Construction

Quality Assurance in Materials and Construction

Observations and Recommendations

Observation #2: Existing QA regulations do not address areas of concern to Division Offices and States.

Throughout the course of this review, all seven Division Offices and all seven States indicated a need to refine the regulation to address current needs and issues.

During our interviews, there was a great deal of discussion about the regulation and its application. The areas where Division Offices and States see a need for refinement of the regulation can be consolidated into four primary topics:

• The limited applicability of the current regulation;
• The need to incorporate construction inspection into 23 CFR 637;
• The need for the regulation to address acceptance of manufactured/certified materials; and
• The need for additional regulatory language addressing project delivery methods other than the traditional design-bid-build.

The limited applicability of the current regulation

The current regulation was issued in 1995 during a time when FHWA was seeking to define the scope of Federal interest in the highway program in the post-Interstate era. The Agency, and the enabling legislation, focused FHWA's Title 23 activities on the National Highway System (NHS) and 23 CFR 637 was developed with that in mind. The regulation was issued and is applicable only to projects on the NHS; there are no regulatory requirements for QA on non-NHS projects. Division Offices and States perceive this as an inconsistency as they tend to adhere to the idea that "a Federal dollar is a Federal dollar" regardless of where it is spent and FHWA is accountable for all funds it administers. This perspective is supported by the improper payments standards set forth in FIRE. The audit procedure calls for proper documentation of both the quantity and quality of what is paid, regardless of whether the project is on the NHS or not.

Significantly, all seven States we reviewed utilize the same requirements for all projects, i.e. the State implements a single QA program for all projects. It is notable that States developed their current QA programs at a time when they were under less pressure to reduce staffing and to continually "do more with less" than they are today. The fact that States uniformly chose to implement one program for all their projects further supports the idea that "a Federal dollar is a Federal dollar" regardless of where it is spent.

As States become more and more pressed to deal with budget cutbacks and staffing reductions, they may be tempted to relax their requirements and, therefore, increase the risk for projects off the NHS. This sentiment is borne out in two of the States we visited. In the first, the Division Office and State said that local agencies were pressuring the State legislature to force the State DOT to relax/eliminate its QA requirements for locally administered projects. They were using the fact that the regulations did not require QA for their projects as leverage, stating that since QA is not required by Federal regulation it is not needed and they should not be held to that standard on their projects. With the acknowledged level of risk that already exists with locally administered projects, the fact that the regulation only applies to the NHS should not be used as justification to develop an alternate, presumably less rigorous, QA program for projects off the NHS. This would increase the risk to the public and increase the likelihood that an acceptable level of quality is not obtained for the money spent. Again, the requirements set forth in FIRE do not support the argument being advanced by those local agencies. As noted, FIRE requirements do not distinguish between NHS and non-NHS projects.

In the other State, an upper management State DOT official opined, With all that is going on nationally, QA is an area that FHWA cannot afford to back off of; if anything, the effort needs to be increased. This comment builds off the same message we received from the first State. The official was referring to the budget pressures and cutbacks in staffing that many States are facing and the temptation of State DOT upper management to proceed with the same position taken by the local agencies in the previously mentioned State. As these budget and personnel pressures continue to increase, State DOTs may look to reduce QA on non-NHS projects. If this occurs, this will increase the risk on projects, serve to further erode the highway infrastructure, and lead to the loss of public trust as noted under Observation #1.

The concluding issue on this topic is the conflict of interest provisions in 23 CFR 637.209(c). As with the rest of the regulation, these provisions apply only to the NHS. In response to the aforementioned budget cuts and staffing reductions, States are making more use of consultants to perform QA activities. In recent years, many States have added specific contractor quality control requirements to their specifications; this has led to contractors also increasing their reliance on consultants. These trends are likely to increase in the future; the result is that conflicts of interest will become an increasingly important issue. If the applicability of the regulation is not expanded, the conflicts of interest that are specifically prohibited on the NHS will inevitably occur on projects off the NHS. By their very nature, conflicts of interest increase risk and are not in the public interest.

The need to incorporate construction inspection into 23 CFR 637

This topic was mentioned by each Division Office and each State; although there was consensus that construction inspection needs to be addressed, there were a variety of opinions on how it should be addressed. This topic was an item in the 1994 FHWA 23 CFR 637 Quality Assurance Procedure for Construction, Notice of Proposed Rulemaking, but was not fully incorporated into the final rule and is still a major issue encountered in the present day QA program. The NPRM placed more emphasis on the requirement for construction inspection. It stated, "The SHA shall inspect the product or construction or both for attributes that are detrimental to the performance of the finished product." In the final rule, the reference to construction inspection was deleted. This omission has resulted in confusion as to whether the "specific attributes to be inspected" includes construction inspection.

