DOT proposes plans to use fewer private consultants

WISC-TV investigation finds private contractors cost taxpayers more

Published On: Feb 11 2013 10:01:43 PM CST   Updated On: Feb 12 2013 07:33:05 AM CST
MADISON, Wis. -

There are thousands of employees working for the state of Wisconsin, but the state Department of Transportation often has private sector workers designing highway projects.

WISC-TV followed the money in May 2011 and found private engineers were often doing state work at a much higher price tag. WISC-TV was told then that steps were under way to remedy the spending, and it's now investigating where the DOT stands today.

The practice of shifting state work at the DOT to private contractors began nearly a decade ago. It was costing the state money in 2011, and WISC-TV found it's still going on today, but the DOT secretary said officials are trying to find a new balance of work to save money.

Whether there's ice or snow slowing down drivers' daily commute, they tend to focus more on the condition of the roads this time of year. But it's this time of year when engineers are hard at work planning the construction that will begin in a few short months, and WISC-TV found it still isn't just state engineers doing the work.

In 2011, WISC-TV found the state spent nearly $14 million more than needed on engineering highway projects in a timespan of six months because there weren't enough state employees to do the work and private engineers were being hired instead.

Now, 20 months later, WISC-TV wanted to see if anything had changed.

Since that time, more than 1,000 cost-benefit analysis forms have been processed, which compare the prices of private versus state engineers. The reasons for the outsourcing now are similar to 2011: "not enough staff" or "not enough expertise."

WISC-TV analyzed all the forms and, this time, the price tag since the first story aired totals $43.8 million. That includes nearly $70,000 extra for the Fish Hatchery Road interchange and $2.5 million for preliminary engineering work on Interstate 39 from Rock County to Madison.

WISC-TV took the numbers to DOT Secretary Mark Gottlieb and asked him if the nearly $50 million figure surprised him.

"I think it's a complicated process and there's a lot of ways to make that analysis," said Gottlieb.

Gottlieb told WISC-TV in 2011 that he was backfilling engineering positions to slow the spending. Where do things stand now?

"We've gone a long way to bringing down our vacancy rates for engineers," Gottlieb said. "In fiscal (year) 2011, we had a vacancy rate of over 13 percent in engineering positions. We've brought that down to under 5 percent now."

According to numbers from the DOT, 124 more engineers are on staff now, and Gottlieb has actually requested 180 more in the next state budget.

"We believe we can add those positions without increasing costs," Gottlieb said. "In fact, we think we would have a modest cost savings and slightly reduce the percentage of our program that is delivered by consultants."

The state's own budget proposal said that 70 percent of engineering projects are being done by private consultants, and new positions could cut that down to 63 percent, even though the state agrees that consultants cost 31 percent more than state engineers.

WISC-TV asked if that's a level that Gottlieb feels would be most cost-effective.

"I don't know that I want to get too hung up on saying that there is some magical percentage," said Gottlieb. "The important thing is, and our goal we are striving to meet is, to make sure we have the technical resources in the department to manage a complex program."

"If private engineers cost more, and there are these budget shortfalls, then why are they going with the more expensive engineering firms to do the work?" asked Larry Legro, the president of the Wisconsin State Engineering Association.

The Wisconsin SEA argues a 70-30 mix of state workers versus private engineers would be better, and is even skeptical about the likelihood of the latest plan.

"There's a big 'if' there,' " said Legro. "This is just a budget proposal, and that's a small step forward. What the DOT is proposing over the next biennium, that's all on paper and hasn't been approved by the Legislature yet or finally by the governor. The governor is always talking about the hardworking taxpayers of Wisconsin and he wants to do the right thing by them. Well, here's where he can start doing that."

WISC-TV asked the governor's office whether he plans to put any of these changes in his next budget. His spokesman said only that "investing in infrastructure is one of the governor's top priorities" and that additional details on the DOT budget request will be released in the near future.

But the use of private consultants won't end altogether in the DOT. The SEA and DOT agree that's not necessarily the goal. Consultants have some specialized expertise that it wouldn't pay to have in the department.

The American Council of Engineering Companies of Wisconsin has argued in the past that it provides an important service to the state and has even disputed the fact that private engineering contractors cost more, although the DOT's numbers now contradict those claims.