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Conservatively Speaking

State Senator Mary Lazich (R-New Berlin) represents parts of four counties: Milwaukee, Waukesha, Racine, and Walworth. Her Senate District 28 includes New Berlin, Franklin, Greendale, Hales Corners, Muskego, Waterford, Big Bend, the town of Vernon and parts of Greenfield, East Troy, and Mukwonago. Senator Lazich has been in the Legislature for more than a decade. She considers herself a tireless crusader for lower taxes, reduced spending and smaller government.

State Audit: Construction Engineering in State Highway Projects

Audits

 

The Legislative Audit Bureau (LAB) has completed a review of the part constructions engineers play in the Department of Transportation’s (DOT’s) quality assurance on state road projects. The review was made following a complaint reported to the state’s fraud hotline  and is critical since the state will receive $529.1 million in federal stimulus funds, primarily for state highway construction.

Construction engineers, who include both DOT staff and private consultants, are responsible for making sure highway projects are built according to requirements stipulated in contracts. The LAB found that construction contractors measured pavement thickness less frequently than required on 11 of 20 projects begun from fiscal year 2006-07 through fiscal year 2007-08.

Here is important background.

A
ccording to the initial complaint, when the LAB contacted the DOT after receiving a call on the fraud hotline, it learned that allegations were received by the DOT during 2004, claiming contractor Streu Corporation was not meeting concrete thickness requirements. The allegations raised questions whether the DOT was taking proper steps to make sure Streu Corporation was compliant.

The source of the complaint was a former Streu worker who said not only was Streu  using less concrete than specified by the DOT, it was then falsifying thickness measurements in order to increase profits. The complainant also said Streu intentionally submitted false smoothness measurements to obtain greater incentive payments for surpassing DOT requirements. The allegation was that Streu was supposed to measure smoothness over an entire paved surface of road. Instead, Streu repeatedly moved its measuring equipment over the smoother portions of construction.

Allegations were referred by the DOT to the Department of Justice (DOJ) during December 2004 that centered on the concrete thickness issue rather than the smoothness, thinking it was not feasible to duplicate the smoothness measurements taken by Streu since the roads were open to traffic. 


By July 2005, the DOT secured pavement samples for three selected projects completed by Streu before 2003, and the DOT’s measurements of concrete thickness compared to those taken by Streu were significantly different.

In one of two projects constructed by Streu on Highway 151, thickness
measurements in 27 of 40 samples taken by DOT staff indicated Streu did not comply with DOT’s concrete thickness requirements, and eight of these samples were “nonconforming” because the concrete failed to meet the required specifications by more than 3/8". In the second project, 24 of 41 samples taken by DOT indicated the concrete did not comply with thickness requirements, and 16 were nonconforming. For the third project reviewed on Highway 51, the DOT found that 17 of 30 samples did not comply with thickness requirements, although none were nonconforming.

According to the LAB, “DOJ officially closed its investigation of Streu in January 2008, citing insufficient evidence to pursue criminal charges. At that time, DOT considered its legal options, including whether to prohibit any additional Streu employees from performing future highway construction work or whether to pursue civil action against Streu. Ultimately, DOT chose not to pursue any additional action because Streu’s owners had already been barred from performing construction work and DOT had received restitution from Streu as part of federal bid-rigging settlement. In addition, because of the time that had passed, many of the individuals involved were no longer employed by Streu, and Streu’s ownership had changed.”

During December 2008, the LAB announced it would conduct a review of the role of DOT contractors because of the significant amount of funding for Wisconsin roads and because of the LAB’s initial findings. The goal was to determine if appropriate monitoring safeguards are in effect.

The LAB specifically examined projects begun from fiscal year 2006-07 through fiscal year 2007-08, finding none of the 20 reviewed with measurements that indicated unacceptable concrete pavement thickness. However, 11 of the 20 projects involved contractors that measured the concrete pavement’s thickness less frequently than contractually required. State staff served as the lead
construction engineer on seven of the 11 projects, while consultants served in that role on the other four. The LAB says it is possible the measurements were actually taken but not documented, however the LAB cannot independently confirm this.

As a result of the audit, the DOT says it has changed its quality assurance practices. However, the LAB has issued additional recommendations:

The DOT should electronically track the extent to which consultants serve as construction engineers on each state highway project, including whether
they serve as the project leader or as inspectors.

The DOT should ensure that contractors measure the thickness of concrete pavement on state highway projects as frequently as required and that construction engineers verify the contractors’ measurements.

The DOT should use core samples to verify concrete thickness on at least a sample of state highway projects annually.

The DOT should report to the Joint Legislative Audit Committee by August 31, 2009, on the improvements it plans for measuring and verifying the roughness of concrete pavement on state highway projects.

The DOT should report to the Joint Legislative Audit Committee by August 31, 2009, on the steps it has taken to ensure construction engineers complete the required tests on concrete materials, review the necessary certifications, and electronically document the results of these quality assurance activities.

The DOT should report to the Joint Legislative Audit Committee by August 31, 2009, on the actions it has taken in response to the Federal Highway Administration’s December 2008 review of its policies regarding nonconforming construction materials.

You can see the full audit report here. 

As a member of the Joint Legislative Audit Committee, I once again applaud the LAB for another outstanding review, and I am pleased to see the state’s fraud hotline serving its purpose for the benefit of taxpayers.

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