industry

research that was applicable to all types of construction. In addition, we visited two

states, identified by FHWA staff, that were using innovative processes to meet

staffing shortages and increased workloads. The FHWA staff identified ADOT

because it has used a small staff to manage its program for years and SCDOT because

it has awarded $1.5 billion in projects to two contractors. We visited both these

offices and interviewed state officials to obtain information on how they were

handling staffing and workload changes. We reviewed the supporting documentation

these offices provided concerning their operations.

To respond to the second objective, to provide information on the status of the

District’s efforts to reorganize DDOT to improve service, we interviewed District

DDOT officials on the status of the reorganization and reviewed documents

describing the planned new structure for the Division. We also compared the

Division’s planned actions to industry best practices and staffing and workload

management strategies identified under the first objective.

We did our work between July 2000 and March 2001 in accordance with generally

accepted government auditing standards.

We are sending copies of this letter to Senators Mike DeWine, George V. Voinovich,

Mary L. Landrieu, and Richard Durbin; Representatives Tom Davis, Connie Morella,

and Chaka Fattah; and Delegate Eleanor Holmes Norton in their capacities as Chair,

Vice Chair, or Ranking Member of Senate and House Subcommittees with jurisdiction

over District of Columbia matters and to Representative Ernest J. Istook, Jr., who

requested this work in his previous capacity as Chairman, House Subcommittee on

the District of Columbia. We are also sending copies to the Honorable Anthony A.

Williams, Mayor, District of Columbia; the Honorable Alice Rivlin, Chair, District of

Columbia Financial Responsibility and Management Assistance Authority; Mr.

Charles C. Maddox, Esq., Inspector General, District of Columbia; and other

interested parties. Copies will also be made available to others upon request.

 11Strategies for Coping With Construction Project Staffing Demands, Construction Administration Task

Force, Subcommittee on Construction, AASHTO (Sept. 1998); Best Practices Guide for Innovative

Contracting Procedures, Utah Technology Transfer Center (Logan Utah); Primer on Contracting 2000,

2nd ed., Construction Administration Task Force, Subcommittee on Construction, AASHTO (Oct.

1998).

12Adding Value to the Facility Acquisition Process: Best Practices for Reviewing Facility Designs,

Federal Facilities Council Technical Report #139 (Washington, D.C.: National Academy Press, n.d.).
14 GAO-01-347R Restructuring the District’s Division of Transportation

Key contributors to this letter were Ronald L. King and Thomas G. Keightley. If you

have any questions, please contact me on (202) 512-8387.

Sincerely yours,

Bernard L. Ungar

Director, Physical Infrastructure Issues
Enclosure I

GAO-01-347R Restructuring the District’s Division of Transportation 15

Reports and Documents Provided to DDOT Officials

Reports

1. Strategies for Coping With Construction Project Staffing Demands, Construction

Administration Task Force, Subcommittee on Construction, American Association of

State Highway and Transportation Officials (AASHTO) (Sept. 1998).

2. Adding Value to the Facility Acquisition Process: Best Practices for Reviewing

Facility Designs, Federal Facilities Council Technical Report #139 (Washington, D.C.:

National Academy Press, n.d.).

3. BestPractices Guide forInnovative Contracting Procedures, Utah Technology

Transfer Center (Logan, Utah: n.d.).

4. Primer on Contracting 2000, 2nd ed., Construction Administration Task Force,

Subcommittee on Construction, AASHTO (Oct. 1998).

Documents

Arizona Department of Transportation

1. Consultant Construction Management Manual.

2. EngineeringConsultant Contract and Joint Project AgreementAward and

Administration Procedures.

3. Consultant Prequalification Packet.

4. Engineering Consultants Section, Statement of Qualifications Package for Contract

No. 01-49 Construction Administration.

5. Engineering Consultants Section, Statement of Qualifications Package Temporary

Technical Engineering Personnelfor Various Construction Administration Projects.

6. Engineering Consultants Section, Statement of Qualifications Package for Contract

No. 01-17 StatewideOn-call Services Construction Administration.

7. Engineering Consultants Section,Statement of Qualifications Package for Contract

No. 01-40 On-call Roadway Design.

8. Partnering a Strategy for Excellence.

SouthCarolina Department of Transportation

1. Overview—Construction and Resource Manager Program.

2. Request forProposal—Construction and Resource Manager.

3. Constructionand Resource Manager—East Region.
Enclosure II

16 GAO-01-347R Restructuring the District’s Division of Transportation

Best Practices Identified by the Federal Facilities Council

The following list of 18 best practices identified by the Federal Facilities Council (FFC)

relies heavily on research conducted by the Construction Industry Institute, The

Business Roundtable, the National Research Council, FFC, and similar organizations.

The best practices are organized into five categories related to the role of the owner,

teamwork and collaboration, advance planning, process, and benchmarking. While these

practices use facility acquisition as an example, they would generally apply to any design

and construction process.

Role of the Owner

• Be a smart buyer. Facility acquisition processes (including reviews of designs) work

best when the owner has sufficient in-house expertise to qualify as a smart buyer. A

smart buyer is one who retains an in-house staff that understands the organization’s

mission, requirements, and customers’ needs and who can translate those needs and

requirements into a corporate or strategic direction. A smart buyer also retains an inhouse staff that includes technical experts who can articulate the nature of the

technical services being bought, recognize good value during the negotiation of such

services, and evaluate the quality of the services as they are provided.

