Arizona Holds Down Costs on Highway Projects

On recent big highway projects, Arizona has been spared the significant construction-cost overruns that plague many other states.

Every project encounters unforeseen conditions such as severe weather, unknown ground conditions, planning mistakes or accidents. Working around surprises typically adds costs, which contractors recover by submitting requests known as change-order claims.

Nationwide, such changes routinely drive construction costs over budget. Transportation veterans consider a project successful if the final costs are within 5 percent of the bid price and get concerned when overrun costs top 10 percent.

A Gannett investigation of a cross-section of 21 large highway projects across the country found about half stayed under 5 percent. Others had significant cost overruns, delays or both.

Overruns topping 5 percent are rare for the Arizona Department of Transportation, The Arizona Republic found after analyzing construction documents on the largest recent projects in the Phoenix area.

The projects were three widening jobs on Interstate 10 in the West Valley and two contracts to extend Loop 303 to Interstate 17. All were completed in 2010 or 2011.

Overall, after change orders, ADOT paid $312 million for the five Valley projects that were bid for a total of $303 million. That marked a 3 percent increase.Individual contracts came in at costs ranging from the bid amount to 11 percent over. Four of the five ended up within ADOT's goal of 5 percent of the bid prices.

After opening bids, ADOT sets aside an extra 5 percent in a contingency fund for each contract.

Taxpayers saved much more than the overage on the projects because bids on the work came in lower than expected.