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Accelerating Transportation Project and Program Delivery: Conception to Completion (2010)

Chapter: Chapter 5 - Best Practices Case Study Reports

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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Suggested Citation:"Chapter 5 - Best Practices Case Study Reports." National Academies of Sciences, Engineering, and Medicine. 2010. Accelerating Transportation Project and Program Delivery: Conception to Completion. Washington, DC: The National Academies Press. doi: 10.17226/14405.
×
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Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

30 Case studies on the eight selected state DOTs are presented in this chapter. These case studies are not intended to provide a means of comparing and contrasting state practices, but rather a forum to showcase and highlight their strengths in program and project delivery within the context of their environment. California Performance-Based, Outcome-Driven Results for Program Delivery The California Department of Transportation (Caltrans) has always strived for a collective vision that provides “for the mobility and accessibility of people, goods, services, and infor- mation through an integrated, multimodal network.” The goal is to achieve a fully integrated, multimodal, sustainable trans- portation system that supports three outcomes that define quality of life—prosperous economy, quality environment, and social equity (21). California’s state highway system consists of approxi- mately 170,000 miles of public roadways, of which Caltrans operates and maintains 15,269 miles (22). While less than nine percent of the State’s roads fall within Caltrans’ responsibility, this transportation system supports the sixth largest economy in the world due to its rich farmlands, diverse industries, and motion picture production enterprises. The Golden State is 158,693 square miles from top to bottom and faces a tremen- dous challenge in providing for the growing population (23). With 36 million people, California is the most populous state in the country (24). The population is projected to grow to approximately 48.6 million by the year 2025, which rep- resents a 35 percent increase (25). This growth is expected to occur in urban areas, with increasing elderly and Hispanic populations. Apart from these changing demographics, travel behavior, social trends, and land use changes place a clear demand on the existing infrastructure. A closer look at Caltrans’ roads reveals that 10,821 miles are rural while only 4,413 miles are urban. The rural areas of California have only eight percent of the population but com- pose ninety-four percent of the land area. Forty-six percent of the state’s roads are located in rural areas. Caltrans recog- nizes that rural issues have different characteristics than urban areas and providing transportation to the remote rural loca- tions is a challenge. The sparse population may require spe- cial transportation needs when planning and designing for a completely integrated, interconnected system. Furthermore, California’s economy relies heavily on moving agricultural products, timber, and tourists through its rural regions via roads, bridges, and rail systems. Issues that affect rural areas vary depending upon an area’s economic base, topography, and proximity to urban areas. Part of the concern is that if a rural area is located adjacent to an urban area, a “spillover” of big city problems occurs. For instance, the rural area may experience traffic and air pollution, but not have the funds or resources to address these problems (26). California’s Economy and Goods Movement Because of California’s location on the Pacific Coast, it has the unique advantage of being a cornerstone in the shipping and receiving of goods via its many ports. This in turn provides opportunities for other industries and commerce to benefit from California’s unique location. California’s own strength in being the largest agricultural and food producer in the nation, with almost $25 billion per year in agricultural output, makes truck access of particular importance. Timber, food, and agri- cultural industries rely heavily on the trucking industry and the existing transportation system to move and distribute products not only within California but to other states as well. The large trucks take a huge toll on the local and state roads that connect to the interstate system. Pavement conditions, along with other factors such as noise, air quality, and safety, are especially impacted by truck traffic. C H A P T E R 5 Best Practices—Case Study Reports

VMT on California’s roads is 328 billion annually (22). Beyond the wear and tear of daily vehicles on California’s pavement, the climate imposes an entire set of extreme cir- cumstances which the transportation system must bear. Cold- weather freeze–thaw cycles in the north and high-elevation areas, extreme heat conditions near the deserts, earthquakes, and forest fires all have a direct impact on motorists in their daily commute. Such a great challenge calls for innovative solutions as California advances and prepares for the next two decades of change. Funding for transportation in California comes from a vari- ety of sources such as state, local, private, and federal funds. State funds consist primarily of the state excise tax on gaso- line and diesel fuels and truck weight fees. Federal funds con- sist mainly of the federal gasoline and diesel fuel excise taxes. Local funding sources include local sales tax measures, a small percentage share of the state general sales tax, and local gen- eral funds (27). The current transportation budget allocates $13.7 billion in expenditures for Caltrans. The 2008–09 budget provides approximately $6.2 billion for transportation capital out- lay, $2.7 billion for local assistance, $1.8 billion for capital outlay support, and about $1.4 billion for highway opera- tions and maintenance. The budget also provides $397 mil- lion for Caltrans’ mass transportation and rail program and $890 million for transportation planning and department administration. The balance of funding goes for program development, legal services, and other purposes (28). How- ever, it is estimated that California’s unfunded transporta- tion needs are $160 billion. An assessment of California’s transportation trends reveals that infrastructure investments have not kept up with the increase in population or the VMT for both work-related com- mutes and non-work–related travel. According to the FHWA, almost half of California’s urban highways are congested. This fraction is 65 percent greater than the national average. It is expected that on-road VMT will increase to 475 billion by the year 2020. This is a 55 percent increase from the year 2000 (26). Additionally, according to the 2007 Annual Mobil- ity Report, Los Angeles ranks as the number one city in the entire nation for travel delay, excess fuel consumed, and con- gestion cost (29). Caltrans progressively implements new strategies to achieve their goals to realize their vision of a transportation system that provides safety, mobility, and improved quality of life. Organizational Structure Caltrans has a strong work force of about 22,000 employees. The director, along with the chief deputy director, is responsi- ble for nine key programs and 12 districts. The key programs include Project Delivery, Maintenance and Operations, Plan- ning and Modal Programs, Administrative and Information Technology, and Finance. Each of these programs has deputy directors who are responsible for managing numerous smaller divisions. For example, Project Delivery has Construction, Design, Engineering Services, Environmental Analysis, Proj- ect Management, and Right-of-Way and Land Surveys Divi- sions under its umbrella. The 12 district directors also report to the director. Caltrans’ organizational structure is predominantly decen- tralized for project delivery because the state is so large and varies greatly in topography, climate, and socio-cultural issues as one moves from north to south. Urban and rural settings impact both design and project delivery paths. Design issues vary from district to district, as do the cultural groups and communities, and each must be dealt with individually. In areas where there are large numbers of ethnic or native com- munities and/or dense urban populations, an intensive public outreach effort may be required. For rural settings or extreme climate conditions, design parameters may pose a constraint for construction and ultimately project delivery. As such, the districts and their project delivery staff provide specialized expertise in understanding the environment, the social fabric, design constraints, topographic challenges, climate-related issues, and the political arena within which a project must be designed and delivered. Some districts are clustered and form consolidated regions for project delivery. For instance, the Central region includes four districts that share a project delivery staff. This consoli- dation allows for greater efficiency and a regional approach to project delivery. As one deputy director noted, “We are decen- tralized [districts] into centralized regions” (30). Internal Reorganization Caltrans does not claim to be an organization that is struc- tured solely for the purpose of delivering projects. But the organization has changed in the last decade so that greater efficiencies are realized through more streamlined processes. An organization that allows for better communication among its units and greater collaboration helps to achieve a higher quality product and quicker response times. A gradual reorganization at Caltrans has occurred, more for reasons of practicality. For instance, the Environmental Analy- sis Division that used to be part of Planning and Modal Pro- grams was moved into Project Delivery. Also, local programs were separated out of the Design Division. Moving the development of project initiation documents (PIDs) out of Project Delivery and putting them in the Plan- ning and Modal Programs was another organizational change. A PID is one of the first steps that define a project before it gets programmed. Like a mini-project report, it includes the project planning, scoping, and programming. It provides a “clean start” to the project, as noted by one division chief. 31

Caltrans’ capital program has grown significantly over the last five years. Their staffing levels, however, have not increased to respond to the growing programs. Caltrans has maintained relatively the same number of employees over the last 10 years. While other states have markedly reduced their numbers in response to reduced budgets, Caltrans remains steady in employment numbers. But Caltrans differs by a large margin when the level of outsourcing is compared. Similar large- and mid-sized states such as Texas and Florida out- source up to 70 percent and 80 percent of their workloads, respectively. Caltrans only outsources 10 percent of its work and often only by function (e.g., construction inspection, environmental investigation/documentation, etc.) rather than entire projects (12). Yet, under such a great demand to engineer complex projects and continuously meet the quota of delivering the capital program, how does Caltrans mange to “crawl through the barbed wire,” meeting the goal of delivering 100 percent of the Ready to Let projects? The answer lies in three key areas where Caltrans excels at accel- erating projects from conception to completion: (a) project management strategy, (b) NEPA delegation, and most impor- tant (c) performance measures. Project Management Strategy According to some Caltrans managers, the organizational structure may appear “stove-piped” and does not show the strong, deliberate efforts toward developing a project man- agement strategy over the last 10 years. Caltrans has many project management policies and procedures that emphasize project delivery from the start. The move toward a project management approach began in the middle to late 1980s but was formalized in the early 1990s. However, the objective of having a project managed in an organized manner from its inception to its completion was documented as early as 1976, as evidenced by the following note, “Develop Project Man- agement Control System (PMCS), a computerized system for managing and controlling highway projects of all sizes from the earliest planning phase to the completion of contract, data in PMCS stored by project.” While in the 1970s the challenge may have been to leap into the computerized era, the approach toward a project management strategy that allowed for “man- aging and controlling” projects was just as important. (31) A review of Caltrans’ chronology of events discloses that much effort was spent in developing the project management philosophy from 1980 to 1989. A Project Management Imple- mentation Plan was developed and approved, and formal train- ing was provided, on core concepts of project management. Still, comments provided by the Transportation Commission Assembly noted that “Caltrans should look to other organi- zations for new project management techniques to reduce project development and delivery lag times” (32). During the 1990s project management strategies were fur- ther developed through task forces, external peer reviews, proj- ect management re-engineering teams, training academies, and reorganization plans that steered the focus of project chiefs on project delivery rather than functional activities. Five strate- gies were outlined in a 1994 Director’s memo: 1. To fundamentally transform Caltrans from what it was to what it must be in order to serve the already changed needs of the people and business of California; 2. To organize and manage by business process; 3. To reinforce and facilitate delegation of authority and responsibility to the lowest practical level, and also to build in the mechanisms for accountability and assistance to en- sure top performance; 4. To reduce the cost of doing business while maintaining quality; and 5. To focus on the customer—the people of California. This was a call for “Meeting the Challenge to Change” (32). By the end of that year, Caltrans had already begun its trans- formation into an organization that could deliver projects more efficiently. Risk Management Many states perform a risk assessment at some phase of the project. Stakeholders, project sponsors, and DOTs need some assurance that the project is constructible, can meet the needs for which it was intended, and can be built within the allo- cated budget and a reasonable time frame. Risk management is an integral part of project management, yet Caltrans only adopted a risk management strategy for project delivery since March 2004. Caltrans provides a risk management handbook for all project managers. Large, complex projects benefit the most from a risk management plan that identifies and quantifies all the potential risks and ways to mitigate or exploit them. Successful project risk management requires a corporate cul- ture that supports an open, honest, and realistic recognition of project risks and discussions of risk in an environment where there is no enforcement of bureaucratic hierarchy. Identify- ing risks requires the judgment and expertise of informed individuals. However, risk management takes time and most project budgets don’t allow for a formal risk management plan. At Caltrans, risk management is performed on every proj- ect either through informal discussions or via a formal risk register. Project Delivery headquarters in Sacramento encour- ages all districts and regions to actively incorporate risk man- agement principles into project delivery and provide support for implementation of the risk management plan. In every case, project managers are left to decide the level of risk assess- 32

ment that is required for a project. Typically, smaller, simpler projects with very few community concerns may not even have a risk management plan. Complex, large projects carry greater risk and a project manager may decide to have a full risk man- agement plan to manage crises and unforeseen events. In such cases the risk management plan is implemented early on and monitored throughout the life of the project. The end result is that project managers and sponsors can make informed decisions regarding alternative approaches to achieving their objectives. NEPA Delegation—Balancing Delivery with Stewardship Under the SAFETEA-LU bill that became law in August 2005, Caltrans now has the ability to streamline the federal environmental review process. It became the first of five state transportation agencies to participate in the federal Sur- face Transportation Project Delivery Pilot Program or NEPA Delegation. Under the pilot program, the FHWA assigned to Caltrans the U.S. Secretary of Transportation’s responsibilities for federal approvals under NEPA and other federal envi- ronmental laws such as the Endangered Species Act and Sec- tion 106 of the National Historic Preservation Act (23). Section 6004 and 6005 of the law allows Caltrans the oppor- tunity to test and streamline the environmental process. As of July 1, 2007, Caltrans assumed the FHWA environmen- tal responsibilities under NEPA. This assignment includes all projects on the State Highway System and all local assistance projects off of the State Highway System within California. FHWA responsibilities include environmental coordination and consultation under the federal environmental laws per- taining to the review or approval of projects under the pilot program (33). The goal for Caltrans is to simplify and expedite the project delivery process. The NEPA process involves a strict adherence to the standards that protect the environment. The Califor- nia Environmental Quality Act (CEQA), passed in 1970 on the heels of NEPA, imposes some requirements that are more stringent than the federal ones. For this reason, Caltrans was well positioned to become a leader in expediting the environ- mental review processes. The pilot program does not change federal environmental protection standards. Caltrans’ participation in the program shows California’s continued leadership in environmental pro- tection and transportation project delivery. Implementation of the pilot program was expected to simplify and expedite the federal environmental review process for transportation projects, while ensuring the same level of protection for envi- ronmental resources. The program has some proven results and has benefited Caltrans with an overall time savings and quicker delivery for producing approved environmental doc- uments. Since the program started, “Caltrans has decreased the amount of time required for environmental document approvals. Draft review went from more than six months, to less than two months. That’s a time savings of 69 percent on draft review and 68 percent for final document review (from 2.5 months to less than a month). These savings were achieved after eliminating FHWA environmental document review and working directly with federal resource agencies to meet their requirements” (23). Best Practices for California Performance Measures For a number of reasons, many state DOTs are becoming more focused on developing performance measures. Perfor- mance measures allow for an inventory of the existing trans- portation system, address system conditions, communicate priorities to the public, help make informed decisions, and promote change. It is an evolving area that addresses many factors and provides numerous benefits. But for a state to develop, experiment, and constantly refine the process takes many years and assertive determination to continuously want and expect more. Caltrans has managed to incorporate per- formance measures into every aspect of delivering a project. The concept of a performance-based management pro- gram is interlaced with every aspect of the way Caltrans does business. It includes all levels of management and decision making, from the transportation commission to the director to division managers all the way down to line employees. It incorporates the strategic plan, the operations plan, and the actual performance measures. The extent of Caltrans’ holis- tic approach to project delivery can be appreciated only by understanding the agencies involved, Caltrans’ move toward transparency, the level of commitment by Caltrans’ managers, and the paradigm shift that has occurred since performance- based management was implemented. Transportation Policy Players California transportation policy involves federal, state, regional, and local entities. At the federal level, the U.S.DOT, the FHWA, and Federal Transit Administration (FTA) are involved. At the state level, the California Legislature, Cal- trans, the California High-Speed Rail Authority (HSRA), and the California Transportation Commission (CTC) are involved. The state has 26 Regional Transportation Planning Agencies (RTPAs) that administer funds, allocate federal and local funds, and select projects for improvement at a regional level. Finally, the state’s 18 MPOs are very involved with the planning and prioritizing of projects that are included in the Regional Transportation Plan. They plan and program proj- ects in urbanized areas with populations over 50,000. Local 33

involvement includes cities, counties, and transit agencies such as Bay Area Rapid Transit and the Los Angeles County Metro- politan Transportation Authority (27). The RTPAs have an integral role in which capacity proj- ects are prioritized for design and construction within their purview. For instance, in the Bay area, the Metropolitan Trans- portation Commission (MTC) actually selects the projects and hands them over to the engineering firm, which may be Caltrans, for concept development, design, permitting, and construction. Complete System Approach Caltrans has built a pyramid upon which transportation investments lead to significant improvements (Figure 3). It is a performance-based, outcome-driven approach that can be applied to many transportation issues. For example, the strate- gies outlined in Figure 3 can be used to reduce congestion. Sys- tem monitoring and evaluation, and maintenance and preser- vation form the foundations upon which other strategies are built. Operational improvements and system completion and expansion will provide the mobility benefits over the next decade (34). State Transportation Improvement Program, State Highway Operation and Protection Program, and Traffic Congestion Relief Program Three components make up Caltrans’ programs: the State Transportation Improvement Program, the State Highway Operation and Protection Program (SHOPP), and the Traffic Congestion Relief Program (TCRP). Funding is administered by the CTC. The State Transportation Improvement Program is a five- year capital improvement plan that is updated every two years for transportation projects throughout the state. These projects add capacity to the transportation system; funding dollars are distributed using a formula to regions and inter-regional areas. The SHOPP is a four-year capital improvement plan that is also updated every two years. This plan specifies projects that provide rehabilitation, maintenance, and operational improvements, including safety. Initially, the SHOPP begins with a 10-year plan that contains a list of projects based on need. This list is eventually pared down to a funded list of projects which is finalized to become the four-year SHOPP plan. SHOPP projects have priority over the transportation dollars and projects are funded based on a statewide need 34 Figure 3. Complete system approach. Source: California Department of Transportation System Completion and Expansion Operational Improvements Intelligent Transportation Systems, Traveler Information/Traffic Control, Incident Management Smart Land Use Demand Management/Value Pricing Maintenance and Preservation System Monitoring and Evaluation

rather than a geographic formula. Funding for SHOPP comes “off the top” of the State Highway Account. The TCRP is also referred to as Proposition 42. Proposi- tion 42 is funded separately from the State Transportation Improvement Program. It amends the state constitution and allows for a permanent dedication of the sales tax on motor vehicle fuels to be allocated to transportation (27). Toward Transparency—Changing the Political Mindset Caltrans has set a clear direction for its future. The 2007–2012 Strategic Plan highlights the goals and direc- tions that the organization wants to take. Each goal reflects an area of improvement and is tied directly into perfor- mance across the organization. This is an incredible attempt to bring so many diverse operations, processes, programs and policies together to align toward a common vision. Caltrans identified five goals (34): • Safety—Provide the safest transportation system in the nation for users and workers. • Mobility—Maximize transportation system performance and accessibility. • Delivery—Efficiently deliver quality transportation projects and services. • Stewardship—Preserve and enhance California’s resources and assets. • Service—Promote quality service through an excellent workforce. Caltrans’ third goal emphasizes its constant efforts to deliver quality transportation projects and services efficiently so that it can become transparent, i.e., accountable, to the user. Moving toward transparency has not always been easy because changing the political mindset was necessary. The pub- lic has not always understood the complexities of constructing a project, let alone having multiple stages of a project that won’t come together until it becomes a finished, usable product. Nor have the political constituents always been privy to the difficult project prioritization process that must occur annually. How- ever, the leadership of a very engaging director has allowed Cal- trans to change the mindset of the public. It started with per- formance measures and delivering on promises made. The goal has been set at 100 percent delivery for projects on the Ready to Let list. After small gains, Caltrans has achieved a high suc- cess rate in the last four years (23): • FY 2001–02: 86 percent • FY 2002–03: 85 percent • FY 2003–04: 87 percent • FY 2004–05: 96 percent • FY 2005–06: 99 percent • FY 2006–07: 100 percent • FY 2007–08: 100 percent As shown in the preceding list, once again, for the FY 2007–2008 transportation program, Caltrans delivered 100 per- cent of the 294 projects on the list (a total worth of $3.5 bil- lion) (34, 23). This delivery translates to credibility and integrity in the eyes of the public and their political leaders. In the political realm, credibility is critical. It takes a long time to build it, but it can be lost instantly if inaccurate information is presented. The integrity of performance measures are key for an agency, because they provide internal guidance to ensure that the agency is providing the optimum service for every tax dollar collected. Performance-Based, Outcome-Driven Results How does Caltrans accelerate the delivery of its projects consistently and efficiently? In the early 1990s, Caltrans began with a system vision: “all forms of transportation in a unified, interconnected manner.” There was also a “call for better management with an eye on performance” (34). Due to an Executive Order, California’s 1993 transportation plan alludes to the development of appropriate transportation system performance objectives and measures. California’s system at that time was a set of interconnected parts that lacked a standard management function to help understand the existing conditions and accomplishments and carve future targets. Caltrans needed a planning tool to improve investment analysis while delivering a customer-oriented, as opposed to a service provider-driven, program. A workshop held in Sacramento in 1997 served as the start- ing point for the entire performance measure approach to be examined, for eventual development into the performance management system that is in place today. Some of the key themes discussed at the workshop formed the foundation of how performance measures would be developed, used, and monitored. One key point raised was whether performance measures should be based on outcome or output. While output-based measures relate to the agency’s accomplish- ments (number of lane-miles added, improvements in level of service, etc.), outcome-based measures track the extent that the users of the system achieve their goals. Tracking mobility, reliability, and accessibility, for example, are ways of measuring outcome. However, outcome-based measures are difficult to devise and time consuming to document. These measures have to be relevant and useful, so that users can understand them and link them to the investment of their tax dollars in the transportation system. 35

Another key point is that performance measures should be decision tools, not decision rules. Performance measures do not replace politics, but rather “reassert a balance between political decision making and scientific and technical knowl- edge” (35). They should help make better decisions overall, so that funding can be allocated appropriately and weaknesses in the transportation delivery system can be addressed so that the system can improve holistically. The dynamic process of implementing performance mea- sures successfully requires political buy-in. Political powers and stakeholders are important opinion leaders, and they should be involved in the process of developing indicators as well as participating in the entire process of developing and imple- menting performance measures. An inclusive and participa- tory approach is essential to gaining political acceptance (35). Users and customers also had to be included in the process in order for it to be responsive to their needs. User expecta- tions vary with respect to mode, location of activities, pattern of travel, and length of trips. Performance measures would therefore have to be sophisticated enough to account for this user variability and be capable of collecting and processing diverse information. Moreover, “there is an important link between the measurement of system performance, users’ sat- isfaction with the performance of the system, and the policy planning and funding process. Improvements in infrastruc- ture can only be attained if the funding priorities and plan- ning decisions genuinely reflect measures of performance that are of interest to the system users” (35). Criteria Challenges. The first step for Caltrans was to assess its multimodal system and develop a coordinated, cooperative process that would measure transportation system performance throughout California and support informed decisions by public officials, operators, service providers and system users. The initial work plan included a review of existing perfor- mance measure efforts, identifying system outcomes, devel- oping indicators (measures) that correlate to outcomes, and formulating an implementation scheme. Turning the work plan into a reality revealed a number of hurdles. Caltrans worked through many challenges. The first was identifying the outcomes that reflected Caltrans’ vision. Nine outcomes were identified: mobility/accessibility, reliability, cost effectiveness, sustainability, environmental quality, safety and security, equity, customer satisfaction, and economic well- being. They are described in more detail as follows (35): • Mobility/accessibility—reaching desired destinations with relative ease within a reasonable time, at a reasonable cost with reasonable choices • Reliability—providing reasonable and dependable levels of service by mode • Cost effectiveness—maximizing the current and future ben- efits from public and private transportation investments • Sustainability—preserving the transportation system while meeting the needs of the present without compromising the ability of future generations to meet their own needs • Environmental quality—helping to maintain and enhance the quality of the natural and human environment • Safety and Security—minimizing the risk of death, injury, or property loss • Equity—Fair distribution of benefits and burdens • Customer satisfaction—providing transportation choices that are convenient, affordable, and comfortable • Economic well-being—Contributing to economic growth Once the outcomes were identified, the indicators had to be determined. But these indicators had to be “mode neutral,” with each indicator considering all transportation modes equally. Intermodal issues were prevalent to ensure that the measures developed were appropriate across all modes and excluded mode-specific indicators. For an overarching trans- portation network, this would be difficult to accomplish. Among other issues was the fact that, while most trips were found to occur intermodally, the transportation system is not managed intermodally (35). Building on Successes. Caltrans had already been using basic forms of performance measures in its Maintenance and Operations division and for congestion management. These served as a basis for developing the other areas of perfor- mance measures. Building on the successes of the established measures allowed Caltrans to use the information and data already available. Caltrans made a concerted effort to strike a balance between simplicity and comprehensiveness in devis- ing its performance measures. In the year 2000, Caltrans released the first prototype model for performance measures. This framework was not intended for the entire state; it dealt predominantly with urban areas because they experience the most congestion and challenges with mobility, delay times, and infrastructure deterioration. Later on in the process, Caltrans developed performance mea- sures for rural areas as well. Using the framework and data available for the urban measures, and modifying them to suit the unique scenarios encountered in rural counties, Caltrans continues to build upon its successes. Currently, Caltrans’ performance measures represent a keystone in the California Transportation Plan (CTP). The relationship between the CTP goals, performance measures/ outcomes, and indicators are shown in Table 2 (26). For most of the indicators, baselines already exist and annual targets are set. At the end of the fiscal year, performance is examined against the targets. If the targets are not met, the strategies are refined, interim benchmarks are reviewed and 36

