Accounting for Non-Construction Costs

I think I am going to get a bit of grief from those in the local programs world, especially the local governments on this subject. Time and time again I have seen projects set up where the initial cost estimate for the non-construction items are considerably underestimated.

Now, I think that I have taken enough time (for now) to beat a dead horse on the Uniform Act and Right of Way (ROW) acquisition. If you are going to acquire ROW on a TDOT Local Programs project (TDOT managed or Locally managed) there is a potential that it is going to cost a lot of money. I think that people get that.

What I don’t think local governments get is how much the other non-construction items cost the project. These things include the following:

  1. Survey-Everything to TDOT standards
  2. National Environmental Protection Act (NEPA) approval through the TDOT Environmental Office. This is a whole discussion in and of itself.
  3.  Initial Design Plans and their approval from TDOT, along with any revisions and comments that must be addressed.
  4. Obtaining all applicable permits, and whether permits are needed or not TDOT permit approval.
  5.  A Detailed Construction Estimate is submitted and must be approved by TDOT.
  6. Right of Way Certification- There is a process set up with this even if the project is completely within the existing ROW.
  7. Utilities Certification- Again this is another process even if there are no utilities affected by the project. Depending on the scope of the project and the utilities involved this can be something that can take lots of time and effort.
  8. Construction and ROW Plans-These are a more developed set of plans, and may required additional TDOT revisions and approvals.
  9. Bid Book Approval from TDOT. All TDOT Locally managed projects must use the TDOT format bid book. That may sound simple, but you would be surprised at how much effort this can take.
  10. Help with the Bid Process-After you receive the Notice to Proceed your engineering consultant group will help in getting the TDOT approved advertisement out, make sure that the bid process is to TDOT standard, then package the bid tabs up for approval by TDOT Construction. Your engineering firm will also follow up with TDOT to get a timely response back so that the project can be awarded.
  11. Organized and lead the Pre-Construction meeting. Making sure that the contractor, Construction Engineering Inspectors (CEI), the local government, and the right people from the TDOT Regional Construction and Materials and Test office attend.
  12. Construction Engineering and Inspection (CEI). This is another topic that could be it’s own discussion. Bottom line is that TDOT requires a lot CEI of activities  on all TDOT funded projects. You can look at the TDOT guidelines here to go into detail of what is required. Expect to pay 15%-20% of the total construction cost for CEI services.
  13. Reimbursement requests and Final Project Close out. Your consultant will help make sure that the local government is getting reimbursed promptly from TDOT and work with the TDOT Regional Office to close the project out.

As you can see your TDOT pre-qualified Engineering Consultant has a LOT of things that they are responsible for in this process. This is a lot of coordination and work. Remember all of these activities are REQUIRED BY TDOT. This is not just a bunch of stuff that us consultants are trying to make up in order to pad our bills. IT IS REQUIRED BY TDOT BECAUSE IT IS REQUIRED BY FEDERAL LAW. For the most part TDOT is not the one making up the rules. If there is Federal money involved, then there are Federal rules and laws to follow. That is all there is to it. 

Back to cost. All of the things that I listed above are legitimate project costs. If your project is set up for funding of Preliminary Engineering for NEPA, Final Design, or ROW then they can be billed to the project. Yes, this means that you will have less funding available for actual construction on your project. And yes, you must do all of the steps if you want to see one penny of the construction funds.

So how much do all those “Engineering” fees (items 1-13 cost)? They cost a lot. A minimum of $40-$50k. And no, there are not cutting corners. Not even on small projects. The engineering fees will be much higher on projects that are larger and more complex.

Doubt my credibility? Call a few other engineering firms and ask them what their estimate is for helping you to manage a TDOT project. Call Jerry Hughes (615-741-0808) or Freddie Miller (615-741-0835) of the TDOT Design Division and ask them how much TDOT pays for this kind of work to it’s consultant engineering firms on their projects.

This is  not something that you want to try doing on the cheap. Having the right consultant group working for you is the difference between having a partner who is working for and with you through this complex process, or a total nightmare.


About arran375

I work for Askew, Hargraves, Harcourt and Associates, Inc. here in Nashville, Tennessee. The short version of what I do is that we help local governments spend the Federal funds they get from TDOT on road, and bridge projects.
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