Forecasting Highway Construction Staffing Requirements (2013)

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5 chapter two GENERAL CONSTRUCTION INFORMATION FOR RESPONDING STATES This chapter examines the demographics of construction staff- ing at STAs, including general agency information (e.g., bud- get, state populations, average vehicle-miles traveled), types of projects performed (e.g., average project size, construction staff assigned), project delivery methods (e.g., public–private partnerships, design-build), and information on construction staff demographics (e.g., average age, average experience). This builds foundational knowledge for the current state of construction staffing across STAs. Data from this section were obtained primarily from the survey, but also include published data from FHWA, the U.S. Census Bureau, and the National Academy of Sciences. GENERAL TRANSPORTATION SYSTEM INFORMATION BY STATE From 2000 to 2010, of the 40 STAs that responded to the sur- vey, 39 states (97.5% of respondents) experienced an increase in population, 38 (95% of respondents) experienced an increase in total lane-miles within their road systems, 33 states (82.5% of respondents) experienced an increase in the number of highway bridges, and 35 (87.5% of respondents) experienced an increase in total annual vehicle-miles traveled (AVMT). Detailed infor- mation for each state is available in Appendix B. On average, from 2000 to 2010, state population from responding states increased by 9.47%, with only one state (Michigan) experienc- ing a population decrease. State managed lane-miles reported to FHWA increased by 4.10% during this time, with only two responding states (Nevada and Oregon) reporting a decrease in lane-miles, which may be the result of changes in reporting methods. The average number of state-managed highway bridges increased by 3.17%, with only seven responding states (Kansas, Louisiana, Nebraska, New York, North Dakota, Washington, and Wyoming) reporting a decrease. The average AVMT in the responding states increased by 8.25%, with only five states (Michigan, Oregon, Pennsylvania, Rhode Island, and West Virginia) reporting a decrease in AVMT between 2000 and 2010. To calculate the volume of construction performed within each STA the capital outlays for each state’s transporta- tion system is used by the U.S.DOT (n.d.), from reports of STAs to FHWA. The “Capital Outlay” category includes federal, state, and local funding spent on acquisition of right-of-way, preliminary and construction engineering, highway construc- tion, and system preservation for each STA. State disburse- ments of capital outlay for roads and bridges in state highway systems increased by an average of 52.31% between 2000 and 2010 (taking inflation into consideration). A significant portion of this substantial increase was the result of stimulus funds released through the American Recovery and Reinvestment Act in 2009 and 2010. When 2009 and 2010 capital outlays are not considered, the inflation adjusted average increase in capital outlays between 2000 and 2008 was 9.15%. Table 1 shows the distribution of frequencies for the increases in state population, total lane-miles, number of highway bridges, AVMT, and dis- bursement on capital outlay for the responding states. Of the 40 STAs that responded to the survey, 26 reported at least some information on the number of full-time equiva- lent (FTE) positions within their respective transportation agencies. It is important to note that to improve the response rate of survey participants, the respondents were asked to report on the number of FTEs within the entire transporta- tion agency, rather than asking the participants to collect data on the number of construction FTEs. The synthesis assumes that changes in FTEs across STAs can serve as a proxy with changes in construction FTEs during the same time period. Table 2 shows the change in FTE levels reported between 2000 and 2010. During this time, 15 states reported FTE levels for 2000, 2005, and 2010. Of these states, one (North Dakota) reported an increase in agency FTEs, three (Nebraska, Okla- homa, and Wyoming) reported no change in FTEs, and 11 (Georgia, Illinois, Kansas, Kentucky, Maine, Michigan, North Carolina, Oregon, Utah, West Virginia, and Florida) reported a decrease in FTEs. The average percent change in FTEs between 2000 and 2010 for the responding states was -9.68%, with six states reporting a decrease in FTEs greater than 10%. Table 2 also shows the change in FTEs per mil- lion dollars of disbursement on capital outlay by the respec- tive STA, with all 15 of the responding states reporting a decrease. The average percent change in FTEs per million dollars of disbursement on capital outlay in the respond- ing states is -37.26%, with ten states reporting changes in excess of 30%. The respondents to the survey were asked if they were “doing more with fewer people than [they] were 10 years ago”; 86.1% responded “yes” and 13.9% “no” (36 total responses). PROJECT DELIVERY METHODS The survey requested information on a number of different project development, funding, and delivery systems includ- ing design-build, public–private partnerships (PPPs), and

