State DOT In-House Manufacturing

[TheArkansasRoadgeek]

Why does a state transportation agency hire out certain work, but has the capabilities to make something like signs or sign panels? For my state, we hire out a TON of our jobs, but why wouldn't a state have construction equipment to do their own work? We pay the state to get the transportation maintained, not some third-party contractor. Is it about funding? If it is, then how does a state like mine have the funding to hire out the job to someone else? It doesn't make sense to me, it would be more expensive to hire out the job than have the tools to do it yourself.

[MNHighwayMan]

It's not necessarily more expensive for a DOT to hire a contractor than it is for the DOT to do the work itself. Take, for a simple example, a local contractor doing a sign replacement along a 10 mile stretch of road 150+ miles from headquarters. The contractor won't have to pay nearly as much to get to the job site than the DOT crews. Hauling 10 miles' worth of signs, posts, etc. 3 miles instead of 150+ miles obviously saves money.

Not only that, but the DOT probably does not have the labor required to do all its required work itself. Paying other people to do it lessens their labor load while only costing marginally more. Or, in other words, a DOT may have more money available than it does everything else (you know, jobs, equipment, fabrication space, etc).

[hbelkins]

Part of this has to do with the cost of fringe benefits. In Kentucky, for example, state employees get paid sick and annual leave, health insurance and a retirement plan. This costs money. If a contractor does not offer a pension, paid leave or insurance, that saves on personnel costs.

[Rothman]

The balance between what is done in-house and what is bid out will always be something of a pendulum.  From where I sit currently, the pendulum is leaning a little towards bidding too many things out, at least here in NY.  When I say "a little," I'm thinking of some real basic, routine work that some NYSDOT Regions still put out to bid at times, so nothing that huge.  Probably not even that big of a deal; NYSDOT would probably only save a negligible amount by doing the things in-house anyway.

(personal opinion emphasized)

[TheArkansasRoadgeek]

I wonder where I could get some cost related numbers? Google it?

[Scott5114]

In many states, there's also a public policy of contracting things out to private businesses, as this is seen to help the economy more and encourage competition. (It has been theorized that this is part of why OkDOT does not put its foot down against bad-quality work by sign contractors–the state does not want to discourage contractors from competing by making it too expensive for them to do business with the state.)

[Bitmapped]

In a lot of jurisdictions, there is a thought that work (at least over a certain threshold) should be bid out with the idea being that having multiple people competing for the work will lower prices.

Some agencies contract out work because they lack expertise in a particular area. Another reason can be to address a lack of manpower. In West Virginia, for example, salaries for state highway engineers are fairly low so WVDOH has trouble recruiting and retaining engineers. They end up contracting out some design work to private firms because there aren't enough people in-house to handle the load. This may not be the most cost-effective solution, but it's something that happens.

[DaBigE]

In a lot of jurisdictions, there is a thought that work (at least over a certain threshold) should be bid out with the idea being that having multiple people competing for the work will lower prices.

Some agencies contract out work because they lack expertise in a particular area. Another reason can be to address a lack of manpower. In West Virginia, for example, salaries for state highway engineers are fairly low so WVDOH has trouble recruiting and retaining engineers. They end up contracting out some design work to private firms because there aren't enough people in-house to handle the load. This may not be the most cost-effective solution, but it's something that happens.

^ This. We've also got similar debates on that cycle in Wisconsin. A search of some of the state's major newspapers will reveal several investigative reports on the matter. We usually go through cycles of the DOT going through a major hiring binge and retaining more work in-house; to a period of belt-tightening, where non-critical vacancies are left unfilled, layoffs occur, and more work gets pushed to consultants, because the state no longer had the manpower to complete the jobs in-house. Rinse and repeat. Not surprisingly, it seems to coincide with gubernatorial terms.

A couple things have remained constant. WisDOT has not returned to the sign making biz since they farmed it out to private industry and the state prison system years ago. WisDOT still maintains the state-owned traffic signals and street lights. Highway maintenance (sign replacement, pothole filling, plowing, mowing) has been contracted to the county highway departments for as long as I can remember.

[Brian556]

In a lot of jurisdictions, there is a thought that work (at least over a certain threshold) should be bid out with the idea being that having multiple people competing for the work will lower prices.

Some agencies contract out work because they lack expertise in a particular area. Another reason can be to address a lack of manpower. In West Virginia, for example, salaries for state highway engineers are fairly low so WVDOH has trouble recruiting and retaining engineers. They end up contracting out some design work to private firms because there aren't enough people in-house to handle the load. This may not be the most cost-effective solution, but it's something that happens.

^ This. We've also got similar debates on that cycle in Wisconsin. A search of some of the state's major newspapers will reveal several investigative reports on the matter. We usually go through cycles of the DOT going through a major hiring binge and retaining more work in-house; to a period of belt-tightening, where non-critical vacancies are left unfilled, layoffs occur, and more work gets pushed to consultants, because the state no longer had the manpower to complete the jobs in-house. Rinse and repeat. Not surprisingly, it seems to coincide with gubernatorial terms.