During the review, some Division Offices and State DOTs commented that the regulations should focus on adequate levels of inspection, i.e. staffing levels and items requiring inspection, while others felt the regulation should focus on the qualifications of inspectors, similar to how the current regulation treats those performing acceptance sampling and testing. All Division Offices were in agreement that there is confusion and uncertainty as to whether or not construction inspection is a part of the current regulation.

In 23 CFR 637 "Construction Inspection and Approval," the word "Inspection" is notably mentioned in two places:

637.203
Definitions. Acceptance Program. All factors that comprise the State transportation department's determination of the quality of the product as specified in the contract requirements. These factors include verification sampling, testing, and inspection and may include results of quality control sampling and testing.

637.207 (c)(1)(i)(C):
Identification of the specific attributes to be inspected which reflect the quality of the finished product.

The Federal-Aid Policy Guides (FAPG) transmittal 36, dated July 19, 2006, provides a non-regulatory supplement to 23 CFR 637. Under 2 (a), it reads: "The State's acceptance program should provide a reasonable level of inspection to adequately assess the specific attributes which reflect the quality of the finished product. Acceptance inspection should include inspection of the component materials at the time of placement or installation, as well as the workmanship and quality of the finished product."

This language, taken in concert with the title of the regulation, seemingly makes it clear that inspection is a part of the existing regulation, yet the confusion is readily apparent throughout both FHWA and the States. This issue has been discussed and debated numerous times at the FHWA meetings held in conjunction with the AASHTO Subcommittee on Construction meeting.

There are several other entities, both within FHWA and in other organizations that are currently examining this issue. These organizations include: FHWA Office of Asset Management, FHWA Office of Pavement Technology, the aforementioned AASHTO Subcommittee on Construction, AASHTO Subcommittee on Materials, and the Transportation Curriculum Coordination Council.

Revising the regulation to address construction inspection will not only help resolve the confusion, and concurrent inconsistent application of the regulation, but will help raise the overall emphasis on QA, as called for under Observation #1. A more straightforward approach to construction inspection requirements should also promote the concept that inspection and materials testing are both necessary components of an acceptance program. Having that concept firmly established should help prevent further erosion of QA programs at the State and local level resulting in better-quality, longer-lasting projects, thereby facilitating the achievement of several Agency goals.

The need for the regulation to address acceptance of manufactured/certified materials

While existing data is not available to determine a specific amount of funds involved, a substantial amount is spent on manufactured/certified materials. The existing regulation is written around the acceptance of project-produced materials, e.g. soils and aggregates, hot mix asphalt pavement, and concrete, while remaining silent on the use of manufacturer's certifications for acceptance. Six of the seven Division Offices and States noted this as an issue and expressed a desire for the regulation to address it.

States have different practices and procedures for accepting products based on manufacturer's certifications; one State we reviewed had a very well-developed process that included periodic testing and formal evaluation of field performance for these materials while other States had virtually no process at all. One State noted that once a product was placed on the Approved Materials List, barring a major documented failure it would remain on the list because periodic testing was not performed and field evaluation of product performance was not done. Given the amount of funds involved in these materials, this broad variation is evidence of the need for a clearer regulatory position.

The 23 CFR 637.205(a) states that each State's QA program must "be approved by FHWA." Materials acceptance is an integral part of a QA program and the regulation focuses on the acceptance of project-produced materials. Manufactured/certified materials constitute a significant expenditure of funds; one State observed that 10 percent of their funds are spent on these materials. However, there is no regulatory language allowing or disallowing the use of manufacturers' certifications to be used as a basis for acceptance. The Team supports the development of regulatory language to address these materials; this is appropriate given the amount of funds expended on these items.

The need for additional regulatory language addressing project delivery methods other than the traditional design-bid-build

As States and FHWA look for ways to maximize the efficiency of the Federal-aid dollar, alternative project delivery methods are becoming increasingly more commonplace. The regulation was developed at a time when warranties and design-build contracting were being newly applied on Federal-aid contracts. With the passage of time, these have become more commonly used and we are now seeing new delivery methods such as design-build-operate-maintain, design-build-warranty, and public/private partnerships being used.

The regulation does address design-build contracting. One Division Office and Statedid not feel the regulation considers allowing reduced QA requirements coincident with reduced risk of public funds. Regulatory modifications should be made to differentiate between the various project delivery methods and their impact on QA and, ultimately, the risk to the public. By way of example, Texas is pursuing a public/private partnership project funded primarily with private funds. The private entity will design, build, operate, and maintain the facility for 40 years, at which point it will be turned over to the Texas DOT. Clearly, the risk to public funds on this project is minimal in comparison to the typical design-bid-build project contemplated in the regulation. As FHWA proceeds with risk-based decision making, this is an area where the regulations can be used to support those processes.

