Lawmakers request info on NCDOT outsourcing after WBTV investigation

Updated: Mar. 9, 2017 at 7:12 PM EST
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RALEIGH, NC (WBTV) - State lawmakers have requested information from the North Carolina Department of Transportation on the comparative cost to hire private contractors versus using state employees for design and engineering services. The request comes just weeks after a WBTV investigation exposed questions about the increased use of private contractors at NCDOT.

Rep. Frank Iler (R-Brunswick) made the request during a meeting of the Joint Committee on Transportation Appropriations in the House of Representatives held Tuesday morning.

"The media back home has picked up and talked about our senator," Iler said, referring to State Senator Bill Rabon (R-Brunswick), who was the focus of WBTV's story. "Is there any report in the works whether we're saving money or not?"

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In response to the question from Iler, NCDOT Chief Engineer Mike Holder said the department was working on trying to quantify the cost of using state personnel versus outside contractors.

"Unfortunately, there's not any literature, there's not any whitepapers, there's not any AASHTO or TRB reports that exist that actually have done an exhaustive analysis and I think part of that is because it's very difficult," Holder said.

Holder told lawmakers NCDOT has agreed to pay a consulting company to study how much money NCDOT pays in overhead costs for its employees.

The focus on overhead comes after WBTV's investigation published line-item cost estimates from private consulting firms that showed the state was paying between 140% and 200% overhead, in addition to the cost of man-hours and other actual expenses.

LISTEN: Audio of committee hearing where lawmakers ask questions uncovered in a WBTV investigation

Currently, NCDOT does not have a way to track employee hours when they are spending time working on department tasks not associated with a specific project.

Holder told lawmakers that the outside consultant will help the department determine those overhead costs so that agency leaders can provide a closer apples-to-apples comparison with what it currently pays private firms for the same work.

"It will provide a much clearer and much more transparent picture of what the cost is for our in-house staff versus our external," Holder told lawmakers.

Iler's comments towards the end of the discussion seemed to indicate a desire to hold off on mandating any additional outsourcing—which the legislature has required in every budget since 2011—until there is proof that using private companies is actually saving money.

"Before we outsource, we don't have any proven statistics or facts to say that they can do it as efficiently and cheaper than the DOT workers are doing it," he said.

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