Keeping What You Paid For—Retaining Essential Consultant-Developed Knowledge Within DOTs (2017)

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1 1.1 Challenge: Sustaining and Building Agency Capabilities as Reliance on Outsourcing Increases Increases in DOT Outsourcing All departments of transportation (DOTs) have well-established processes for contracting out construction work and hiring consultants for data collection, bridge inspections, planning studies, and other activities. Over the past two decades, staff down- sizing and the pursuit of innovative project delivery methods have expanded outsourcing related to project delivery beyond traditional construction work. DOTs are outsourcing more of their design work and using consultant resources for diverse functions including right of way, construction engineering, maintenance, and operations. DOTs use consultants for many reasons: to deliver a program of work that is beyond the capacity of the agency workforce, meet tight deadlines, undertake complex projects, and/or access special- ized expertise that the agency does not have. In the current environ- ment where DOTs are constantly challenged to work smarter and improve efficiencies, agencies are increasingly looking to tap into external expertise. Knowledge Transfer Needs and Opportunities Internal agency staff are constantly learning from their experiences, building their skills, and developing the agency’s knowledge base. When consultants are engaged to do a project, they are also building skills and experience—but this experience is lost to the agency once the consultants or contractors complete their work unless deliberate steps are taken. In some instances, this is not a major issue of concern—for example, when the work being performed is similar to a commod- ity being purchased, i.e., standardized and delivered with sufficient documentation. However, when outsourced work is specialized or utilizes methods that represent a departure from the agency’s standard operating procedures, the need for knowledge capture and learning is greater. In addition, outsourcing can provide an opportunity for agencies to build internal capabilities by exposing staff to consultants who bring in-depth expertise and experience from working in a variety of situations. Once a consultant completes their assignment, agencies assume responsibility for the deliv- erables or products. At a minimum, sufficient knowledge transfer from consultant to DOT staff C H A P T E R 1 Introduction

2 Keeping What You Paid For—Retaining Essential Consultant-Developed Knowledge Within DOTs must be undertaken to ensure that staff has an understanding of what was done, how, and why, so that they can adequately respond to issues as they arise in the future. For example: • Following completion of an urban roadway project involving special features to meet require- ments of the abutters, district staff need to understand why the design decisions were made— and pass on this information to their successors to make sure that the design requirements are considered as part of any future changes to the affected section. • Maintenance crews taking over a newly constructed storm water management facility need a good understanding of the inspection and maintenance requirements for the facility and how these impact its proper function. Requiring comprehensive documentation as part of the contract deliverables is an important part of the solution to meeting these knowledge transfer needs, but even the best documentation will not necessarily provide the kind of in-depth understanding necessary for answering ques- tions about what was done or internalizing and applying lessons learned. More active interaction between the consultant and the staff is needed for true learning to occur. Ideally, opportunities will be provided during the course of the work to discuss not only the basis for decisions but also to identify lessons learned that could be applied going forward in order to avoid repeat mistakes and improve agency efficiency and effectiveness. Developing a knowledge transfer strategy for outsourced work needs to take into account which capabilities and areas of expertise are to be retained in-house. The agency may make the decision to not build (or maintain) certain types of expertise. In this situation, a DOT may engage a contractor to perform some work with no expectation or need for in-depth knowledge transfer beyond delivery of appropriate documentation. Conversely, a DOT hiring a vendor to build a custom database application will likely want ongoing knowledge transfer to in-house staff so that when the vendor is finished, they are able to take over maintenance of the system. An agency also may hire a consultant with specialized expertise to do a project as part of an internal staff team in order to build this type of expertise within the agency. It is important to recognize that knowledge transfer in an outsourcing arrangement involves a two-way flow of knowledge—not only from contractor to agency but from agency to contractor. Depending on the nature of the work, agencies may spend considerable time and effort to get a new contractor up to speed about the work to be done, the context, information sources, key contacts, etc. Good internal documentation of agency business processes and systems can facili- tate this effort. If this type of documentation does not exist, the agency could use the contract as an opportunity to fill in the gaps and augment the existing base of information as the contrac- tor learns the ropes. Knowledge transfer can be viewed as a cycle with knowledge flowing from agency to contractor, then back to agency, then on to the next contractor, and so on. Purpose of this Guide This guide was developed to help DOTs identify and implement strategies for capturing and learning consultant-developed knowledge. Its premise is that DOTs have opportunities to grow their internal staff capabilities by putting in place a standard set of practices for knowledge cap- ture and learning associated with outsourcing activities. In the absence of a proactive knowl- edge transfer approach, DOTs are not gaining full value from their consultants. In some cases, they may be increasing their risk exposure. Many DOTs have recognized the need for improving internal knowledge management prac- tices to address loss of institutional knowledge resulting from employee retirement and staff making mid-career job changes. Many of the same techniques for knowledge capture and learning

