oversight

Transportation Infrastructure: Impacts of Utility Relocations on Highway and Bridge Projects

Published by the Government Accountability Office on 1999-06-09.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                  United States General Accounting Office

GAO               Report to Congressional Requesters




June 1999
                  TRANSPORTATION
                  INFRASTRUCTURE
                  Impacts of Utility
                  Relocations on
                  Highway and Bridge
                  Projects




GAO/RCED-99-131
      United States
GAO   General Accounting Office
      Washington, D.C. 20548

      Resources, Community, and
      Economic Development Division

      B-280707

      June 9, 1999

      The Honorable John H. Chafee
      Chairman
      The Honorable Max S. Baucus
      Ranking Minority Member
      Committee on Environment and Public Works
      United States Senate

      The Honorable Bud Shuster
      Chairman
      The Honorable James L. Oberstar
      Ranking Democratic Member
      Committee on Transportation and Infrastructure
      House of Representatives

      Work on highway and bridge projects often involves relocating utility lines
      and facilities that are used in producing, transmitting, or distributing
      communications, electricity, natural gas, water, and sewage. Schedule
      slippages and increased costs associated with the construction of these
      projects may result when these lines and facilities are not relocated in a
      timely manner. In this regard, the Transportation Equity Act for the 21st
      Century (TEA-21) directed us to assess the impact that delays in relocating
      utilities are having on the delivery and cost of federal-aid highway and
      bridge projects.

      As agreed with your offices, we examined the following for fiscal years
      1997-98: (1) the extent to which states are experiencing such delays and
      the causes and impacts of the delays; (2) the number of states that are
      compensating construction contractors for the added costs incurred on
      their projects because of untimely relocations by utility companies; (3) the
      available technologies, such as subsurface utility engineering (SUE),1 that
      are being used during project design to reduce the number or impact of
      utility relocation delays; and (4) the mitigation methods that states are
      using, such as incentives, penalties, and litigation, to encourage or compel
      cooperation by utility companies that are relocating utilities on federal-aid
      highway and bridge projects. To obtain information about these issues, we
      sent a questionnaire to the departments of transportation of the 50 states
      and the District of Columbia—for which we achieved a 100-percent



      1
       SUE is an engineering process that incorporates new and existing technologies to identify and map
      underground utilities during the early development of a highway project.



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                   response rate. A summary of the responses is in appendix I.2 We obtained
                   additional information through interviews with officials of the
                   headquarters and field offices of the U.S. Department of Transportation’s
                   Federal Highway Administration (FHWA), state transportation departments,
                   construction contractors, and/or utility companies in nine states.
                   Additional information on our scope and methodology is discussed later in
                   this report.


                   The extent of the delays on highway and bridge projects because of
Results in Brief   relocating utilities ranged from none in three states to all projects in one
                   state during fiscal years 1997-98. The states that reported the delays cited a
                   variety of reasons for them, such as short time frames for planning and
                   designing projects, the utility companies’ lack of resources to perform
                   relocation work, and the poor timing, sequencing, and coordination of the
                   relocation work relative to the construction work. Only 10 states thought
                   that the delays had a great or very great impact on the costs and/or
                   construction schedules of federal-aid highway and bridge projects. States,
                   however, are not always aware of all the delays that occur. The
                   information that states have largely depends on the degree to which
                   individual construction contractors request schedule extensions and/or
                   submit claims for increased costs on delayed projects. Rather than
                   requesting extensions or submitting claims, some contractors told us that
                   they accommodate the delays by shifting work crews and equipment to
                   other segments of the project or to another ongoing project.

                   Forty-four states compensated contractors for utility relocation delays by
                   extending project completion schedules, and 30 paid contractors’ claims
                   for increased costs. Some contractors told us that while some direct-cost
                   increases resulting from delays can be recovered in their respective states,
                   either (1) they usually do not have the time to prepare the paperwork or
                   (2) the expected reimbursement–along with its timing–is simply not
                   worth the effort to prepare the paperwork. Other contractors told us that
                   certain states require contractors to assume full financial responsibility for
                   utility relocation delays.

                   Forty-three states reported that they used computer-aided design and
                   drafting systems during the project design phase of more than half of their
                   projects. Such systems use computer graphics technologies for designing
                   and mapping construction projects, including locating utilities. Although


                   2
                   For statistical purposes, in compiling and analyzing the questionnaire responses, we included the
                   District of Columbia as a state.



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             the Federal Highway Administration recommends subsurface utility
             engineering as a means of using new and existing technologies to
             accurately identify, characterize, and map underground utilities, only
             seven states responded that they used this engineering process on half or
             more of their projects. However, it is unknown whether the use of
             subsurface utility engineering has reduced the extent of utility relocations
             or delays.

             Forty-one states responded that they used early planning and coordination
             and 33 responded that they used special contracting methods as a means
             to help mitigate the impact of utility relocation delays. This contrasts with
             the number of states that responded that they used more forceful
             mitigation measures to encourage or compel utility companies to complete
             utility relocations in a timely manner—three states responded that they
             used monetary incentives, seven used monetary penalties, and two used
             the courts.


