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WRAL Investigates: DOT paid for free advice

The state Department of Transportation paid millions of dollars for a report that offered some recommendations it had received at no cost a year earlier.

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RALEIGH, N.C. — Riddled by delayed and botched road projects and criticized for its inefficiency, the North Carolina Department of Transportation paid millions of dollars for a report last year that offered some recommendations it got at no cost nearly a year earlier.

That's according to Kathryn Sawyer, executive director of the American Council of Engineering Companies of North Carolina.

"Where project delivery was concerned, I do think we had given them recommendations that could have been acted upon that wouldn't have required that level of expense," Sawyer said.

But the DOT says that ultimately, the savings from the changes implemented as a result of the $3.6 million study will make up for the report's cost.

In May 2006, the ACEC, a member organization of engineering companies, paid to bring experts and transportation department officials from Florida, Missouri and Virginia – states that lead the nation in transportation project management – to find ways to help North Carolina become more efficient and successful when it comes to finishing projects on time.

"Missouri, at the time we put together this think tank, was over-delivering their program. They were going into their next year’s set of projects because they had been so successful in meeting their goals," Sawyer said. "So obviously, they were doing something right."

Among the think tank's findings were needs to improve productivity, use key performance indicators and increase accountability – an area in which Sawyer said North Carolina needs improvement.

In the other states, like Missouri, a project deadline is locked in place. If it is not met, project managers are held accountable, Sawyer said.

"(Project managers in North Carolina) had goals, but if they didn’t meet them, then (the goals) were moved," she said. "If a project was not completed, they just moved the date to where they thought it could be completed next."

Those three recommendations were along the ones more than a year later in a 472-page report from international management consultant McKinsey & Co.

"(The think tank is) something that we provided as a resource in being a partner and delivering the program here in North Carolina," Sawyer said. "And for that not to be adequate, that there had to be a higher price tag associated with recommendations in order for them to be given the validity, it’s frustrating."

None of the ACEC's recommendations, except for one to form a transportation leadership team, was implemented during the year's time before the DOT hired McKinsey.

Sawyer said she does not think the DOT took those findings seriously and used money that could have gone into road projects to pay for the McKinsey report.

"By sitting still, our hole is getting deeper, because of inflation," she said. "I would have rather seen that money go into the actual delivery of the transportation program."

Acknowledging the ACEC think tank had good recommendations, Roberto Canales, DOT deputy secretary for transit, said McKinsey's report was also much more comprehensive and went far beyond project delivery, Canales said, looking at other aspects of the DOT, including recruitment and staff retention.

The DOT is not disregarding the ACEC recommendations, Canales said, but is going through a process to implement some of them.

"I think the transformation effort in the McKinsey diagnostic helped us put a motor behind some of those ideas and efforts and helped us accelerate them," he said.

Ultimately, the savings from the changes will make up for the report's cost, he said. For example, from its findings, he said, DOT has been able to cut two years off delivery of bridges and has implemented programs to streamline delivery of projects.

Canales also said the report has provided DOT officials knowledge of what employees, motorists and others in the industry think about the department.

"We've learned different things about their needs and about how they think we should interact with them. But we've also learned where we might become more efficient," he said. "It told us where the potential problem areas are."

However, the DOT's not acting on free expertise has Rep. Ty Harrell, D-Wake, a member of a legislative transportation committee, questioning why the DOT did not better utilize the free expertise.

"If the Department of Transportation is ignoring free advice from other departments of transportation … then we really need to investigate why," Harrell said. "The Department of Transportation paid (millions) for the McKinsey report, and that’s not the accountability we need with taxpayers’ dollars."

Like Sawyer, Harrell is frustrated by the DOT, saying that even with the McKinsey report, he has not seen any substantial results.

"Well, I've seen a PowerPoint presentation that's saying they're going to start doing better," he said. "But the clock is ticking, and the taxpayers' dollars are being burned as we're waiting around."

"We have a broken DOT, and I think a lot needs to be retooled," Harrell added. "I think they're trying to make the best efforts out there, but we need to really look at how the department is being run."


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