A couple things have remained constant. WisDOT has not returned to the sign making biz since they farmed it out to private industry and the state prison system years ago. WisDOT still maintains the state-owned traffic signals and street lights. Highway maintenance (sign replacement, pothole filling, plowing, mowing) has been contracted to the county highway departments for as long as I can remember.

The state has the counties maintain their highways? That's crazy. Texas stopped doing that in 1928!. There are a lot of logistical reasons that would not work. County employees typically don't have the level of expertise required to maintain state highways and signage. They also don't typically have the required equipment, esp arrow boards, shadow trucks, ect. Our county road dept doesn't even have amber warning lights on most of their pickups. 

[TheArkansasRoadgeek]

From what I've gathered, the state picks up the work after the initial job has been completed? It seems that way in Arkansas.

[Joe The Dragon]

Why does a state transportation agency hire out certain work, but has the capabilities to make something like signs or sign panels? For my state, we hire out a TON of our jobs, but why wouldn't a state have construction equipment to do their own work? We pay the state to get the transportation maintained, not some third-party contractor. Is it about funding? If it is, then how does a state like mine have the funding to hire out the job to someone else? It doesn't make sense to me, it would be more expensive to hire out the job than have the tools to do it yourself.

it's easy to make stuff in the prison not so much with prison work crews working out side.

[TheArkansasRoadgeek]

Why does a state transportation agency hire out certain work, but has the capabilities to make something like signs or sign panels? For my state, we hire out a TON of our jobs, but why wouldn't a state have construction equipment to do their own work? We pay the state to get the transportation maintained, not some third-party contractor. Is it about funding? If it is, then how does a state like mine have the funding to hire out the job to someone else? It doesn't make sense to me, it would be more expensive to hire out the job than have the tools to do it yourself.

it's easy to make stuff in the prison not so much with prison work crews working out side.

I get the analogy, but prison? Really? Let's not all drop the soap at once! 🤣


iPhone

[J N Winkler]

The state has the counties maintain their highways? That's crazy. Texas stopped doing that in 1928!. There are a lot of logistical reasons that would not work. County employees typically don't have the level of expertise required to maintain state highways and signage. They also don't typically have the required equipment, esp arrow boards, shadow trucks, etc. Our county road dept doesn't even have amber warning lights on most of their pickups.

The amount of capacity counties have varies from state to state and sometimes from county to county within a state.  In Kansas, KDOT is responsible for all rural state highway mileage, but all of the metropolitan counties can and do mount professional road construction and maintenance operations.  It is only in the very rural counties that things can get kind of sketchy.  Meanwhile, in states like Pennsylvania, local agency traffic engineers have to be certified by the state to keep them from running wild.

In many states, there's also a public policy of contracting things out to private businesses, as this is seen to help the economy more and encourage competition. (It has been theorized that this is part of why OkDOT does not put its foot down against bad-quality work by sign contractors–the state does not want to discourage contractors from competing by making it too expensive for them to do business with the state.)

Oklahoma DOT also apparently keeps signing contracts small in order to make it possible for smaller firms to bid on them.  Part of ODOT's perennial problems with sign quality occur at the design stage, and may reflect a desire not to drive smaller consulting firms out of the market for state highway design work.

The balance between what is done in-house and what is bid out will always be something of a pendulum.

This applies not just to what work is outsourced to contractors, but also how the contracts are structured.  For example, Illinois DOT used to procure guide sign replacement by work order contract:  i.e., the state would advertise a contract for about 20,000 SF of new large sign panel, but only with a proposal having fold-up plans that included standard plan sheets for assembly of the sign panels but no details for the sign messages themselves.  Once the contract was awarded, details for the signs would presumably be forwarded by work order.  Now it is much more common for IDOT to advertise signing contracts with actual signing plans, so that the contractor bids with a general idea of what the finished signs are supposed to look like, even if the actual control for fabrication purposes is still by work order.

[cjk374]

This link takes you to a video of LaDOTD making signs in their sign shop in Baton Rouge:

https://www.aaroads.com/forum/index.php?topic=79.msg2180224#msg2180224

[hbelkins]

Lou Corsaro posted on Facebook yesterday a promotional video of the South Carolina DOT sign shop. It was not obvious from that video if the state produced its own guide signs (what Kentucky calls panel signs) or if they are contracted out.

Missouri DOT posted a video several years ago that shows their panel signs (or, to use a very non-technical term, Big Green Signs or BGSes) are produced by prisoners.

Kentucky generally produces normal signs in-house, but occasionally there are signing contracts (typically HSIP projects) in which signs will be done by contractors. That is in addition to new construction projects in which signage is part of the contract. Panel/guide/BGS signs are done by contractors, either whole-scale replacements/installations along a stretch of road, or individually when signs are damaged or need to be changed.

Kentucky has gone to privatization of a number of other maintenance-related activities, such as strip patching and guardrail installation/repair/replacement. We even have some contractor snowplows.

EDITED TO ADD: Also, lane striping. State forces used to do it when I was young. Now, it's contracted out.

