CHANGING ENVIRONMENT FOR HIGHWAY CONSTRUCTION: THE UTAH EXPERIENCE WITH CONSTRUCTION COST OVERRUNS

Abstract

A study of cost overruns in construction projects performed under contract with the Utah Department of Transportation (UDOT) is reported in this paper. The approach looks at historical patterns through largely quantitative and descriptive information covering more than 800 projects completed between 1980 and 1989. Interviews were also conducted with current UDOT personnel, representatives from the State Attorney General's office, and private contractors and their legal counsel to determine current perceptions and assessments of the construction claims environment. Findings suggest that the climate of construction management has changed in recent years. As the Interstate system has neared completion, rehabilitation and reconstruction projects have increased both in number and as a percentage of all projects. These projects are found to be more likely to involve cost overruns. During the same period, UDOT preconstruction staffing levels fell, contributing to numerous design and other preconstruction errors, and an increased opportunity for contractors to seek additional compensation. Lack of cooperation between divisions within UDOT contributed to the decline in relationships between UDOT and the contracting community. Contractors were found to be more willing to file and pursue claims due to an increasingly competitive bidding process and increased access to legal counsel.