An Examination of the Montana Department of Transportations - - PowerPoint PPT Presentation

An Examination of the Montana Department of Transportation’s Maintenance Division

PERFORMANCE AUDIT AND RESPONSE TO HOUSE BILL 473 JUNE 2018 - 17P-07

Division Background

• Maintenance program preserves the highway surface, shoulders, roadsides,

structures, and traffic-control devices

• Just over 25,000 lane miles maintained
• 856.55 FTE in Maintenance and Equipment programs
• FY 2017 Expenditures: $126.1 million (mostly state special revenue)
• 117 maintenance sections; 10 maintenance areas; 5 administrative districts
• New maintenance management system

Maintenance Equipment, Outsourcing, and Cost Comparison

OBJECTIVE 1 AND HB 473

Maintenance Fleet Size Compared to Those of Other States

Sta tate te Montana Washington Idaho Wyoming Sou

• uth D

Dakot

• ta

Lane M Miles a as o

• f 2016

2016 25,125 18,478 12,341 15,726 17,921 Mainten enance F e Fleet eet S Size 3,948 4,800 3,830 4,000 4,782 Equipment p per L Lane M Mile 0.16 0.26 0.31 0.25 0.27 Public lic D Daily ily V Vehic icle le M Mile iles Travelled ( (DVMT) i in t thousands 23,523 91,351 24,873 17,543 17,119 Equipment p per t thousand D DVMT 0.17 0.05 0.15 0.23 0.28 Equipment Fl Fleet S Size a and L Lane M Miles B By S State

Equipment Fleet Composition and Age

• Light-duty vehicles are replaced more

frequently than heavy equipment

• Average ages of common classes:
• ½ ton pickup trucks – 5.5 years
• Dump (plow) trucks – 13.8 years
• Loaders – 20.6 years
• Trailers – 15.8 years

Average age of all division equipment is 14.1 years.

• 48% of division equipment is for

winter maintenance

• Specialized equipment is not

numerous and has clear uses

Equipment Replacement & Reduction

Average Years of Equipment Useful Life 15.3 Average Percent of Lifetime Currently Used 101% Average End of Life Mileage Standard 261,899

Equipment Reduction 2009 to 2017

• 23 of 38 classes reduced
• 6% overall less equipment than

in 2009

Number of Equipment Past Useful Life in Years 1,811 Number of Equipment Past End of Life Mileage 13 Number of Equipment Past Useful Life and Mileage 84 Total Equipment Due for Replacement 1,908 Percent of Equipment Past Useful Life 48.2% Percent Past Mileage Threshold 2.5% Percent Need Replacement 48.5%

Equipment Replacement Standards

Fleet Reduction Practices

• Process to regularly dispose of unneeded equipment
• Includes identification of underused equipment and

assessment of criticality of that equipment

• MDT has no formal standards for what constitutes

minimum usage for each class of equipment

Recommendation #1

Develop formal standards for annual equipment usage to better identify equipment no longer needed during its equipment review process.

Current Contracting Practices

• Volumes and types of work contracted is consistent with
• ther states
• Primary reasons to contract for services are lack of internal

capacity, lack of specialized staff, and legal mandates

• Much of what is readily outsourced is already contracted

Cost Composition

$3,673,779.44 $4,835,790.29 $138,640.04 $2,494,213.45 $1,075,275.67 $71,862.06 $495,807.35 $195,513.41

$0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 In-House Chip Seals Contracted Chip Seals In-House Crack Seals Contracted Crack Seals

Dollars Expended Type of Project

Expenditure Composition of Standard Main Crack Seals and Chip Seals Fiscal Years 2016 and 2017

MDT Labor and Equipment Paid to Vendor

Outsourcing Outcomes

• Large-scale efforts to privatize highway maintenance in other states

and provinces have been accompanied by challenges: costs, service level, and department flexibility and ability to manage contract

• Considerations of market competitiveness, capacity, and desire to

perform different types of work

Pavement Projects

• Overlays and Mill-and-Fills involve paving and are contracted
• Rut-Fills and other reactive projects done in-house
• Crack Seals and Chip Seals can be contracted or done in-house

Decision-making for contracting chip seal and crack seal projects

• Large projects are contracted
• Small projects are performed in-house
• Medium-sized projects can be performed either way
• No formal cost comparison; estimation
• Push to contract as much as possible
• Other factors include specialization and project timeframe

Recommendation #2

Institute a formal, quantitative cost comparison between contracted and in-house maintenance pavement preservation projects.

Maintenance Prioritization and Assessment

OBJECTIVE 2

Project Selection Process

• Pavement Management System

recommends specific treatments annually

• Projects selected by area and district

staff

• Little central oversight
• Reliant upon professional judgment

and expertise

• Maintenance chiefs weigh a number of

different factors variably

• Process is not documented

Area # Recommended by PvMS # Not recommended by PvMS Area A 4 2 Area B 4 1 Area C 15 4 Area D 4 5 Area E 8 3 Total 35 15

2016 and 2017 Projects in Visited Maintenance Areas

Recommendation #3

Develop procedures for and document the maintenance pavement project selection process to consistently

• ptimize and ensure accountability for these decisions.

Communication Between Divisions

• Rut-fill over center-line rumble strips; reinstallation and re-

striping

• Maintenance staff using work-zone signs that were

noncompliant for contractors Effects

• Direct costs: $7,000 for rumble strips; estimated $100,000

for sign replacement

• Harm to MDT’s reputation with partners in contracting

community and the general public

Recommendation #4

Develop formal lines of communication between Maintenance and Highways and Engineering divisions.

Assessment of Maintenance Activities

$0 $1,000,000 $2,000,000 $3,000,000 $4,000,000 $5,000,000 $6,000,000 $7,000,000 $8,000,000 $9,000,000 $10,000,000

2013 2014 2015 2016 2017

Labor Cost

Top Five Maintenance Activities by Labor Cost, Fiscal Years 2013 through 2017 Plowing, Sanding, Deicing Equipment Maintenance or Transportation Yard, Building, and Storage Maintenance Winter Roadway Inspection Debris Removal

Recommendation #5

Develop maintenance performance measures and goals.

Data Integrity

73, 89% 9, 11%

2016 and 2017 Chip Seal and Crack Seal Project Data in Management System

Accurate Contained Meaningful Error

Recommendation #6

Develop and implement a formal quality assurance process for maintenance management system data integrity.

Inventory Management and Asset Security

OBJECTIVE 3

What We Found

• Inventory and equipment management systems are effective and in

line with policy

• High-risk, non-consumable items like power tools not inventoried in

4 of 5 visited maintenance areas

• Variable security practices throughout the state
• Fencing, gate closures, key security practices
• Inconsistent theft reporting
• No formal security or theft reporting policy

Recommendations #7 and #8

• Develop and implement inventory standards and practices

for high-risk tools and equipment.

• Develop a statewide policy for proactive asset security and

theft reporting.