DOT Saves $46.7 Million On Road Project Bids

MacIver News Service | August 2, 2017

By: Bill Osmulski

[Madison, Wisc…] Decreased construction costs and effective bidding are helping the Wisconsin Department of Transportation get its highway projects ahead of schedule, while at the same time providing budget relief, according to DOT Secretary Dave Ross.

On Tuesday, the department released its August report on major and mega projects to the Transportation Projects Commission (TPC). There are currently 15 major and 2 mega enumerated projects.

Last fiscal year, the DOT saved $46.7 million on the majors from let savings, which means vendor bids came in lower than expected. That was due, in part, to lower construction costs. The Wisconsin Construction Cost Index dropped 5.3 percent last year. On top of those lower costs, bidding has also become more competitive recently.

“There’s less work especially on the majors, so that meant a lot more competition for those jobs,” Jeff Gust, Wisconsin state highway program director told MacIver News. “Everyone’s sharpening their pencils.”

That $46.7 million in savings allowed it to start work on US Highway 10/441 ahead of schedule. Gust said it was a project that could be completed quickly with maximum benefit to the public.

Since Ross took over, the department has adopted new accounting methods. Before, project costs included reserve funds allocated for a project, but were oftentimes left unused. That inflated the perceived cost of projects. Since eliminating that practice, project cost estimates have dropped by $214 million. Ross said that is merely an accounting change made for the sake of transparency.

“These estimate changes do not make any additional funds available for current spending, but instead only adjust the total cost to complete each individual Majors project,” Ross wrote in the report.

The DOT still has $13.1 million left from the let savings. It intends to use those funds to leverage more federal matching dollars later this year.

Altogether, the DOT’s current cost estimates are $49 million less than what Governor Walker’s budget proposal allots.