Introduction 3 are applicable for both internal staff and external contractors. Therefore, it makes sense for DOTs to incorporate planning for external knowledge capture as part of their overall workforce development and knowledge management strategies. It is important to note, however, that strategies for knowledge capture from consultants need to consider factors that do not come into play for internal knowledge management. These fac- tors include avoiding conflicts of interest and appearance of favoritism, ensuring adherence to procurement rules and regulations, managing consultant–staff relationships where tensions may exist related to compensation disparities, and the need to be explicit about knowledge transfer expectations within formal contractual agreements. 1.2 Terminology This guide uses terms that may mean different things to different people. Definitions of these terms, as used here, are provided below to afford a common foundation for the material that follows. Learning. A process by which a person gains knowledge through experience, study, instruction, or interaction with others. Knowledge. The basis for a person’s ability to take effective action or make an effective decision. Declarative Knowledge. Knowledge about concepts, things, relationships typically gained through “book learning.” Procedural Knowledge. Knowledge about how to perform an activity; typically gained through experience, including know-how, insight, judgment, and intuition that is inherently difficult to communicate. Knowledge Generation. A process by which new knowledge is discovered by a person or an organization through activities such as research, synthesis, and problem solving. Knowledge Capture. A process by which knowledge is elicited and made available for others to learn, typically involving a knowledge codification step to organize and record knowledge for later re-use; this may include interviews, presentations, story-telling, and documentation as formal capture and may include distillations of essential facts; checklists; descriptions of methods, techniques or procedures; interpretations of events; insights about cause and effect; advice or rules; and warnings about “red flags” as captured and codified knowledge. Knowledge Transfer. A shorthand term for the combination of knowledge capture and learn- ing; may occur through direct person-to-person interaction, as in a mentoring situation, or through a multi-step process in which knowledge is first captured and recorded (e.g., in a set of training materials) and then later absorbed by a person through study or instruction. Information. Data and documents that have been given value through analysis, interpre- tation, or compilation in a meaningful form; may be produced through knowledge capture and codification and communicated via various media (e.g., manuals, training videos, and online courses). Organizational Capability. An organization’s ability to effectively meet its objectives. Figure 1 illustrates the cycle of knowledge building through learning, use and application of the knowledge, capture and codification of knowledge to produce information, and information management so that it can be discovered and used for the learning process.

4 Keeping What You Paid For—Retaining Essential Consultant-Developed Knowledge Within DOTs 1.3 Target Audiences This guide presents knowledge capture and learning techniques that agencies can use to facili- tate transfer of knowledge from consultants and contractors to agency staff. A variety of managers at different levels of a DOT may have an interest in identifying techniques to build internal staff capabilities, ensuring that essential information and knowledge is captured as part of consult- ing engagements, and leveraging consultant expertise and knowledge to improve efficiency and effectiveness in agency practices, standards and guidelines. Individuals in the following roles may benefit from the material presented: • Human resources and training managers, • Chief engineers and design office leads, • Innovative project delivery office leads, • Consultant procurement office leads, and • Engineering project managers. 1.4 Guide Content and Organization Chapter 2 presents a framework for developing knowledge capture and learning strategies in order to help DOTs understand when and why knowledge capture and learning strategies should be considered. Chapter 3 describes techniques for knowledge capture and learning, drawing upon a set of case studies at DOTs and other agencies. Appendix A presents detailed case studies of consultant knowledge capture and learning. Appendix B includes resources to support implementation of knowledge capture and learning techniques, as well as sources of further information. Figure 1. The knowledge and information cycle.