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INFRASTRUCTURE OUTSOURCING: - page 12 / 46

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6

RPPI

State Natural-resource and Environmental-protection Agencies:

  • Eighteen states report outsourcing engineering services;

  • Seventy-eight percent of outsourcing agencies say their use of outsourcing continued or increased in the 1990s (none decreased);

  • Eighty percent say it will continue or increase in the 2000s (2 percent expect a decrease); and

  • Cost savings, increased support of political leadership, increased innovation, and lack of agency personnel and expertise are the dominant reasons for outsourcing.

State Transportation Agencies:

  • Thirty-four states report outsourcing highway design, road and bridge construction, road maintenance, architectural services, or airport projects;

  • Seventy-six percent of outsourcing agencies say their use of outsourcing increased in the 1990s (none decreased);

  • Ninety-seven percent say it will continue or increase in the 2000s (none expect a decrease); and

  • Lack of agency personnel and expertise, cost savings, and increased support of political leadership are the dominant reasons for outsourcing.

Table 2: 1990 Estimated Percentage of Total Highway Engineering Projects by Consultants

State

Percentage

Arizona

80

Indiana

80

Pennsylvania

75

Florida

74

Louisiana

70–80

Illinois

50

Wisconsin

35

California

15

Michigan

15

Iowa

<10

Minnesota

<10

Sources: Wisconsin Legislative Audit Bureau, Evaluation of Use of Engineering Consultants: Department of Transportation, 90-9 (Madison: State of Wisconsin, April 1990); and Chester Wilmot et al., “In-House Versus Consultant Design Costs in State Departments of Transportation,” Transportation Research Record 1654, Paper No. 99-1403, p. 159.

Preliminary results from a survey by the

National

Cooperative

Highway

Research

Program,

under the

auspices

of the

Transportation Research Board, found that half of the states are using consultants to accomplish 50 percent or more of preconstruction engineering, and that most states expect growth in this type of outsourcing to continue.19 Furthermore, the study notes that the primary reason for contracting out design work is constraints on staff size, or the desire to avoid staffing peaks.20 This process is accelerated since many state departments are moving in- house engineers into project management of both in-house and consultant projects21 (see Table 2). Since 1990, outsourcing by state departments of transportation has likely increased. The study also indicates that those states that outsource 50 percent or more of their design services have lower overall costs.

19

Loren Kaye and Richard Kreutzen, Meeting California’s Infrastructure Challenge: Assuring Cost-effective and Timely Project Delivery (Sacramento: California Taxpayers’ Association and California Chamber of Commerce, May 1999), p. 5, www.caltax.org/RESEARCH/infrastructure.design.5-99.htm.

20

Ibid.

21

Ibid.

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