6 % Increase Population Lane-miles Bridges AVMT Disbursement on Capital Outlay <0 1 2 7 5 3 0–5% 12 25 24 7 4 5%–10% 12 11 8 14 0 10%–15% 8 1 0 8 1 15%–20% 4 0 0 5 1 >20% 3 1 1 1 31 Total 40 40 40 40 40 TABLE 1 DISTRIBUTION OF INCREASE IN STATE POPULATION, TOTAL LANE-MILES, HIGHWAY BRIDGES, AVMT, AND DISBURSEMENT ON CAPITAL OUTLAY FOR RESPONDING STAs TABLE 2 FULL-TIME EQUIVALENT POSITIONS FROM RESPONDING STAs State FTE Positions % Change FTE Positions per $ Million Disbursement on Capital Outlay % Change 2000 2005 2010 2000 2005 2010 California 23,444 21,035 20,796 9.1 8.65 3.73 Colorado Connecticut Delaware Florida 10,354 7,579 7,443 –28.11% 4.28 2.2 1.72 –59.81% Georgia 5,895 5,807 4,950 –16.03% 6 5.91 3.14 –47.67% Hawaii Idaho Illinois 8,000 5,750 5,270 –34.13% 4.96 3.49 1.96 –60.48% Iowa Kansas 3,304 3,247 2,916 –11.74% 5.61 5.41 4.84 –13.73% Kentucky 5,972 5,108 4,814 –19.39% 6.55 7.1 3.82 –41.68% Louisiana Maine 2,396 2,390 2,260 –5.68% 11.11 10.98 6.83 –38.52% Maryland 3,181 3.36 Massachusetts Michigan 3,244 2,872 2,863 –11.74% 2.84 2.57 2.1 –26.06% Minnesota Missouri 6,000 4.52 Montana 1,377 2.85 Nebraska 2,200 2,200 2,200 0.00% 5.76 6.71 5.72 –0.70% Nevada New Hampshire New Jersey 3,973 2.69 New Mexico New York 9,000 3.24 North Carolina 14,457 14,544 13,957 –3.46% 9.87 8.26 7.02 –28.88% North Dakota 1,040 1,044 1,055 1.44% 6.62 4.32 3.17 –52.11% Oklahoma 2,350 2,350 2,350 0.00% 3.01 5.79 1.91 –36.54% Oregon 4,727 4,559 4,550 –3.74% 13.21 7.43 6.04 –54.28% Pennsylvania 11,000 2.66 Rhode Island 200 230 1.28 0.94 Tennessee 4,800 4.2 Utah 1,920 1,820 1,753 –8.70% 2.78 4.48 1.49 –46.40%