             To accommodate highway and bridge construction, utilities often must
Background   relocate their lines and facilities when they lie in the path of a construction
             project. Utility relocations are more prevalent today than in the past
             because most current federal-aid roadwork involves the reconstruction or
             expansion of existing highways and bridges (with accompanying utility
             lines and facilities that already exist) rather than new construction.
             Federal-aid highway and bridge programs, administered at the federal
             level by FHWA, provide states with financial assistance for various types of
             projects. The projects under these programs are financed generally on an
             80-percent-federal, 20-percent-state basis—although the split in percentage
             varies, depending upon the specific highway or bridge program. In fiscal
             years 1997-98, about $21 billion a year in federal funds was obligated for
             highway and bridge projects. Under TEA-21, the estimated funding for fiscal
             year 1999 increased to about $26.6 billion and to about $28.3 billion for
             fiscal year 2000. Along with the increased funding, an increased number of
             projects involving the relocation of utilities is expected.

             At the state level, state transportation departments generally administer
             federal-aid highway and bridge projects. States are responsible for
             planning, designing, and—with their contractors—constructing highway
             and bridge projects, while utilities are usually responsible for relocating
             their lines and facilities out of the path of the highway or bridge
             construction. States often inform utility companies of planned highway
             and bridge projects up to 5 years before construction begins. With an early



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                         alert, utilities can begin their own conceptual designs for relocating their
                         lines and facilities in concert with the planned projects. During predesign
                         meetings between the project designer and the utility representatives, the
                         utilities learn about upcoming highway and bridge projects, as well as
                         probable construction time frames. Even under the best of circumstances,
                         the planning and designing of highway and bridge projects often take a
                         long time, and frequently involve delays, cancellations, changes in
                         alignment, and other factors that can alter the involvement of utility
                         companies. These conditions encourage highway agencies to wait until
                         later in the design process to involve the utilities. Similarly, utility
                         companies prefer to wait until they are certain that the project’s planning
                         and design are firm before they begin their relocation work.

                         Construction contractors and utilities need to schedule their respective
                         work so that their activities are properly sequenced. Before utility
                         companies can relocate their lines and facilities, they must have the
                         right-of-way to the locations where the utilities are to be moved, and those
                         sites need to be cleared and graded.3

                         To varying degrees among states and individual projects, the site
                         preparation work is performed by the construction contractor, the utility
                         company, or a separate contractor. Once the site is cleared, the utilities
                         can install their conduits, ducts, or poles and connect their lines and
                         facilities at the new location. However, if a utility does not have the
                         needed right-of-way or the site is not cleared or graded, a utility company’s
                         relocation work would likely be delayed. If for these, or any other reasons,
                         a utility does not relocate its lines or facilities as scheduled, the
                         construction contractor’s schedule can be delayed.


                         During fiscal years 1997-98, about half of all federal-aid highway and
Extent, Causes, and      bridge projects involved the relocation of utilities.4 States’ responses to
Impacts of Delays        our questionnaire varied widely—from no delays resulting from utility
Resulting From Utility   relocations in three states to delays on all projects involving the relocation
                         of utilities in one state. However, the full extent of the delays on
Relocations              federal-aid highway and bridge projects caused by relocating utilities is
                         not known because states are not always aware of the delays. The states
                         provided us with a number of reasons for the delays, such as the following:
                         short time frames for states to plan and design projects, which affect all

                         3
                          Right-of-way is a general term denoting real property, or an interest therein, usually in a strip,
                         acquired for or devoted to transportation purposes.
                         4
                          Based on the numbers of advertised projects in the states’ responses to GAO’s questionnaire.



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                             subsequent aspects of a project, including utility relocations; utility
                             companies’ limited resources to perform an expanding amount of
                             relocation work; and the poor timing, sequencing, and coordination of the
                             utility relocation and construction work. States generally did not perceive
                             that the delays have had a great impact on the costs and construction
                             schedules of federal-aid highway and bridge projects.


States Indicated That        Forty-two states responded to our questionnaire on the percentage of
Projects Were Delayed, but   delays caused by the relocation of utilities on federal-aid highway and
the Full Extent Is Not       bridge projects in their respective state for fiscal years 1997-98. The extent
                             of these delays ranged widely among the states—from none reported by
Known                        Montana, North Dakota, and Vermont to about 95 percent of the
                             completed projects involving utility relocations in Idaho and to
                             100 percent of such projects in Rhode Island. We found that 20 states
                             reported delays for 0-10 percent of their projects, 8 for 11-20 percent, 6 for
                             21-30 percent, and 8 for above 30 percent. Nine states did not provide an
                             estimate. Figure 1 shows the extent of the delays reported for each state.




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Figure 1: States’ Responses Regarding Percentages of Federal-Aid Projects Involving Utility Relocations That Were
Delayed, Fiscal Years 1997-98



                  WA

                                   MT                                                                                                                       ME
                                                               ND
             OR                                                                                                                                   VT
                                                                               MN
                        ID                                                                                                                             NH
                                                               SD                                WI                                         NY         MA
                                                                                                                MI                                    CT         RI
                                        WY

                                                                                       IA                                             PA
                   NV                                           NE                                                                               NJ
                                                                                                                      OH                   MD                    DE
                              UT                                                                      IL   IN                                                    DC

        CA                                   CO                                                                             WV
                                                                     KS                                                               VA
                                                                                            MO
                                                                                                                 KY

                                                                                                                                      NC
                             AZ                                                                            TN
                                                                          OK
                                        NM                                                  AR                                   SC


                                                                                                      MS   AL          GA

                                                                TX                          LA


                                                                                                                                 FL




                                   AK




                                                                                  HI




                                                           0-10 percent

                                                           11-20 percent

                                                           21-30 percent

                                                           Above 30 percent

                                                           No estimate provided



                                                  Source: GAO’s analysis of states’ responses to GAO’s questionnaire.