37 CTP Goals System Performance Measure/Outcomes Key Indicators (Data to Collect and Report on) Improve Mobility and Accessibility Mobility/Reliability/ Accessibility Travel Time (Mobility) • Travel time within key regional travel corridors Travel Delay (Mobility) • Total person (passenger) hours of delay. Percentage on-time performance travel (Reliability) • Percentage on-time performance in key corridors Coordinated Transportation and Land Use (Key indicators are included under the Accessibility outcome.) Other additional measures under development. Available Travel Choices (Accessibility) • List modes available in key corridors and at key transportation centers • Percentage of workers within x (15, 30, 45, 60) minutes of their jobs • Modal Split (including choice ridership) • Percentage of jobs within a quarter/half mile of a transit station or corridor • Percentage of population within one - quarter/half mile of transit station/stop or bus corridor Productivity Throughput—persons and vehicles (Productivity) • Percentage utilization during peak period (highway) • Passengers per vehicle revenue mile (transit) • Passengers per vehicle revenue hour (transit) • Passengers miles per train mile • Percentage trucks by axle Preserve the Transportation System System Preservation Highways, Streets, and Roads • Pavement—smoothness and distressed miles • Bridges—structurally deficient or functionally obsolete • Roadside Transit and Passenger Rail • Vehicle fleet age • Miles between service calls Aviation • General aviation runway pavement condition Support the Economy Econ omic Development Return on Investment Measures Under Development Enhance Public Safety and Security Safety Traveler Safety • Fatal/injury collisions and fatalities/injuries—rates and totals Reflect Community Values Equity Measures Under Development Enhance the Environment Environmental Quality Air Quality • Days exceeding national/state standards by region/air basin and statewide Noise • Number of residential units exposed to transportation-generated noise exceeding standards Energy Consumption • Fossil fuel use ratio to passenger miles traveled Others Under Development Source: California Department of Transportation, California Transportation Plan 2025 Table 2. Relationship between CTP goals and transportation system performance measures/outcomes and key indicators.

resources are adjusted so that Caltrans continues to head in the right direction. For the “soft” indicators that are difficult to measure, data is being collected over several cycles so that a baseline can be established. Reporting Results. Once the wheels were in motion for Caltrans, it and its partners realized the benefits of develop- ing and implementing performance measures. Performance measures led to better decision making, candid communi- cation with the public and other stakeholders, easier prior- itization of projects and improving accountability. These pos- itive results led to integrating the performance measures into the long-range plan. Once Caltrans obtained results and gauged the relevance of the information, the decision to share the results with the Business, Transportation and Housing Agency (BTH) on a quarterly basis showed its confidence and its desire and abil- ity to strive for excellence. More recently, in December 2007, Caltrans made its quarterly performance measure report avail- able to the public for the first time. The online report included some vital measures, shown in the form of a “dashboard,” i.e., a series of easy-to-read gauges (see Figure 4) that pro- vide the viewer with a sense of the overall condition and sta- tus of Caltrans at a glance. The baseline, target, and current data, including comments, are included for each perfor- mance measure. Caltrans had fully embraced a culture of performance-based management. Contract for Delivery—Accountable Links in Performance Measures. Linking all facets of the Caltrans’ project delivery process may not have been an initial goal when performance measures were first implemented. This by-product, however, has certainly become the final end product against which the system itself and Caltrans are measured. Perhaps one of the most difficult steps that Caltrans took was to link individual employee performance evaluations to the overall performance measures. In other words, the director of Caltrans and all dis- trict directors discuss the planned project deliveries for the fol- lowing year. District directors sign a “Contract for Delivery” for the fiscal year that indicates a specific number of projects they will deliver. This agreement mandates great responsi- bility and accountability on the part of district directors, and their respective staff, to deliver the contracted number of projects on a quarterly basis. District directors meet on a reg- ular basis with the director and review a STAR report which helps them track key milestones such as approval of the envi- ronmental document, ROW certification, plans, specifications & estimates, Ready to Let dates, and award dates for all the projects in the district. A “star” on this report indicates that the goal was met ahead of schedule. Conclusions Caltrans continuously strives for a 100 percent delivery goal. With one decade of performance measure experience, Caltrans has combined system outcome with organizational goals and kept the local regional organization involved. Performance measures have allowed Caltrans to become more transparent to the public and other stakeholders through quarterly report- ing of performance data against the baselines and targets. Above all, Caltrans had refined its ability to deliver programs and projects in record time, from the moment they are con- ceived to the time they are open for public use. For Caltrans, performance management is an all encompassing approach that has effected greater efficiency for California’s transporta- tion system and streamlined the processes through which ideas become realistic critical transportation networks. Maine A Bridge Program with Accountable Teamwork and Leadership Maine is a small, rural state with an active and innovative state department of transportation. Maine ranks 39th in the United States in terms of area, 40th in terms of population, and 38th in terms of population density. (37, 38) In 2005, less than 30 percent of the state’s VMT occurred in urban areas (the lowest among all eight case study states). (39) However, per capita VMT in Maine is about 11,300—about 13 percent higher than the national average. (39) Maine has 22,236 miles of public roads. (40) Of these, 367 miles are interstate highways, 2,295 miles are arterials, and 5,595 miles are collectors. (40) The state owns and man- ages a network of 2,722 bridges. (41) Eighty-five percent of the state’s lane miles are located in rural settings. (39) Maine has 3,857 bridges, 70 percent of which are under the jurisdiction of the Maine Department of Transportation (MaineDOT). (41) Of the state-owned bridges, 14.4 percent are considered structurally deficient. That places Maine at 13th highest in the nation with regard to percentage of structurally deficient bridges. In 2007, MaineDOT estimated that without proper investment, the number of state-owned bridges consid- ered in poor condition would double in 10 years, going from 9 to 18 percent. (41) MaineDOT’s latest Long-Range Trans- portation Plan indicates that, in 10 years, the state runs the 38 Figure 4. Example of a dashboard gauge.

risk of having nearly 10 percent of its bridges closed or posted at lower weight limits. (42) The Long-Range Transportation Plan goes even further, clearly stating MaineDOT’s view about its roadway system: “The State of Maine is losing ground in the struggle to main- tain and improve the transportation system that is vital to its economic well-being.” (42) It recognizes that the state has had to depend on a funding stream whose federal share has shrunk nearly 10 percent over the past 10 years. (A state motor fuel tax is the key non-federal source for highway/ bridge projects.) It foresees a gap of between $2.5 and $3.3 bil- lion to provide basic improvements to Maine’s bridges, arteri- als, collectors, and other parts of the transportation system by 2030. Such improvements include replacing 30 to 40 bridges each year, modernizing almost 200 miles of inadequate arteri- als, and modernizing 1,850 miles of collectors. (42) One critical note in the Long-Range Transportation Plan points to the relationship between long-term needs and the need for more effective and efficient delivery of services: “before we receive new resources, we must demonstrate to [the governor] and the legislature that we are maximizing the benefits from every taxpayer dollar we already receive.” (42) Organizational Structure— The Team Approach At the beginning of the 21st century, MaineDOT formal- ized a change in organizational structure, such that the highway and bridge programs function in a team approach. Prior to this change, the organization has been described as an “assembly line,” with handoffs from one group to the next, each operating as a “silo” or “stovepipe,” both organizational metaphors that essentially depict a vertical structure designed to keep what is inside from interacting with the surrounding environment. In sharp contrast, the team approach brings rep- resentatives of various key divisions together, typically led by a project manager who guides the team—and the project—from planning through construction. Multimodal projects typically include outside consultant representatives on the team. The team approach has been described as having “signifi- cantly helped in the acceleration of programs.” (43) It also has been cited as helping in employee retention and growth. Some of the following positive opinions of the team approach that were indicated are noted: • Teams have significantly improved communications. There are frequent team meetings and self-directed teams. • Teams have played a significant role in helping to retain trained employees. It broadens their work experience while challenging them with a variety of responsibilities. • Teams are more efficient. Almost everyone is a part of the project team and provides input into a project budget and schedule. • Teams produce urgency. There are real deadlines and lines of responsibility. “We can’t hide things anymore.” • The chain of command is simpler, with more accountability. Team leaders can make decisions. There are, however, issues with the team approach that everyone must address for them to be successful. The team approach requires significant buy-in and effort in order to be effective. It takes added effort to set up team meetings to ensure that all parties are represented. Managing a team is an important skill that needs to be learned. The team leader needs to address these ongoing issues (43): • Input from team members is important, but ultimately the project manager needs to be able to make decisions. • One has to watch out for the “squeaky wheel,” the team member who by dint of personality or seniority can tend to overpower the team, and seemingly force the rest of them to follow. • The team leader needs to know how to aim for and recog- nize consensus. It is not always easy to establish. • Teams are encouraged to take risks, e.g., employ context- sensitive solutions, but this is not always easy to do, since adherence to AASHTO standards has long been institu- tionalized as a major part of the training and experience for many MaineDOT employees. Team leaders need to encourage risk taking, while still recognizing the need for adequate backup for important design choices. In addition, at MaineDOT, the environmental unit is not formally a team member. Some believe that the environmen- tal department very much needs to be part of the team. Right- of-way personnel are part of the teams, but a dedicated staff member at the central Bureau executes the final property con- demnation for all projects. Some project managers see this as a potential bottleneck that prolongs the project schedule regardless of their efforts to expedite other tasks. Thus, there are important issues that project managers at MaineDOT face and try to deal with constructively when institutional trade-offs require a mix of team and non-team approaches. An important part of the team approach is that it encourages—and nearly requires—cross training of MaineDOT personnel. Engineers will need to serve as proj- ect managers from scoping through design and into con- struction. The goal, or effect, is for the individual engineer to learn many aspects of many different jobs. This cross- training not only produces effective project managers, but further adds to employee morale and employee retention. One final point should be made about organizational structure: MaineDOT has five regional offices, but the high- way program is very centralized. “Regions are not fiefdoms,” said one official. “Key support staff is in Augusta; uniform 39

policies are established and are maintained statewide. It is a struggle to maintain regional consistency, but we do a good job . . . via monthly meetings with the regions.” Another aspect of centralized activities occurs in the Property Office. Capa- bilities now exist to obtain statewide multiple-listing services online. Information about sold properties can easily be ex- tracted and helps the state make reasonable offers for needed property. Appraisers are able to obtain information in 15 min- utes, as opposed to a week of work in the field. As one official noted, “Maine . . . is small enough so that everyone can work closely. The organizational matrix works well. Regional and central responsibilities go across lines.” (43) Accelerating Design and Construction on Critical Projects MaineDOT describes itself as reacting especially well to crises—quite simply, it heightens the sense of urgency. The two projects discussed in the following paragraphs were noted by MaineDOT as examples of successful fast-tracked projects. Verona-Bucksport Bridge Replacement Project The Verona-Bucksport Bridge Replacement Project was completed in 30 months. The original bridge was identified as a failing structure. Project acceleration was achieved through a multipronged approach. For instance, MaineDOT insisted on what was almost literally a shotgun-enforced teaming of design and build functions. There were between 30 and 40 day-long meetings among the designer and contractor. All efforts were made to expedite environmental review. There was extensive, early, and continuous community involvement. However, MaineDOT points out that, largely because of the historical nature of the existing bridge, it was not possible to gain a consensus of public support for the project. On the other hand, MaineDOT considered early disclosure of the estimated project cost to be important in winning support among some stakeholders. There was a strong effort to utilize CSS in the design process. It was acknowledged that the existing bridge was historical, but the failing structure could not be preserved. Its histori- cal nature led MaineDOT to incorporate new historical and appealing aspects to the new bridge: incorporating an obser- vatory into the design of a support pillar and using elements and materials from other well-known historical structures. To accomplish this, MaineDOT maintained a strong relation- ship with the Maine Historic Preservation Commission, the state historic preservation office. Interstate 295 Resurfacing Project Several miles of I-295 were scheduled to be resurfaced over three construction seasons. However, when an inspection found the pavement to be in worse shape than anticipated, the resurfacing work urgently needed to be done sooner than planned. The idea was put forth to fast track the resurfacing to three months, which would require the closing of all lanes along the southbound side of I-295 during that period. Maine- DOT officials cite several reasons as to why this project accel- eration was so successful. (a) Early and continuous public out- reach was conducted. This consisted both of meetings with local officials about detour routes and other meetings with the public about the need for the project. Slabs of the deteriorat- ing concrete were exhibited at public meetings to clearly show the severe problems of the pavement. It was felt that if the public understood the need and the problems generated by the pavement condition, there would be a better likelihood of buy-in despite the inconveniences imposed by such a major detour. (b) Also, significant media attention was generated by the outreach effort. (c) Internally, staff-related efforts were undertaken, including cross-training of staff, shifting of super- visory personnel, and the establishment of managerial cham- pions for the project. One of the challenges associated with accelerating a critical project is the effect it may have on other, non-crisis programs. Among mid-level managers, the perception exists that con- centrating all efforts on accelerating a large project (as was the case with the I-295 resurfacing) can actually delay the delivery of the remainder of the program. It is important to give vent to these perceptions and formulate a plan, when focusing on a super-critical project, to move ahead on schedule with the rest of the program. Bridge Legislation and Project Prioritization As stated earlier, MaineDOT oversees nearly 2,800 bridges. Nearly 16 percent are considered structurally deficient, and many more are likely to deteriorate over the next 10 years. (41) To address this problem, the Maine state legislature passed two significant pieces of legislation that helped to expedite bridge projects. In 2001, the Local Bridge Program (LBP) divided responsibilities for various types of spans between MaineDOT and towns. It made MaineDOT responsible for all larger bridges and the towns responsible for smaller spans on town ways. It allowed MaineDOT to focus its capital and maintenance efforts on larger bridges that need it. State Highway Fund dol- lars are conserved by better leveraging federal funds, because only bridges with a span of more than 20 feet are eligible for federal funding. MaineDOT could fulfill its responsibility for bridge safety by continuing to inspect all smaller spans and larger bridges every two years. Most important, the larger bridge projects could be delivered quickly, without the cum- bersome process of calculating cost-shares, letters offering projects, town funding authorization, preparing town billing, processing town payments, and resulting delays. 40

In 2008, the state legislature created a funding source for MaineDOT to provide $160 million ($40 million per year) to supplement the currently anticipated bridge funding of approximately $280 million ($70 million per year), to cre- ate a $440 million, four-year bridge investment plan. (44) This plan represents a bold step toward addressing the bridge funding recommendations contained in the November 2007 report to Governor Baldacci entitled “Keeping Our Bridges Safe” (the Bridge Report), as well as the goals in 2007 P.L. Chap- ter 470 “An Act to Secure Maine’s Transportation Future,” both of which have been incorporated into “Connecting Maine,” MaineDOT’s Long-Range Transportation Plan. Among all the case study states analyzed in this report, Maine is the only state that has created this special bridge funding source. This legislation identifies and funds 246 badly needed capital bridge improvements in every corner of Maine. Table 3 presents highlights of this bridge investment plan. MaineDOT officials played a strong role in creating the list of 246 bridges. The four-year funding has created a strong urgency within MaineDOT to undertake these additional bridge projects expeditiously—in some ways similar to the urgency created by the Verona-Bucksport bridge replace- ment project and the I-295 resurfacing project. The Evolution of Performance Review— The Bridge Program In 2004, MaineDOT’s bridge program instituted the first form of project performance review in the DOT. Known as “Quality Assessment of Completed Bridge Projects,” it mea- sured the quality of the work performed on various bridge projects. Scoring was based on a 1 to 4 scale with 1 being unsatisfactory and 4 being exceptional. Scores were assigned to five criteria: • Safety Quality: Effective maintenance of traffic during construction; improved safety to traveling public, pedes- trians, and bicyclists; use of safety features on structure or approaches. • Environmental Compatibility Quality: Aesthetically plea- sing; fits into surroundings; minimal or no environmental impacts; improved environmental conditions; historical or archeological integrity maintained; minimal or no ROW impacts; good erosion control during construction; satis- fied public. • Functionality Quality: Meets purpose and need; appropri- ate structure type; appropriate structure size; effective use of right-of-way; effective accommodation of pedestrians and bicyclists; effective accommodation of boats and trains. • Cost-Effectiveness Quality: Appropriate scope of work; good workmanship ensured; low-maintenance structure type; durable materials used; reasonable life cycle costs; effective use of extra work or change orders; reasonable project costs; effective design, plans, and specifications. • Overall Quality Baseline target quality scores were assigned by a quality assessment team (QAT) to projects and then compared to the overall quality score assigned by that QAT at the project’s completion. The overall quality score measures a great deal about the construction process (including costs), as well as an overall assessment of how well the project performs from safety, environmental, functional, and public reaction per- spectives. What it doesn’t do is measure aspects of a project as it progresses through the pipeline. To begin tracking projects as they move through the pipe- line, MaineDOT has begun to implement a new dashboard tracking system for all projects. The dashboard tracks proj- ects that are identified in MaineDOT’s Biennial Transporta- tion Improvement Program (BTIP) and its Biennial Mainte- nance Activity Plan (BMAP). It classifies projects into three categories: • Green: Two types of projects are in the green category: – Projects that have just been kicked off – Projects that remain in the following parameters:  Scope stays consistent with the Scoping Report.  Estimated expenditures stay within seven percent of programmed amount.  Four or fewer change orders.  Project schedule stays within 25 days. • Yellow: Projects move to yellow parameters when: – Project experiences a minor scope change from the Scop- ing Report. – Project falls 25 to 40 days behind schedule. – Project experiences five to nine change orders. – There is municipal unrest concerning the project. – Project cost estimate exceeds programmed amount by eight to twelve percent. 41 Types of Improvements Quantity Bridge Replacements 80 Bridge Improvements Not Yet Scoped 59 Bridge Rehabilitations 10 Bridge Removals 6 Minor Spans 27 Bridge Preservation 64 Total 246 Source: Maine Department of Transportation (44) Table 3. Breakdown of capital bridge improvements funded by Maine’s bridge investment plan.

• Red: Projects move to red parameters when: – Project experiences a significant scope change from the Scoping Report. – Project falls 40+ days behind schedule. – Project experiences 10+ change orders. – There is municipal/civil unrest concerning the project. – Project cost estimate exceeds programmed amount by more than 12 percent. Figure 5 shows additional information on the criteria, deci- sion making, and issues associated with each category. The purpose of this dashboard is to uphold accountability, keep projects in the green, move projects from yellow to green, and learn from projects in the red. The extent of oversight that projects receive has to do with which category a particular project is in. Project managers are responsible for providing regular status updates to MaineDOT management. The project managers and their teams make all decisions about projects categorized as green. The overall BTIP and BMAP are managed by a Workplan Management Team (WMT), made up of MaineDOT management officials. When projects move into the yellow category, the project man- ager and other key team members must meet with the WMT. The meeting determines why this shift occurred, and whether the project can move back into the green category. If it moves back into green, basic scoping assumptions are likely to change. If a project moves into the red category, the project manager and key team members will meet with senior management at a monthly meeting and discuss how it happened. Senior man- agement will decide if the project is to be shelved or moved back into the green (along with revised scoping assumptions). Environmental “Streamlining” Changes in the Environmental Office at MaineDOT have had the net effect of informally “streamlining” the environ- mental review process that often slows down projects in the pipeline. The Environmental Office maintains strong rela- tionships with state and federal environmental agencies. These relationships help expedite the review process by build- ing understanding and credibility between these agencies and MaineDOT. Key permitting questions are resolved early on. For instance, does a project need a permit, or can a permit be avoided early on by changing the design? As Bridge Program officials stated: “Rule No. 1 is to stay out of the water.” (43) Finally, a MaineDOT waterway and wildlife crossing policy is being developed to help project developers better understand these environmental issues. Lessons Learned and Conclusions There are two overall lessons learned from the MaineDOT case study that are useful to other states. One is the team approach and the second is a comprehensive performance tracking program. The team approach is motivating and engaging and provides more accountability. By eliminating handoffs, it saves time. Through active engagement and cross-training, it builds a strong and experienced workforce—one capable of acceler- ating both programs and individual projects. It fosters coop- erative planning, design, and decision making, which further strengthens MaineDOT’s ability to team and work with the public, elected officials, other stakeholders, and other state and local agencies, as well as important federal agencies. Comprehensive performance tracking is critical. In devel- oping the dashboard system, MaineDOT has the ability to improve its project delivery process by having a standard method by which projects are continually monitored and reviewed. This standard helps ensure that projects do not fall behind schedule, become neglected, or become mismanaged. In summary, accountable teams and performance tracking of its efficient bridge program are MaineDOT’s path towards an expedited project delivery system. Maryland Performance Measures for Program Delivery Maryland is a small state, ranked 42nd in the nation in area. (37) However, with an estimated 2008 population of over 5.6 million, it is the fifth densest state in the United States. (38) Maryland is geographically quite complex and is roughly divided into three areas. The western part, bordered by West Virginia and Pennsylvania, is mostly rural. Central Maryland, including Baltimore and the Washington, D.C. suburbs, is quite urbanized and dense. Eastern Maryland, defined by the Chesapeake Bay, is primarily agricultural and enjoys a large amount of tourist traffic primarily destined to the Eastern Shore. Maryland’s per capita VMT is nearly the same as the U.S. average, with nearly 75 percent of it occurring in urbanized areas. (45) But surprisingly, Maryland’s annual VMT has remained nearly constant since 2005 at approximately 56.5 billion. (45) There are 29,265 centerline miles of roadway in the State of Maryland. Of this total, SHA maintains 5,243 centerline miles. (46) Although this represents less than 20 percent of the total roadway miles in the state, these highways account for approximately 70 percent of the total VMT in the state. (46) The 5,243 miles of highways maintained by SHA are catego- rized for funding purposes as primary and secondary high- ways. The state primary systems consist of approximately 1,288 miles of state-maintained routes, or 25 percent of the total state-maintained road mileage. (46) The secondary system is a network of state routes that serve interregional and local- ized traffic. This network consists of 3,955 miles (75.45 percent) 42

