Colorado Auditor Finds Waste and Delay in State’s
Alternative Delivery Program
The Colorado Department of Transportation (CDOT) spent almost $4 billion on alternative delivery construction projects that bypassed the state’s low-bid practices, violated state laws, and led to the projects costing more than independent cost analysis indicated they should, according to a recently released Colorado performance audit.
The use of alternative delivery projects in Colorado followed the passage of state legislation in 2013 that allowed the department of transportation to loosen its strict adherence to low-bid procedures. That law, House Bill 13-1292, instead allows the state agency to consider factors other than cost when awarding bids. Alternative project delivery includes design-build and construction manager/general contractor (CMGC) contracting.
The audit reviewed 19 active alternative delivery projects CDOT managed during the fiscal year 2021 and 2022. In eight of those projects, the audit found that CDOT “did not fully use its project delivery process” for deciding when to forego low-bid procedures. This increased “the risk of choosing an unsuitable delivery method that could lead to cost and schedule overruns.”
In addition, the audit found that state officials ignored independent cost estimates they gathered when negotiating for alternative delivery work. This resulted in CDOT awarding contracts that were nearly $18 million more costly than independent estimates had suggested for 27 contracts on nine projects.
Although Colorado has trumpeted that alternative delivery projects saved time and money, the audit found that neither claim is supported by the evidence. In fact, one design-build project jumped by 25% over the original contract amount, escalating to a total $65 million cost. Another design-build project jumped up to a total $77 million cost, a 13% increase from the original contract, according to the audit.
In addition, the audit determined that significant delays had occurred in alternative delivery projects, with construction delays of nearly a year or more for such projects.
Read more in Yahoo Finance.