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                      Although 20 states reported that about 10 percent or less of the federal-aid
                      highway and bridge projects involving the relocations of utilities
                      encountered delays because of these relocations, this does not necessarily
                      indicate the full extent of the delays. For example, although Connecticut
                      reported that only about 3 percent of its projects involving utility
                      relocations had delays caused by the need to relocate utilities, a state
                      transportation official told us that Connecticut does not keep track of all
                      the delays caused by utility relocations. This official stated that the
                      3-percent figure, which the state reported, represents the state’s
                      federal-aid highway and bridge projects involving documented delays in
                      relocating utilities. Therefore, if delays were not documented, they were
                      not included in the state’s response. A contractor association official in
                      Connecticut told us that the state has no good indicators of the frequency
                      and magnitude of delays caused by utility relocations. One contractor
                      pointed out that because Connecticut does not reimburse contractors for
                      the cost increases resulting from delays in relocating utilities, the costs of
                      such delays are often anticipated and incorporated somewhere in a given
                      contractor’s bid. As such, the costs of these delays go unreported.


States Gave Various   The reasons that states gave for delays caused by utility relocations were
Reasons for Delays    related but varied. Table 1 shows the reasons most frequently indicated for
                      such delays and lists them according to the number of states that
                      considered them to be a moderate or major reason for delays.




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Table 1: States’ Responses Identifying
Reasons for Delays in Relocating         Reason                                                               Number of states
Utilities                                Utility lacked resources                                                            34

                                         Short time frame for state to plan and design                                       33
                                         project

                                         Utilities gave low priority to relocations                                          28

                                         Increased workload on utility relocation                                            28
                                         crews because highway/bridge construction
                                         had increased

                                         Delays in starting utility relocation work:                                         28
                                         some utilities would not start until
                                         construction contract was advertised or let

                                         Phasing of construction and utility relocation                                      26
                                         work out of sequence

                                         Inaccurate locating and marking of existing                                         23
                                         utility facilities

                                         Delays in obtaining rights-of-way for utilities                                     23

                                         Shortages of labor and equipment for utility                                        19
                                         contractor

                                         Project design changes required changes to                                          19
                                         utility relocation designs

                                         Utilities were slow in responding to                                                16
                                         contractors’ requests to locate and mark
                                         underground utilities

                                         Inadequate coordination or sequencing                                               13
                                         among utilities using common poles/ducts

                                         Source: States’ responses to GAO’s questionnaire.



                                         As the table shows, one of the most prevalent reasons cited by the states
                                         was the short time frame for them to plan and design projects, which can
                                         affect all subsequent aspects of the project, including utility relocations.
                                         With recent increases in the federal funding of highway and bridge
                                         projects, states are planning and designing an increasing number of
                                         projects in a shorter amount of time. For example, Colorado told us that



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its highway construction program had nearly doubled since 1995 and that,
in its rush to get projects under contract, time had become a shrinking
resource—particularly the time available for planning and designing
projects and the time available for designing and relocating utility lines
and facilities.

Shorter time frames for planning and designing construction projects also
reduce the amount of time available to acquire needed utility
rights-of-way. When utility facilities are located on a state’s rights-of-way
and those existing rights-of-way are not sufficient to accommodate a
planned utility relocation, additional rights-of-way need to be acquired.
Utilities are generally responsible for acquiring additional rights-of-way
that may be needed for a given project. In some instances, the utilities may
already have the necessary rights-of-way prior to the construction of the
highway and/or bridge project (known as “prior rights”). If the utility has
prior rights, the state usually pays for any additional rights-of-way that
may be needed, as well as for the relocation itself. Because utilities cannot
relocate their facilities unless they have the right-of-way for the new
location, delays in obtaining rights-of-way can, in turn, slow the timing of
relocation work.

Utility relocations for large highway and bridge construction projects can
be very complicated. In addition to the state transportation department
and its construction contractors, multiple utilities also may be involved.
To reduce scheduling problems, the contractors would prefer that, to the
extent possible, all utility relocation work be finished before the highway
or bridge construction begins. Preconstruction conferences involving all
the parties to the project provide an opportunity for the state agency and
the utility companies to communicate any final changes in project
schedules, jointly review and approve final sets of plans, and identify key
points of contact for the project. The conferences also provide an
opportunity for the contractors and utilities to agree upon work schedules
that will minimize possible conflicts during construction.

Several contractor officials told us that the work schedules that the
utilities provide at preconstruction conferences are often not specific or
reliable. Contractor officials also stated that utilities are often
unresponsive to contractors’ requests for needed actions. Contractor and
state highway officials pointed out, however, that utilities are not solely to
blame for all delays associated with relocating utilities. In this regard,
utility company officials told us that (1) contractors often make changes to
construction work schedules, (2) they have limited resources to respond



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                         to contractors’ requests, and (3) their first obligation is in servicing their
                         existing and new customers. Furthermore, even when reimbursed by a
                         state, utility companies do not profit from relocation work and generally
                         do not recover all of their indirect costs.