43 Yellow Results in Decision-Maker Performance Meeting o Consensus on why project moved to yellow o Cause within/without DOT control o Recommendation to decision- makers Move-to-Yellow Parameters o Minor $$$ scope change from report o 25–40 days behind schedule o 5–9 change orders o Municipal unrest Only Projects in Green Kicked off o Complete Scoping Report with signatures from appropriate parties (Planning and PD PM) o Milestones and schedule established o Municipal agreements in place o Sufficient funding for identified scope Remain-in-Green Parameters o Scope stays consistent with report o Estimated amounts stay within 7% of programmed amount o 4 or fewer change orders o Project schedule stays within 25 days of original schedule Projects in Red Require Senior Management Decision to Shelve or Send to Green o DOT accountability o Learning from red is primary goal Move-to-Red Parameters o Significant $$$ scope change o 40+ days behind schedule o 10+ change orders o Municipal/civil unrest (warren/ dunstan) o Cost estimate more than 12% over programmed amount Decision Making o Project management team makes all decisions. o Accurate reporting information in system becomes a top performance measure for project and program managers. o PMs document parameter status on weekly basis even to report “no change.” o Little involvement from WMT. Decision Making o Senior management makes shelving decision at monthly meetings with presentation by appropriate team members. o If return to green, revised scope report, schedule, estimate, agreement, etc. is prepared. o Projects in red undergo a quasi- value engineering assessment for continuous improvement. o WMT monitors/reports on light status and bottom line. Decision Making o Program manager, project manager, other key team members, scope developers, WMT meet on project. o Performance meeting leads to recommendation to move to red or green. o Senior PD/Planning designees consider recommendation and make decision. o If green, revised scope report, schedule, estimate, agreement, etc. is prepared. o WMT monitors/reports on light status and bottom line. Issues o What happens from when project moves to the red until next monthly meeting? o How does this move to red happen now? o Are parameters realistic for move to shelf? o What process should be in place to learn from the red? o How is accountability maintained? Issues o Items outside management team affecting schedule o Accurate reporting is essential for process to work. o Capability for management report by green criteria. o Criteria flexible by program? Issues o Who are appropriate decision makers? o How does this move to yellow happen now? o Is this too complex? o Parameters need to be appropriate to avoid proliferation of meetings o What happens when projects return to yellow after having already been returned to green? Figure 5. BTIP/BMAP process: Managing the work plan.

of the total state-maintained roadways and provides feeder and support functions to the primary system. (46) Transit in urban areas includes subway, light rail, and bus. Commuter rail connects Washington, D.C. to Baltimore. The Washington Metro subway and bus system serves Montgomery and Prince George’s counties. Long-haul passenger rail service is provided by Amtrak. Maryland’s geography is strategically located along the eastern seaboard and is poised to grow its economy which is based in traditional manufacturing, wholesale and retail trade, transportation, financial services, agriculture, and government contracting. Growth in these areas in the last decade has increased Maryland’s gross state product from $162 billion to $273 billion in 2008. (47) This translates to a robust economy in which the median household income is ranked the third highest at $66,500, well above the national average. (48) This growth has been supported by a multimodal transporta- tion network that the Maryland Department of Transportation (MDOT) is committed to enhancing and maintaining. Mary- land’s projections that freight movement will increase dramat- ically in the next decade will impact the roads and highways as well. It is expected that Maryland’s freight industry will grow by 120 percent statewide between the years 2000 and 2030. (49) Currently, approximately 82 percent of freight tonnage moves on the highways. Maryland is also a “through” state for freight movement, with half of the tonnage simply passing through. As a result, the state experiences more wear and tear on its aging infrastructure. Organizational Structure The organization of the MDOT is unique among the eight states studied, in that the transportation secretary oversees six separate modal administrations as shown in Figure 6. The last of these modal agencies, SHA, received the most attention in this study, as it has jurisdiction over the state’s highway network, similar to the role played by the depart- ment of transportation in other states. Not surprisingly, over half of MDOT’s capital program is allocated to SHA. (50) While MDOT as a whole reduced its total number of posi- tions by 7.6 percent since 1992 (50), SHA in particular has become more streamlined, reducing staff by about 25 percent. SHA is overseen by an administrator with three deputies: operations, administration, and planning/engineering. SHA’s capital investment, bridge, geometric, and ROW divisions are centralized, reducing redundancy and improving streamlin- ing between the agencies. Interviewed SHA officials noted that they were organized in a manner that values the role of individuals in the organization. Unlike some of the other case study DOTs, SHA has moved toward specialization of individuals. In the view of those inter- viewed, this has allowed staff in various areas to develop a level of competency in their subject area that shortens the length of time they are involved with a given project, leading directly to that project’s acceleration. Other perceived benefits of spe- cialization include the following: • Provides one point of contact for key subject areas • Creates a stable, streamlined process • Ensures that tasks are executed correctly the first time, thereby reducing backtracking • Provides each technical specialty with the ability to track the project’s schedule • Builds trust among review agencies by allowing them to work with the same SHA personnel all the time. They feel a sense of consistency and confidence when they don’t have to walk a new SHA project manager from square one through the entire process for every project. SHA had at one point experimented with the concept of keeping one project manager on a project from scoping through construction. However, a key problem kept recurring: Proj- ect managers would be promoted to a different position or leave the agency, resulting in the need for project handoffs to a new project manager. As a result, SHA began to move toward project specialization. 44 Source: Maryland Transportation Plan, 2009 Figure 6. Organizational chart for the Maryland Department of Transportation.

45 Federal Aid 17% Sales and Use Tax 6% Bonds 6% Operating 11% Corporate Income Taxes 5% Registra- tions & MVA Fees 16% Vehicle Titling Taxes 18% Motor Fuel Taxes 20% Other 1% Sources MDOT Opera- ting Expendi- tures 43% MDOT Capital Expendi- tures 37% Debt Service 5% Local Govt's & General Fund 15% Uses Figure 7. Sources and uses of the Transportation Trust Fund. Figure 8. Relationships of the State Report on Transportation documents. Transportation Trust Fund Securing funding is obviously a critical component for timely project completion. Maryland’s method of funding projects is notable and has been adopted by other states. A cen- tralized, dedicated fund is set up for all of the state’s transporta- tion needs. This fund is separate from the state’s General Fund, which supplies funding for other government programs. Rev- enues are not earmarked; fund allocations are made with input from local elected officials. Sources of funds include taxes, fees, and federal aid, as shown in Figure 7. Bonds are issued to sup- port the cash flow requirements of a given capital program in a manner mindful of debt coverage requirements. The Trust Fund gives the state a great amount of the flexi- bility required to meet the needs of a diverse transportation infrastructure through a stable source of revenue. By having such secure funding, MDOT is able to ensure projects travel from design through completion. Maryland Transportation Plan MDOT recognizes that long-term planning is essential for the population growth, diversifying economy, and changing environment that are imminent. The vision for a sustainable preserved environment and a safe and reliable highway sys- tem is outlined in a 20-year plan. The Maryland Transporta- tion Plan (MTP) is only one of three documents that define a framework of policies and priorities that help guide trans- portation investments across all modes. (51) Figure 8 illus- trates that the State Report on Transportation also comprises

the Consolidated Transportation Program, a short-term, six- year plan that defines a list of funded projects, and the Attain- ment Report, a product of MDOT’s performance measure program. In developing the MTP, the MDOT used an intense pub- lic outreach effort to gather information. It involved state, regional, and local agencies to ensure that its strategic plan- ning efforts could correlate with the state efforts. Citizens and stakeholder groups were contacted through interviews, facilitated meetings, interactive websites, newsletters, and online surveys allowing countless citizens, many of whom would not have been included in traditional settings, to par- ticipate in the statewide issues. (51) Their contributions and a broad-based approach identified six critical challenges: (a) transportation and the economy, (b) freight demand and infrastructure capacity, (c) planning for development, (d) transportation and the environment, (e) transportation needs outpacing funding resources, and (f) transportation- related fatalities and injuries. The MTP addresses these chal- lenges in detail but also outlines a strategic direction to deliver the MDOT’s mission. Five goals identify and support the vision (51): • Quality of service • Safety and security • System preservation and performance • Environmental stewardship • Connectivity for daily life The goals, in turn, are addressed through a series of perfor- mance measures that are reported in the Attainment Report. Maryland’s approach to transportation is comprehensive in that the MTP long-range vision is broken down into the Con- solidated Transportation Program’s short-range plans, which then are implemented through the mission and goals of the MDOT by application of performance measures. System Preservation and Performance Maryland is predominantly in the mode of preserving its infrastructure in this difficult climate of limited funding, as evidenced in the third goal. “Fix it First” is the motto before additional funds are expended in expansion-type projects. Almost 43 percent of the MDOT’s capital expenditures go into system maintenance and preservation. (52) With an emphasis in preserving the infrastructure so that it operates efficiently, the MDOT can extend the useful life of its assets and invest remaining funds for expansion of the network. Environmental Stewardship Environmental stewardship is also a prime goal for SHA. MDOT takes a lead role in protecting the air, water, soil, and ecosystems of the state. Their priority under the governor’s Smart, Green and Growing initiative is to promote smart growth so that developments occur in areas where infra- structure already exists. It is a balanced approach to preserv- ing natural resources, optimizing the use of existing facilities, reducing the cost to taxpayers, and increasing quality of life. Context-sensitive solutions play a large role in project devel- opment and, like many other states, Maryland struggles to bal- ance the cost and time involved in incorporating CSS against accelerating project delivery. A Standard Operating Procedure of Thinking Beyond the Pavement SHA views context-sensitive design (CSD, also known as context-sensitive solutions or CSS) as satisfying the “need to invest in community opinion from the very beginning.” It describes CSD as “a collaborative, interdisciplinary approach to developing and implementing transportation projects, in- volving all stakeholders to ensure that transportation projects are in harmony with communities and preserve and enhance environmental, scenic, aesthetic and historic resources while enhancing safety and mobility.” (53) For SHA, noise walls, especially, face a variety of community- to-community opinion, where CSD is especially helpful in building consensus. SHA’s commitment to CSD is so fun- damental that when asked about it, many members of the agency viewed it as simply a normal operating procedure. The main goal of CSD is not to accelerate projects but rather to enhance their acceptance by the community by ensuring that they meet the communities’ goals and objectives. How- ever, better design leads to better community acceptance, which may ultimately speed some projects by ensuring they avoid massive resistance. Additionally, when viewed as a long-term investment, integrating CSD into transportation project design may help project timeliness by building a foundation of trust and con- sensus between agencies and communities. That is, once communities trust agencies to be sensitive to their needs and environment, resistance—which may ultimately lead to delays through lawsuits or political pressure—is less likely to be met throughout the project. The strong community involvement that is part and parcel of CSD does raise the public expectation of a project reaching completion. When a project fails to move out of the planning stages, it may produce both disappointment and mistrust by community members. SHA has noted that the public needs to be made aware that not all project concepts progress to com- pletion, while others may take longer than expected because of funding uncertainties. SHA also noted that not all local offi- cials fully understand or have bought into CSD. These offi- cials often chafe at the level of community involvement that 46

SHA engages in, preferring more of a one-on-one relation- ship between SHA and the municipal leaders. In the end, Maryland’s view is straightforward—it is “Think- ing Beyond The Pavement” (TBTP). Four task teams (Orga- nization and Policy Task Team, Project Development Process Team, Community Involvement Team, and Project Manage- ment and Leadership Development Training Team) and their subteams have tasks and action items well defined to fully incorporate CSD/TBTP principles into their projects. MDOT develops and builds its facilities so they fit within the phys- ical environment. This requires an adherence to the imple- mentation strategies and a DOT culture that supports TBTP initiatives. Best Practices for Maryland Performance Measures—The Annual Attainment Report Rather than the dashboard approach used by other state DOTs, MDOT publishes the Annual Attainment Report on Transportation System Performance. This report is truly an integrated effort of tracking, monitoring, and attainment efforts of the six agencies that make up MDOT. Numerous adjustments have been made in what is measured and setting specific goals since MDOT began tracking its performance in this report in 2002. However, MDOT is now able to report on a multiyear trend for each performance category. The mea- sures and trends are represented in the Attainment Report on graphs and charts, and a written explanation is also provided for each in the form of responses to questions such as “What is the reason for the change?” and “What is to be measured in the future?” Every question is answered by two or three bul- leted items explaining the metrics. What begins as five goals for MDOT are divided into per- formance measures that each of the agencies are account- able for. Currently, MDOT tracks a total of 58 measures that provide individual gauges of Maryland’s entire multimodal transportation network. For instance, for the goal of system preservation and performance, 12 measures are tracked and monitored, but all six agencies are responsible for meeting this goal. Responsibility for another of the goals, environmental stewardship, is illustrated in Table 4. The eight measures that come under this goal are monitored either by MDOT or by one or more of its modal agencies. Metrics tracked by SHA include the following (45): • Maryland driver satisfaction rating (based on a weighted average score for 22 questions) • Percentage of state highway network in overall preferred maintenance condition • Bicycle and pedestrian fatalities and injuries on all Maryland SHA roads • User cost savings for the traveling public due to incident management • Acres of wetlands restored and miles of streams restored • Total fuel usage (SHA-dispensed fuel contains ethanol) of the light fleet • Number of SHA park-and-ride spaces and reduction in VMT through park-and-ride usage 47 Performance Measure Monitoring Agencies Transportation-related emissions by region MDOT Transportation-related greenhouse gas emissions MDOT Transportation emission reduction measures MDOT & MTA Acres of wetlands or wildlife habitat created, restored, or improved since 2000 MPA Compliance rate and number of vehicles tested for vehicle emissions inspection program versus customer wait time MVA Acres of wetland restored and miles of streams restored SHA Total fuel usage of the light fleet SHA Travel demand management SHA & MTA Source: Maryland Department of Transportation, 2009 Annual Attainment Report (45) Table 4. Performance measures and monitoring agencies for MDOT’s environmental stewardship goal.

• Percentage of SHA centerline miles with a bicycle level-of- comfort grade “D” or better and mileage of highways with marked bike lanes • Percentage of SHA centerline miles within urban areas with sidewalks and percentage of ADA-compliant sidewalks The Maryland Transportation Authority (MdTA) is an independent agency responsible for managing the state’s toll facilities. The Intercounty Connector and the John F. Kennedy Memorial Highway, a 50-mile tolled section of I-95 from Baltimore’s northern city line to the Delaware border under MdTA’s jurisdiction, are combined with the SHA’s roads for the purpose of calculating and reporting on the following performance measures (45): • Annual number of traffic fatalities and personal injuries on all Maryland roads • Number of bridges and percentage that are structurally deficient • Percentage of roadway miles with acceptable ride condition • Percentage of freeway and arterial lane-miles with average annual volumes at or above congested levels The graphs and charts that represent the performance of each of the metrics also set a target for the upcoming years. For example, the smoothness or roughness of the pavement ride quality, which facilitates mobility, efficiency, and safe movement of people, is shown in Figure 9 in the form of a bar chart. SHA and MdTA actually exceeded their target in 2007. Figure 10 shows a target of reducing the number of fatal- ities to less than 550 by 2011. In 2007, Maryland reported 615 fatalities. The Attainment Report explains reasons for the performance change and strategies to continue a down- ward trend. Similarly, each measure charts a trend that is benchmarked every year (or biennially for some measures). Targets are set and MDOT managers and leaders are tasked with meeting the goals of the department. The 58 performance measures are reported “externally,” i.e., to the public, via the Internet and through publication of MDOT’s Annual Attainment Report. While many states are still attempting to embrace a performance measurement or management system, Maryland has managed to assess its infra- structure and benchmark its assets for the past seven years. The realistic targets help managers to reach for the annual goals through the strategic alliance of all agencies involved. It is a self- assessment of their services, their economy, environment, and quality of life. The Attainment Report holds MDOT to the highest level of accountability and transparency. It was pointed out by the interviewed SHA personnel that measuring whether projects are being delivered faster is a difficult endeavor: Projects are not all alike, funding avail- ability differs depending on when a project begins, satisfy- ing the owner and customer(s) can be an elusive goal, and CSD sometimes extends the project’s schedule. For these rea- sons, MDOT hasn’t been able to measure changes in the speed of project delivery per se; however, it is measuring its ability to meet its commitments to deliver projects as well as its commitments to environmental stewardship. While it hasn’t completely met its goals as yet, it is improving in its ability to meet them. 48 Source: Maryland Department of Transportation, 2009 Annual Attainment Report (45) Calendar Year 1999 2000 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 2001 2002 2003 2004 2005 2006 2007 82.4% 83.0% 82.8% 82.8% 82.3% Target: Maintain 84% annually 82.0% 83.4% 83.8% 85.0% Pe rc en ta ge o f R oa dw ay M ile ag e Figure 9. Percentage of roadway miles with acceptable ride conditions.

Accelerating the Intercounty Connector The Intercounty Connector (ICC) was a large project designed to relieve congestion between the I-270/370 and I-95/US 1 corridors within central and eastern Montgomery County and northwestern Prince George’s County with a new multimodal highway. Technically, the ICC project was first conceived on a high level in the 1950s, but a lack of fund- ing and urgency delayed the project until the 21st century. Once the decision was made to prioritize the project, however, numerous methods were employed to successfully accelerate the design and construction phases. Environmental Streamlining. The ICC’s environmental process was completed extremely quickly, utilizing a number of techniques. Some of these methods had been successfully applied by SHA to the Woodrow Wilson Bridge replacement earlier in the decade. First was the formation of an Inter- agency Working Group (IWG) dedicated to this project alone. When the IWG could not resolve issues, a formal group con- sisting of agency principals plus one support person (“P+1”) was convened. The IWG and P+1 meetings both employed a neutral facilitator to expedite an effective process. In addition, the NEPA process was tracked with an eagle eye—high-level officials, including the governor, the secretary of transportation, and the SHA administrator, were closely involved in the environmental review process on a frequent basis. This involvement included a great deal of up-front and senior-level attention to creating the project purpose and need, as well as a significant amount of effort spent on developing alternatives. SHA acknowledges that this streamlining process acceler- ated the design and construction of the ICC and that the man- power shifts undertaken to deliver this MdTA-owned facility adversely affected other projects in SHA’s pipeline, causing some to fall to a lower priority. However, SHA also acknowl- edges that “staff came back from ICC working harder and with a greater sense of urgency, realizing that they can do more.” This realization has led to a number of practices that have helped expedite projects, including weekly breakfast club meetings for team leaders to discuss specific projects. (54) In addition, a number of environmental streamlining practices have been adopted, including the following: • Working with agencies during the planning process to begin the permitting process. This entails a number of things: Preparing a single document to satisfy both NEPA/ Clean Water Act Section 404 and the Maryland Clean Water Action Plan, completing the mitigation package before (or at least during) and not after the design stage, and getting corridor permits early. • Making staffing agreements with other agencies. SHA funds staff positions in regulatory agencies and retains 49 Source: Maryland Department of Transportation, 2009 Annual Attainment Report (45) Calendar Year 1999 2000 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 2001 2002 2003 2004 2005 2006 2007 598 617 662 661 651 643 614 652 615 R at e pe r 1 00 M illi on M ile s Tr av el ed 500 550 600 650 700 N um ber of Fatalities Target: < 550 fatalities per year by 2011 1.22 1.23 1.27 1.23 1.20 1.17 1.08 1.15 1.08 Traffic fatality rate per 100 million miles traveled on all roads in Maryland Annual number of traffic fatalities on all roads in Maryland Figure 10. Annual number and rate of traffic fatalities on all roads in Maryland.

consultants for other agencies, for the purpose of expedit- ing the review and approval process for its projects. • Banking stormwater. Building surplus stormwater recharge into larger projects offsite to avoid the need for site-specific replacement or mitigation on small projects. • Gaining programmatic approvals. Certain actions can be approved programmatically rather than on a case-by-case basis. Depending on their scope, some entire programs can be delivered faster through this means. Design–Build Contractor Selection Based on Competi- tive Sealed Proposal and Best Value. The design–build delivery system has proven successful in reducing the deliv- ery schedule of a project through overlapping of the design and construction phases, without reducing the time required to complete the individual tasks. It traditionally reduces the proj- ect risk for the owner, placing a greater amount of accounta- bility for delays and losses on the design–build contractor. (55) SHA has had a design–build program for unique and trial transportation programs for the past 10 years. Its design–build program only accounts for about 10 to 15 percent of the over- all construction program and has been deemed successful so far. SHA normally undertakes two to four design–build projects per year, ranging from large construction projects to guardrail replacement. SHA began requesting proposals for design–build highway projects in 1998. As of October 2009, 32 highway design–build contracts had been issued, ranging in size from $800,000 to $36 million. This is a 50 percent increase from 2005. None of these projects exceeded the $50 million FHWA threshold set for design–build highway projects. (56) Between FY 2000 and 2004, 5.6 percent of SHA’s construction dollars went to design– build projects; that number was projected to increase to 17 per- cent between FY 2005 and 2007. (57) In mid-2004, SHA began a competitive sealed proposal (CSP) pilot program to carry out “best value” selection. Best value is defined by the Design–Build Institute of America as a selection process in which proposals contain both price and qualitative components, and award is based upon a combina- tion of price and qualitative considerations. (57) The interviewed SHA officials have found two challenges in using design–build. The first is securing enough funding to be able to expand the use of design–build. The second is the inherent difficulty in dealing with utility relocation—a facet of construction that requires coordination with and cooperation of independent utility companies and is ideally completed before roadway construction begins. The ICC is being constructed using design–build contract- ing methods along with intense interagency collaboration facilitated through leadership in the Secretary’s office that ultimately make big exceptional projects like the ICC happen. SHA has experienced much success as evidenced by the con- struction of this iconic highway that will provide the neces- sary connections that were envisioned 50 years ago. Conclusion MDOT uses its performance measures for budgeting and programming, program management and project delivery, operations, and monitoring results. The increased pressure of having to maintain infrastructure at an acceptable level, greater public accountability, and transparency has challenged MDOT to track its system and continue to improve system performance. With a deliberate effort on environmental stew- ardship and context-sensitive design, MDOT continues to deliver and attain its transportation goals. Missouri A Practical Program of Setting and Meeting High-Performance Expectations The Missouri Department of Transportation’s (MoDOT’s) accomplishments in the last decade are prominent. Missouri has gone from ranking the nation’s third worst in pavement condition on major roads to the ninth best. Seventy-eight percent of the same roads are in good condition. The Show Me State ranks 17th in overall performance when compared to other state highway systems, and customer satisfaction with MoDOT is 78 percent. (58) While most states have seen a decline in the condition of their infrastructure over the last few years, Missouri is one of the few that has managed to improve its transportation system. Despite all this, MoDOT Director Pete Rahn comments that it is not enough. “Great nations build and invest for succeeding generations—like our parents and grandparents did. We have not.” (59) Missouri is a large state (17th largest in the nation by popu- lation, 21st largest by area), with a population of just under six million. (37) About 70 percent of the population lives in urban areas, with most urban dwellers living in either the St. Louis or Kansas City Urbanized Areas. While the state’s population is heavily urbanized, urban areas themselves occupy less than four percent of its land area. (60) Missouri has the seventh largest highway system in the country. (58) There are over 123,000 miles of public roads in the state. Of that, MoDOT operates and maintains 32,800 miles of state highway. Additionally, Missouri has 10,276 bridges located throughout the state. (58) Most public roads are in rural areas—only about 13 percent of statewide roads are located in urban areas. Interstates and principal arterials make up less than five percent of Missouri’s road miles, while nearly 80 percent are part of various local road systems. (61) Highway vehicles in Missouri travel around 67 billion miles per year—about the same as in New Jersey (but still the 16th 50

