How then-Gov. Allen messed up Va.'s Dept. of Transportation

Virginia's Department of Transportation is plagued by lengthy project delays, multimillion-dollar budget overruns, a lack of oversight and a severe personnel shortage, leading local officials to question how the agency will complete a decade of planned road-building in Washington's Virginia suburbs and elsewhere.

In Northern Virginia, where a quarter of the state's road construction takes place, the widening of the Dulles Toll Road and completion of the Fairfax County Parkway are a combined $35 million over budget and months behind schedule. The state also will have to shell out at least $22 million to cover overruns in two high-technology projects aimed at moving traffic faster through Northern Virginia by synchronizing traffic signals.

VDOT, or VEE-dot, as many Virginians call the agency, has had trouble rebounding from the loss of about 1,300 employees in the last four years, most from former governor George Allen's $40 million buyout program that trimmed what Allen said was a bloated state bureaucracy. It led VDOT to turn over much of its road design and maintenance work GÇô worth hundreds of millions of dollars GÇô to private firms.

The abrupt exodus of about 11 percent of VDOT's work force GÇô including many of its most experienced engineers GÇô also accelerated long-simmering problems at the agency, which controls virtually everything having to do with building and maintaining roads and bridges in the Old Dominion.

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The buyout program has left VDOT short of experienced senior managers at a time when Congress is showering the state with unprecedented federal money GÇô $671 million a year over the next six years GÇô for a building program that includes a $320 million highway interchange at Springfield and the state's share of the $1.6 billion project to replace the Woodrow Wilson Bridge.

Questions about the buyout program come as frustrated officials from Fairfax to Tidewater, who for years have not criticized VDOT out of fear they would offend the state agency that controls local road money, now are openly wondering about VDOT's ability to finish those and other projects on time and within budget.
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"VDOT's process is broken," said James K. Spore, city manager of Virginia Beach, where delays in six of eight major road projects have annoyed tourists, residents and businesses. "A few months you can understand. But some cases are more than double the estimated completion time. There's just no sense of urgency there."

Part of the problem, state auditors say, is that the engineers who remained at VDOT after the buyout program have been overwhelmed with work.

Many of VDOT's remaining employees have told auditors they can't finish their duties on time, which the employees said leads to more delays and mistakes in the design of road and bridge projects.

Managers in the critical division that designs road projects, which has lost 50 of its 250 employees since 1991, have told auditors that they don't have the time or people to properly oversee all their work. Engineers manage an average of 23 projects at a time GÇô three times the average in the private sector GÇô and some juggle as many as 60 projects. Overtime expenses are up 19 percent since 1995, or about $3 million a year.

Meanwhile, local officials point to several recent cases in which they say VDOT's oversight was lacking: A senior engineer was sent to jail after stealing $366,000 from the Dulles Toll Road automated toll-collection project, and another manager was suspended after building up a $550,000 overrun in the popular program in which roving VDOT trucks assist stranded motorists.
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Though the VDOT job cuts started under then-Gov. L. Douglas Wilder (D) in 1991, most of the cutbacks came under Allen's work force reduction program, which gave workers as much as a year's salary as an incentive to leave the agency.

Allen's transportation secretary, Robert E. Martinez, said he allowed all VDOT employees who applied for the program to leave, a calculated risk because he said he knew "a few people would leave who you wish didn't."

The result was an exodus of about 1,000 people, which could cause VDOT headaches as the agency plans for a federal building program that will increase the U.S. government's contribution to the state's road fund by 62 percent. Finding qualified help could be a challenge; VDOT is having trouble filling dozens of existing vacancies.

"The cuts were not made as part of a strategic plan but as a result of a blunt, across-the-board decision to simply cut," said former governor Gerald L. Baliles (D). "VDOT has lost people with institutional memory and invaluable experience. That has a downstream effect, as projects back up and congestion increases."

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Another senior VDOT administrator said that veteran private consultants GÇô some of them former managers at VDOT GÇô won't take direction from engineers with substantially less experience who still work for the agency. As a result, the "consultants tend to assume control of the projects," the commission said. A spokesman for the state's consulting engineers association, Tim Stowe, denied that this happens.

State auditor Walter J. Kucharski said he has warned VDOT officials of the potential for abuse by private contractors and consultants, given their increased role. "VDOT is doing a ton of this stuff and needs to have better control over it," he said.

Kucharski, in a routine audit of VDOT, chastised the department for "inadequate monitoring" of the Dulles Toll Road automated toll-collection project. ***

"They need more oversight," said James E. Rich, a member of the state's transportation board during Allen's administration. "We have to institute a new system for overruns so they explain them better, and the board has to approve" them.

This costly, inefficient decision by George Allen is typical of someone who makes decisions by slogan and has no real business or administrative experience to guide him.  Privatization was a mantra of the GOP starting in 1980, and as an economist I support many privatization efforts.  However, one cannot just privatize on a massive scale without considering the consequences.  What economists call transaction costs -- the costs of the change -- must be considered.  Although a smaller VDOT may have been preferable, an experienced administrator would have foreseen that a gradual approach (e.g., reduction through attrition) would have avoided the problems described above.

I do not see that George Allen has ever done anything besides hold political office.  Perpetual officeholders are prime candidates for being bad administrators, because they do not understand the complexity involved in largescale projects. 

Someone experienced in the corporate world would have known, for example, that senior employees may possess a wealth of experience that cannot easily be compared with the replacement costs of a private sector substitute.  Perennial  officeholders typically do not understand that avoiding certain direct, short-term costs is not necessarily prudent if long-term costs inundate the short-term savings.

Thus you have the following paradox.  A private sector solution to a societal needs may indeed be better because of the profit motive, but the long-term officeholder may not possess the experience to carry out the plan successfully.

Having studied the government vs. private sector argument for some time, I have personally concluded that from an efficiency standpoint the optimal officeholder is one who has substantial experience outside government before assuming the complex management decisions inherent in government projects.

Although I have voted Republican the majority of times in my 26 voting years, the choice for me in this race is clear, not only because of Senator Allen's regressive social policies, but because Jim Webb seems to have experience in areas that are in scarce supply at the federal level.  There are very few legislators left in Congress who understand foreign policy and warfare from a practical standpoint.  I understand Jim Webb has some business experience involving Vietnam contracting.  These attributes seems far superior to those in Senator Allen's skills bank.

Thank you for listening. 

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