Impacts of Delays Vary   As with the extent of delays, quantifiable information on the full impact of
                         delays caused by relocating utilities on the cost and delivery of federal-aid
                         highway and bridge projects does not exist. Delays in relocating utilities
                         can cause construction work to be rescheduled or delayed, or result in
                         contractor claims or litigation. In addition, less tangible impacts result. For
                         example, safety concerns, such as leaving excavations open while
                         conflicts are resolved, increase the risk to state agencies, contractors,
                         utility companies, and the traveling public. Furthermore, public travel on
                         highways under construction is more time-consuming and less convenient.

                         Five states responded that delays caused by relocating utilities had a great
                         or very great impact on the construction schedules of federal-aid highway
                         and bridge projects. Five states responded that these delays greatly or very
                         greatly increased the construction costs to the state, two states responded
                         that they greatly increased the costs to construction contractors, and two
                         states responded that they greatly or very greatly increased the costs to
                         other utility companies. In addition one state, New Mexico, reported that
                         delays greatly affected utility coordination efforts on other projects. The
                         states responding that the delays had a great impact on the projects’
                         schedule and/or costs for fiscal years 1997-98 are shown in figure 2.




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Figure 2: States Reporting Great or Very Great Impacts From Delays Caused by Relocating Utilities, Fiscal Years 1997-98




                                                                                                              U



                                                                                                    S

                                                                              S
                                                                                                                  S

                                                                                                            SCU
                                                       SC




         Increased length of project construction schedule
    S    Increased construction costs to state
    C    Increased costs to construction contractors
    U    Increased costs to other utilities




                                                        Source: States’ responses to GAO’s questionnaire.




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                       Although, as indicated by figure 2, most states did not report that delays
                       caused by relocating utilities had a great impact on the construction
                       schedules and costs of federal-aid highway and bridge projects, officials of
                       one national contractor association and several contractor companies told
                       us that states are not fully aware of the increased costs borne by
                       contractors because of these delays. This is because many states do not
                       reimburse their contractors for the costs resulting from delays caused by
                       relocating utilities and, therefore, the documentation supporting the full
                       impacts of delays is not sent to the states. Even in one state that provides
                       reimbursements, Rhode Island, four contractors that we met with told us
                       that, rather than take the time to gather the documentation and submit a
                       claim to the state, they find it easier to either absorb the increased costs or
                       simply factor an estimate of such costs into their contract bids.

                       State and contractor officials told us that contractors can lessen the
                       impact of some relocation delays by shifting their work crews to other
                       segments of the delayed project, or to entirely different projects until the
                       delayed work can be resumed. To illustrate, Idaho reported that about
                       95 percent of its projects had been affected by delays in relocating utilities.
                       Such delays caused the respective contractors to shift work crews and
                       adjust their schedules; thus, only about 6 percent of Idaho’s projects
                       actually resulted in contractual change orders or claims.


                       States can compensate contractors for delays caused by relocating utilities
States’ Compensation   by extending project completion schedules and/or paying contractors’
of Contractors         claims for increased costs. Claims due to delays in relocating utilities may
                       be included in the federal share of project costs provided to states.5
                       However, it must first be determined that (1) the utilities were relocated
                       prior to advertising for bids, or necessary coordination was arranged with
                       the utility company to avoid delaying the contractor, (2) approved state
                       procedures were followed, (3) construction work was delayed by the
                       utility company through no fault of the construction contractor, and
                       (4) the state exercised reasonable efforts to control the situation. Some
                       contractors in states that reimburse contractors for direct cost increases
                       resulting from delays told us that they usually do not have the time to
                       prepare the paperwork or that the expected reimbursement—along with
                       its timing—is simply not worth the effort to prepare the paperwork. Other
                       contractors told us that certain states require contractors to assume full
                       financial responsibility for delays caused by relocating utilities.

                       5
                        See Program Guide, Utility Adjustments and Accommodation on Federal-Aid Highway Projects, fourth
                       edition, Federal Highway Administration, U.S. Department of Transportation (Mar. 1998).



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Twenty-nine states responded that they provided both project time
extensions and reimbursements to contractors for cost increases resulting
from delays in relocating utilities in fiscal years 1997-98, 15 states provided
only time extensions, 1 provided only cost reimbursement, 5 provided
neither, and 1 responded that it did not know if it gave time extensions but
it did not provide cost reimbursements. The states responding that they
provided project time extensions and/or reimbursed contractors for cost
increases in fiscal years 1997-98 are shown in figure 3.




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Figure 3: States’ Responses Concerning Compensation of Contractors for Delays Caused by Relocating Utilities, Fiscal
Years 1997-98




      Project time extensions

      Reimbursed contractors' cost increases



                                               Source: States’ responses to GAO’s questionnaire.




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                     Thirty-three of the 44 states shown in figure 3 reported that in fiscal years
                     1997-98, they granted time extensions for delays caused by relocating
                     utilities that ranged from 1 to 912 days. Eleven of the 30 states that
                     compensated contractors for costs incurred as a result of these delays also
                     identified the dollar amounts compensated in fiscal years 1997-98. These
                     amounts ranged from $7,855 to $8 million per state and totaled
                     $15.4 million for the 11 states.