highest among all states). On a per-capita basis, however, Missourians have the eighth highest VMT in the nation— with each person traveling just under 12,000 miles per year on average. About 60 percent of annual VMT occurs in urban- ized areas, with nearly all of that (90 percent) occurring in the St. Louis and Kansas City Urbanized Areas. (62) For this reason, metropolitan mobility and congestion are of great concerns to MoDOT. MoDOT owns and maintains just over 25 percent of statewide public roads. The majority of public roads are county owned, while the rest are nearly all owned by local municipalities. MoDOT has evolved from its creation in 1921 (when the Highway Commission was first created and the agency was led by the chief engineer) to a multimodal agency with over 6,000 employees, governed by an expanded Transportation Commission and led by the director of transportation. The position of director is a relatively new one, having been created in 1999. Also in that year, MoDOT changed its capital funding plan from a 15-year plan to a 5-year plan. Its most recent funding plan (the 2010–2014 State Trans- portation Improvement Plan) represents a reduction in over- all capital funding, with the annual outlay decreasing from $1.3 billion in 2010 to $421 million in 2014. (63) MoDOT’s introspective approach to moving forward relies on its ability to focus on organizational results and communi- cating them internally and externally. Organizational Structure MoDOT has as its mission to provide a world-class trans- portation experience that delights its customers and promotes a prosperous Missouri. Toward that end, MoDOT has taken upon itself to consider as “Job #1” the ability to relate to and understand the needs of the public, as well as to build trust, visibility, and credibility for the agency’s actions. However, MoDOT did not always have these goals. In the 1990s, MoDOT was an underperforming agency that was overcommitted, underfunded, and just emerging from a poorly delivered 15-year capital program. The agency was not respected by state residents, elected officials, or a wide range of partnering agencies. Two changes over the past 10 years have helped turn MoDOT around into a results-oriented entity: (a) In 1999, the position of director of transportation was created and a performance measurement system was ini- tiated. (b) The second change—a major “sea change” accord- ing to many MoDOT employees—began when Director Pete Rahn took over in 2004. With the introduction of the director’s position in 1999 came other organizational changes. Most critical among these was the reorganization of front-line units into a complete “system delivery team.” The chief engineer oversees this team, which incorporates program delivery, system manage- ment, and multimodal operations. For the purposes of this study, program delivery is of most interest, because highway and bridge projects are conceived, analyzed, designed, and built from this area. The director of program delivery over- sees these functions, units, and personnel, reporting directly to the chief engineer. MoDOT has one of the most innovative organizational structures among the states studied. Its organizational chart has three separate wheels for system delivery, organizational support, and system facilitation. Figure 11 illustrates the func- tions within each wheel. At the core of each wheel is the outcome that MoDOT’s customers expect—tangible results. These are the consequences of a performance measurement system that turns plans into actions and ideas into best practices. The system delivery team focuses on functions related to “Retail MoDOT.” This team has direct public contact, supports customer service efforts, and is responsible for the 10 districts of MoDOT. The role of the system facilitation team is to assist the system deliv- ery team to achieve MoDOT’s tangible results, supporting functions necessary to maintain operations. The organiza- tional support team provides services to both system delivery and system facilitation teams. (64) The director of MoDOT is appointed by the governor and confirmed by the state senate. The director does not report to the governor, however, but rather to the Transportation Commission. The commission is independent, has its own set of bylaws, and consists of three democrats and three republicans. This equal number provides a bipartisan bal- ance on all transportation issues, and a sounding board on all capital planning and maintenance projects. Transformation through Leadership The success of an agency in overcoming challenges and fis- cal constraints is a true reflection of leaders that guide, take risks, and continue to look for innovation in everyday prac- tices. The current MoDOT director encourages risk and the acceptance of failure, but insists that staff complete projects at a fast pace using the right tools. Over the last five years, a major set of changes have occurred within MoDOT. The Director’s mandate that the agency perform at a very high standard set the stage for operational, strategic, and cultural transformations to occur within the department. Under the kind of leadership that has empow- ered the department, the concept of speedy project delivery has been positively reinforced. As a result, expectations within the MoDOT have been ratcheted up, schedules are being accel- erated from the projects’ very inception, and, most notably, MoDOT has succeeded in winning back the public’s trust. (65) Director Rahn is reported to have helped transform MoDOT into a performance-based agency. New processes have been 51

proven successful and are predicted to last well beyond his term as Director. In addition, the performance measurement sys- tem that was conceived in 1999 has evolved into the Tracker, MoDOT’s quarterly report on measures of departmental per- formance. As the January 2009 report states: “This document is your window into MoDOT—warts and all. It invites you to hold us accountable for exceeding your expecta- tions. . . . These results guide us every day as we go about the busi- ness of delighting our customers. In the Tracker, you will see that we have established measures to gauge our progress and we are comparing ourselves to the best organizations in the country.” (66) The Tracker holds MoDOT staff accountable and is “com- mitted to being open and transparent. We want you to know what we do well, what we don’t do so well and what we are doing to get better.” (66) Accelerating Project Delivery A number of specific actions have been implemented to help MoDOT better accelerate delivery of projects over the past decade. Five of them are discussed in the following sections. 52 Source: Missouri Department of Transportation Organizational Support TeamSystem Delivery Team System Facilitation Team Figure 11. Partial MoDOT organizational chart.

Strategic “Advance” Every year, a meeting is held among departmental managers to discuss priorities and develop strategies for the upcoming year. An important aspect of this “advance” is to assure that the activities of managers are in line with MoDOT’s mission statement and overall policies. This proactive approach con- trasts directly with the more commonly used “retreat” termi- nology, where management looks back at past performance and reacts—often too late—to problems and issues that have gone unaddressed and affected the public’s perception of the department. This advance approach seeks to implement actions rather than discuss plans. The Strategic Advance is only the first step to setting and communicating the over- arching organizational direction. Figure 12 shows the other steps involved in MoDOT’s strategic planning approach that integrates top-down and bottom-up methodologies. Building and Maintaining Strong Relationships with Other Agencies Throughout MoDOT, a major emphasis has been placed on developing strong working relationships with agencies at all levels of government in order to better coordinate and expedite important processes and reviews. Some of the critical relation- ships that have been fostered include the following: • Federal Highway Administration: Many in the agency point to the close working relationship they have with the FHWA as critical to expediting their work. MoDOT is currently working with the FHWA on the “Better Roads, Brighter Future” program. Their involvement has been very helpful. Together, MoDOT and the FHWA have streamlined resurfacing, restoring, and rehabilitation of non-freeway roadways and environmental processes and have reached agreements on design treatments, guardrails, etc. As a result, projects go out to bid faster, are completed under budget, and are saving more lives by being completed sooner. MoDOT’s environmental division has enhanced its work- ing relationships with state and federal regulatory agencies, including the FHWA. The FHWA has expressed approval of MoDOT’s “planning framework” process, and the two agencies have maintained a close relationship. • Missouri Department of Natural Resources: MoDOT administrators have praised the department’s environmen- tal division for developing a variety of staff experts who have established great working relationships with state agen- cies such as the Department of Natural Resources (DNR). 53 • After reviewing state and federal mandates/requirements that Tracker measures, and input from regional planning partners, employees, statewide surveys and other customer input, leadership conducts an analysis of its strengths, weaknesses, opportunities and threats (SWOT) to determine its strategic challenges, advantages, and potential blind spots. • Senior management team lists the “WOW” accomplishments and identfies potential new WOWs. • The senior management team-assigned leader sponsors a cross-functional team of employees, and partners as needed, to investigate, research, and recommend innovative solutions to address the issue, achieve the Tangible Results and produce another WOW for MoDOT’s customers. • Teams present their findings and recommendations complete with costs, implementation plan, timeline, action plan, anticipated outcomes, impact to the Tangible Results, and performance indicators. • Results are made available in the Tracker, senior management team meets quarterly to discuss all Tracker measures. Strategies are listed in the Improvement Status section of each Tracker measure. Source: Missouri Department of Transportation, 2007 Application for the Missouri Quality Award (64) Strategic Advance Teams and Action Plan Approval and Implementation Monitoring Results Figure 12. Steps involved in MoDOT’s strategic planning approach.

It is fortuitous that MoDOT shares office space with DNR; this co-location has facilitated communication and proven crucial in fostering a strong working relationship with the agency. MoDOT tracks environmental responsibility and takes it very seriously. • Metropolitan Planning Organizations and Regional Plan- ning Commissions: MoDOT districts are customer focused and have strong relationships with Missouri’s seven MPOs and nineteen regional planning commissions (RPCs). The department has worked to maintain a professional work- ing relationship with these quasi-governmental agencies. MoDOT has changed its project prioritization process over the past five years. It used to identify needs and projects in its central office, a practice that frequently raised concerns at the local and regional level. MoDOT now has a “planning framework” in place, where each MoDOT district works with its respective MPOs and RPCs to identify needs and build support for projects at a more grassroots level. • Contractors: MoDOT holds quarterly meetings with rep- resentatives of the general contracting industry, as well as with specialized contractors who work exclusively in con- crete, asphalt, and bridge work. As a result, the industry has been influential in many of the changes that MoDOT has implemented. Their inclusion in the process has built mutual respect, while preserving the owner/contractor relationship. By establishing a dialogue with contractors on a regular basis, MoDOT has learned about making specifi- cation changes that are important to the industry but of no consequence to the department. By making these changes, MoDOT has won an ally in the construction industry and made it easier for contractor and owner alike to expedite projects and reduce costs. An additional benefit of involving general contractors in quarterly meetings is that they begin to understand that the projects listed in the State Transportation Improvement Plan are real, with three-month locked-in schedules for letting. This knowledge encourages them to gear up for a job and hit the ground running when the project is released for bid. • U.S. Army Corps of Engineers: MoDOT has fostered good relationships with the Army Corps, especially in conjunc- tion with the “Safe and Sound Bridge” program geared toward improving bridge safety. • Partnering for Innovative Efficiencies: MoDOT recognizes that transportation demands are increasing while state rev- enues are not adequate for construction. A system called the Partnership Development Process has been created to allow other agencies to partner with MoDOT so that inno- vative financing methods can be developed for transporta- tion projects that serve a public purpose. Partnerships help MoDOT to jointly solve problems, build and strengthen relationships, increase efficiency, develop innovative solu- tions, and improve coordination. (67) Such alliances have accelerated project delivery, which ultimately benefits the citizens. Building with shared purposes—and shared resources—helps offset the cost of building the projects sep- arately, inflation costs stemming from delays, and other financing costs. Maintaining Core Competencies and Experience In an era of state fiscal crises nationwide, MoDOT has maintained relatively stable staffing levels over the past decade. In 2008, MoDOT continued to retain a large staff of over 6,300 employees, which has translated into MoDOT’s preserving core competencies, even through periods of low funding and workload. It has also enabled individual project managers to maintain responsibility over a project from incep- tion through construction. MoDOT program delivery has been successful because of strong leadership, competent per- sonnel (i.e., the right people in the right jobs), the Trans- portation Commission’s recognition of the staff’s hard work, and the system’s flexibility. MoDOT has held its employees accountable to the depart- ment’s motto: “Working together to achieve the right results.” Staff members have reported that personnel are implored to perform. MoDOT leadership prepares managers through the Management Development Institute, which is designed to improve a person’s ability to manage people, processes, and results. This ultimately allows managers to take on more responsibility and challenges. Staff responsibilities and internal cross-training have in- creased as well. Resident engineers are now required to be familiar with the responsibilities of the construction and materials engineers. One recent example of such cross-training has been demonstrated by sending personnel from through- out MoDOT to see first-hand, the lessons learned from the major I-64 reconstruction project in St. Louis. The knowledge gained has helped employees in the design and construction functions work better together. Expectations and accountability have not only increased internally; professional consultants are expected to get the job done, and MoDOT terminates those who do not succeed. According to one manager, beginning in 2008, MoDOT has successfully reduced its share of outside consultant procure- ment from about 35 percent to 5 percent. A Focus on Purpose and Need Purpose and need is considered to be a fundamental com- ponent of a project during the scoping process. Department management has encouraged DOT staff to be passionate about developing the right scope and budget for projects, with the aim of delivering projects in a timely fashion and 54

within budget. A poorly defined scope that is broader than the purpose and need will result in higher project costs and lengthy schedules, while a scope that falls short of it will result in a project that does not meet the objective. The complete project scope involves determining the root causes of the need, developing a range of alternatives, and choosing the best solu- tion that considers the cost and delivery time frames. The pur- pose and need is revisited often and items that do not support it are redesigned, re-evaluated, or eliminated completely. (68) Decentralization and Centralization Reorganization within MoDOT has involved the judicious use of both decentralized and centralized management— utilizing the benefits of each according to the application and what best fits the organization’s mission and goals: • Decentralization: MoDOT divides the state into 10 dis- tricts: Northwest, North Central, Northeast, Kansas City Area, Central, St. Louis Area, Southwest, Springfield Area, South Central, and Southeast. These districts are more cus- tomer focused and are able to maintain stronger relation- ships with local and regional governments than a single central office can. This arrangement respects the unique- ness of each district, its geography, its social culture, and its political climate. The decentralized aspects of the organi- zation afford district personnel a measure of autonomy. MoDOT staff is held accountable statewide, however, via the Tracker system. • Centralization: The creation of a central system delivery team is widely acknowledged as being critical to the suc- cessful acceleration and delivery of projects at MoDOT. Furthermore, creating the position of director of program delivery in the central office has been especially important, making that individual responsible for directing the trans- portation planning, design, right-of-way, construction and materials, and bridge groups. Further within the program delivery function, there is a mix of centralized and decentralized units. For instance, design, right-of-way, and construction and materials are decentral- ized among the 10 districts. Again, when decentralization gets programs and projects delivered faster, MoDOT empowers the district offices to make decisions that move projects for- ward. MoDOT is prudent with its use of eminent domain, pre- ferring to do mediation over outright taking. Property issues often get resolved at the eleventh hour, which, although frus- trating to the affected district, is typically appreciated by the public. This kind of activity is much better administered at the district level rather than from a central office many miles away. Other functions at MoDOT are predominantly either cen- tralized or decentralized. For instance, a small transportation planning staff is located in each district, although most are located in the Jefferson City central office. Planning staff in the central office deal with many project delivery issues, long- range planning, MPO and RPC oversight, and various depart- mental management systems. This central group also provides assistance to district planners on policy issues. Community relations staff is located primarily in the districts, supported by some central office functions that provide resources as needed, such as video and photography services. The centrally located bridge division is in charge of all MoDOT river crossings and viaducts. The environmental division is also located centrally, benefiting from its co-location with DNR staff. Some construc- tion and materials personnel/facilities are centrally located as well, including geotechnical experts, laboratories, and some construction and materials engineering staff. However, most (such as inspectors) are located within each district. Process Management— Integrating Core Competencies MoDOT’s core competency is to develop and maintain the state’s transportation system. MoDOT strives to provide the public with a safe, efficient transportation system that delights its customers and promotes a prosperous Missouri. MoDOT delivers this promise through core competencies such as plan, design, build, and maintain (See Figure 13). At the root of these competencies is MoDOT’s mission to achieve its tangible results as reported in the Tracker. (64) Expanding outward from this core is a myriad of processes that are not only tied directly to the mission, values, and tan- gible results, but also prescribe the work systems of planning, designing, building, and maintaining. “New technology, organizational knowledge, and agility are built into the pro- cesses by setting the focus and allowing empowered employees to manage performance with an eye on measurement indi- cators.” (64) Each process has to achieve MoDOT’s tangible results. Each process should be timely, efficient, and effective without compromising safety. The processes work together, holistically, to ensure that the state’s programs and services for all modes of travel are delivered. And all work processes must be better, faster, and cheaper. Best Practices for Missouri Tracker—Measures of Departmental Performance Organizational effectiveness begins with a total understand- ing of the mission and values and a commitment to delivering tangible results. The Tracker was developed to assess how MoDOT “is measuring up” both internally and externally. For a program that is only four years old, the Tracker already has had much success in the results it provides. It has become 55

the focal point of how MoDOT delivers its programs and projects. The Tracker is a system that continuously measures and monitors the tangible results. The expectations of the public are translated into 18 tangi- ble results: • Uninterrupted traffic flow • Smooth and unrestricted roads and bridges • Safe transportation system • Roadway visibility • Personal, fast, courteous, and understandable response to customer requests • Partnership with others to deliver transportation services • Transportation leveraged to advance economic development • Innovative transportation solutions • Fast projects that are of great value • Environmental responsibility • Efficient movement of goods • Easily accessible modal choices • Customer involvement in transportation decision making • Convenient, clean, and safe roadside accommodations • Best value of every dollar spent • Attractive roadsides • Advocacy for transportation issues • Accurate, timely, understandable, and proactive transporta- tion information The tangible results measures within the Tracker are key indicators that measure MoDOT’s organizational effectiveness. For each of these tangible results, there are two to sixteen measures used to evaluate MoDOT’s success in attaining those results, as shown in Figure 14. For instance, for the tangible result environmental responsibility, seven measures are mon- itored: (a) percentage of projects completed without environ- mental violation, (b) number of projects where MoDOT pro- tects sensitive species or restores habitat, (c) ratio of acres of wetlands created to the number of acres of wetlands impacted, (d) percentage of Missouri’s clean air days, (e) number of gallons of fuel consumed, (f) number of historic resources avoided or protected as compared to those mitigated, and (g) number of tons of recycled/waste materials used in con- struction projects. Similarly, the remaining 17 tangible results also have detailed measures that are tracked and reported. The January 2009 Tracker lists 112 total measures spread among the 18 tangible results. (69) Clearly there is a great emphasis on getting the best value for every dollar invested in the trans- portation system. Drivers and Benchmarks Individual MoDOT personnel are assigned responsibil- ity as “drivers” for the overall tangible result as well as for 56 Planning Processes – Long-range planning process – Planning framework analysis – System analysis process Maintaining Processes – Pavement maintenance process – Bridge maintenance process – Roadside management process – Incident management process Building Processes – Contract administration process – Material inspection process – Construction inspection process Designing Processes – Scoping process – Cost-estimating process – Location process – Right-of-way process – Pavement type selection process – Work zone process – Bidding and letting process Support Processes – Budget process – Communication process – Procurement process – Staffing process Source: Missouri Department of Transportation, 2007 Application for the Missouri Quality Award (68) Figure 13. Work system design and key processes.

each measure. For example, the director of program delivery is assigned responsibility as the driver for the tangible result fast projects that are of great value, while the responsibility for “driving” the nine measures of this result is split among five other individuals. What is quite apparent in the MoDOT cul- ture is that they attempt to benchmark every measure in the Tracker against the best in class. For environmental respon- sibility, Missouri measures itself against Dallas, Texas; for best value of every dollar spent, MoDOT compares itself against Maryland and New Mexico DOTs and the private construc- tion industry; for fast projects that are of great value, MoDOT compares itself to Georgia and Michigan; and for innovative transportation solutions, MoDOT measures itself against the New York State DOT as the benchmarking organization. (64) This practice sets the stage for continuously improving and striving to provide “a world-class transportation experience.” Four of the eighteen tangible results have a direct bearing on expediting projects and programs through MoDOT: smooth and unrestricted roads and bridges, transportation leveraged to advance economic development, innovative transportation solu- tions, and fast projects that are of great value. The Tracker reports on the status of each of the measures for each tangible result. Using fast projects that are of great value as an example, Table 5 shows the level of detail that is measured and monitored on a quarterly basis for each of its nine measures. Establishing baselines, setting benchmarks, tracking pro- gress, and making adjustments to one’s system and processes are challenging tasks. While a number of states track con- struction costs, few have information on total project costs. Even fewer are able to compare programmed total project cost to final total project cost. While many states can provide qualitative information on how they are perceived by the 57 Figure 14. Chart indicating the number of measures used for each tangible result. 0 2 4 6 8 10 12 14 16 8 7 10 4 4 3 3 4 9 7 5 10 4 5 16 2 5 6 N um be r o f M ea su re s Tangible Results

58 Source: Missouri Department of Transportation, Tracker. Measure of Departmental Performance, July 2009 Measure Purpose of Measure Results Percentage of programmed project cost as compared to final project cost This measure determines how close MoDOT’s total project completion costs are to the programmed costs. The programmed cost is considered the project budget. As of June 30, 2009, for Fiscal Year 2009, a total of 411 projects were completed at a cost of $1.593 billion. This represents a deviation of 0.31 percent or $5 million more than the programmed cost of $1.588 billion. Average number of years for a project to go from the programmed commitment in the Statewide Transportation Improvement Program to construction completion (from 2006 to 2007) This measure monitors how quickly projects go from the programmed commitment to fiscal closure of a construction project. Design time for resurfacing projects: down to 0.7 yr. Design time for safety projects: up to 1.3 yrs. Design time for major bridges: down to 1.5 yrs (from 4.3 yrs) Design time for new or expanded highways: up to 3.9 yrs Percentage of projects completed within programmed amount The measure tracks the percentage of projects completed within the programmed amount. It includes separate categories for projects over and under $1 million. In Fiscal Year 2009, 60 percent of projects programmed over $1 million were completed within the budgeted amount, while 54 percent of projects under $1 million came in at or below budget. Percentage of projects completed on time This measure tracks the percentage of projects completed by the commitment date established in the contract. 93 percent of projects completed in fiscal year 2009 have been on time. Percentage of change for finalized contracts The measure tracks the percentage difference of total construction payouts to the original contract award amounts. MoDOT’s performance of 1.1 percent in fiscal year 2009 is below the target of 2 percent. Average construction cost per day by contract type This measure tracks the cost per day for project completion to determine the impact to the traveling public, enabling MoDOT to better manage project completion needs. The greater use of A+B and calendar-day contracts resulted in a larger amount paid per calendar day in the first three quarters of Fiscal Year 2009. Unit cost of construction expenditures This measure tracks how MoDOT projects provide great value by comparing the cost of major items of work for MoDOT projects to other state DOTs. Excellent competition in the past year has enabled MoDOT to realize almost a 7 percent reduction in unit prices for bridge construction—the second largest percentage decrease in this area among Missouri’s surrounding states. Annual dollar amount saved by implementing value engineering (VE) This measure tracks the amount of money MoDOT saves by implementing value engineering proposals. In 2008, MoDOT design savings from VE studies were $96.1 million, a 94 percent increase from 2007. So far, for 2009, design savings are $23.5 million. Percentage of customers who feel completed projects are the right transportation solutions This measure provides information regarding the public’s perception of MoDOT’s performance in providing the right transportation solutions. The majority of respondents thought that the project made the roadway safer (95.4 percent), more convenient (91.2 percent), less congested (82.7 percent), easier to drive (94.2 percent), and better marked (92.3 percent) and was the right transportation solution (94.7 percent). Table 5. Measures that track fast projects that are of great value.

