The Texas Department of Transportation (TxDOT) signed an historic first when it hired a private firm to oversee virtually all maintenance work on segments of its state highway system. Although the department has done privatization before, this marks the first time that it has given out a contract which includes total maintenance, according to Gaby Garcia, public information spokesperson for the department.
VMS Inc., the history-making company based in Richmond, VA, was awarded two five-year contracts totaling $31 million to handle all maintenance duties traditionally performed by TxDOT on I-35 around Waco and I-20 near Dallas.
One of two competing companies, VMS bid lower at $19.8 million for the I-35 project and $11.3 million for the I-20 — about 20 percent lower than TxDOT would have spent, according to Garcia.
In explaining its lower bid, VMS cited its flexibility over that of a state agency, which is restricted to a yearly budget. By borrowing and applying more money to the contracts in the first couple of years, the company argued that, in the long term, it would save money.
Although VMS holds similar contracts in both Virginia and Florida, the Texas projects are unique because they went to the low bidder — making this contractor the first in the nation to be hired through a competitive bid process for a total maintenance project.
Beginning on Sept. 1, 1999, VMS took over responsibility for all items necessary to maintain and operate the two sections of Texas interstate highways. The contracts detail duties such as repairing and improving pavement and drainage, striping, repairing and installing signs, repairing guardrails, picking up litter, mowing, maintaining traffic signals, and removing snow and ice.
According to Richard Kirby, director of maintenance operations at TxDOT in Austin, the contracts have some “unusual language.” They specifically exclude permitting if a utility company wants to place a line on the highways or if a landowner wants a driveway permit. They also disallow courtesy patrol and traffic management devices such as cameras.
These contract stipulations refer to segments of highway on a 163-kilometer (120 mi.) portion of I-35, beginning at the Bell County line and continuing through all of McClellan and Hill Counties, and a small portion of Falls County; and a 96-kilometer (60-mi.) segment of I-20, running through all of Dallas and Kaufman Counties. As Garcia explained, the two sections were chosen because of the variety of traffic and the number of contractors in the area that are available as subcontractors to VMS.
“If we picked out a stretch of very rural interstate … there may not really be enough work to justify someone bidding on the contract,” Kirby revealed further. “To the other extreme, I think we’ve almost captured the traffic on I-20 in Dallas. It’s high enough in Dallas County to really give us a glimpse of how a private company could handle urbanized environment . . . and I-35 in Waco, even though Waco is certainly not the size of Dallas, has very heavy traffic volumes.”
How is VMS handling the challenge? Kirby expressed a consensus of opinion when he said it was too early to say anything very definitive. He thought it might take three or four years to allow VMS time to exercise its management prerogative on the highway.
Kirby mentioned that one of the department’s concerns in entering into the contracts was VMS preparedness for incident response — an area that the company openly admitted had been a problem when it first entered into the Virginia contract. To understand the scope of the problem, members of TxDOT visited Virginia to discuss the VMS project there. “They were comfortable with it,” said Kirby, explaining the VaDOT response. “Although they were still only a little over a year into [the contract], it seemed to be working enough that we proceeded with it.”
With the TxDOT contracts let in early July, awarded in mid-August, and effective on Sept. 1, VMS was pressed for time to move to a new state, set up offices and begin doing business. In reviewing this timeline, TxDOT has also learned from experience.
“In retrospect with future contracts, I think we’d be better off with a three to six month mobilization period after we let the contract,” said Paul Montgomery, TxDOT’s Waco district maintenance engineer. “Considering they did only have a couple of weeks, I think they did a good job buying equipment and getting ready.”
“I think it’s going pretty well,” was the response from Amy Burlarley-Hyland, P.E., area engineer with VMS, speaking from her office in Hewitt, TX, near Waco. Hyland noted that the Virginia and Texas jobs were similar in expectations and that, with the early incident response experience in Virginia, they had come to Texas prepared. “We had to hit the ground running, and I think we’ve done a pretty reasonable job in getting up to speed in a fairly short period of time,” she said.
A fleet of four pickups, three 0.9-metric ton (1 ton) trucks to carry crews, and a couple of 0.9-metric ton (1 ton) trucks with arrow boards and crash attenuators, ready the company for emergency response. It has begun minor repairs, mowing, and litter cleanup. In-house forces are working on drainage, shoulder and pavement repair, delineator replacement and crack sealing along both corridors. A Champion C80A motor grader, rented from Nations Rental in Waco, is performing ditch work on I-35.
With a philosophy of utilizing smaller local contractors, VMS will subcontract 95 percent of its work. A snow and ice contract is already in place — just in case. During December it will let contracts for next year’s mowing and striping. It will also sign subcontracts with Texas Mowing Services, Texas Tree and Landscape, N-Line Construction — to do barricade and incident work, and Noriega and Noriega, who will do guardrail repair on the Dallas project. Terry Jones signed on for sweeping and mowing and Texas Institute for the Blind and Handicapped will perform litter pickup and rest area maintenance.
When fully staffed, the Hewitt office will have 14 people and Dallas, 8. These numbers include maintenance technicians, emergency response crews, and subcontract inspectors. “So, we’re pretty mean and lean,” Hyland commented.
“I’m not convinced that they’re going to operate much different than we did. They’re contracting out a certain amount, but it’s real comparable to what we were contracting out,” Montgomery responded, then added, “We’re on a limited allocation of employees. We can’t add employees to our pool; that’s set by the legislature. So, as we get more and bigger highways and have more traffic, obviously we have to do something. So this is allowing us to utilize personnel that would be on the interstate on other areas that we feel like could use extra help.”
Although daily inspections of the projects are left to the Dallas and Waco TxDOT districts, Kirby’s Austin office stays informed. Other states are also watching. Alabama and Mississippi are proceeding with a similar approach, according to Kirby, and his office has received an inquiry from Arizona DOT.
“Hopefully, it works,” said Kirby of the five-year pilot programs. “We’re not going to prop it up . . . It lives or dies on its own, I guess. It’s going to be treated very evenhandedly. The thing I’m interested in is, after a period of time, how much work was done on the road compared to what we had been doing. What is the over-all evaluation of that road? Is this company efficient enough to meet our standards — or efficient enough to exceed our standards?”
Rather than challenged, Hyland feels confident of her company’s ability to get the job done. Although finding qualified workers can be a bane in any contractor’s eye, she found that “sometimes you have to put in a lot of leg work to find them. You have to look for … people who are creative thinkers … with new and different solutions to the same old problems. We try to do that from the bottom to the top, and we really put an emphasis on recognizing that the people who are actually out doing the work are probably the ones with the best ideas of about how to do it best.”
An expanding company, VMS currently employs over 500 people. In addition to Texas, it has contracts in Virginia, Florida, Utah and South Carolina.