                     The states identified technologies used in locating and identifying utilities
States’ Use of       during the design process to facilitate utility relocations.
Available
Technologies     •   Computer-aided design and drafting (CADD) systems use computer
                     graphics technologies to design and map construction projects and
                     presents an expedient way to consolidate many different design aspects,
                     such as rights-of-way maps, into a common database, or base map.
                     Forty-three, or about 84 percent, of the respondents to our questionnaire
                     said that they had used CADD on more than half of their projects.
                 •   Vacuum extraction, which removes dirt and debris from test holes with a
                     vacuum, is one of the more accurate methods for the nondestructive
                     location of underground utilities. Seven states used it on more than half of
                     their projects.
                 •   Geographic information/global positioning systems are used for mapping
                     purposes. Geographic information systems use software and hardware to
                     develop an information database using coordinates of various land
                     features and mapping techniques. Global positioning systems represent a
                     newer method of providing ground control points for mapping purposes
                     by monitoring satellite signals; on-ground receivers pick up the satellite
                     information, which is then transferred to an attached computer. Fifteen
                     states reported they had used these systems on more than half of their
                     projects.
                 •   Subsurface utility engineering is used to incorporate new and existing
                     technologies to identify and map underground utilities during the early
                     development of a highway project. This engineering process might include
                     using vacuum extraction to help locate utilities and CADD or geographic
                     information systems for information management and mapping activities
                     critical to the design process. Having such information early in the design
                     process offers project designers the ability to redesign the project or avoid
                     existing utilities. Seven states reported that they had used SUE on more
                     than half of their projects.




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The states that reported that they had used these various technologies on
more than half of their projects in the design phase during fiscal years
1997-98 are shown in figure 4.




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Figure 4: States’ Responses Regarding Use of Selected Technologies on More Than Half of Their Projects, Fiscal Years
1997-98



             CADD
                                                                                                                            CADD
                                                                                                                                   CADD
                                                     GPS                                                                            GPS
                                                    CADD
         CADD                                                     CADD                                                             CADD
                                                                   GPS                                                              GPS
                       GPS                                                                                           CADD           SUE
                                                    CADD                     CADD
                      CADD                                                                                            GPS            VE
                                    GPS                                                     CADD                                    SUE
                                   CADD
                                                                                                              CADD                 CADD
                                                                      GPS
                                                                     CADD                                      GPS                 CADD
                                                    CADD
                SUE
                GPS                                                              CADD                                              CADD
                         CADD                                                            CADD
                                                                                                                                     VE
                                       CADD                                                                   VE
       GPS                                                                                             CADD CADD                    SUE
                                                                         CADD
        VE                                                                                                   SUE                   CADD
                                                                                              CADD
      CADD                                                                                                                          GPS
                                                                                                                GPS
                                                                                                                                     VE
                                                                                            VE                  SUE
                        SUE                                CADD                                                CADD
                         VE                                                                CADD
                       CADD                                              CADD                               CADD

                                                                                 CADD
                                                                                          CADD        GPS
                                                                                                     CADD
                                                                          GPS
                                                     CADD                CADD
                                                                                                       CADD




                                CADD




                                                                         CADD




                                          CADD   CADD

                                          VE     Vacuum extraction

                                          GPS    Geographic Information/Global Positioning Systems

                                          SUE    SUE



                                          Source: States’ responses to GAO’s questionnaire.




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Because we were specifically asked to examine SUE, we took a closer look
at its use among the states. FHWA has recommended the use of SUE to
accurately identify, characterize, and map underground utilities during the
design phase of a highway or bridge project. In April 1997, FHWA reported
several case studies to illustrate the cost savings or cost avoidances that
can result from using SUE.6 For example, Virginia made design adjustments
to a major highway project and eliminated 61 of 75 potential utility
conflicts with construction. By making the design changes, Virginia
reported that utility relocation work estimated to cost $731,425 was
avoided. With the cost of the project’s SUE activities totaling $93,553, a net
savings of $637,872 was reported. In another case, using SUE technology
enabled Maryland to redesign a project and thus reduce the length of gas,
water, and sewage lines needing relocation from 5,000 to about 400 feet for
each utility. SUE activities cost the project about $56,000, but Maryland
reported that the state and the utilities avoided over $1.3 million in
relocation costs that they otherwise would have incurred. Still another
example was a project in North Carolina, where vacuum extraction
technology was used in conjunction with SUE to precisely identify the
location of a water line running alongside 18 miles of roadway. According
to North Carolina, the process, costing about $10,000, resulted in
identifying approximately 4 miles of the water line that could remain in
place, thus helping the state and the utility company avoid about $500,000
in relocation costs.

We examined whether the states using SUE on more than half of their
projects performed better than the rest of the states in terms of having
fewer projects involving utility relocations, having less costly projects, or
having fewer delays caused by utility relocations. Five of the seven states
that indicated they used SUE on more than half of their projects also
included information on the numbers and costs of advertised projects, and
the delays of completed projects, which we used to compare with similar
information provided by many of the 32 states that reported that they were
not using SUE to any great extent. The results of our comparisons were
inconclusive. For the small number of states using SUE, we got mixed
results with respect to whether the use of SUE directly affected the number
of utility relocations, their costs, and any associated delays. These results




6
  Subsurface Utility Engineering, Federal-Aid and Design Division, Office of Engineering, Federal
Highway Administration (Apr. 1997).



Page 18                                                      GAO/RCED-99-131 Utility Relocations
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                                       indicated that other factors may be affecting the extent of utility
                                       relocations and the extent of the delays caused by utility relocations.7

                                       Under a July 1997 contract with FHWA, Purdue University is currently
                                       conducting a 2 1/2-year study to determine the effectiveness of SUE on
                                       reducing costs and delays on highway projects. This study is examining
                                       the use of SUE in North Carolina, Ohio, Oregon, Texas, Virginia, Wyoming,
                                       and Puerto Rico. A final report is due in late 1999.