7 warranty projects. Of the STAs responding to the survey, 27 (75%) indicated that their agencies have utilized design-build delivery systems for their projects, while 9 STAs (25%) indi- cated that their agencies did not use design-build delivery systems. Of the STAs utilizing design-build delivery systems, 16 (59.3% of respondents) indicated that they expect their agencies use of design-build contracts to increase over the next 10 years, 10 (37%) expected their use of design-build delivery systems to remain at the current level, and one (3.7%) expected its use of design-build contracts to decrease over the next 10 years. The survey did not collect data on the percent breakdown of total construction volume between delivery methods. Contractor-supplied warranties on highway construction projects were less common among the survey respondents than design-build contracts, with 14 STAs (38.9%) indicat- ing that their agencies used warranties on previous projects, while 22 (61.1%) indicated that their agencies did not use warranty contracts. Of the 14 STAs that used warranties, ten noted that they employed Construction Administration and Construction Inspection personnel to monitor warranty enforcement, and eight that they also use Construction Engi- neering personnel to monitor the warranty. The use of PPPs on highway construction projects was also rare among the STAs responding to the survey. Seven states (19.4% of respondents) indicated that their agencies had used PPPs for highway construction, while 29 states (80.6%) reported not using PPPs. Of the seven states that use PPPs, five expected their use to increase, while two expected the use of PPPs to remain at current levels. CONSTRUCTION PERSONNEL DEMOGRAPHICS Table 3 shows the reported average age range for construc- tion personnel within the responding agencies. The highest frequency range for average age was 40 to 50 years old. This range corresponds to a median age of 42 years for engineers employed in the general civil/architectural field (Abt. Associ- ates 2004). Figure 1 shows the distribution of the average experience range of construction staff for the survey respondents. The largest concentration of construction personnel experience for the responding STAs was in the 10 to 15 year range (43%). The survey also queried agencies concerning the union status of their construction staff; 24 states (63.2% of respon- dents) indicated their agency staff was represented by a union, whereas 14 states (36.8%) reported no union involvement. Of TABLE 2 (continued) State FTE Positions % Change FTE Positions per $ Million Disbursement on Capital Outlay % Change 2000 2005 2010 2000 2005 2010 Vermont 1,200 5.85 Virginia 7,000 7.26 Washington 7,000 4.15 West Virginia 5,100 5,000 4,900 –3.92% 7.57 8.75 6.56 –13.34% Wisconsin Wyoming 2,000 2,000 2,000 0.00% 8.45 8.81 5.14 –39.17% Average 6.73 5.82 4.01 –37.26% Age Range (years) Count Percentage 30–40 15 39.5 40–50 23 60.5 50–60 0 0 60–70 0 0 TABLE 3 REPORTED AGE RANGE OF CONSTRUCTION STAFF 5-10 years 27% 10-15 years 43% 15-20 years 22% 20-25 years 8% FIGURE 1 Average years of experience for construction staff.

8 Project Type Description Reconstruction Limited Access A project that utilized the existing alignment but may revise the profile, number of lanes, or drainage issues on a restricted access roadway (e.g., Interstate system). Reconstruction Open Access A project that utilized the existing alignment but may revise the profile, number of lanes, or drainage issues on an open access roadway (e.g., a road with signaled intersections and numerous access points). New Route A project that allows a new road system to be constructed on a new alignment (e.g., “greenfield” construction). Relocation A project that relocates a portion of an existing road onto a new alignment and grade. Bridge Rehabilitation A project that involves repairing an existing bridge (e.g., lane resurfacing, bridge widening). Bridge Replacement A project that involves the construction of a new bridge. Hancher and Werkmeister (2000). TABLE 4 DESCRIPTION OF GENERIC PROJECT TYPES FOR HIGHWAY CONSTRUCTION the 24 states with union representation, none reported that their union contracts specified minimum staffing levels for highway construction projects. To examine the impact of union contracts on STA staffing levels, an analysis of variance was performed comparing FTEs per million dollars of disbursement on capi- tal outlay between union and non-union states using the JMP version 9 software package. Making comparisons based on FTEs per million dollars of disbursement on capital outlay normalizes the data for managed system size across STAs. Figure 2 shows the output of a one-way analysis of variance. The analysis demonstrated that the average FTEs per million dollars of disbursement on capital outlay is slightly lower for union STAs (3.79) than for non-union STAs (4.31). However, as shown in this figure, the difference is not statistically sig- nificant (Prob > f is much larger than 0.05). TYPICAL PROJECT SIZE AND CONSTRUCTION STAFFING LEVELS Survey respondents were also questioned concerning the average project cost and construction staffing level for a typical project within their agency. Ten states supplied infor- mation on average project size and staffing levels. To ensure consistency among answers, the respondents were asked to categorize projects according to the generic descriptions of typical roadway construction projects as shown in Table 4. Although a basic description for each project type is pro- vided, it is important to acknowledge that survey respon- dents may differ in how they classify a specific project. Figure 3 shows the average project size (in $ million) for the responding agencies by project type. Figure 4 shows the average FTE staffing level for different project types. Fig- ure 5 shows the construction volume managed by one FTE by project type. The average project data reported shows that “reconstruc- tion limited access” and “new route” are the two largest proj- ect types in terms of both project size ($ million) and in terms of construction staff. Across project types, construc- tion inspection staff comprises the largest percentage of the overall construction project staff. There is some variation in construction volume managed per FTE across project type, with “bridge rehabilitation” showing the lowest construction volume per FTE. FIGURE 2 Analysis of variance for union and non-union FTEs per million dollars of disbursement on capital outlay.

