All Roads Lead to VDOT

One of Virginia's three largest agencies, VDOT accounts for about 13 percent of the state budget.

In most states, including Maryland, local governments build, operate and maintain their own streets while the state government takes care of state highways and arterial streets. But Virginia is one of a few places where state government is responsible for nearly all roads, including those in the counties.

Historically, VDOT has relied on private contractors to build its roads and bridges, but the state took care of most of the maintenance of state roads. Now, most maintenance is done by private companies. Nearly all of Virginia's 41 rest areas and 13 drawbridges are maintained and operated by private firms. And most of the engineering work that precedes construction is done by private companies, a reversal from only three years ago, when state engineers did most of that work.

Though the VDOT job cuts started under then-Gov. L. Douglas Wilder (D) in 1991, most of the cutbacks came under Allen's work force reduction program, which gave workers as much as a year's salary as an incentive to leave the agency.

Allen's transportation secretary, Robert E. Martinez, said he allowed all VDOT employees who applied for the program to leave, a calculated risk because he said he knew "a few people would leave who you wish didn't."

The result was an exodus of about 1,000 people, which could cause VDOT headaches as the agency plans for a federal building program that will increase the U.S. government's contribution to the state's road fund by 62 percent. Finding qualified help could be a challenge; VDOT is having trouble filling dozens of existing vacancies.

"The cuts were not made as part of a strategic plan but as a result of a blunt, across-the-board decision to simply cut," said former governor Gerald L. Baliles (D). "VDOT has lost people with institutional memory and invaluable experience. That has a downstream effect, as projects back up and congestion increases."

VDOT has become the leaner agency that some state officials – particularly Republicans – have envisioned for years. Allen, as well as Gilmore, believes that relying on private consultants and contractors can save the state millions of dollars a year. Martinez said the state has saved $24 million by having a private firm maintain parts of three interstate highways.

But using private firms also can drive up project costs, analysts say. The custom is that a private firm hires an experienced state engineer at a higher salary. Then, the private firm wins a contract on a project that its newly hired engineer had been working on.

"So the state hires the same skills back at a much higher price," said Francis B. Francois, executive director of the American Association of State Highway and Transportation Officials.

Richard C. Lockwood, a 32-year VDOT employee who rose to become the agency's chief planner, took Allen's early-retirement plan. He was making $67,000 at VDOT and accepted a higher-paying job at a Richmond transportation engineering firm that works on VDOT projects. He declined to disclose his new salary.

Supporters of VDOT's buyout program maintain that hiring new employees for the federal building program is not an admission that the buyout effort was a failure.

Gilmore, meanwhile, has said he will continue Allen's pursuit of a leaner state government but says he will ask the legislature for a yet-to-be-determined increase in VDOT employees in part because "we don't want to reduce the working people of this state [government] to such a level that they cannot efficiently get the job done."

But many local officials say that's exactly what has happened in recent years.

"When the Allen administration took over [in 1994], there was a huge impact on the VDOT bureaucracy. They really haven't recovered," said Kathleen K. Seefeldt (D), chairman of the Prince William Board of County Supervisors. Added Fairfax Supervisor T. Dana Kauffman (D-Lee): "Incredible hemorrhaging is taking place."

Oversight Questions

Many state transportation engineers not only lack experience overseeing others but also are being assigned too many private-sector projects to manage, the audit said. This leads to delays and errors, the audit added, although engineers did not cite specific examples when they talked to auditors.

"I do not have the time to thoroughly . . . review projects, which makes me dependent on the consultants' evaluation of project conditions," an unidentified VDOT project manager told the audit commission.

Another senior VDOT administrator said that veteran private consultants – some of them former managers at VDOT – won't take direction from engineers with substantially less experience who still work for the agency. As a result, the "consultants tend to assume control of the projects," the commission said. A spokesman for the state's consulting engineers association, Tim Stowe, denied that this happens.

State auditor Walter J. Kucharski said he has warned VDOT officials of the potential for abuse by private contractors and consultants, given their increased role. "VDOT is doing a ton of this stuff and needs to have better control over it," he said.

Kucharski, in a routine audit of VDOT, chastised the department for "inadequate monitoring" of the Dulles Toll Road automated toll-collection project. The engineer overseeing installation of the system, Charles L. Williams Jr., was caught embezzling $366,000 in state money. He was sentenced to two years in a work-release program and was ordered to pay the money back; court records indicate he has not reimbursed the state.

Gehr emphasized that the department's own employees detected the embezzlement and that Williams was punished. "We have adequate controls. We caught it," Gehr said.

But Kucharski said the installation of the toll-collection equipment had not been monitored properly by Williams's supervisors, allowing Williams to initiate and fraudulently approve 49 orders changing the project, running up costs.

"Management failed to detect the unauthorized change orders until the project was almost complete, because no one had responsibility for administering the contract and no one monitored the contract costs," Kucharski said.

He added that no one was watching managers of the safety service patrol, which assists stranded motorists along Northern Virginia's highways, when the managers exceeded their $2.2 million budget by $550,000 earlier this year. After a state police investigation, the patrol's manager was suspended for two weeks, but the incident cast more doubt on VDOT's oversight at the agency's top levels.

At the time of these incidents, several elected officials in Northern Virginia had begun hammering VDOT for overspending its budget on the widening of the toll road, the completion of the Fairfax County Parkway and two projects with traffic-watching TV cameras and computers that are supposed to speed traffic along interstate highways and at traffic signals.

The toll road project exceeded its budget by 40 percent, from about $50 million to $71 million, because of changes made after the project started two years ago. Last spring, VDOT officials discovered a $15 million overrun in the construction of the cross-county parkway because additional engineering work was needed. The traffic signal contract is about $12 million over budget, in part because of errors in estimating supplies.

"They need more oversight," said James E. Rich, a member of the state's transportation board during Allen's administration. "We have to institute a new system for overruns so they explain them better, and the board has to approve" them.

Local officials say that whatever money VDOT spends to cover overruns means there is less in the state's budget for other road and bridge projects. "Every dollar of a cost overrun is a lost dollar to us" for other projects, Fairfax's Connolly said.

VDOT collects money from contractors if they don't finish on time or have other problems completing a contract not caused by the agency. In the last year, the state has sought financial penalties from 12 contractors and banned an additional six firms from state work.

Virginia lawmakers, meanwhile, disagree over how seriously to treat VDOT's overruns.

"Is it a big thing? No. It hasn't gripped the public's mind," said state Senate Minority Leader Richard L. Saslaw (D-Fairfax). "This is not a $700 Pentagon toilet."

But Del. Jay W. DeBoer (D-Petersburg), a critic of Allen's buyout program, said the overruns fly in the face of Virginia's penchant for frugality. "It wasn't that long ago that cost overruns were cause for dismissal," he said. "Now, they're business as usual."

TOMORROW: How one VDOT contract turned sour.

Staff writer R.H. Melton contributed to this report.