                                       Incentives, penalties, and/or the courts were infrequently used to
Mitigation Methods                     encourage or compel utility companies to relocate utilities for federal-aid
Used                                   highway and bridge projects in a timely manner. Forty-one states used
                                       early planning and coordination, and 33 states used special contracting
                                       methods to help mitigate or ameliorate the impact of relocating utilities.
                                       Table 2 shows the number of states that reported that they used these
                                       mitigation methods or measures in fiscal years 1997-98.

Table 2: States’ Responses Regarding
Mitigation Methods Used by States,     Mitigation method                                                                   Number of states
Fiscal Years 1997-98                   Monetary incentives                                                                                        3

                                       Monetary penalties                                                                                         7

                                       Courts                                                                                                     2

                                       Early planning and coordination                                                                        41

                                       Special contracting methods                                                                            33

                                       Source: States’ responses to GAO’s questionnaire.




Use of Incentives                      Although three states provided monetary incentives to encourage utility
                                       companies to complete utility relocations on federal-aid highway and
                                       bridge projects, none of these incentives were contingent on the timely
                                       completion of the relocation work. For example, Delaware noted that it
                                       paid one of its construction contractors to perform the utility trench
                                       excavation for one utility relocation project. The second state, Missouri,
                                       stated that it pays utility companies for the state’s share of relocation costs

                                       7
                                        States’ identified the extent to which they used SUE on the basis of the projects in the design phase
                                       during fiscal years 1997-98. Our comparisons would be affected if the states significantly altered their
                                       use of SUE for projects advertised or completed during fiscal years 1997-98.



                                       Page 19                                                       GAO/RCED-99-131 Utility Relocations
                   B-280707




                   before the utilities begin work, subject to a final audit. Lastly,
                   Massachusetts pointed out that it reimburses utilities for 100 percent of
                   the costs of relocating utilities on bridge replacement projects. Under the
                   provisions of this program, Massachusetts makes the reimbursements
                   contingent on the utilities’ completing the relocation work on time. For
                   each day that the utility falls behind schedule, the state reduces the
                   amount being reimbursed. If relocating the utilities causes a contractor to
                   incur a delay that results in a claim, the cost of the claim would also be
                   deducted from the moneys due the utility. Although these provisions to
                   reduce payments for delays incurred are written into project agreements, a
                   Massachusetts highway official told us that these provisions have never
                   been used.


Use of Penalties   Seven states responded that they had assessed monetary penalties against
                   utilities that failed to complete utility relocations on federal-aid highway
                   and bridge projects in a timely manner. These states either charged the
                   utilities for the costs that the states incurred or for contractor claims paid
                   as a result of delays in relocating utilities. These penalties were not
                   directly tied to missed agreed-upon utility relocation dates but were
                   assessed on a case-by-case basis. In 1998, the state of Rhode Island, which
                   pays for all of the costs of relocating utilities on federal-aid highway and
                   bridge projects, considered legislation that would have required utilities to
                   relocate their facilities within 30 days of receiving notice. If utilities were
                   not relocated within that time, Rhode Island’s department of
                   transportation would have been permitted to contract for the relocation
                   with a private company, and the utility company would had to have paid
                   for the cost of the contract. The utilities successfully argued that having
                   them pay for the relocations would increase the cost to their utilities’
                   customers, and the proposed legislation was not enacted.


Use of Courts      The courts are seldom used to discipline utility companies for untimely
                   utility relocations. Only two states reported using the courts over the past
                   2 years. Kentucky responded that it had used the courts very infrequently,
                   and Texas responded that it had used the courts on only one occasion.
                   Officials from Maryland, which has not used the courts, questioned
                   whether the state could be successful in court because it would be
                   difficult to show that the utility was at fault. The officials said that the
                   state would need to demonstrate that (1) it or the construction contractor
                   had notified the utility company in a timely manner of the work to be done
                   and (2) the utility had not been kept from doing its relocation work. An



                   Page 20                                        GAO/RCED-99-131 Utility Relocations
                                 B-280707




                                 official from Maine pointed out that his state works closely with utility
                                 companies to resolve problems and conflicts. He expressed concern that
                                 litigation would jeopardize the positive working relationship that exists
                                 between the Maine department of transportation and the utilities. Officials
                                 in several of the states we visited echoed this comment.


Early Planning and               Forty-one states responded that they used early planning and coordination
Coordination                     methods to help avoid or reduce delays in relocating utilities and their
                                 impacts on highway and bridge projects. For example, various states were

                             •   providing much earlier—in some instances 5-year—notices of upcoming
                                 projects;
                             •   inviting utility companies to meetings early in the design phase of a
                                 project;
                             •   holding monthly, quarterly, or other periodic planning/coordination
                                 meetings;
                             •   providing advanced rights-of-way and utility relocation funding before the
                                 highway and/or bridge construction work was funded; and
                             •   improving coordination efforts and working relationships.

                                 Illustrative of some of the actions being taken by states to deal with utility
                                 relocation concerns, the Texas department of transportation recently
                                 developed and adopted what it calls its Utility Cooperative Management
                                 Process. This process was put together as a means of discovering and
                                 incorporating utilities’ concerns into the planning, design, acquisition, and
                                 construction phases of project development. Texas recognized, as have
                                 many other states, that early coordination provides for more efficient
                                 highway design, economical utility relocation, and reduced construction
                                 costs. Texas’s goal is to (1) accommodate utilities during the planning and
                                 design phase and (2) when utility adjustments are necessary, implement
                                 an adjustment plan that is compatible with the state’s established contract
                                 award scheduling and construction sequencing.