9 using consultants. When compared with the reported 59% of responding STAs using consultant construction personnel in NCHRP Synthesis 146 (Newman 1989) and the 60% in NCHRP Synthesis 246 (Witheford 1997), this represents a significant increase in the number of STAs using consultant services for construction personnel. Figure 7 shows the construction staffing functions in which consultant personnel are typically employed. As would be expected, given the high levels of construction inspection staff- ing requirements for a typical project (Figure 4), construction inspection was reported as the most commonly outsourced function. STRATEGIES FOR ADDRESSING CONSTRUCTION STAFF SHORTFALLS To identify strategies that are most commonly used to meet staffing shortfalls, the survey asked the STAs to identify strate- gies that their state had used in recent years to address staffing issues (Figure 6). This figure shows that the most common strategy to address a staffing shortfall was the use of outsourced construc- tion personnel to perform construction duties. Thirty states (88.2%) reported using contract personnel (i.e., non-STA employees) to augment their permanent construction staff, whereas only four states (11.8% of respondents) reported not 17.53 15.28 20.88 10.85 2.95 8.16 0 5 10 15 20 25 Reconstrucon Limited Access Reconstrucon Open Access New Route Relocaon Bridge Rehabilitaon Bridge Replacement Si ze (M ill io n $) Project Type FIGURE 3 Average project size by project type (in $ million). 0 5 10 15 20 25 30 Reconstrucon Limited Access Reconstrucon Open Access New Route Relocaon Bridge Rehabilitaon Bridge Replacement N um be r o f F ul l T im e Em pl oy ee s (C on st ru c on ) Project Type Other Inspecon Engineering Administraon FIGURE 4 Average FTE construction staffing for a typical project.

10 Of the respondents reporting the use of smart phones or tablet computers, 60% indicated that the use of these devices has not affected the productivity of the construction person- nel. Forty percent of the respondents noted that the technology resulted in an increase in productivity, with a 10% productiv- ity increase being the most frequently cited. There are several potential hindrances to the impact of new IT on staff productiv- ity. There may be the limited availability of IT infrastructure at the project site. Discussions with several STAs indicated a resistance by their central office IT groups of allowing the use of wireless technology owing to concerns about data security. The limited availability of mobile applications specific to the transportation construction industry may also contribute to the low acceptance of IT. Finally, different levels of compatibility between current tablet operating systems and existing STA IT systems may prohibit the use of certain tablets. When examining the factors that contribute to the decision to use consultant construction personnel, the vast majority of respondents cited the lack of available personnel in-house to meet the staffing needs, followed by the lack of qualifications of in-house staff (Table 5). USE OF INFORMATION TECHNOLOGY BY CONSTRUCTION STAFF In recent years, information technology (IT) such as smart phones and tablet computers has seen increased use in the general business world. However, as Table 6 shows, the adoption of these technologies among responding agencies has been low. Table 7 shows that of those agencies using smart phones and tablet computers the most cited function for their use is smart phones for communication. 0 5 10 15 20 25 30 35 40 Reconstrucon Limited Access Reconstrucon Open Access New Route Relocaon Bridge Rehabilitaon Bridge Replacement $- M ill io n/ FT E Project Type Other Inspecon Engineering Administraon FIGURE 5 $ million/FTE by project type. 2.90% 8.80% 20.60% 20.60% 26.50% 35.30% 76.50% 88.20% 0.00% 20.00% 40.00% 60.00% 80.00% 100.00% Reduce work volume Other (Please idenfy): Reduce inspecon requirements Hire addional staff Transfer staff among districts Assign non-construcon personnel to construcon dues Place exisng staff on overme Outsource consulng dues % of Respondents Selected FIGURE 6 Strategies to address staffing shortfalls.

