Saturday, March 29th, 2008
You might think it is a nice problem to have, but when your department’s budget gets a dramatic increase, it can be a struggle to handle. Consider the case of INDOT and Major Moves. The Toll Road lease brought in a huge amount of funds. The challenge is how to get that turned into concrete quickly. It isn’t just as simple as posting bids. Designing and implementing major roadway projects is complex. There are numerous environmental, design, and land acquisitions steps that need to be undertaken before construction can begin. What’s more, a lot of these tasks require critical skills. INDOT’s entire organization was sized to support a certain sized budget and certain number of projects. Similarly for the entire ecosystem of contractors, consultants, materials suppliers, etc. Where do you land those 25 extra project managers you need, especially when they have to have specialized skills and knowledge about not just civil engineering generally, but Indiana standards, laws, business practices, etc.? It isn’t easy.
The IBJ ran a very nice piece this week [dead link] talking about the institutional changes INDOT is implementing to turn dollars into concrete faster. For example, there is more parallelization of tasks that used to be done serially. And INDOT is relying more on prime consultants, who then hire and manage the subcontractors, instead of directly hiring all the subs.
The net result is projects getting done faster. Not only is this better for motorists, it is a huge financial windfall to INDOT. With the cost of construction skyrocketing a well above the consumer CPI rate of inflation, and most assuredly faster than Indiana is earning interest on the money it has in the bank, every year that goes by only erodes the value of that money. Building faster is the number one thing INDOT can do to build cheaper, because of the time value of money in a high inflation environment.
Obviously there is a ways to go. You can’t turn an $800 million organization on a dime. But things are definitely moving the right direction and showing positive results where it counts.