public, MoDOT provides a percentage of overall customer satisfaction, or the percentage of customers surveyed that feel that MoDOT takes into consideration customers’ needs and views in transportation decision making. In effect, each tan- gible result is backed by a baseline of where it was and a benchmark of where it is currently. Very few states have gone to such lengths to gauge themselves and then inculcate expectancies to raise the bar. Whether the trend is toward a positive improvement or a negative result, each tangible result driver has the responsi- bility—and the challenge—to meet the baselines previously set and/or exceed the established benchmarks. The Tracker is an excellent tool for short-term action planning. Based on the data collected for each measure every quarter, managers have the ability to change or modify their strategy if the trend for the tangible result is not headed in the desired direction. As such, constant improvement, continuous monitoring, and balancing of priorities occur so that the results expected by the customers/public are delivered—almost in real time. Practical Design Nearly everyone interviewed at MoDOT talked about the move toward “Practical Design” solutions as an important, positive step in the project and program delivery process. The concept was introduced at MoDOT in 2005 and was documented later that year in a Practical Design Implemen- tation Manual. In the first two years, Practical Design saved Missouri taxpayers $400 million. (70) As both MoDOT and the American Council of Engineering Companies of Missouri have stated, “State DOTs must deliver the transportation sys- tem better, faster, and cheaper than ever before. MoDOT’s Practical Design effort accomplishes that goal by building ‘good’ projects everywhere instead of ‘perfect’ projects some- where.” (19) In a similar vein, MoDOT Director Rahn stated that Missouri engineers design highways aiming “not to build perfect projects, but to build good projects that give you a good system.” (71) The concept of Practical Design involves looking at proj- ects on a case-by-case basis, rather than following the strict guidelines and parameters of a project. In other words, a road might be built to a lower standard than would be the case if funds were unlimited, but still meet the purpose and need and basic requirements. Safety, however, is never compro- mised in this equation. Critical aspects of Practical Design as practiced by MoDOT include properly defining the scope by focusing on meeting the purpose and need, while considering the surroundings of each project (adequately meet purpose and need without unnecessarily going beyond), getting the best value for the least cost, never compromising safety, and collaborating on the solution. (68) An example of a Practical Design solution was to use an 8- or 10-inch pavement thickness instead of 12 or 14 inches of concrete as was done in the past. By using non-traditional design methods or newer construction prod- ucts and materials, and different techniques, MoDOT trans- portation officials have been able to deliver system-wide improvements while saving funds that were being wasted in over-designed items. Figure 15 shows the dollar savings from Fiscal Year 2002 to 2006 though MoDOT’s implementation of Practical Design. MoDOT encourages innovation and creativity among its staff to accomplish the goal of implementing Practical Design. There is also a powerful incentive to institute Practical Design 59 Source: Missouri Department of Transportation, MoDOT’s Approach to Program Management (68) Figure 15. Dollar amount saved by implementing Practical Design.

at MoDOT: If a districts’ project comes in under budget, the savings are returned to that district for future projects under its purview. At the same time, if projects come in over budget, the money is taken from the overall district budget. Conclusions MoDOT is doing much to accelerate project and program delivery. The Missouri Tracker sets the organizational strategic goals and direction, while Practical Design is one of the tools and methods of doing business to accomplish tangible results. Other salient points observed at MoDOT are summarized in the following sections. Committed Leader There is no way to overestimate the impact that the current director of MoDOT, Pete Rahn, has had on the department’s commitment to accelerate projects and quickly create a great transportation system in Missouri. In the five years that he has served, there appears to have been a significant internal shift to high performance for the benefit of the state’s taxpayers, as well as a perception outside the agency that a positive transformation has occurred. Perhaps the greatest compli- ment to the director’s role in creating this environment was the MoDOT official who felt that the informal and formal changes implemented by Rahn would last well beyond his tenure as director. Values such as honoring commitments, appreciating diversity, fostering a caring workplace, being responsive and courteous, encouraging risk and accepting failure, empowering employees, and innovative decision mak- ing are practiced by senior leaders and filtered down through- out the organization. Essentially, the director has succeeded in achieving total organizational buy-in for MoDOT’s mission. Strong Reliance on Staff In an era of shrinking state DOT staffs, Missouri seems to have bucked the trend. Not only has there been an effort to retain staff and competency levels, but there has been a move to help employees develop new skills and foster new working relationships and to refocus them toward delivering projects, meeting performance goals, and acknowledging customer needs and viewpoints. Coordination and Communication Are Critical It is a major department-wide goal to improve and maintain communication and coordination with the wide range of part- ners MoDOT needs to engage in order to effectively deliver its projects and programs. The communication begins internally, as managers and staff share best practices, progress, and issues through formal and informal channels. It extends to the host of federal, state, regional, and local government agencies involved at all levels of project development and delivery. It involves contractors. And it extends to the general public. Innovative Design Practices MoDOT, like several other state DOTs, has engaged CSS concepts in its design processes through the development of Practical Design policies and manual. What seems par- ticularly unique in MoDOT’s application of CSS is the clearly stated desire and sharp focus on delivering more “good enough” projects better, faster, and cheaper, with the end result being a great statewide transportation system. Emphasis on an Open and Clear System of Performance Measures The Tracker has evolved quickly into an important depart- mental tool for measuring MoDOT’s overall performance, including its ability to accelerate projects and programs. Its measures are both clear and results oriented. Champions of each measure are named and therefore clearly identifiable, internally as well as externally to the public. The Tracker is published quarterly, to facilitate better judgment of trends and provide time to adjust strategies in performance. It mea- sures present-day effectiveness against past trends. Most important, it is a tool that is of equal importance to effectively managing MoDOT and its various responsibilities, as well as building credibility among Missourians about how their transportation system is performing. This “public window” via web access is the greatest testimony to MoDOT’s efforts toward transparency. MoDOT has experienced a cultural shift in the last five years. Beginning with the Tracker and Practical Design, both of which were implemented in 2005, these strategies are designed to exceed customer expectations, maintain accountability, and continuously improve quality. A focus on turning ideas to reality and implementing best practices to produce results, while striving for innovation and radically controlling costs, has done much to speed its programs and projects from con- ception to completion. New Jersey Pipelines to Project Delivery The New Jersey DOT’s mission statement is “Improving Lives by Improving Transportation.” This motto is one that challenges the New Jersey DOT (NJDOT) in its efforts to improve its aging infrastructure and roadway networks that commuters have come to depend on. NJDOT’s philosophy begins with addressing the critical goals and objectives of 60

safety first, fix it first, congestion relief, smart growth, inter- modal efficiency, environmental/quality of life, and economic development opportunities. (72) New Jersey’s state highway system consists of approxi- mately 38,000 centerline miles of roadways, of which the DOT owns and maintains approximately 2,344 miles. The remaining roads fall under county and municipal jurisdictions. Although NJDOT manages only 6 percent of the roads, about 67 percent of all traffic, including heavy trucks, use these state-owned roads. A recent measure of state roadway roughness and dis- tress measurement indicates that approximately 49 percent of the state’s highway system is deficient. (72) With a population of approximately 8.7 million, New Jersey is the most densely populated state in the nation. Surpris- ingly, this urban environment has only six urban cities with more than 100,000 people, based on a 2004 estimate. (29) New Jersey’s geographic location in the Northeast Corridor, its immediate proximity to New York City, and major economic generators and industries—such as ports, airports, warehous- ing, and pharmaceuticals—generate high volumes of com- muter, freight, and recreational traffic. These volumes place a huge burden on the roadway system to carry ever-increasing amounts of everyday traffic. More telling is the number of VMT on state roads. New Jer- sey experiences 75 billion VMT annually on federal aid high- ways. (72) When compared to other Northeast Corridor states, New Jersey also has the most densely traveled lane miles. The wear and tear of daily traffic, the multiple freeze–thaw cycles of the temperate winter climate, and heavy truck traffic cause pavement surfaces to deteriorate more quickly than states in other locations. Transportation professionals in New Jersey have the unique challenge of finding ways to deliver projects amid fluctuating climatic conditions, limited space require- ments, and the increasing heavy truck traffic that passes over New Jersey’s roads and interstates to get to their destinations. Apart from the aging infrastructure, New Jersey also faces problems with congestion. Despite the increase in population and employment, New Jersey has recognized that it “cannot build [its] way out of congestion” and must instead look to innovative solutions and practical approaches to address its transportation needs. Fourteen percent of the roads operate at or over capacity. Congestion in New Jersey is no longer reserved just for peak hour traffic; pockets of urban New Jersey’s roads experience congestion lasting more than one hour, and experience increasing delays at other bottlenecks and intersections. (72) State funding for New Jersey in 2006 came from a variety of sources including user tax revenues, road and crossing tolls, general funds, bond proceeds, the federal government, and other miscellaneous income. Total receipts amounted to $4.9 billion. Disbursements were allocated to the national highway system, roads and streets, maintenance and highway services, interest, bond retirement, grants, and local aid. Total disbursements amounted to $3.8 billion. (72) However, it has been estimated that approximately $7 billion is required to bring the state’s deteriorating infrastructure to acceptable standards. Roads and bridges that were designed for the 20th century have outgrown their useful life and must now be upgraded or rehabilitated to 21st century standards. According to NJDOT’s discussion group, limited revenue resources along with competing demands do not provide the necessary funds and tools to restore and rebuild New Jersey’s infrastructure needs. The new mode of operations currently in place at NJDOT is focused on rehabilitation and maintenance of existing infrastructure. Organizational Structure The NJDOT has always had a predominantly centralized organizational structure. It is a tiered structure wherein the commissioner provides leadership to his or her subordinates. Under the deputy commissioner, assistant commissioners, along with directors and program managers, address the DOT’s organizational and operational issues. Directors, pro- gram managers, department heads, and regional managers all provide direction and guidance in their respective areas to deliver their short-range and long-range programs and projects. The three major areas under the deputy commis- sioner that contribute to program delivery are (a) Planning and Development, (b) Capital Program Management, and (c) Operations. Of these, Capital Program Management lies at the heart of project delivery. NJDOT has satellite offices and maintenance facilities located throughout the state, but all major decisions are made from the central office in Trenton. Centralizing all offices and units in one location has allowed for better communication, not only within different units but also with external stakehold- ers. While the organization is somewhat vertical, there have been many internal changes resulting in a flatter and more horizontal approach to reduce the formalities inherent in “tall” organizations. Internal Reorganization NJDOT has also gone through several internal reorgani- zations. However, reorganization did not simply occur on one level. At the macroscopic level, there were global changes within NJDOT that allowed the department to move from long-duration, high-development cost to lower cost and higher efficiency in project delivery. These overarching elements of re- organization involved a pipeline approach to project delivery, capital investment strategy, and a management-by-objective approach. At the microscopic level, fine-tuning of community 61

partnering, agency partnering, and task order contracts has helped to expedite projects. NJDOT’s reorganization involved restructuring where certain functions were handled. For instance, environmental documentation was only initiated in the Division of Project Management (DPM) after an initially preferred alternative was selected in the Division of Project Development (DPD). Not only did this entail an official handoff from one unit to another, but critical time was also lost in the ramp-up efforts to gain an understanding of the initially preferred alternative and the preparation of environmental documentation. At each phase, a new group of individuals would have to famil- iarize themselves with the history, project data and infor- mation, decisions, stakeholders, and particular challenges of the project. Often, decisions made by the DPD were ques- tioned by the DPM, and projects would either take longer to advance or additional effort would be required to move the project forward. Some of this effort involved rework and a resulting loss of time and budget. In an effort to streamline the environmental process, activities related to environmen- tal documentation were brought into the development phase of the project. This way, the environmental process could start sooner in the project’s life cycle, with other tasks being per- formed concurrently, and remain with the same individuals who were involved in the earlier decision-making process. Prior to the reorganization, the Office of Access Design and the Major Access Permit unit were under the Division of Design Services. Managers found that many access functions had a direct impact on right-of-way, which would then impact project delivery. These units were relocated under the Divi- sion of ROW, which functions under the Capital Program Management area. This relocation bridged the gap between ROW and access functions and caused some of the ROW acquisition processes and access alteration processes to be streamlined. Project Management Philosophy Reorganization within the Capital Program Management area also involved a more critical step toward changing the way projects were delivered. Approximately 12 years ago, NJDOT began making the change toward a project management–based philosophy. This philosophy provided guidelines for proj- ect managers in terms of how projects should be initiated, planned, executed, controlled, and closed, requiring the Capi- tal Program Management area to undergo a paradigm shift in the way projects were being delivered. The phases of a proj- ect (planning, design, and construction) were analyzed for redundancies and potential areas where time was being lost in the project cycle. Reorganization of that area transformed project phases, causing it to take a more unified approach in delivering projects. Using a management-by-objective approach, projects were scoped to have realistic objectives. Those objectives were periodically evaluated and monitored. The project management philosophy introduced a differ- ent way of delivering projects. The concept of the triple con- straints—a balancing of scope, schedule, and budget—became a code that project managers lived by. Project managers became more aware of their role in integration management and the importance of such things as project charters, project management plans, and change control procedures. A greater emphasis from upper management on managing scope and maintaining schedules guided the project managers to deliver projects in an organized manner. The push to move toward a project management philos- ophy met with some resistance initially. But the philosophy takes this into account and provides a holistic acceleration approach from the initiation of a project to its end. More important, through the project charter, a formal recognition of the project allowed the project manager to begin work, assign resources, make decisions, and orchestrate a plan that provided an end product for users. Not only did the project management philosophy change the way NJDOT did projects, but it also aligned programs with the department’s overall business goals; ergo, the need for a formal process to man- age projects was established. Consultant Continuity to Expedite Project Delivery NJDOT has significantly reduced its staff from 6,000 to only 3,000 employees in the last 10 years. This staff reduction has affected the way programs and projects are processed. To meet the demands of programs that need to be delivered on an annual basis, NJDOT frequently procures professional consultant services. Consultants are brought on board to perform concept developments, feasibility assessments, en- vironmental documents, design, and construction services. Often, a consultant’s expertise becomes valuable when the department looks to research and develop a new program or process as well. One of the challenges that New Jersey faces with a reduced work force is maintaining a wealth of knowl- edge (of the organization) that is tacit and transactive at the same time. More recently, the NJDOT has taken a step forward to expedite project delivery through the implementation of qualification-based consultant selection in batches and the use of consultant task orders for simpler projects of similar scope. This initiative has eliminated the downtime between project phases and enhanced the department’s procure- ment management practices. In the past, a qualification-based consultant selection was performed for each separate phase of a project, regardless of its scope. For instance, one consultant might have been respon- 62

sible for the feasibility assessment phase of a project, while a different consultant would undertake the design phase. Over its life cycle, the project might have passed through three or more different consultants. From the NJDOT end, this pro- cess required additional administrative time and effort to prepare RFPs and select consultants. At the consultant end, ramp-up efforts were required when a new consultant was selected for the next phase of the project. To provide better continuity, the new consultant solici- tation process incorporates language that allows one con- sultant to take the project from inception to completion, from purpose and need definition through to final design and construction services. It permits a contract to be mod- ified such that the same consultant may remain assigned to the project through multiple phases, at the request of the department, without needing to undergo additional con- sultant selections. Therefore, the DPD has the ability to se- lect a consultant from a group of qualified consultants and subsequent divisions can allow that consultant to perform all aspects of a project. The intent is that one consultant can provide continuity from beginning to end, reducing admin- istrative time in responding to preparing proposal documents and allowing for seamless continuity through project phases. Another key element of maintaining one consultant through the life of the project is that it allows for a better knowledge management system. In other words, critical information and knowledge that is acquired as a project gains momentum is less likely to be lost if the same team of individuals is involved from beginning to end. Best Practice for New Jersey: Pipelines to Project Delivery Propelling a project forward through critical milestones and a multitude of activities is possible if the right components are in place throughout the life of the project. Pipelines to proj- ect delivery have helped NJDOT achieve just that. “Pipelines” are customized paths that facilitate and ensure that all the ele- ments required for project delivery are addressed from the onset of purpose and need assessment through construction. There are four different pipelines, each representing a differ- ent level of project complexity and common characteristics. Pipeline 1 is the most complex pipeline; projects in this pipe- line require a purpose and need, environmental documenta- tion, a full feasibility assessment, and preliminary and final design. Pipeline 2 projects are those that qualify for a Cate- gorical Exclusion, with less intensive purpose and need and feasibility assessment work. Pipeline 3 projects require min- imal or no work on ROW issues and are relatively simple in scope. Last, Pipeline 4 projects are the least complicated and are usually delivered by in-house maintenance and opera- tions staff. Pipeline History The pipelines concept came about in the late 1990s. It was the result of numerous NJDOT units coming together to find ways of streamlining project delivery from its inception. Prior to this time, projects had their beginnings in a Regional Design Office of the Division of Design and ROW and were then transferred to a centralized Environmental group. This unit would perform environmental screening and implement the NEPA process to secure the necessary environmental doc- umentation. The project would be transferred once again to the Project Management group for design. A final transfer would occur when the project was let and entered the final phase, construction. However, in the initial attempts at accel- eration, depending upon the complications and challenges of a project at any point in the cycle, the project had the tendency to slow in momentum because of scope changes, to be reprioritized due to funding, to be “thrown” back into DPD possibly due to fatal flaws or insufficient assessments, or simply to be halted due to stakeholder opposition. All of these factors contributed to increased budgets, hours of re- work, and delayed project delivery. Management wanted to eliminate those pitfalls and provide a fluid process whereby projects could consistently follow a path to completion. Through years of refining their existing processes, the four pipelines were created and redefined to provide a clear path to plan, develop, design, and construct transportation projects from the time that an issue is simply a problem statement. These pipelines are now a fundamental way for projects to follow a defined process, build on the basic information and data, and gain momentum as they pass through the multiple phases of concept development, feasibility assessment, design, and finally to construction and completion. Capital Projects Procedures The pipelines are a part of a larger set of Capital Projects Procedures (CPP). The CPP serve as a guide that allows NJDOT staff and design consultants to follow a consistent set of steps to produce the best product—a safe, efficient trans- portation system. Given that the execution of projects requires practical engineering judgment, the CPP is flexible enough to allow for changes. Both NJDOT staff and consultants have some authority to seek changes that eliminate waste- ful steps, reduce cost, or even add steps without an undue increase in time, as long as legal issues and regulations are met. (73) Inasmuch as the guide provides an organized flow of activities that move projects forward, it allows all partici- pants working on a project to have the same understanding and expectations of how the project will advance step by step. NJDOT broadly defines five critical phases of a project: screening, purpose and need (PN), feasibility assessment (FA), 63

design, and construction. Projects that are simple, that require little or no ROW acquisition, which have minimal potential for community concern, and those that are eligible for pro- grammatic approvals can bypass the PN and FA phases. These types of projects are typically limited in scope so they can pro- ceed directly into design and construction. Other projects are screened and entered into an appropriate pipeline for devel- opment and execution. Front End of Pipelines Before a project enters a pipeline, some front-end prelim- inary work has to be performed to analyze the problem state- ment and assign the appropriate pipeline. The Capital Pro- gramming and Funds Management unit receives problem statements and evaluates them using a two-tiered screening process. Overall, problem statements are evaluated based upon the Capital Investment Strategy, funding constraints, and other factors that may be influential to the problem statement. Tier 1 Screening. The Tier 1 screening uses information available and collected by the Management Systems Com- mittees as well as information generated by other sources. Taken together, the coordination and analysis conducted by the Capital Investment Strategy process along with the man- agement systems information serve to inform the selection of an appropriate pipeline for the problem statement. If a problem statement is targeted for Pipeline 1 or 2, it will also undergo a Tier 2 screening. Problem statements that have the potential to advance through Pipeline 3 or 4 are reviewed to ensure that a Tier 2 screening is not required. Tier 2 Screening. A Tier 2 screening is conducted by the DPD. Such screening identifies and assesses any other needs within the project limits. Because Tier 2 screenings are more detailed and involved, a technical assessment in the field may be required, additional in-house subject matter experts may be enlisted for their expertise and opinion, and community officials may be contacted to obtain a better understanding of the problem statement. “A prioritized, hierarchical recom- mendation is made that identifies the quickest, most stream- lined path that a proposal could reasonably follow after com- pilation and assessment of the needs, and will sort the [problem statement] into the appropriate project pipeline.” (73) Tier 2 screening reports are short-term studies performed on potential project locations that help the Capital Program Committee make decisions on a series of issues regarding the potential project. Decisions regarding the selection of the appropriate pipeline revolve around the following issues: • Identification of any other needs in the project vicinity, which may not have been addressed in the original problem statement • Assessment of any additional needs that may have been uncovered and a determination of whether those needs should be addressed at the current time or suspended for future action, or to spin them off as separate problem statements • Identification of project limits • Field visit findings • NJDOT staff coordination • Results of environmental screenings—the Bureau of Envi- ronmental Project Support is requested to review the poten- tial project scope. It determines whether its involvement is necessary based on issues regarding hazardous waste, air and noise, and other environmental impacts. • Public involvement concerns • Context-sensitive solutions issues/opportunities Recommendations resulting from the Tier 1 and Tier 2 screenings define the priority for advancement of the project, limits of the project scope, pipeline path, and anticipated NEPA classification. Pipeline 1 and 2 projects typically require purpose and need as well as feasibility assessment. Results and recommendations provided by the Bureau of Environmental Project Support and the Office of Community Relations play a significant role in determining the pipeline assignment. (73) Tier 2 screenings are more involved than Tier 1 screenings and suggest the quickest, most streamlined path that a proj- ect could follow to bring it to construction. This suggestion could result in additional sub-projects that may potentially follow different pipelines. After a Tier 2 screening is com- pleted, the project may follow either Pipeline 1, 2, 3, or 4 or it may be withdrawn completely from NJDOT responsibility and reassigned to local, MPO, or toll road authority; recycled into the project pool for reassignment in later years; or termi- nated altogether. A Tier 2 screening does not ensure that a project will be advanced. Management Systems Input Both Tier and 1 and Tier 2 reports look to internal data repositories to collect information on congestion, pavement condition, safety, drainage issues, maintenance, and rock fall hazards. Management systems that are continually maintained and updated for certain conditions on transportation facili- ties across New Jersey are listed below (73): • Congestion Management System • Pavement Management System • Bridge Management System • Safety Management System • Drainage Management System • Maintenance Management System • Rock Fall Hazard Rating System Underground Strata 64

These databases provide relevant information on which some preliminary decisions can be based. For instance, a problem statement regarding the improvement of an inter- section is evaluated for the level of congestion, safety issues, pavement conditions, drainage concerns, and other factors that the intersection has. These factors are weighed against and among the factors of other problem statements. This comparison allows the severity of the problem statement to be ranked. An intersection may rank high for level of conges- tion but have little or no adverse pavement conditions. Other problem statements may concern potential projects with seri- ous safety threats as well as poor drainage conditions. Ranking the problem statements on a system-wide basis using a con- sistent set of parameters identifies which problem statements are most in need of attention. Capital Program Committee—“A Good Layer of Bureaucracy” The Capital Program Committee (CPC) stands as an inter- mediary or a last step for projects selected for advancement to a pipeline. This committee provides a “check and balance” to ensure that the projects selected for advancement by the Capital Program Screening Committee include the right proj- ect scope and enter the right pipeline. Without CPC approval, a project cannot proceed to any of the four pipelines. Even “anticipated NEPA classifications” are contingent upon CPC’s approval. (73) The DPD seeks approval from the Capital Program Screen- ing Committee. Management approval is important regard- less of the pipeline or path that is selected for a project. This approval aids the DPD and project manager in securing the support units that help to expedite project delivery. Beyond the task of approving projects to enter pipelines, the CPC is also responsible for decisions related to ongoing projects. Existing projects that require formal changes in scope (increase or decrease) and allocation of additional funds are reviewed by the CPC. As such, according to one manager at NJDOT, the CPC provides “a good layer of bureaucracy” to ensure that funds are spent wisely, using “the right treatment, at the right time, at the right place, and at the right cost.” This approach allows the NJDOT to appropriately use available funds, taking into consideration timing, treatment selection, and priority locations. Propelling through the Pipelines Pipelines are customized to differentiate one pipeline from another. Projects are accelerated through pipelines because they offer a direct, precise set of tasks and activities based on the complexity and characteristics of a project. For instance, a complex bridge construction project that has environmen- tal concerns must account for those activities that address the environmental documentation and permitting aspects of the project. The pipeline it is assigned to must address those activities in a logical, sequential manner so that all key tasks are identified and performed. A simpler resurfacing project would not require the multitude of activities inherent in a bridge construction project, and thus could be simplified to include only those tasks required for a less complex project. For this reason, multiple pipelines were established to allow the simpler projects to bypass the elaborate, complex process required by larger projects. Figure 16 shows the process flow diagram of the project delivery process. The pipelines offer a template of activities that can be further customized to fit the needs of each project. No two projects are the same, so they are not handled with a “cookie cutter” approach. The pipelines provide a dual advantage: they offer project managers the flexibility to be selective in the tasks that are performed for each project, while providing a controlled guideline of activities to follow for project delivery. While the key elements of a pipeline remain the same, minor tasks can be modified to allow a project to move at a quicker pace. For example, a Pipeline 2 template may outline up to three brief- ings of community officials as a general rule, but a project manager may feel that only two are required to resolve the is- sues concerning the community. Simply removing the third community officials briefing from the schedule could accel- erate the project by up to three months. Such small adjust- ments to and fine tuning of the pipeline tasks by the project managers and consultants allow for more expedient project delivery. Conversely, FHWA review and other agency-related tasks may be less easy to adjust and project managers must work within the framework of their standard time frames. The four pipelines that NJDOT has established are discussed in the following paragraphs. Pipeline 1: Full Purpose and Need/Feasibility Assessment/ Preliminary Design/Final Design Pipeline Process. This is the most complex pipeline. Projects in this pipeline require extensive purpose and need definition followed by a feasi- bility assessment. Additionally, Pipeline 1 projects are likely to involve the preparation of an Environmental Impact State- ment or at the very least an Environmental Assessment as opposed to a Categorical Exclusion Document. At the con- clusion of the feasibility assessment and environmental documentation, the project advances to the DPM where it continues through the pipeline with activities related to preliminary and final design. (73) Pipeline 2. This pipeline includes projects that are classi- fied as Categorical Exclusions under NEPA. Through a screen- ing process, these projects do not require extensive PN or FA work. PN efforts include only a fatal flaw analysis and sufficient 65