11 56.30% 81.30% 93.80% 9.40% 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00% Construc on Administra on Construc on Engineering Construc on Inspec on Other: Please iden fy: % o f R es po nd en ts Funcon FIGURE 7 Use of consultant labor by construction function. Factor Count Percent of Responses Lack of Availability of In-house Personnel 31 96.9 Cost 12 37.5 Qualifications Lacking In-house 22 68.8 Other 2 6.3 TABLE 5 FACTORS CITED IN MAKING THE DECISION TO OUTSOURCE CONSTRUCTION DUTIES INTEGRATED CONSTRUCTION AND MAINTENANCE PERSONNEL Some STAs have recently reorganized and combined some (or all) of their construction and maintenance personnel into a single district or regional organization in which personnel per- form both construction and maintenance duties. The results of the survey indicated that this type of reorganization is not widespread (Figure 8). Colorado, Illinois, Iowa, Kansas, North Carolina, Oklahoma, and Utah report fully integrated construction and maintenance divisions. Oregon does not have a specified maintenance division. Kentucky and New Jersey have organizations that have separate construction and maintenance divisions at the central office level, but have integrated construction and maintenance divisions at the dis- trict level. INVOLVEMENT OF CONSTRUCTION PERSONNEL IN THE PROJECT DEVELOPMENT PROCESS To determine the involvement of construction personnel in the project development process, respondents were asked to identify which of the project develop phases (Design, Bid, Contract Award Construction, and Project Closeout) their construction administration, construction engineering, and construction inspection personnel were involved with. The results are displayed in Figure 9. This figure shows that on average, construction administration staff has the highest percent involvement across the entire development process, whereas construction engineering and construction inspec- tion involvement peaks during the construction phase. It can be noted that the low indicated level of construction inspection involvement could indicate confusion concern- ing the question, as it would be expected that inspection personnel would be heavily involved with the construction process. OWNER-PERFORMED WORK STAs reported that 69.4% of the agencies do not self-perform construction work, while 30.6% reported some level of self- performed work. Of the states that do self-perform construction work, seven of eight respondents reported that self-performed work requires less oversight from construction administra- tion, engineering, and inspection personnel, whereas only one reported that self-performed work requires more oversight. One STA noted that there are reduced construction super- vision and inspection requirements on self-performed work because there is less need for workforce oversight. A different STA noted that its materials testing requirements are not as extensive on self-performed work. CHAPTER SUMMARY The data presented in this chapter demonstrate that, on aver- age, by any reported measure, the transportation systems managed by the responding states experienced increases in both the size and use of the road system managed between 2000 and 2010. The data also demonstrate that, on average, the responding states are managing these larger, more frequently

12 Separate Divisions 72% Integrated Divisions 17% Other (Please specify): 11% FIGURE 8 Construction and maintenance division organization. 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00% Design Phase Bid Phase Contract Award Phase Construcon Phase Project Close- Out Phase % R es po nd en ts S el ec te d Funcon Administraon Engineering Inspecon FIGURE 9 Involvement of construction personnel in project development phases. Information Technology (IT) Respondents Functions Using IT Construction administration Construction engineering Construction inspection Smart Phone 25% 27.5% 17.5% Tablet Computer 15% 10% 15% TABLE 6 USE OF INFORMATION TECHNOLOGY BY CONSTRUCTION FUNCTION Information Technology (IT) Respondents Using IT for: Communication Inspection Plans and specs Daily work report Change orders Smart Phone 32.5% 10% 7.5% 5% 5% Tablet Computer 12.5% 12.5% 15% 15% 12.5% TABLE 7 RESPONDENT USES FOR INFORMATION TECHNOLOGY

13 dent agencies were represented by unions, although no state reported minimum staffing requirements specifications in union contracts, and the difference in staffing levels between union and non-union agencies was not statistically significant when normalized to the size of the road network. Limited access reconstruction and new route construction were the largest types of projects executed, with construction inspec- tion comprising the greatest staffing requirements. Finally, the adoption of smart phones and tablet computers by con- struction personnel has been slow, with those who are using the technology reporting only modest gains in productivity. used road networks with fewer in-house FTEs than they were 10 years ago. The use of outsourcing among responding agencies to augment construction staff is significantly higher than was reported 15 years ago. However, the data collected in the synthesis does not provide insight as to how the com- bined number of FTEs of STA in-house personnel and con- sultant personnel compares with in-house personnel levels from 15 years ago. The majority of respondents indicated that their agencies employ design-build project delivery systems for some of their projects, whereas the use of warranties and PPPs was less common. Personnel at the majority of respon-