Recommendation #2: The FHWA should identify strategies for addressing the limitations in the existing language of 23 CFR 637 such as:

1. Being more applicable to all Federal-aid projects, regardless of system, class, or type;
2. Addressing construction inspection more formally and clearly;
3. Addressing acceptance of manufactured/certified materials; and
4. Addressing alternate project delivery methods in the context of QA and the risk to public funds.

Observation #3: The QA functions are distributed within FHWA Headquarters and the Resource Center in a way that does not allow for a focused QA approach. There is confusion in the Division Offices as to who to contact with QA issues since there is not a clear understanding if this is a program or technical issue or how the organizational structure supports QA.

Prior to 2000, FHWA's staffing levels were more robust and the organizational structure for QA was more clearly defined. As mentioned under Observation #1, the Division Office area engineer was supported by someone in the Division Office who worked in the QA area, either full-time or as a collateral duty. Additionally, the Regional Office with clearly defined responsibilities in QA provided additional support to the Division Office. Headquarters' QA functions were closely aligned with program delivery in the Materials Branch under the Construction and Maintenance Division. Today there is not clear alignment of Agency support roles and responsibilities.

In 1998, the Regional Offices closed and FHWA established the Resource Center offices to provide technical support and assistance to the Division Offices. In the late 1990's, Headquarters also underwent organizational realignment to better fit with the Agency's new business model. With Division Offices now operating under the revised Agency structure, it has become clear that QA is an area that has lost organizational clarity as the previous clear-cut lines of responsibility have become splintered. This has resulted in Division Offices not being able to efficiently get additional guidance or answers to their questions. In many cases, time is critical when Division Offices are seeking answers to QA-related questions and the lack of ability to easily obtain answers has proven frustrating to Division Offices and States. Five of seven Division Offices commented that there is a need for a more cohesive structure in Headquarters and the Resource Center to provide support to the field in the QA area.

In a May 3, 1999, memorandum regarding Quality Management, the Office of Infrastructure defined how the QA program area would be handled at the Headquarters level under the revised Agency structure. This memorandum noted that QA is a very broad subject area that cannot be pigeon holed in a single segment of the Agency. The memo stated, "Overall direction...rests in the Office of Asset Management...Various technical topic areas have been separated among the technology offices." The memo went on to identify specific functions and assign them to "lead offices."

While the memorandum may have provided some initial clarity, over time FHWA has deviated from the direction of the memo. There are several aspects that may now contribute to the lack of clarity rather than resolve it:

• The memo assigns the overall direction to the Office of Asset Management yet the perception at the Division level is that because the regulatory responsibility for 23 CFR 637 resides in the Office of Pavement Technology, QA in general does as well;
• Over time, the lines of delineation for topic areas identified in the memo have become distorted and the associated lead offices roles have become unclear. One example is statistical analysis, control, and comparison was assigned to the Office of Asset Management when, in practice today, this function is largely handled by the Office of Pavement Technology;
• When the memo was issued, the Resource Center was relatively new and did not have a defined role in the QA area, consequently, the memo did not identify whether FHWA considers QA to be a technical or program issue and what role the Resource Center should play. One Division Office told the Team that they would not contact the Resource Center for any QA-related issues because they viewed QA as a program issue, not a technical one. This is in stark contrast to the letter of thanks written by a Division Office, as shown on the Resource Center's website, to a member of the Resource Center Pavements and Materials Team thanking him for his assistance with "QC/QA specs." Additionally, when reviewing FHWA's online resources, QA is specifically noted as an area of responsibility under the Resource Center Pavements and Materials Team and several QA functions are noted areas of responsibility of the Resource Center Construction and Project Management Team. Clearly, there are some missing links in the information and resource chain.

Five of seven Division Offices mentioned problems either getting timely responses to questions or even knowing where to go for information; the Team verified some of the concerns expressed. Given the reduction in personnel in the QA area, Division Offices are likely to seek answers on FHWA websites. The Team examined various FHWA websites looking for information on QA. Our experience in doing this was less than satisfactory and substantiates the Division Offices' concerns. The QA is scattered throughout several web pages including those of the Office of Asset Management and the Office of Pavement Technology with some limited additional information available on the Resource Center Construction and Project Management Team's site. We found it difficult and confusing to navigate the FHWA sites in search of answers.

Given the issues discussed in the introduction and under Observation #1, the Team feels it is imperative that the agency develop an approach to be more responsive to the Division Offices.

Recommendation #3: The FHWA Headquarters and the Resource Center should develop and implement an action plan to be adequately staffed and organizationally aligned to provide a single focal point that will provide timely program and technical advice to Division Offices/States on QA.

As a first step towards implementation of this recommendation, the Team suggests forming a task force with Headquarters, Resource Center, and Division Office representation to study and recommend staffing or organizational changes that may be required to meet the needs of the Division Offices.