Use of Special Contracting       States are using special contracting methods to help mitigate relocation
Methods                          delays. One way of reducing conflicts between construction work and
                                 relocation work is to include the relocation work in the construction
                                 contracts; thus, giving the construction contractor more control over all
                                 the work. Fifteen states—Alabama, Alaska, Colorado, Delaware, Georgia,
                                 Kentucky, Louisiana, Maine, Maryland, Missouri, Montana, New
                                 Hampshire, North Carolina, Ohio, and South Carolina—have included



                                 Page 21                                       GAO/RCED-99-131 Utility Relocations
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utility relocation work, such as that for water and sewer lines, directly in
construction contracts for certain projects.

Another contracting method used by nine states—Louisiana, Maine,
Maryland, Mississippi, Missouri, North Carolina, Ohio, Oregon, and Rhode
Island—is to separately contract the site clearing and preparation work
and allow utility companies the time to relocate their lines and facilities
before the state advertises the highway construction project. A state
transportation official told us, however, that such a phased approach can
generally extend the length of each job. Some representatives of utility
companies told us that they are reluctant to relocate utilities too soon
(e.g., before a construction project starts) because of the possibility of
subsequent project redesigns and the need for them to come back and
redo what they have already done.

Partnering is still another mitigation method mentioned by 11
states—Alaska, Connecticut, Delaware, Indiana, Kansas, Kentucky, Maine,
Massachusetts, Michigan, Nebraska, and Texas. This method, which is
advocated by at least one national contractor association, seeks to remove
the adversarial relationships that sometimes exist between states,
contractors, and utility companies and replace them with business
relationships that are based on common goals and a desire to work
productively together.8 According to the contractor association, partnering
does not change nor release any of the contractual requirements but helps
all parties recognize that a basic tenet of contract law is to act in good
faith. A Massachusetts highway official explained that partnering has been
used on large projects. State, contractor, and utility company officials
involved in the project meet weekly or biweekly to discuss all issues and
resolve problems. This official said that partnering helps improve
communications and reduce delays but that it does not resolve all delay
problems. He explained that when conflicting demands for a utility
company’s resources arise, relocating utilities may receive a lower priority
by the utility company because it entails expending resources as opposed
to doing something that generates income.

Contracts associated with very large federal-aid highway and bridge
projects sometimes contain unique features involving utility relocations
because of the magnitude of the relocation work. For example, the
ongoing Interstate-15 Project in Salt Lake City, Utah, is a
multi-billion-dollar, 17-mile project that involves the relocation of the lines
and facilities of about 45 utility companies and must be completed in time

8
 See Partnering: A Concept for Success, The Associated General Contractors of America (Oct. 1991).



Page 22                                                    GAO/RCED-99-131 Utility Relocations
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               for the 2002 Winter Olympic Games. As a means of facilitating the
               relocation of utilities on this time-critical project, agreements were
               reached whereby the relocation work of all but one of the utilities is being
               done by the construction contractor. The electric utility company is the
               only holdout, preferring to remain in charge of its relocation work.
               Performing the utility relocation work gives the contractor more control
               over this work, thus reducing the coordinating and work-sequencing
               problems that might otherwise arise.

               Another example of a very large highway and bridge project is the $10.8
               billion Central Artery/Tunnel Project in Boston, Massachusetts. This
               project involves hundreds of miles of gas, electric, sewer, telephone, and
               other utility lines and facilities that needed to be moved out of the path of
               the new highway. At the time of our visit to the project in September 1998,
               the utility work was more than 80-percent complete. Project officials
               attributed the success they had in relocating the utilities to their ability to
               (1) obtain utility companies’ involvement from the start and throughout
               the design process; (2) require construction contractors to build the ducts
               and conduits and the utilities to perform the hookups, such as cutting and
               splicing cables; (3) enhance project coordination by having each utility
               provide an employee liaison; and (4) use SUE early in the design process.
               Project officials estimated that the costs of relocating utilities for the
               Central Artery/Tunnel Project will total about $1 billion, including about
               $150 million that represents reimbursements to the various utilities for
               their relocation costs.


               The relocation of utility lines and facilities is an integral part of many
Observations   highway and bridge construction projects. Project construction is often
               delayed when utilities are not relocated in a timely manner for the
               construction work to proceed. There is no one solution to this problem.
               Each highway or bridge project is different, with its own set of
               circumstances, and must be dealt with accordingly by those involved in
               the project. The highway and bridge projects that have proceeded most
               smoothly are those that involved a lot of coordination, cooperation, and
               communication between the various project participants early in the
               project’s design and throughout the project. However, delays in relocating
               utilities may become even more pronounced in the future. Increased
               funding provided under TEA-21 for highway and bridge construction
               currently and in the years ahead is expected to result in increased
               (1) numbers of ongoing highway and bridge construction projects and
               (2) demands on the resources of state transportation departments,



               Page 23                                        GAO/RCED-99-131 Utility Relocations
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                  construction contractors, and utility companies. Because the resources
                  available for utility relocation work are already stretched thin, utility
                  relocation delays will continue to demand attention by all project
                  participants.


                  We provided the Department of Transportation with a draft of this report
Agency Comments   for review and comment. The Department generally agreed that the facts
                  have been accurately and fairly presented in the report.