[J N Winkler]

It was not obvious from that video if the state produced its own guide signs (what Kentucky calls panel signs) or if they are contracted out.

SCDOT has at least one pure signing contract per year for large panel signs, and the accompanying set of plans for each such contract has sign layout sheets and sign panel detail sheets (SignCAD).  I have never been aware that they contract out small sign replacements.  I strongly suspect their in-house fabrication capability extends even to large guide signs, to accommodate knockdown replacement and the like.

Missouri DOT posted a video several years ago that shows their panel signs (or, to use a very non-technical term, Big Green Signs or BGSes) are produced by prisoners.

Missouri DOT has done large sign panel replacements by contract several times over the years.  Besides a major contract for I-49 about five years ago, there have also been a couple of major Kansas City freeway guide sign replacements in the last fifteen years, as well as at least one large contract for St. Louis.  MoDOT just doesn't do pure signing contracts as frequently as Kansas DOT (typically at least one annually) or Iowa DOT (typically at least 15-20 annually, mixing large and small signs in each contract).

Another point to keep in mind is that it is very common for there to be two channels for contracting for signing work.  The one that is most familiar is the construction letting, and the usual format (not followed by all state DOTs) is a proposal book and a set of signing plans that includes sign layouts, sign panel detail sheets, and sometimes sign elevations.  It is normal for large signing work and structural signing (which includes replacement of overhead sign structures) to be processed through the construction letting.  But in many states there is a procurement channel that is typically reserved for work falling below a certain cost threshold.  Many state DOTs, including Kansas DOT and Arizona DOT, use this for small-sign replacements.  KDOT has also used it for welcome signs, supplemental guide signs, and other large sign work at spot locations.  ADOT, in an episode that was and remains unique in my experience, used it to shoehorn in about $10 million worth of large sign panel replacements spread across seven project numbers.

The norm is that state DOTs run their own construction lettings while procurements are handled by a separate body on behalf of all state agencies.  In Kansas, for example, this is the Department of Administration.

[ekt8750]

Why does a state transportation agency hire out certain work, but has the capabilities to make something like signs or sign panels? For my state, we hire out a TON of our jobs, but why wouldn't a state have construction equipment to do their own work? We pay the state to get the transportation maintained, not some third-party contractor. Is it about funding? If it is, then how does a state like mine have the funding to hire out the job to someone else? It doesn't make sense to me, it would be more expensive to hire out the job than have the tools to do it yourself.

it's easy to make stuff in the prison not so much with prison work crews working out side.

PennDOT still has the state prison system manufacture license plates and in-house signs are printed there as well.

[DaBigE]

Why does a state transportation agency hire out certain work, but has the capabilities to make something like signs or sign panels? For my state, we hire out a TON of our jobs, but why wouldn't a state have construction equipment to do their own work? We pay the state to get the transportation maintained, not some third-party contractor. Is it about funding? If it is, then how does a state like mine have the funding to hire out the job to someone else? It doesn't make sense to me, it would be more expensive to hire out the job than have the tools to do it yourself.

it's easy to make stuff in the prison not so much with prison work crews working out side.

PennDOT still has the state prison system manufacture license plates and in-house signs are printed there as well.

Wisconsin still uses the prison system for its license plates as well. In fact, there was a news story not too long ago, up in the NE part of the state talking about the "challenges" of switching from 6 to 7 characters on the standard plates. It apparently was a really slow news day.

If you ever see something with the label "Badger State Industries" (or a sign with "BSI" in the border), it came from the Wisconsin prison system. In addition to license plates and standard road signs, they also produce some office furniture. I recall seeing a BSI label on much of the furniture in a few of the newer campus buildings back in college.

[cbeach40]

MTO have the main provincial sign shop in Toronto that makes all types of signs, and an auxiliary one in North Bay that just makes plywood signs and overlays.

[ekt8750]

Why does a state transportation agency hire out certain work, but has the capabilities to make something like signs or sign panels? For my state, we hire out a TON of our jobs, but why wouldn't a state have construction equipment to do their own work? We pay the state to get the transportation maintained, not some third-party contractor. Is it about funding? If it is, then how does a state like mine have the funding to hire out the job to someone else? It doesn't make sense to me, it would be more expensive to hire out the job than have the tools to do it yourself.

it's easy to make stuff in the prison not so much with prison work crews working out side.

PennDOT still has the state prison system manufacture license plates and in-house signs are printed there as well.

Wisconsin still uses the prison system for its license plates as well. In fact, there was a news story not too long ago, up in the NE part of the state talking about the "challenges" of switching from 6 to 7 characters on the standard plates. It apparently was a really slow news day.

If you ever see something with the label "Badger State Industries" (or a sign with "BSI" in the border), it came from the Wisconsin prison system. In addition to license plates and standard road signs, they also produce some office furniture. I recall seeing a BSI label on much of the furniture in a few of the newer campus buildings back in college.

I kid you not, PA's equivalent organization is called "Big House Products" a unit of Pennsylvania Correctional Industries.