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Wednesday, December 10, 2008

What's wrong with this picture?

On Monday the Montgomery County Gazette wrote about a study indicating chronic time and cost overruns on major Montgomery County (Maryland) road projects. Gee wiz, we have a culture of slack. Now, I'm no stranger to slack, but I'm haven't sought responsibility for civic infrastructure. Hey-Zeus!

The first line suggests that the study itself is behind schedule. It would be funny if it wasn't sad.

County Committee Tunnels Into Roads Report: Looking into why cost and completion projections are inaccurate
by C. Benjamin Ford, staff writer

Montgomery County has moved slowly on a study that showed county road projects often cost more and take years longer to complete than their initial estimates.

The County Council's Transportation, Infrastructure, Energy and Environment Committee followed up Monday on a Feb. 5 report from the county's Office of Legislative Oversight that studied 14 county road projects. The report showed that studies before the projects were undertaken often proved too optimistic on costs and how long the projects would take to complete.

"People want to protect their turf, they want to make sure their project is not elbowed out," said committee chairwoman Nancy M. Floreen (D-At large) of Garrett Park.

The February study of 14 county road projects showed that the average cost was 54 percent higher than initial estimates.

In addition, the initial estimates predicted an average of 4.7 years to complete the project — from initial study, design, land acquisition and permitting. Instead, the projects took on average 7.5 years to complete.

The county is continuing to look at why projects take longer and cost more than the initial estimates, said Aron Trombka, senior legislative analyst with the Office of Legislative Oversight, but significant changes in the capital improvement project process have not been made yet.

No single factor explains why the costs rise or delays occur, Trombka said. Costs increased, in part, due to inflation and variables in market conditions, as well as the unknowns involved when land has to be acquired or utilities have to be relocated, he said.

The county's Department of Transportation bases project estimates on the costs of materials such as asphalt and concrete over the past one to three years and then projects how much the materials will cost about halfway through the project, he said.

The project estimates also are based on similar past projects, using the best available information, Trombka said.

Floreen asked why penalties were not assessed contractors for cost overruns and project delays.

When they are their fault, contractors are issued penalties of $50 to $1,000 per day for delays under some construction contracts, said Department of Transportation division chief Bruce Johnston.

The county is looking at adding incentives for earlier completion of construction projects, he said, adding that incentives have been used at times to minimize road closings, but can carry their own risks.

"The bridge that collapsed in Minnesota had an incentive contract," Johnston said.

The county's performance in projecting costs and the completion schedule is "pretty typical" for counties nationwide, he said.

"Most of our projects come in within 5 to 10 percent of the estimated costs," Johnston said.

But not the projects in the study, apparently. And the bridge didn't collapse because it was built under an incentive contract. The Gazette Story is here.

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