                  To assess the impact that delays in relocating utilities are having on the
Scope and         delivery and cost of federal-aid highway and bridge projects, we
Methodology       conducted various literature searches. We met with officials from FHWA
                  headquarters, the American Society of Civil Engineers, and several
                  subsurface utility engineering companies. We visited nine states and met
                  with officials from FHWA, state departments of transportation, and
                  construction and utility companies. We visited Delaware, Maryland, North
                  Carolina, and Virginia because of their proximity to Washington, D.C. We
                  visited Connecticut because construction contractors in the state brought
                  the issue of utility relocations to Congress’s attention. Massachusetts and
                  Utah were selected because of the large highway project going on in each
                  state–the Central Artery/Tunnel Project in Massachusetts and the I-15
                  Project in Utah. Both are large-dollar projects involving extensive utility
                  relocations. Rhode Island was selected because its state legislature
                  recently considered a bill that would impose a penalty on utility
                  companies that failed to relocate their utilities within 30 days. Texas was
                  selected because several officials we met with mentioned its utility
                  relocation activities.

                  We also met with representatives of the Connecticut Road Builders
                  Association, Construction Industries of Massachusetts, Construction
                  Industries of Rhode Island, the Associated General Contractors of
                  America, and Bell Communications Research. We contacted, by telephone,
                  officials from the Baltimore City Public Works, Maryland Public Service
                  Commission, Electric Power Research Institute, and American Road and
                  Transportation Builders Association. We attended a forum on utility
                  relocation delays hosted in July 1998 by the Construction Automation &
                  Robotics Laboratory, North Carolina State University; a national utility
                  relocation conference held in Louisville, Kentucky, in October 1998; and a
                  Utility/Contractor Forum hosted in October 1998 by the Connecticut
                  department of transportation.



                  Page 24                                      GAO/RCED-99-131 Utility Relocations
B-280707




Finally, on the basis of information we obtained through the above efforts,
we prepared a questionnaire and mailed it to the highway departments of
each of the 50 states and the District of Columbia. We received responses
from all 50 states and the District of Columbia, which we summarized and
analyzed. The responses provided us with general information regarding
the extent, causes, and impacts of delays caused by relocating utilities in
each of the states and some information on how each state is responding
to the problem.

We performed our work from July 1998 through May 1999 in accordance
with generally accepted government auditing standards.


We are sending copies of this report to the Honorable Rodney E. Slater,
Secretary of Transportation; Kenneth R. Wykle, Administrator, Federal
Highway Administration; the Honorable Jacob J. Lew, Director, Office of
Management and Budget; state departments of transportation; interested
congressional committees; and other interested parties. We will send
copies to other interested parties upon request. Major contributors to this
report are listed in appendix II.




Phyllis F. Scheinberg
Associate Director, Transportation Issues




Page 25                                      GAO/RCED-99-131 Utility Relocations
Contents



Letter                                                                                               1


Appendix I                                                                                          28
Summary of States’
Responses to GAO’s
Questionnaire
Appendix II                                                                                         35
Major Contributors to
This Report
Tables                  Table 1: States’ Responses Identifying Reasons for Delays in                 8
                         Relocating Utilities
                        Table 2: States’ Responses Regarding Mitigation Methods Used                19
                         by States, Fiscal Years 1997-98


Figures                 Figure 1: States’ Responses Regarding Percentages of Federal-Aid             6
                          Projects Involving Utility Relocations That Were Delayed, Fiscal
                          Years 1997-98
                        Figure 2: States Reporting Great or Very Great Impacts From                 11
                          Delays Caused by Relocating Utilities, Fiscal Years 1997-98
                        Figure 3: States’ Responses Concerning Compensation of                      14
                          Contractors for Delays Caused by Relocating Utilities, Fiscal
                          Years 1997-98
                        Figure 4: States’ Responses Regarding Use of Selected                       17
                          Technologies on More Than Half of Their Projects, Fiscal Years
                          1997-98




                        Abbreviations

                        CADD       computer-aided design and drafting (system)
                        FHWA       Federal Highway Administration
                        GAO        General Accounting Office
                        SUE        subsurface utility engineering
                        TEA-21     Transportation Equity Act for the 21stCentury


                        Page 26                                     GAO/RCED-99-131 Utility Relocations
Page 27   GAO/RCED-99-131 Utility Relocations
Appendix I

Summary of States’ Responses to GAO’s
Questionnaire




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Summary of States’ Responses to GAO’s
Questionnaire




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Summary of States’ Responses to GAO’s
Questionnaire




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Summary of States’ Responses to GAO’s
Questionnaire




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Summary of States’ Responses to GAO’s
Questionnaire




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Summary of States’ Responses to GAO’s
Questionnaire




Page 33                                 GAO/RCED-99-131 Utility Relocations
Appendix I
Summary of States’ Responses to GAO’s
Questionnaire




Page 34                                 GAO/RCED-99-131 Utility Relocations
Appendix II

Major Contributors to This Report


                        Sumikatsu J. Arima
Resources,              Paul D. Lacey
Community, and          Ralph W. Lamoreaux
Economic                Luann M. Moy
                        Earl P. Williams, Jr.
Development
Division, Washington,
D.C.
                        Helen T. Desaulniers
Office of the General
Counsel, Washington,
D.C.




(348097)                Page 35                 GAO/RCED-99-131 Utility Relocations
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