Texas Department of Transportation
A Report on Contract Administration at the Texas Department of Transportation
Report Number 97-091
August 1997
Overall Conclusion
The Texas Department of Transportation (Department) has processes in place to administer the contracting function for its preliminary engineering (design), construction, and maintenance activities. However, opportunities exist for the Department to strengthen controls over certain portions of these functions. While the contracting practices used by the Department minimize the risk of abuses such as those identified in other agencies, the Department's contracting practices still present some opportunities to obtain public funds without delivering intended services. The Department has designed a variety of controls to minimize these risks. We identified opportunities to improve certain aspects of these control systems.
Key Facts and Findings
Contractor selection is a critical step in ensuring the efficient and effective use of funds for highway design, construction, and maintenance. At the time of our fieldwork, the Department's procedures did not consider past or present performance as part of contractor selection criteria. This prevented the Department from limiting or prohibiting contractors who were behind schedule on current or past projects from receiving contracts for additional, new projects.
The Department reports in the Transportation Revenue Needs Assessment that current funding sources will enable the State to meet only 33 percent of the transportation system needs for the next decade. The change order processes and management of advanced funding agreements are areas we identified with potential for cost efficiencies.
The Department's existing policies and procedures do not adequately address the pricing methodology and structure for all change orders that add items of work to the contract. Change orders are not subject to the same contracting controls since they occur outside the competitive bid process.
The Department needs to improve controls over the process for contracting for preliminary engineering and the process for monitoring payments to preliminary engineering consultants. The process for contracting with engineering consultants seems to take a long time. The Department did not have a formal mechanism to hold design consultants accountable for timely completion of their design services contract.
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