Pu rp os e A nd N eed DP D Co llec t d at a Ev al ua te De fi ci en ci es Co or di na te wi th st ak eh ol de rs an d NJ DO T C or e G roup Ob ta in Pu b lic in pu t Ga in Co mm un it y co ns en su s Pu rp os e a nd N eed St at em en t a nd Co nc ep tu al So lu ti on s Fe as ibilit y As se ss ment DP D Co mp le te an d e va lu at e a ra ng e o f a lt erna ti ve s A sse ss Impa ct s a nd co st s Co mp le te en vi ronm en ta l do cu ment at io n C oor dina te wi th st ak ehol de rs an d N JD OT Co re Gr ou p In it ia te Ut il it y P ro ce ss Id en ti fy fa ta l f la ws Ob ta in pu b lic in pu t Ga in co mmuni ty co ns en su s A ppr ov ed P roj ec t P la n A ppr ov ed en vi ron ment al do cu me nt an d f in al sc op e Pr e limin ar y De si gn CP M De si gn A ppr ov ed Pr oj ec t P la n De ve lo p R ight -o f- Wa y Pl an s Ob ta in a cce ss pe rm it s Co nc lude a cce ss pr oc es s Co nt in ue Ut i lit y Pr oc es s K eep pu b lic in vo lv ed Ma in ta in co mm un it y su pp or t In it ia l p la ns an d s pe cs En vi ro nmen ta l P er mi ts Fi na l De si gn CP M Pr od uc e f in al ut il it y, co ns tr uc ti on pl an s a nd sp ec ific at io ns Ac qu ir e r ig ht -o f- wa y Ob ta in en vi ro nm en ta l pe rm it s Co mp le te Ut il it y Pr oc es s K eep pu b lic in vo lv ed Ma in ta in co mm un ti y su pp or t Fi na l c on st ru ct io n pl an s, sp ec if ic at io ns an d e st im at es En vi ro nm en ta l P ermi ts Co ns tr uc ti on CP M Op er at io ns Ad vert is e f or Bi ds Aw ar d P ro je ct Bu il d P ro je ct Ke ep pu b lic in fo rmed Ma in ta in co mmuni ty su ppo rt Pr oj ec t C om pl et ed Co mp le te Ti er 2 Sc re en in g Pl ac e i n f ut ur e s tu dy an d d evel op ment p rogra m As si gn to : Pi pe li ne Pi pe li ne Ma y i nc lude so me Pu rpos e a nd N eed an d F ea si b ili ty A sse ss ment Pi pe li ne Ma y i nc lu de so me Pr el im in ar y De si gn to su pp or t en vi ro nm en ta l d oc um en t Pi pe li ne Ma y i nc lu de Fi na l D es ig n T ermi na te Pr oj ec t S cr een in g As si gn to pipe li ne Pe rf or m T ie r 2 Sc re enin g As si gn to ou ts id e Ag en c y T er mi na te NJ DO T C ap it al De ve lo pm en t P rogr am Pl a nni ng St ud ie s NJ DO T M an ag em en t sy st em s Pr ob le m S ta te ment s MP O Pr oj ec t S ourc es Pipeline Process Co ns tr uc ti on Co ns tr uc ti on Co ns tr uc ti on Ma in te na nc e Co nt ra ct Fi na l De si gn Fi na l De si gn Fi na l De si gn Pr e limin ar y De si gn Pr e limin ar y De si gn Fe as ibilit y As se ss ment Fe as ibilit y As se ss ment Pu rp os e a nd N eed Pu rp os e a nd N eed T ie r 2 Op ti on s T ie r 1 Op ti on s New Jersey Department of Transportation Capital Project Delivery Process 1 2 3 4 T hen, th e D iv is io n o f Pr oj ec t D evel op ment (D PD ) c on du ct s a Ti er 2 Sc re en in g t o p ro po se th e qu ic ke st pa th to pr oj ec t de liv er y a nd th e a ppr op ri at e p ip le lin e Pr oj ec ts ar e f ir st ev al ua te d b y t he Di vi si on of Ca pi ta l Pr ogra ms an d Fu nd s Ma na ge me nt to de te rm in e t he ap pr op ri at e pr oj ec t d e liv er y pr oc es s as si gnment As a project develops, NJDOT will look for opportunities to advance or accelerate it to the next stage of the Project Delivery Process P r o d u c t P u b l i c T a s k s Source: New Jersey Department of Transportation, http://www.state.nj.us/transportation/capital/pd/pdf/CPDProcess.pdf Figure 16. Flow diagram of the NJDOT project delivery process.

engineering work to establish a scope for preliminary design. The PN statement also includes an analysis of ROW and util- ity involvement. Examples of projects that enter Pipeline 2 typically include, but are not limited to, the following: • In-kind bridge replacements • Bridge rehabilitations • Simple intersection improvements • Drainage projects • Roadway resurfacings • Safety upgrades • Operational improvements Pipeline 2 projects typically require ROW acquisitions in fee or easement. They may also include projects that require a Section 106/Section 4(f) Alternatives Analysis (AA). For example, projects that involve replacing historic bridges and other projects that have Programmatic 4(f) impacts usually enter this pipeline. The AA work on these projects may be detailed but normally follows a very predictable scope of alternatives. (73) Pipeline 3. This pipeline includes projects that have min- imal or no ROW concerns. They often meet the criteria for a Certified Categorical Exclusion. Pipeline 3 projects must also have a finding of “No Effect” on any Section 106 resources. Examples of Pipeline 3 projects include, but are not limited to, the following (73): • In-kind bridge superstructure replacements (non-historic bridges only), • Bridge deck replacements • Bridge deck patching and minor rehabilitation • Roadway rehabilitation within existing right-of-way • Intersection improvements without right-of-way or major utilities • Drainage projects without right-of-way or major utilities • Roadway rehabilitation projects without right-of-way or major utilities • Roadway resurfacing projects • Safety upgrade projects • Guiderail projects • Noise barrier projects without right-of-way or major utilities • Operational improvements without right-of-way or major utilities. Most projects in Pipeline 3 can be designed by NJDOT in-house staff. Pipeline 4. This is the simplest pipeline of the four. Proj- ects entering this pipeline are assigned directly to the Opera- tions area for implementation. Minimal plan development is required for Pipeline 4 projects and usually is performed by in-house forces. Projects in Pipeline 4 may include the following (73): • Resurfacing projects • Traffic signal projects (timing and rehabilitation) • Traffic striping Preliminary and Final Design At the tail end of PN and FA, a milestone is reached from the perspective of project delivery. The PN and FA phases of the project are considered complete when environmental documents have been approved and reasonable assurance for design exception documents has been obtained. Only then do projects enter the final design phase and are officially trans- ferred to the DPM. Although this transition introduces a new team experienced in design and other technical details, the continuity of the project is provided by the pipeline. In other words, the pipeline also includes all activities related to final design. The physical transfer of the project from one unit to another does not hinder the project’s delivery because the predetermined pipeline remains the same. Another measure of continuity is provided though the project manager. As soon as a project is initiated (while it is in the DPD), a project manager from the DPM is assigned to the project. This project manager assists with issues in the project that may become design and constructability concerns when the project advances to the preliminary design phase. Because the project manager is aware of the details of the project through its preliminary stages and has assisted with certain decisions, he or she is able to mitigate risks more effectively when the project hits “speed bumps.” This project manager is the one individual who guides the project from concept to completion. Construction The pipeline process carries a project into construction once the project’s contract documents, including plans, speci- fications, and estimates for construction, are completed. Again, continuity is provided through the pipeline even though a con- struction team takes the lead for the construction of the trans- portation facility. The project manager remains on the project and works closely with the resident engineer in the field until the project is constructed. Tools To track a program and the numerous projects that com- pose its surface transportation aspects, a sophisticated soft- ware is used that can monitor the minute details of every 67

project in the pipeline as well as provide summary overviews of an entire system of projects. NJDOT uses scheduling soft- ware called Primavera to track, monitor, schedule, and deliver its projects both in the DPD and in the Capital Program Man- agement area. Regardless of pipeline, all projects—from their inception with purpose and need definition—actually follow a Primavera schedule all the way through to final design. But when a project moves into construction, a new schedule is cre- ated. The construction schedule is distinct from the previous schedule that depicted all the activities of purpose and need, feasibility assessment, preliminary design, and final design. Consultants working on NJDOT projects provide monthly updates for projects. Updates are entered into a master sched- ule that then provides an outlook for a group of projects or all projects that are in the system. As a whole, projects can be compared and forecasts can be developed for future activities, delays, constraints, and the potential for acceleration. Different Primavera schedules exist for the four pipelines so that unnecessary activities do not lengthen or delay a realistic deliverable schedule. Back End of Pipelines The end of the Pipeline 1, 2, and 3 processes is when the FHWA Agreement Closing and Suspense Analysis occur. A final audit is performed by an NJDOT auditor to ensure that the facilities built are acceptable. For Pipeline 4 projects, which are typically constructed in the field with minimal or no construction documents, the back end of the pipeline con- sists of a final product constructed in the field, whether it be an operational improvement or basic roadway striping. Lessons Learned NJDOT maintains a list of lessons learned. There is a for- mal process in place for NJDOT staff to gather, review, and maintain the existing database of lessons learned. The Pro- gram Management Office maintains this database and solic- its lessons learned in order to populate and constantly update the database. These approaches often lead to process improve- ments, revised standards, and policy revisions. Asset Management Transportation funding has rarely kept up with transporta- tion needs. New Jersey’s annual capital budget is about $1.8 bil- lion, but it is estimated that approximately $3.5 billion is needed for the state highway system. To prioritize the right projects and spend the federal and state funds more wisely, New Jersey is moving toward an asset management approach. This approach will take into consideration the entire trans- portation system and evaluate it on a system-wide basis. An asset management plan will provide “a foundation for strate- gic, tactical, and operational decision making relative to [NJDOT’s] financial and human resources” so that NJDOT can use a more systematic approach to managing its assets. To move from a “worst-first” crisis response funding approach to a system-wide assessment and system condition–driven approach to investment will be a big step for New Jersey. (74) Approach The project prioritization and selection process is a four- step approach starting with asset management, moving to capital investment strategy, then project prioritization, and finally the capital program. Asset Management involves poli- cies, programming, program delivery, and information and analysis. The use of performance measures and good data will help to drive and support the decision making. As such, performance measures and performance analysis will help in determining how well various alternative investment scenar- ios perform over time. Program trade-offs can be identified and the right mix of projects can be advanced to the pipelines for delivery. The capital investment strategy allocates average annual funding targets for general categories of investments (struc- tural assets, road assets, safety, congestion, multimodal invest- ments and support facilities) over the next 10 years. The third step, project prioritization, is where all the detail work begins once the capital investment targets are set. Exist- ing project delivery schedules and cost estimates are evalu- ated. Existing conditions are assessed and projections are made in terms of where New Jersey wants to be in 10 years from an infrastructure perspective. New Jersey is currently in the process of setting these goals. For certain systems, such as pavement and bridge management, benchmarks exist and potential goals are set for the future. In other categories, such as safety and congestion, benchmarks are difficult to assess; ergo, the future goals and system-level outcomes are also dif- ficult to define. An important part of this step is the involve- ment of the New Jersey’s three MPOs. NJDOT and each MPO office negotiate project priorities and other constraints. The last step is the formalization of a capital program and a 10-year capital plan. The capital program is a one-year pro- gram and part of the overall state budget process. It requires legislative approval for the state to use the funds on the out- lined projects and programs. The 10-year capital plan requires MPO and FHWA approval, which include requirements for a four-year constrained capital. Asset Management Steering Committee Because asset management uses a performance-based pro- gramming approach, the Asset Management Steering Com- 68

mittee is in the process of defining benchmarks for various categories. This process is also providing NJDOT with an opportunity to define where the data collection gaps are in its system. While bridge and pavement categories have his- torically been well documented with consistent and detailed reports, other areas have very little information. The “softer” side of transportation such as safety, congestion, and quality of life are more challenging to measure and benchmark. The lack of available data for these categories complicates the goal of setting future system conditions. For instance, New Jersey may want to achieve a 70 percent improvement in the level of safety on a system-wide basis. Simply measuring the current level of safety is difficult. Future goals for levels of safety are even more difficult to establish without the right metrics. Similar challenges face the steering committee, but it has two broad goals: • Develop an asset management plan • Develop an asset management improvement strategy NJDOT has a challenge ahead of it in implementing and establishing an asset management plan that can help decision makers pursue the right projects at the right time for the right cost. For now, it is relying on data that exists in its internal management systems to see where the gaps exist in its repos- itory of information. Using that as a starting point, it will build upon that information and move forward. New Jersey is in the process of determining how and what kind of infor- mation will be required to set the benchmarks for some of the difficult-to-quantify areas of transportation which it wants to measure and monitor. The improvement strategy will con- tinue to develop and mature the processes that are currently in place. At some point, NJDOT leaders recognize that a shift has to occur in the culture and mindset of the department in order for asset management to be a success. But that is not too far off in the horizon. Overall, NJDOT has put in place a system of four project pipelines that simplify the flow of projects from conception through to completion, regardless of project size or complexity. This approach may be applicable to other state DOTs, depend- ing on their particular circumstances and the political, physi- cal, and social environments in which they work. North Carolina Realigning for the 21st Century and Beyond When the North Carolina Department of Transportation (NCDOT) adopted its 2004 Long-Range Transportation Plan, the business model it was following clearly had to change. Increasing congestion, aging infrastructure, and financial limitations, coupled with its highway system’s large size and complexity and continuing population growth, had strained the department’s ability to adequately serve the citizens of North Carolina and other users of the highway system. The percentage of construction contracts advertised and awarded on schedule was fairly low. (75) In light of this realization, officials at NCDOT were strongly motivated to seek ways of improving efficiencies, optimizing performance, and expediting program and project delivery. But the process had already begun some years earlier. In the 1990s, the department had developed a collaboration—a Merger Process—with state and federal regulatory and per- mitting agencies that had measurably reduced the delays that customarily followed the filing of permit applications for major infrastructure projects. More recently, the depart- ment pooled its collective expertise and took a hard look at its organization and operations, resulting in a careful but comprehensive restructuring to meet the new challenges faced in the 21st Century. This restructuring, which provides greater accountability and tracks performance at multiple levels, has benefitted pro- gram and project delivery holistically, from conception to completion. Background Although North Carolina ranks 28th in the nation in geo- graphical area, among the Eastern Seaboard states only Florida (22nd) and New York (27th) are larger. (37) However, in terms of gross mileage, NCDOT’s jurisdiction is the second largest in the nation behind TxDOT’s, having responsibility for 79,067 of the state’s 103,500 miles of highway. (76) This per- centage (76.4 percent) is the highest share of state-owned and maintained highway miles of any state in the United States, the national average being around 20 percent. In 2006, North Carolina’s public roads consisted of 1,086 miles of interstate highway, 9,960 miles of other principal and minor arterials, 17,463 miles of major and minor collectors, and 74,991 miles of local roads, for a combined total of 103,500 miles. Despite the immense size of NCDOT’s highway system, just seven per- cent of the state’s roads, the 5,400 miles constituting North Carolina’s Strategic Highway Corridors, carry 45 percent of the state’s traffic. (76) With an estimated population of slightly over nine million people, North Carolina is currently ranked 11th most popu- lous in the United States. (37, 77) Like many other states, until the late 1980s, North Carolina’s rural population out- numbered its urban population. However for several decades, the urban population of North Carolina has exceeded the rural population by a small percentage. (78) The gap between urban and rural population is widening, due partly to state residents migrating from countryside to city and suburb, but owing more to immigration from other states. Between July 69

1, 2007, and July 1, 2008, the Raleigh–Cary metropolitan area saw its population climb 4.3 percent to 1.1 million, making it the nation’s fastest-growing metropolitan area during that period. (79) North Carolina’s four largest cities all lie in the central Piedmont region of the state, between the Coastal Plain region to the east and the Appalachian Mountain region to the west. VMT has gone up in North Carolina as it has throughout the nation. In 2006, NC roads experienced 101,515 million VMT, up 13.4 percent from 89,504 million in 2000. It is ex- pected to double in the next 20 years. During the same period, the state’s population is expected to grow by another 50 per- cent, surpassing that of Georgia, Michigan, and Ohio and making it the seventh most populous in the nation. (80) North Carolina is experiencing a demographic shift and will have to adjust to the increasing urbanization along with an aging infrastructure. But the state has been impacted more by the economic shift that is gradually changing the global economy. This state, whose economy was traditionally based on tobacco, furniture, and textiles, has transformed itself into a knowledge-based enterprise. (81) Infrastructure manage- ment and maintenance has played a key role in supporting NCDOT’s vision to become an operations-based agency. Organizational Structure Reorganization for NCDOT was more than simply mov- ing some units around or creating new departments. Reorga- nization meant tearing down the old processes, methods, and structures and disposing of the old culture to create a solid, efficient organization. To do this, NCDOT had to expose its ideologies to an external, neutral third party and allow itself to be critiqued. NCDOT leadership engaged an outside consult- ant with proven expertise in organizational transformation and capability-building to help it analyze its organizational structure profile; identify its strengths, weaknesses, processes, and methods; and address project development and the per- mitting process. A Transformation Management Team (TMT) composed of managers and analysts from across the department internally led the effort in designing and implementing NCDOT’s trans- formation and future improvements. The TMT worked with the consultant to diagnose the NCDOT’s situation, set priori- ties for transformation, and build its capabilities by identifying areas for long-term continuous improvement. The following list includes four of the major organiza- tional structural challenges the TMT and consultant found and NCDOT’s response to them (80): • A “silo culture” that discouraged coordination among busi- ness units—Employees tended to focus on meeting unit- specific goals, as opposed to organization-wide goals, re- sulting in “siloed,” or isolated, knowledge. For example, information collected by Traffic Congestion may not be regularly shared with Planning, and information on a proj- ect site collected by the Division of Highways may not be adequately shared with the Rail Division. In addition, best practices may not have been adequately shared across the department. Response: A completely reorganized NCDOT, focusing on functions and processes. • Insufficient accountability for project delivery across busi- ness units—Accountability for successful project delivery was often unclear, leading frequently to slow and ineffi- cient project delivery. Response: A series of metrics and performance indica- tors, presented in a public-facing dashboard as well as an internal results-based reporting model. • Inconsistent coordination and success across geographies in planning, designing, delivering, operating, and main- taining projects—Division managers would coordinate some processes with staff familiar with their regions, while coordinating others with whomever was available. Response: Organization of the entire delivery process, from beginning to end, around North Carolina’s three geo- graphical regions (Coastal Plain, Piedmont, and Appalachian Mountains). • Slow, multilayered, sometimes bureaucratic decision- making processes across the organization—In some areas too many layers existed between senior, middle, and lower management with regard to decision making, leading to extended and inefficient decision making and contribut- ing to a reduction in the Department’s productivity. Unit heads were often limited in their independent decision- making power. Response: A concerted effort to change NCDOT’s culture to provide managers with wide decision-making leeway. Transformation Initiatives Five transformation initiatives were identified: (a) align strategic direction with a new mission statement and goal, (b) streamline project design and delivery, (c) design a more productive organization, (d) increase accountability for and visibility of performance, and (f) improve talent management. All of these initiatives are synchronized to deliver programs more efficiently. The first links projects, programs, and services to goals. It addresses funding and creates strategic planning and function. The second initiative seeks to streamline the delivery of projects through proper prioritization. The third initiative attempts to break down the silos so that the transportation net- work operates as one system. This initiative assists the depart- ment in creating opportunities for shared insights, economies of scale, and single-point accountability. The fourth initiative 70

emphasizes accountability and visibility for performance so all employees work effectively toward corporate goals and suggests organization-wide metric-based management. The last initiative seeks to make choices about where and how to invest in human capital. Retaining critical talent, improving employee performance, and creating a culture that builds morale, collaborative approaches, and proactive problem- solving techniques help to change traditional mindsets. (75) Creative Realignment Similar to the concept of creative destruction, NCDOT has undergone a process of “creative realignment.” In this pro- cess, TMT members methodically examined and often decon- structed the old organizational structure from within and created a new one. This step was essential in order for the department to sustain and remain effective in a financially strained and demographically burgeoning environment. Under the guidance of the TMT, the department was re- structured along new strategic functional alignments and responsible positions, as follows: (77) • Organization Monitoring, Communication & Control— chief operating officer (chief deputy secretary), inspector general, communications director, and governance office director • Transportation Strategy & Investment Analysis—deputy secretary for intergovernmental affairs and budget coordi- nation and the chief financial officer • Transportation Business Administration—deputy secre- tary for administration and business development and the human resources director • Transportation Process Management—technical services director and chief information officer • Transportation Program & Asset Management—deputy secretary for transit and the state highway administrator • Transportation Program Delivery—chief engineer of oper- ations and the commissioner of motor vehicles This reorganization aligned NCDOT’s direction for the fu- ture in terms of its vision, strategy, and employee engagement. It aligned leadership for both Board of Transportation mem- bers and senior management, including increased supervisor collaboration. Alignment occurred for environmental issues and values. In terms of stimulating programs, reorganization created accountability, coordination, and control among divi- sions; new capabilities; and motivation. Renewing the organ- ization led to innovation of ideas and external orientation with stakeholders and other regulatory agencies so that NCDOT was more responsive and proactive. (75) What resulted was a broader, more horizontal organiza- tion with more opportunities for greater communication and collaboration, leading to more cohesive processes. To inaugu- rate its reorganization, NCDOT adopted a new mission state- ment: “Connecting people and places in North Carolina— safely and efficiently, with accountability and environmental sensitivity.” In addition, it set forth a series of goals that are tied directly to an online performance dashboard. NCDOT’s operations are led by the secretary of trans- portation, a member of the governor’s cabinet. A 19-member Board of Transportation is the department’s governing body and is responsible for assisting in the transportation decision- making process and approving fund allocation. Board mem- bers are appointed by the governor. NCDOT has six divisions: Aviation, Bicycle & Pedestrian, Ferry, Highways, Public Transportation, and Rail. While the reorganization affects each one of these, this case study deals for the most part with the Division of Highways. Geographi- cally, NCDOT subdivided the state into 14 highway divisions, as illustrated in Figure 17. Project Prioritization While each highway division is responsible for NCDOT’s “physical plant” within its designated counties, some of the department’s functions are best left centralized. One of the most important benefits of having all project development centralized, under the Preconstruction unit, is project pri- oritization. If this function were to be divided up by high- way division, each division would advocate its own projects and vie with one another for priority. Following a single pri- oritization list for state transportation projects does not guar- antee complete elimination of this type of competition, but it does tend to minimize the problem. NCDOT began prioritiz- ing its infrastructure needs from a systems perspective rather than an individual corridor perspective. Consistent Administration of Construction Management Another area of centralization in NCDOT’s organizational structure is the administration of construction activities. Within the southeastern United States, North Carolina is a comparatively large state, with a considerable number of pro- grams and projects. However, the organization administers a standard set of policies and procedures across the state on how construction projects are managed. This standardization has facilitated a measure of control, ensuring that the same activities are carried out in the same sequence, regardless of where in the state a project occurs. Ultimately it contributes to the overall quality and integrity of the programs and proj- ects carried out statewide by NCDOT. A Central Construction unit provides statewide support and assists in providing consistent contract administration. While 71