• Develop a scope of work that clearly and accurately defines the owner’s expectations

regarding the facility’s cost, schedule, performance, and quality. The owner’s

standards, more than those of any other entity involved in the acquisition process,

will set the tone for all aspects of design review activity. The owner’s scope of work

should be used as the yardstick for measuring performance.

• Avoid the temptation to micromanage design reviews. Architectural and engineering

firms (A/E) are selected on the basis of their experience and expertise; they should be

given wide latitude to bring that expertise to fruition.

Teamwork and Collaboration

• Use team-building and partnering techniques to build good working and

communicative relationships among the participants, as well as to align all

participants toward common objectives and expectations.

• Ensure that all interested parties participate in design reviews from the planning and

design phases, so that all perspectives are represented as the design evolves. Broad

participation creates early project endorsement or “buy-in,” reducing the potential for

later disagreement or the need for changes. At a minimum, involve representatives of

the owner, the user, the A/E, construction management staff, maintenance and

operations staff, and staff with specialties such as procurement, safety, and fire

protection. Where possible and appropriate, include the construction contractor,

permitting agency staff, and independent specialists for value engineering and
Enclosure II

17 GAO-01-347R Restructuring the District’s Division of Transportation

independent review. Err on the side of excess participation—it is cost-effective

protection against subsequent unexpected and expensive fixes and oversights.

• Use the same A/E throughout the facility acquisition process to maximize continuity

and allow participants to build and apply their experience baseline. Using the same

A/E for conceptual planning, detailed design, construction support engineering

services, and start-up takes advantage of the A/E’s intimate understanding of both the

owner’s and the project’s needs and supports the continuity of personnel involved.

• Use senior, experienced personnel who understand the relationship of a facility to

meeting the agency’s overall mission and who can effectively evaluate the evolving

design and guide the review process.

• Participants should commit for the duration of the activity to ensure continuity.

Changing participants from any of the organizations involved in reviewing the design

can disrupt the work flow and threaten the stability of good team relationships.

• Participate in a design awards program to recognize and motivate excellence.

Nothing succeeds like success! Recognition of a job well done gives visibility to a

successful process and motivates all of the participants to continually improve.

Advance Planning

• Focus attention on the review of designs during the conceptual planning and design

phases, where the ability to influence the ultimate functionality and cost of the

project is the greatest. Effective design review processes start out being very

intensive and proactive, with an intensity that declines through the procurement,

construction, and start-up phases of the acquisition process.

• Do not start the final stage of design—preparation of the construction plans and

specifications—until the preliminary engineering has been completed. To do

otherwise could significantly slow the overall design activity because of frequent

interruptions and rework caused by incomplete definition of the project’s scope.

Process

• Tailor the design review approach to the project’s specifics. The project’s

complexity, cost, mission criticality, visibility, method of contracting, and schedule

are just a few of the variables that can drive aspects of the design review approach.

Also, frequency, intensity, and reliance on outsourced experts and consultants should

be taken into account in developing a design review approach.

• Keep up the pace to maintain momentum and keep the facility acquisition process on

schedule. The review of designs at each phase of the process should not impede

progress toward a completed facility. A stop-start or prolonged process affects the

acquisition in many ways, perhaps the most critical of which is the increased
Enclosure II

18 GAO-01-347R Restructuring the District’s Division of Transportation

potential that organizations will reassign participants.

• Pay special attention to the civil, structural, electrical, and mechanical interfaces.

Historically, 30 to 50 percent of all construction change orders result from

interference fit problems between trades. Is the power supply appropriate to the

specific mechanical equipment? Does the heating, ventilating, and air-conditioning

(HVAC) ducting interfere with structural members?

• Exploit technology. The technological revolution has provided many tools to

enhance design review processes, including computer-aided design, threedimensional modeling, data collection and distribution software programs, and rapid

communications systems, including the Internet.

• Conduct a postoccupancy evaluation to develop a lessons-learned document for

future reference. After the facility starts up, the design review team should document

objective results (how did the final cost and schedule compare with those planned?)

as well as subjective results (is the user pleased with the facility’s performance?).

The postoccupancy evaluation should also relate approaches taken during the

various phases of the facility acquisition process with the final results.

Benchmarking

• Measure the results achieved by design review processes in order to assess their level

of performance. A process cannot be managed if it is not measured. Successful

benchmarking requires an organization to identify relevant performance

characteristics, measure them, and compare the results against either established

industrial norms or against similar measured characteristics of other organizations

recognized for their excellence.

• Document both unusually good and bad performance for future reference. Even

better, find a way to share such information with other organizations and federal

agencies.

(393003)
Orders by Internet

For information on how to access GAO reports on the Internet, send an e-mail message

with “info” in the body to

info@www.gao.gov

or visit GAO’s World Wide Web home page at

http://www.gao.gov

To Report Fraud, Waste, and Abuse

in Federal Programs

Web site: http://www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: 1-800-424-5454