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INFRASTRUCTURE OUTSOURCING

For example, after the Loma Prieta and Northridge earthquakes, California began a massive seismic retrofitting of all state highways. Caltrans, the state transportation department, purchased 450 person-years in fiscal year 1996 and another 800 person-years in fiscal year 1997 for seismic design work.62 Once the work was completed, the consultants were “turned off,” avoiding the massive layoffs that might have occurred had the person-years been obtained by expanding Caltrans staff with highly specialized seismic engineers.

Another example is road-building projects being adjusted to meet Clean Air Act requirements. If a municipal area goes out of compliance with clean-air standards, due to increased standards or changes in compliance plans, one of the first actions it is likely to take is to stop all road-building projects which would permit more vehicles to travel and possibly increase emissions. If the work is outsourced, the transportation department can more easily adjust the staffing assigned to the project.63

A final example is Santa Clara County, California, which in 1983 passed a special tax to fund a series of road improvements and new roads.64 The county was chagrined to find that Caltrans could not accommodate the staffing demands to design, engineer, and construct the projects. Caltrans at first estimated that the work would take 23 years but, when pressed, revised the figure down to 14 years. That was still too long for the county, so it outsourced all phases of the projects, finishing the last of them in 1996.65 It took the contractors only seven years and cut engineering costs by $64 million, and changes to the project from Caltrans plans cut total project costs by $131 million.66

Self-help County Outsources for Timely, Cost-effective Project Delivery

In the early 1990s, Santa Barbara County, California, wanted to accelerate the delivery schedules for its sales-tax-financed road projects. Originally, the county solicited the state transportation department (Caltrans) for design and engineering work, but Caltrans was unable to meet local delivery schedules because of a lack of resources, resulting in the outsourcing of projects to private consultants. The county quickly realized that it had “more control and more effective management with private design and

engineering consultants” than with Caltrans.67 At the end of 1998, 10 of 14 projects had been completed. Of the 11 private contracts, six were on time or accelerated and five were delayed; all three projects designed by Caltrans were delayed at least a

year.68 Furthermore, the original project cost estimate was $133 million, but now it is $125 million—a

saving of $8 million.69 County staff give most of the credit to the consultants themselves. “[Consultants] are more motivated to

work within budgets and find value engineering.”70 They also point to Caltrans’ lack of flexibility, contrasting with consultants and private contractors employing innovation and flexible methods for project delivery.

62

Steven Moss et al., Fiscal and Economic Impact Analysis of the Fair Competition and Taxpayer Savings Initiative (San Francisco, CA: M.Cubed, 1999), p. 18.

63

Steve Stagner, executive director, Consulting Engineers Council of Texas, interview with author, May 2000.

64

Will Kempton, “Status Report on the Measure A Program in Santa Clara County,” presented to the California Transportation Commission, September 1989.

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70

Santa Clara County Traffic Authority Coalition for Project Delivery, presentation, November 1996. Santa Clara County Traffic Authority, June 2000. Kaye and Kreutzen, Meeting California’s Infrastructure Challenge, p. 11. Ibid., pp. 11–12. Ibid., p. 12. Ibid.

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