the department’s 14 highway divisions actually administer the contracts, they turn to Central Construction for assistance and guidance on statewide applications and specifications. Considerable effort has been expended by NCDOT to develop and launch a computer program called the Highway Construction and Materials System (HiCAMS). HiCAMS is a custom application that tracks and supports highway construction work and the testing of materials used in the construction process. More than just a database, HiCAMS is a computer system into which payments to contractors, documentation of materials received (as measured by the resident engineers), and invoices are all entered. As NCDOT pays the contractors’ estimates based on data entered into HiCAMS, the system can track and document invoices and payments while simultaneously tracking the status, progress, and completion of projects. The system has the capacity to indicate “approval” of a contractor’s invoice—or not—based on current data pertaining to a particular job. HiCAMS also tracks contractors’ claims, subconsultant agreements, and numerous other pieces of information vital to administering programs and projects in an efficient, accountable manner. Originally developed in the late 1990s, HiCAMS has been undergoing constant improvements and enhancements ever since. With HiCAMS in place, contractor invoices get paid within 30 to 60 days from receipt of invoice, and in some cases in less than a week. When these wait times are compared with waits of up to 120 days or more that contractors experi- ence with other DOTs and agencies, it becomes evident that keeping information current is actually more efficient than requiring people at various levels of management to approve an invoice in order for it to be processed and paid. Current Funding Sources For the 2007–2008 fiscal year, NCDOT’s $3.9 billion budget was funded 47 percent by a state highway fund ($1,832 mil- lion), 29 percent by a highway trust fund ($1,128 million), 24 percent by federal funds ($943 million), and 0.6 percent by department receipts ($24 million). State transportation rev- enue sources are supplied as follows: motor fuel tax, 55 per- cent; highway use tax, 25 percent; and fees, 20 percent. That same $3.9 billion was projected to be divided up such that highway maintenance and Transportation Improve- ment Plan (TIP) construction received the largest funding at $898 million and $1,556 million, respectively. Other construc- tion, non-highway programs, other agencies, and municipal aid receive the remainder of funds. (82) Best Practices for NCDOT Merger 01: Streamlining Project Development and Delivery through Concurrence Over the course of the past 12 years, NCDOT has actively sought ways to streamline the project development and per- mitting process that so often halts progress on a project schedule. Merger 01 is the process that was developed to pro- vide a common forum for discussion so that, through inter- agency coordination, comprehensive evaluation and resolution of issues could occur. This process results in quicker and shared decision making. (83) Merger 01 is a multiagency initiative whereby regulatory agencies—including various branches of the state Department of Environment and Natural Resources 72 Source: NCDOT website Figure 17. NCDOT highway divisions.

(DENR), the U.S. Army Corps of Engineers (USACE), the FHWA, other state and federal agencies, and numerous areas of the NCDOT—meet together and formally register their concurrence at strategic points in the development of projects from their earliest conceptual and planning phases. Very often in the past, after reviewing a submitted design, permitting agencies (such as DENR and USACE) were likely to return it with recommended modifications to avoid, minimize, or mitigate impacts to surrounding areas that would result from a proposed action. Because for many projects, more than one permit needs to be obtained—often from more than one regulatory agency—before design and construction can begin, this process could be very time consuming. Also, modifications made on a project during the final design phase invariably cost more and may be more time consuming than if the same changes were requested at an earlier stage of the project. To address these issues, and in an attempt to remedy an unacceptably low ratio of projects let to projects in design in a given fiscal year, NCDOT initiated talks with DENR and USACE regarding new alignment projects and projects requir- ing an individual permit under Section 404 of the Clean Water Act. FHWA, USACE, DENR, and NCDOT entered into an agreement to consult early in the project development process and identify specific projects that would follow the Merger 01 process, through the application of screening criteria. As part of an effort to streamline the project development and permitting processes, an agreement containing a set of procedures integrating NEPA and Section 404 for transporta- tion projects in North Carolina was signed in May of 1997 by the Wilmington District of USACE, the North Carolina divi- sion of FHWA, DENR, and NCDOT. This agreement was supported by a federal action that took place in May of 1992 when the U.S.DOT, the Office of the Assistant of the Army (Civil Works), and the U.S. Environmental Protection Agency developed a policy that would (a) improve interagency coor- dination and (b) integrate NEPA with Section 404 procedures. The agreement was modified early in 2005 based on expe- rience using the 1997 agreement and guidance provided by a process improvement workshop held by a team representing the three key agencies. Additional streamlining provisions of TEA-21 were incorporated as well. Evaluation of this process for its effectiveness is ongoing, and the team is making mod- ifications, as appropriate. The Merger 01 process accelerates projects. The team, con- sisting of representatives from the NCDOT and regulatory agencies, meets on a project at strategic points in the project development process and makes balanced decisions that move the project forward so that potential project development and environmental-related risks are avoided. All players provide input on project decisions, with the intent that the environ- mental review and permitting processes will go quickly, and post-review modifications to the design can be minimized. Concurrence is Key. The key to Merger 01 ratcheting the project forward is the concept of concurrence. Each team member—and by association, the agency he or she represents—agrees to decisions made throughout the devel- opment of the project. This agreement constitutes a pledge by the agency to abide by the decision made and not to revisit previous concurrence points unless substantive new informa- tion surfaces that warrants a re-evaluation. A multiagency, multilevel team was formed to determine what was needed to make a decision at each concurrence point. The milestone concurrence points in a typical project under Merger 01 are as follows: 1. Purpose and need and study area defined 2. Detailed study alternatives carried forward 2A. Bridging decisions and alignment review (if applicable) 3. Selection of the least environmentally damaging prac- ticable alternative (LEPDA)/preferred alternative (The LEPDA is the NEPA-preferred alternative.) 4A. Avoidance and minimization—A detailed interdiscipli- nary and interagency review to optimize the design and benefits of the project while reducing environmental impacts to both the human and natural environment 4B. 30 percent hydraulic review 4C. Permit drawings review Merger 01 provides for resolution of issues causing non- concurrence, in the event that an agency cannot concur. It prescribes the procedure to be followed for three basic types of projects: • Projects on new locations • Widening and other improvement projects • Bridge replacement projects processed as a Categorical Exclusion Following the Merger 01 methodology has been found to save at least six months on a given project’s overall schedule. By far, Merger 01 has accelerated the program and project delivery process for NCDOT. As a result of these formal con- currence points, project review in subsequent stages is mini- mized, approvals are speedy, and re-submissions are practically nonexistent. Collaboration Accelerates Projects. The entire process of formulating the Merger was successful on several levels. It involved a greater number of people in each of the agencies, and enhanced communications and relationships within and between all of them. Senior leaders recognized the need to work together on common goals and participated in the meetings. Top people from the agencies (the secretary of transportation, the colonel from the USACE Wilmington District, and the 73

Secretary of DENR) spoke on what their expectancies were from the workshops. When mid-level managers and line em- ployees saw and heard these individuals at the workshops, they realized what an important issue this was. As an added benefit, upper-level managers from the vari- ous agencies got to know each other better and now feel com- fortable placing a telephone call to one another and speaking directly to top people in other agencies when issues arise. “Shared decision-making in the Merger process really moves things forward. It’s not just someone’s input; its concurrence and an agreement not to . . . revisit unless there’s huge new information.” (84) Merger 01 documents all decisions made on projects as they advance from planning through permit- ting and design, so that if a new project manager inherits a project, a history of how the project developed and was shaped into its current state is available. All the participants, key deci- sion makers, and decisions are noted so that time is not lost in going back to justify the major decisions that so influence the flow and flux of a project. As one NCDOT executive noted, “In an emergency situation, you develop one overarching goal, and it gets accomplished. There is a lot of ownership and everybody breaks down the silos and does whatever it takes. There is a common priority— project delivery is the goal.” But in a non-emergency situa- tion, what happens to the jobs and the deliverables? “Work- ing in merger-type relationships, you’re working with a sense of trust. The trust is built through relationships.” It is a mat- ter of collaborating with a sense of trust versus laboring under a sense of urgency. (84) Organizational Performance Dashboard One of the initiatives identified by the TMT was to address the issue of performance and accountability. An outgrowth of the Merger 01 process was the imminent development of performance metrics and management. Using the five goals of the organization and keeping in line with the long-range plan, NCDOT created a department-wide dashboard that is available to the public via its website. The dashboard serves as a real-time indicator of how well the organization is accom- plishing its mission and meeting its goals. The process to create and implement a system that was usable and reflected the department’s goals and missions was difficult and required much support and guidance from upper-level management. It involved six tedious steps: (a) development of performance measures, (b) establish- ment of benchmarks, (c) strategic program development, (d) communication and implementation, (e) reporting and feedback, and (f) analysis and retool. These steps were designed to operate iteratively, in a con- tinuous cycle, so that after “retooling” (step f), the TMT would revisit the performance measures (step a), and move through the cycle again and again, making refinements as needed to each component of the reorganization along the way. The first step linked the mission statement with the goals, which then tie into the metrics. The value tree shown in Fig- ure 18 shows the critical steps that NCDOT took toward establishing measures. NCDOT addressed many challenges, including long-term viability; buy-in from all levels; incremental gains versus “miracles”; establishing realistic, attainable goals that are easily measured; and creating challenging and rewarding work. “Putting the pieces together” in the overall context of NCDOT’s business plan and the 25-year Statewide Trans- portation Plan was a great accomplishment, as shown in Figure 19. (77) NCDOT’s organizational performance dashboard is an online tool that uses a set of gauges to indicate performance based on actual, real-time statistics. So far, NCDOT has designed metrics for more than 40 independent units. The metrics are linked to the performance dashboard and con- tinue to be reinforced with new performance management programs. The dashboard, which can be accessed by anyone through the NCDOT website, is shown in Figure 20. The dashboard web page is the “tip of the iceberg.” By clicking on any of the gauges, the Internet user can bring up more detailed information on the metrics that combine to determine the reading on that gauge. While the gauges on the dashboard show performance statewide, a user interested in a specific location’s performance can drill down to view the same data for any of North Carolina’s 100 counties. The performance-based management model is intended to provide a longer-lasting transportation network, operating at lower costs with fewer traffic interruptions. Already, $40 mil- lion in savings have been identified through interagency col- laboration to find ways of saving on the cost of designing and delivering transportation projects. (85) NCDOT’s overall performance results for the fiscal year 2008 are impressive: the share of measured activities that met or exceeded expectations was 75.8 percent. (77) Future Developments Interagency Leadership Team In 2004, NCDOT advocated for the formation of an Inter- agency Leadership Team (ILT), understanding that the trans- portation system needs to be planned in coordination with economic development, and protection and enhancement of cultural and natural resources, which are also extremely important to the citizens’ quality of life. A large group of state and federal agencies was brought together in May of 2004 and began meeting on a quarterly basis with the goal of improv- ing existing operations. More recently, the ILT identified a strategic plan and refined its original three goals: (86) 74

75 Figure 18. Value tree linking mission statement, goals, and metrics. Source: NCDOT website Figure 19. Putting the pieces together.

• Develop a shared, comprehensive Geographic Information System (GIS) database. • Partner with local governments and other stakeholders to integrate local land use and long-range transportation plan- ning, as well as applicable environmental and economic planning initiatives, to meet mobility, economic, and envi- ronmental goals. • Improve the Merger 01 process. This last goal of the ILT is a commitment to improve a cur- rent program that has helped to transform NCDOT. Merger 01 is an exemplary program and is recognized nationally as an innovative approach to state and federal cooperation in transportation improvement and environmental protection. However, it has not achieved perfection; it can go further still. Even though work groups and appropriate technology exist to train team members, Merger 01 has not received formal approval by all state and federal partners. NCDOT is contin- uously striving to maximize the full potential of the Merger 01 Process. (86) Continuous Process Improvement Continuous process improvement (CPI) is a program designed to increase productivity, cut costs, enhance cus- tomer service, and improve business processes. NCDOT employees are encouraged to innovate, document, and sub- mit process improvement techniques under the criteria of improved communications, customer service, cycle time reduction, dollar savings, energy and environment, labor-hour savings, and safety. Annual winners are rewarded through recognition of their ideas. CPI has proven to stimulate, pro- mote, and sustain a culture of innovation and improvement throughout all levels of the department. (87) CPI is not a performance measure per se, but rather a recog- nition program that encourages innovative thinking and goes beyond rewarding improved processes to publicizing them and encouraging their application statewide. At a CPI Conference held annually, NCDOT employees gather from throughout the state both to receive awards for their process improvements and to learn newly developed best practices from one another. Awards are presented for each of the seven process categories, and NCDOT compiles a CPI Results Book annually (available on NCDOT’s website) to make the three winning improve- ments in each category available to the entire department. More than a recognition and celebration forum, CPI is a search for improved methods and outstanding successes, not from high-ranking officials and management consult- ants but from the people who perform the work and face the challenges on a day-to-day basis. It institutionalizes a cul- ture of continuous improvement. Strategic Planning Office NCDOT plans to launch a Strategic Planning Office to con- tinuously align its direction with stated priorities and to make 76 Source: NCDOT website Figure 20. NCDOT’s organization performance dashboard.

the current transformation of the organization sustainable. The Strategic Planning Office will ensure that NCDOT is continu- ously responsive to the needs of North Carolina’s citizens. (88) Improvement of Performance Measures NCDOT is in a mode of constant improvement and renewal of processes and programs. In establishing performance mea- sures, NCDOT has become more transparent to the public and political entities, but still recognizes that the journey to improving its organizational structure is not over. It aims to continue developing metrics toward accountable outcomes. These metrics in turn will lead to more projects being deliv- ered on time and on budget, using taxpayer money most efficiently. (80) Another bold step in measuring performance is also taking form: implementing a new individual performance manage- ment system that evaluates employees’ job performance against an objective set of performance measurements and agency values that will help employees to plan their careers and achieve their development goals. Conclusions NCDOT has made some targeted changes in the last few years. Bold steps toward a complete reorganization and the implementation of performance measures leading to greater accountability, transparency, and efficiency have shaped NCDOT into an agency intent on expediting the delivery of programs and projects. Outcome-based systems, operationally effective processes, a horizontally stable organizational struc- ture, and a concerted system-wide effort toward continuous improvement are the traits that will define the 21st century department of transportation. These trends will continue to serve as the foundation for a new NCDOT. Texas Evergreen Contracts for Efficiency in Project Delivery The Texas Department of Transportation (TxDOT) de- scribes its mission as, “to work cooperatively to provide safe, effective and efficient movement of people and goods.” That mission is supported by the department’s vision, which includes the goal of being a progressive state transportation agency recognized and respected by the citizens of Texas. (89) Texas is a large south-central state with the second largest population in the United States. With over 24 million resi- dents and a land area just shy of 262,000 square miles, the average population density of the state mirrors that of the United States as a whole, 79.6 persons per square mile. How- ever, Texas features a population growth rate roughly double the average of the greater country. (90) An increasing pop- ulation leads to greater strains on the transportation net- work, especially in the metropolitan areas such as Dallas and Houston. The Texas Transportation Mobility Institute ranked Dallas–Fort Worth and Houston as the fourth and ninth most congested areas in the nation, respectively. (91) To meet the mobility needs of such metropolitan areas, the governor’s Business Council estimates that an additional $78 billion is required over the next 25 years to invest in high- way improvements. (29) The state ranks number one in the country in terms of total highway mileage. In 2000, Texas had over 301,000 miles of public roadway. Of that, TxDOT is responsible for over 79,000 highway miles. That figure is more than any other DOT in the country. (92, 93) The agency maintains 1,132,881 acres of right-of-way; nearly 1.5 times the acreage of Rhode Island. (94) The state features a diverse landscape that expands from the Piney Woodlands of the east, through the prairies of north and central Texas, to the arid southwestern desert of west Texas. These landscapes vary from vast open expanses, to rolling hills, to rough and rugged mountainous regions. The climate of Texas also varies considerably, from the extreme humidity of the east to the dry deserts of the west. Hurricanes and tor- nados have presented recurring challenges to Texas’s popula- tion and its transportation system. In 2005 alone, Hurricanes Wilma, Katrina, and Rita caused the evacuation of 1.8 million vehicles from the Texas Gulf Coast, imposing an overwhelm- ing burden on the transportation system. (95) The Basics The stated goals of TxDOT are to reduce congestion, enhance safety, expand economic opportunity, improve air quality, and preserve the value of transportation assets. In furtherance of these goals, TxDOT has implemented four working strategies: to use all financial options to build trans- portation projects; to empower local leaders to solve local transportation problems; to increase competition to drive down costs; and to demand consumer-driven decisions. (96) For transportation funding sources, TxDOT, like most states, relies heavily on federal disbursements, which consti- tute 38.9 percent of total funding. The state highway fund is the second greatest contributor to transportation funding in the state, representing 31 percent of the total. The state highway fund is fed primarily by the state motor fuel tax, with additional revenue generated by vehicle registration fees and other sources. (93) Just behind the state highway fund, bond issuance consti- tutes roughly 30 percent of funding sources. This is a relatively recent development, as TxDOT maintained a fiscally conser- vative, pay-as-you-go disposition for the first 90 years of its 77

existence. In 2007, voters approved Proposition 12, which for the first time allowed the agency to incur debt to deliver crit- ical transportation projects. (93, 97) This ability to issue bonds has resulted in a significant shift in the organization’s philosophy. For most of its history, TxDOT would not pursue projects without secured funds. The project selection process now begins with identification of need, which is followed by funding considerations. The department maintains a backlog of projects that are ready to let, save for funding. As funding sources become available, that backlog of projects is tapped. (97) As a means of organizing agency operations and creating a framework for setting and tracking goals, TxDOT consoli- dated operations into five major categories: Plan It, Build It, Maintain It, Use It, and Manage It. These categories encom- pass all of the department’s operations and are listed here in order of agency funding allocations. (94) The largest share of TxDOT spending is conducted within the Build It category. Approximately 40.4 percent of the depart- ment’s spending goes to construction projects. These projects can be generally described as capacity enhancements and include both new projects and those that improve or expand existing infrastructure. (94) An additional 35.5 percent of revenue is spent on mainte- nance of the transportation system, or the Maintain It oper- ational category. The department’s maintenance strategy emphasizes the safety of existing infrastructure. It involves reconstruction and rehabilitation of the state highway system, including structures and signal systems, as well as the Gulf Intracoastal Waterway and the ferry systems at the ports of Galveston and Port Aransas. (94) The third large operational expenditure for TxDOT is the Plan It category. Planning accounts for 19.1 percent of the department’s budget. Planning activities are performed for all modes and include environmental design activities. Is also includes acquisition of right-of-way and payment of reloca- tion expenses when necessary for transportation projects. The planning budget also includes research programs that aim to improve safety and financial or operational practices. (94) The remaining five percent of the budget is split between what TxDOT describes as Manage It and Use It. Manage It includes administration and human resources, while Use It covers issuance of vehicle titles and registration, regulation of motor vehicle dealers, providing information to the trav- eling public, and provision of public transportation outside of metropolitan areas. (94) Organizational Structure The overall organizational structure of TxDOT has been designed to suit the state’s unique geography and mission. This structure is decentralized and designed to accommodate the state’s vast size. It reflects willful recognition on the part of the department’s leaders that a centralized structure would have difficulty managing far-flung infrastructure and systems, which are faced with widely different challenges and demands. That is why one of the department’s operational strategies is to empower local leaders to solve local transportation problems. At the central level, the department headquarters is based in Austin. The Texas Transportation Commission, a board appointed by the governor, sets department-level policies. An executive director leads the department and reports to the commission. (94) The executive director is assisted by four assistant executive directors who oversee several operational activities, namely, district operations, engineering operations, support operations, and innovative project development. (98) The department houses 18 divisions (as of November 1, 2009) and six offices. The six offices include the Audit Office, Automobile Burglary and Theft Prevention, Office of Civil Rights, Office of General Counsel, International Relations Office, and Research and Technology Implementation. The 18 divisions consist of Aviation, Bridge, Construction, Design, Environmental Affairs, Finance, General Services, Govern- ment and Public Affairs, Human Resources, Maintenance, Occupational Safety, Public Transportation, Right-of-Way, Technology Services, Texas Turnpike Authority, Traffic Oper- ations, Transportation Planning and Programming, and Travel. These divisions provide technical expertise and support for categories ranging from bridges to government and public affairs to traffic operations. The offices and divisions provide administrative and technical support to the districts. (98) In addition to technical expertise on engineering and planning issues, these offices ensure statewide consistency in policy and approaches. Texas has been divided into 25 districts, each loosely en- compassing a metropolitan region, typically spanning several counties (see Figure 21). The districts oversee the design, location, construction and maintenance of the area’s trans- portation systems. Each is led by a district engineer. (98) Under the department’s allocation program, each district is given a set budget to select and fund certain types of projects. This program is intended to give the districts the flexibility neces- sary to address local needs. (94) In many regards, the decentralization of decision-making authority has proven to be a success. There is general agree- ment internally at TxDOT that the districts are well suited to identify and respond to the unique demands of each of their respective areas. With the allocation of limited funds, the districts are motivated to prioritize projects critically and explore creative solutions. Decentralization has proven particularly effective with proj- ects where public involvement or environmental concerns are at play. Senior TxDOT staff feels that when a project is deliv- ered from beginning to end at the district level, there is greater 78

buy-in and support from the public and accountability for environmental commitments increases. (97) However, the department is currently undergoing a period of reorganization. Under this strategic restructuring, TxDOT has sought to move some functions to a new regional organi- zational tier. This effort is aimed at improving efficiency and eliminating redundancies, without undermining the success of decentralized decision making. This strategy has sought to consolidate some of the responsibilities from both the district and the central levels. (97) Under the reorganization, Texas has been divided into four regions, each containing five to seven districts. Regional tier roles and responsibilities are being established and are not yet finalized. The goal is to take some of the redundant functions from the districts and some of the authority of the central of- fice that could be better administered at the regional level. For instance, it is thought that some functions such as sign shops, which are currently conducted at the district level, could be elevated to the regional level, creating efficiency. A single sign shop could likely produce signs for five or six districts with- out a significant loss in quality or responsiveness. (97) Likewise, environmental or design responsibilities, which are currently conducted at the central level, could be admin- istered at the regional level for some projects in order to en- hance responsiveness and accountability. It is believed that the required environmental review or design approval for many projects is actually rather straightforward and could be addressed at the regional level. This, again, would create greater efficiency. Other projects, which span regions or involve a higher degree of risk, would continue to be reviewed and han- dled at the central level. (97) Environmental Streamlining During the drafting of the latest transportation funding leg- islation, SAFETEA-LU, Texas successfully lobbied, along with four other states (Alaska, California, Ohio, and Oklahoma), to be a part of a pilot program that granted FHWA NEPA review authority to these individual states’ DOTs. The program is intended to provide time and cost savings through more effi- cient environmental review. (95) Best Practices for Texas TxDOT has demonstrated a willingness to explore inno- vative practices in terms of financing projects and project delivery. This experimental spirit is born of the department’s desire to meet ever-changing demands in an economically lim- ited environment. The department includes “using efficient and cost-effective work methods that encourage innovation and creativity” in its vision. That creativity and innovation have manifested themselves in a wide array of financing, contract- ing, and project delivery tools. (89) Like many states nationwide, Texas has seen large popu- lation growth over the past 20 years and a disproportionate increase in VMT, due largely to land use growth patterns. This growth is occurring without a matching expansion in fund- ing for transportation projects, resulting in a system that is increasingly strained. In fact, “from 1980 to 2006, Texas’ population has increased by 65 percent, and its road use has increased by 120 percent. The state’s roadway capacity, however, has only grown by nine percent.” (99) Pass-through Financing To address this disparity, the department has employed a variety of innovative financing tools. For example, TxDOT has pioneered a method referred to as pass-through financ- ing. In this model, any public entity, such as a regional mo- bility authority or local government, or even a private devel- oper, can submit an application. An approved application entitles the developing entity to finance, design, construct, maintain, and/or operate a state highway project. The pro- gram is open to expansion projects as well as new projects. In return for covering the up-front costs, the state repays some portion of that debt over time, based on a per-vehicle rate. If there is high demand for the project, the state will repay the developer more quickly, while a lesser-used project will be paid more slowly. This arrangement provides incentive to pursue high-demand projects and enables their construction when the up-front costs may not be available to the depart- ment under conventional funding mechanisms. The depart- ment considers this both an innovative financing tool and a tool for project acceleration. The project is accelerated because 79 Source: TxDOT Figure 21. TxDOT’s 25 Districts.

without the developer entity supplying the up-front costs, the project would be delayed. (100) This program is young, having been approved in early 2009, and its success remains to be measured. However, the program exemplifies the pioneering spirit of TxDOT and its willingness to experiment. This experimentation carries to all stages of project delivery. Comprehensive Development Agreements To enable public–private partnerships (PPPs) and other innovative methods, the agency has initiated comprehen- sive development agreements (CDAs). CDAs are contracts between TxDOT and a consortium of contractors. The agree- ment entitles the consortium to perform all or portions of a given project’s design, construction, operation, and mainte- nance. These agreements accelerate project delivery by allow- ing for parallel processes. In the traditional model, each phase of project delivery must be completed before the next phase can go out to bid. Under a CDA, these phases can overlap, as appropriate. (94) The agreements have allowed for experimentation with a variety of project delivery methods. For example, for a 51-mile segment of State Highway 130, part of the Central Texas Turnpike, the department initiated a design–build–maintain agreement that included a provision for partial financing by the contractor. For another 40-mile segment, TxDOT opted for a full concession. TxDOT estimated that with tra- ditional funding and contracting methods, the project would take 20 years. With the CDA in place, the project will take half of that time. (94) Evergreen Contracts Yet another innovative contracting method that TxDOT has employed has been evergreen contracts. These contracts have given the agency a flexible tool that has both aided in project acceleration and provided greater control over fund- ing streams in times of economic hardship or prosperity. The evergreen, or indefinite deliverable, contract is a form of on-call services contract designed to pre-screen contractors for a specific type of work. The contracts are then exercised on an as-needed basis. They are drafted for a set maximum dol- lar amount and a set period of time, rather than for a fixed deliverable. When either the preset dollar threshold or the lifetime of the contract has reached its limit, a new evergreen contract must be advertised for bids. Evergreen contracts were initially developed to address the need for a flexible tool for designing unforeseen or otherwise out-of-scope pieces of existing contracts. They were never intended to be a solicitation method for large projects. As such, a cap is placed on the maximum total value of the con- tract and/or the total duration. As of today, those caps stand at $2 million and two years, although in certain circumstances, these maximums can be extended, and the department is con- sidering increasing the caps. (101) The selection process for evergreen contracts is rigorous. The department is careful to select contractors who are adapt- able and will perform high-quality work. It is essential that the contractor be able to perform work on a variety of different projects and in different settings. From the department’s per- spective, this selection process can be very time consuming. (97, 101) However, for the districts, these contracts have proven to be a very useful tool for certain types of projects. Specifically, ever- green contracts can be very efficient for projects that involve less risk, are less complex in nature, or involve a specific type of task that is common to many active projects within a district. (97) Another significant benefit of using evergreen contracts is that the TxDOT districts have the ability to adjust their im- plementation or use depending on the availability of funding. When funding is scant, the district simply does not issue work orders on the evergreen contract. The agreements generally have a clause that permits the department to allow an ever- green contract to sit inactive for six months or a year without any repercussions. This can help the districts weather a down cycle without compounding budget constraints. (97) The TxDOT districts have also made creative use of ever- green contracts by drafting multiple contracts with multiple contractors with overlapping terms so that as one is expiring, another is already initiated so that the district always has a contractor on hand to perform a given activity. (97) Evergreen contracts have proven to be an effective tool for accelerating project delivery for small projects and in instances where unforeseen or out-of-scope components arise on large projects. The TxDOT environment, where the decentralized districts are granted a great deal of decision-making ability, makes this tool particularly efficient. The district decision makers are generally most knowledgeable about local projects and therefore can be most responsive by initiating an ever- green contract work order quickly and to the most qualified contractor for the job. Because the selection process is time consuming, some senior TxDOT staff feel that the evergreen contracts should incorporate longer time spans and larger dollar caps. These increases would enable more flexibility for the types of project for which they are deployed and reduce the relative amount of time that the department spends on selection versus the life of the contract. (97) The contractor community has been resistant to increas- ing the nominal value or duration of evergreen contracts be- cause it is felt that they hamper competition. The sense is that every contractor would like to be able to bid on every con- tract. (97) There is also concern on the part of centralized sen- 80

ior TxDOT staff that evergreen contracts encourage the use of the contractor on hand as a matter of convenience, as opposed to selecting the best contractor for a given job. It is feared that expediency or practicality could endanger proj- ect quality. (101) Overall, a balance should be found between accelerating project delivery and hampering competition. There is also consensus that it is important to limit the use of evergreen contracts to smaller projects, as they don’t perform as well on large and complex projects, which often require highly spe- cialized skill sets rather than the versatility required of firms selected for evergreen contracts. Conclusions Evergreen contracts are not a panacea for project accelera- tion. Rather, these contracts are one tool that a state DOT can keep in its acceleration toolbox. TxDOT has found that when unforeseen design issues arise on larger projects, this form of contracting can provide an accelerated solution. TxDOT uses these contracts in conjunction with a wide variety of financing and contracting methods. The use of mul- tiple tools and the organization’s regional restructuring are emblematic of TxDOT’s willingness to experiment. In these uncertain economic times, the department’s past ability to adapt and find creative solutions to external forces portends well for its future. Utah Construction Manager–General Contractor Utah Department of Transportation (UDOT) considers its charge to include a holistic approach to transportation in the state. The department describes its mission as, “quality transportation today, better transportation tomorrow,” and recognizes a fundamental connection between the state’s transportation system and the overall quality of life and eco- nomic prosperity. (102) Utah is a large western state (13th in the nation ranked by area), with a projected population under three million. While Utah features a very low overall population density, that pop- ulation is significantly city based, with 88 percent of its popu- lation located in urban areas. The state’s population is clustered largely around Salt Lake City along the Wasatch Front, with some growth occurring in the St. George area. (103) The state has experienced tremendous population growth over the past several decades. Between 1990 and 2007, Utah’s population grew roughly 47 percent, with much of that growth concentrated in the urban areas. (102) During that time, Utah has consistently been one of the fastest growing states. For sev- eral years, including July 2007 to July 2008, Utah topped the list of the highest growth in the country, with a population growth rate of 2.5 percent. (104) Utah’s state highway system is composed of close to 41,000 centerline miles of highway roads. Of that, UDOT is responsi- ble for approximately 6,000 miles. (105) While state respon- sibility accounts for roughly 14 percent of the total roadway miles, these roads carried roughly 67 percent of the total VMT in 2007. (106) Transportation infrastructure has not kept pace with the booming population. From 1990–2007, Utah experienced a growth in VMT of 71 percent, but added only four percent capacity to its highway system. In reaction to this pressure, UDOT has adopted a strategy with four goals: maintaining the existing system, improving system efficiency, improv- ing safety, and building capacity. The department feels that building capacity is necessary to meet the needs of the popu- lation but notes that, because of financial constraints, high- ways cannot be built fast enough to keep pace with growing congestion problems. (102) Utah is unique in terms of funding transportation projects in that the DOT relies heavily on state funding. While UDOT does take advantage of federal aid funding for qualifying proj- ects, the department generally receives a significant portion of its capacity expansion project funding through the state legislature. That money is allocated from the state General Fund and fed into the Transportation Investment Fund, Crit- ical Highway Needs Fund, or the Centennial Highway Fund. The Transportation Investment Fund is designated for maintenance, construction, and reconstruction. The major- ity of the revenue for this fund is generated by the state sales tax, but it is also fed by legislative appropriations. Money remaining from the latter two funds is also deposited here when their projects are completed with a surplus. The Centen- nial Highway Fund is an allocation of state and federal money for use on 43 capacity-driven projects. Each of these projects is included in the Statewide Transportation Improvement Plan (STIP). The Critical Needs Fund revenue comes from voluntary contributions, legislative appropriations, and sales and use tax. This fund is used for transportation projects around the state, as determined by UDOT, the state Transportation Committee, and the Executive Appropriations Committee. This fund is generally used for capacity expansion projects that are deemed high priority due to population growth. These projects generally do not receive federal aid. Organizational Structure UDOT’s overall strategy has been to centralize some tech- nical knowledge–intensive functions while decentralizing functions that require local knowledge. This strategy has been implemented under a matrix management model. 81

UDOT has divided the state into four regions (Figure 22); Region 4 has been subdivided into three districts. Each region is assigned a region director. The region director is at the top of the matrix model and oversees five position categories: • Administration • Project managers • Pre-construction engineers • District engineers • Materials engineers Project managers are regional staff members who are re- sponsible for overseeing the scope, schedule, budget, and quality of a given project. They provide continuity of project knowledge throughout all phases of a project. Project man- agers oversee project-specific teams for each project and will generally manage between 10 and 15 projects at a time, though not all are advertised in the same year. The project manager also administers contracts for consultant projects. (107) Project teams, as managed by the project manager, are com- posed of staff from any and all of the applicable position cate- gories listed previously. These teams are assigned on a project- by-project basis and are not static across all projects under a specific manager. Program managers are centralized and assist project man- agers with managing the region’s transportation program from initial planning through design, construction, and project closeout (see Figure 23). Their responsibilities include secur- ing funding for projects and determining project funding pri- orities (with consultation from UDOT Planning and relevant MPOs), and determining project priorities (with consulta- tion from regional directors and project managers). They are charged with providing project managers with the resources they need to deliver projects. Program managers are also re- sponsible for tracking program metrics. UDOT policy has been 82 Source: UDOT Figure 22. UDOT regions and districts.

to promote program managers from within UDOT, so that each program manager has spent time as a region director. The program manager position was created in the early 2000s. In UDOT’s funding environment, where the depart- ment is reliant on state funding, the program manager is accountable to the state legislature. According to UDOT staff, the position has created greater accountability at high levels within UDOT. However, some feel that there has been a tendency for accountability to accumulate at those high lev- els and diminish at lower levels. In this regard, it is felt that the creation of these positions has not had an appreciable impact on the speed of project delivery. UDOT has sought a strategy to centralize functions re- quiring a high degree of technical knowledge. For instance, staff at UDOT headquarters in Salt Lake City performs functions relating to structures, right-of-way, hydraulics and geotechnical engineering for projects statewide. Func- tions that require more local or on-site knowledge or significant field time have been decentralized and are per- formed by regional staff. Examples of these functions include project management, roadway design, utilities, and construction. High-level UDOT staff feel that decentralization of those functions is a strength of the department because the local leadership can build projects quickly with all or a majority of the required resources under their control. It is believed that this decentralization has assisted with project acceleration. One possible downside suggested regarding this decentral- ization strategy is that when the central office wishes to pur- sue an innovative procedure, local staff may not be receptive. Resistance to innovations has stemmed from associated costs as well as from the tendency of the local staff to perceive these initiatives as intervention. As a means of linking centralized and decentralized func- tions, UDOT has implemented a proprietary software tool called Electronic Program Management (ePM) for scheduling, tracking, and monitoring program management. The tool is used by all staff involved in project delivery. The STIP is logged into this system as well. Through sophisticated algorithms, the program tracks and prioritizes critical steps in project delivery and allocates staff time accordingly. Timesheets are logged into the system and budgets are tracked. The tool brings a systems engineering approach to program management. UDOT reports that the ePM system can be a valuable scheduling tool and in many instances does produce a stream- lined, efficient project and program schedule. However, the system requires high-quality data and diligent upkeep through- out the project delivery process. UDOT has found that with a 83 Figure 23. UDOT project delivery chart.

large number of individuals using the system, faulty data inputs are frequent and can hinder the efficacy of the tool. At UDOT, perhaps because of the funding mechanisms in place, the emphasis on project acceleration is strong. Access to legislators who allocate funds allows UDOT to reduce time spent on programming. Political pressure from those same legislators creates an incentive to deliver projects quickly. Best Practices for Utah Background UDOT has demonstrated a willingness to experiment and take on risk in virtually all facets of project delivery. Its three- pronged procurement strategy exemplifies this willingness to experiment. The department currently uses design–bid–build, design–build, and construction manager–general contractor (CMGC) models. Over the past 20 years, the department has shifted from primarily using the traditional design–bid–build procurement model to primarily (in dollar terms) using a design–build model. Now, the department is attempting to build on the strengths of design–build by entering into an agreement with the FHWA to implement and evaluate a pilot CMGC procurement model. Under this agreement, federal funding is authorized for 24 projects over a two-year period starting in 2006. Utah has agreed to fund an additional 24 projects—6 projects in each of the UDOT’s four regions—to test the model in geograph- ically diverse settings. UDOT has agreed to report to the FHWA on a variety of criteria, including budget analysis, schedule analysis, design, and constructability feedback. Though implementation of the model is somewhat limited, there have been some preliminary findings that indicate that this model could be a useful tool for project acceleration and budget savings. (108) Implementation of the CMGC model is consistent with UDOT’s efforts to engage the construction and engineering industries. UDOT’s efforts have included regular outreach and consultation with industry representatives, such as the state’s Association of General Contractors and the American Council of Engineering Companies on issues such as RFP language. The department has used input solicited through this outreach to inform the contract formulation process and refine the contractor selection process. These groups are not involved in the process of writing specific contracts, but rather provide general guidance on what will make projects biddable. UDOT has made efforts to standardize RFP language based on this input and successes from past projects. Outside of UDOT, the CMGC procurement method is not generally well understood and is not often employed. In some locations, there are legal barriers to its use. UDOT’s use of the method is one of the largest applications of CMGC contract- ing and thereby contributes to the definition of the method. In UDOT’s model, a contractor is selected as early as possible, though the local FHWA office does not permit this selection to take place until after the approved environmental review documents are signed. (109) The Model Initially, a design consultant is selected. Then, a construc- tion contractor is selected. CMGC contracts are not awarded on a low-bid basis. Rather, the selection process incorporates technical merit and price into a best value formulation. Con- tractors are evaluated on criteria ranging from design skills to delivery schedule. Once a contractor is selected, that firm appoints dedicated design staff to the project. UDOT then works in cooperation with the design consultant and the contractor’s designers to achieve the desired design. The design team works in a collaborative and iterative fash- ion. For example, UDOT will inquire what would be required for an accelerated schedule or to implement a given innova- tion. The contractor’s design representatives provide feed- back regarding constructability and cost for suggested design parameters. The design changes repeatedly, based on identi- fied risks to the schedule or budget. When the design is finalized, the relationship with the contractor is severed. That contractor is then offered the first opportunity to bid the construction. UDOT simultaneously hires an independent auditor/contractor (usually a seasoned individual retired from the industry) who also submits a blind bid. If the two figures are close and reasonable, the contractor retains the job and enters a construction agreement. If the con- tractor’s bid is not within 10 percent of the independent bid, then the project becomes a traditional bid–build project. (108) Early Findings In terms of project schedule, the CMGC model does appear to reduce the time frame for most projects. Involving a con- tractor in the design process creates efficiency in several ways. First, during the design phase, having a contractor provide feedback in real-time allows for earlier identification of design errors and quicker problem solving. The transition from design to construction phases is also hastened and smoothed as the contractor already has detailed knowledge of the design. It has been found that there is less need for specificity and greater ease of communication between UDOT and the selected contractor. (108) The UDOT experience has also shown that this model allows for a project to begin with a degree of risk that would be con- sidered intolerable under other procurement methods. In one instance, design began before ROW issues had been resolved, and the two processes occurred in parallel. That project fin- 84

ished a year ahead of schedule by eliminating the time that had originally been allotted for ROW acquisition. (108) The CMGC model has been found to enhance working rela- tionships with external agencies. Utility and railroad compa- nies have shown greater openness to solving ROW or relocation issues when a familiar contractor is performing the work. This has again allowed for parallel processes in which these issues can be resolved alongside the design phase, thereby decreasing the overall project schedule. Change Orders UDOT hoped that the CMGC model would reduce overall costs for a project. One of UDOT’s primary goals for initiating the pilot program was to test if the model would reduce the number of change orders. The department had identified change orders related to design errors as a significant source of inefficiency with regard to both cost and project delays. By involving the contractor in the design process, design errors were expected to be caught early and contractors expected to absorb the risk associated with those errors. Early indications are that the model has indeed reduced the number of change orders related to design errors. However, UDOT frequently utilizes change orders to expend funds that are either freed by negotiations or legislatively allocated. UDOT employs change orders for this purpose on all projects, regardless of contracting method. This procedure, in turn, complicates the analysis of the impact of the CMGC arrange- ment on change orders and overall budget. It requires analysis on a project-by-project basis, which has not yet been com- pleted by the agency. (108) The Design Process There has been consensus between program managers and Association of General Contractors representatives that this contracting method has resulted in reduced risk, improved design, and shortened project schedules. It is believed that the better design stems from UDOT’s active involvement in the design process. In a design–build model, the department cedes design control to the contractor. In that process, the contractor is motivated to maximize profits. That objective may run counter to accelerating the schedule, developing a high-quality design, or pursuing innovation. In the CMGC model, the contractor is part of the design process insofar as providing feedback on constructability and cost, but UDOT staff guides the use of innovative techniques. The contractor advises on construction, and the design team tailors the design to fit the contractor’s strengths and abilities. While the contractor does not have the same kind of control as in a design–build contract, the design team still strives for a design that the contractor will be able to construct deftly. (108) Having the contractor involved in the design process also opens the possibility for parallel phases. As long lead items are identified, the contractor can begin procuring before the design is complete. Additionally, if innovative methods are employed, early involvement provides the contractor with additional time to learn and develop familiarity with the task. (108) Lessons Learned UDOT found that though CMGC projects do benefit from shortened schedules, it is not the best contracting method to use if there is a considerable time restraint and an abbreviated schedule is the principal driver. When schedule is the primary driver, the project manager and the contractor tend to place pressure on the design consultant to speed the pace of design. This pressure can increase the likelihood of design flaws going unnoticed. Also, there have been experiences where early- phase contracts for materials have resulted in multiple change orders and increased construction costs. In instances where schedule is the primary driver, UDOT recommends using a design–build model. Project and program managers at UDOT believe that the greatest gains in schedule under the CMGC model are derived from the ability to perform tasks on a parallel schedule. Cus- tomarily, design takes longer because of the iterative nature of the process. Some acceleration occurs in construction due to efficiencies created by the contractor’s familiarity with the design. However, the greatest acceleration is achieved by the ability to perform parallel scheduling. One caveat is that par- allel schedules do increase risk; therefore, the model should not be employed in a risk-adverse environment. UDOT found that an advantage of CMGC over design– build is that it is simpler to select a contractor. Where design– build procurement can require a 500-page RFP, a CMGC RFP can be as brief as 25 pages. By retaining control of the design process in a CMGC contract, UDOT can greatly reduce the need for specificity in the RFP language. For contractors, the cost of responding to a CMGC proposal request can be a tenth of the cost of responding to a design–build RFP. Defining roles and responsibilities has proven to be an important task in CMGC projects, as many in the construc- tion industry are unfamiliar with the model. UDOT has begun partner training at the onset of a project to reinforce roles and responsibilities. The department has found that one benefit of the model is the spreading and sharing of risk. In the con- ventional design–bid–build model, the department owns the risk; in design–build, the contractor largely owns the risk; in CMGC, risk is distributed and shared, thus creating account- ability for all the project delivery partners. The department also found that cost must be considered throughout the process. UDOT expressed concern that some contractors may try to exploit the first bid opportunity for 85

construction. It is important for the contractor to know that if it cannot deliver the project for a fair price, the project will revert to a bid–build model. Future Developments Recent months have seen great uncertainty arise in the realm of transportation funding all across the United States. States from coast to coast are finding significant funding short- falls as tax revenue drags with the overall economic slowdown. Adding uncertainty in the coming year is the reauthorization by the U.S. Congress of a federal transportation bill. This bill has been speculated to feature significant alterations to fund- ing formulas and mechanisms. At this time, the funding outlook for Utah is difficult to estimate. The state’s heavy reliance on State funds for capac- ity building projects further clouds the ability to forecast. It is unclear whether this model will fare better or worse than states that rely more heavily on federal funds. In the past few years, UDOT’s efforts have been well funded, but the needs continue to outpace resources. According to senior UDOT staff, an estimated 70 percent of transportation dollars are being spent in design–build projects. That figure is likely due to the design–build model’s proven record of accelerating project schedules over the traditional design–bid–build model. If the CMGC model continues to demonstrate real project acceleration benefits, this contracting method is likely to gain greater prevalence at UDOT. Conclusions UDOT does recommend CMGC as the primary delivery process when schedule is not the primary driver. Its CMGC pilot projects seem to indicate that the contracting method can be an effective tool for accelerating projects. However, the UDOT’s efforts have been conducted in an environment where there is active engagement and cooperation between the DOT and the construction industry. UDOT’s persistent outreach to the state’s Association of General Contractors may lay the groundwork for a unique mutual trust between the department and participating contractors. In other envi- ronments, where contractor–transportation agency relation- ships are less amicable, such a contracting method may prove counterproductive. In addition to project acceleration, the CMGC contracting method has a number of co-benefits. Specifically, UDOT has found the method is less intensive on the front end, with less effort required to prepare an RFP and contract documents. Additionally, the model grants the agency significantly more control in the design process and allows UDOT to pursue innovations as it sees fit. This trait could help to drive inno- vation in Utah and around the country. 86

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TRB’s National Cooperative Highway Research Program (NCHRP) Report 662: Accelerating Transportation Project and Program Delivery: Conception to Completion explores the experiences of eight state departments of transportation that made improvements in their project delivery and examines the lessons to be learned from their experiences.

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