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LaPolitics/State Affairs has obtained the Boston Consulting Group report about the Louisiana Department of Transportation and Development. 

Gov. Jeff Landry tapped the Louisiana Coalition to Fix Our Roads, a private industry group, to initiate a planned reorganization effort for the department. The coalition selected BCG, which was expected to deliver the report to legislative leaders last week. The report is dated Oct. 7.

The Landry administration and industry stakeholders hope the report will spur lawmakers to approve more funding for DOTD. 

Here are the main takeaways from the BCG report about DOTD, most of which will come as no surprise to legislators and others who have been watching the department closely:

— Funding: This is probably the most obvious one: “State revenue sources that are dedicated to DOTD are insufficient, have not kept pace with cost growth, are not sufficiently diversified, and often lack flexibility.”

DOTD is more reliant on the federal government than peer states, and lawmakers tend to earmark transportation dollars for specific projects, which creates delays and limitations on how money is spent. 

“Funding is not tied to strategic goals or outcomes, as there is limited organizational understanding and outward communication of current and anticipated future needs,” the report states. 

— Capital program delivery and management: “There is a lack of consistent or systematic ranking of projects and limited transparency both internally and externally regarding the prioritization of projects, causing frustration for DOTD personnel, legislators, and the public,” according to the report. “While DOTD matches and obligates all federal funds, in recent years, it has not been able to reliably deliver the projects identified in the public let list and in the Highway Priority Program.”

For example, in Fiscal Year 2023, DOTD identified $1.8 billion in “ready to let” projects. But only 26 percent of those projects were awarded during that year. 

As for indirect costs, the department’s management expenses are 22 percent per dollar of capital awarded, compared to 21 percent for its peers. This means that DOTD spends $22 to engineer, let, manage and close out projects for every $100 spent on construction.

— Management and operations: Funding for the district budgets has not kept pace with inflation. Increasing contracting could be used to augment DOTD’s workforce and reduce the amount of equipment the department must maintain.

— Organization and people: There is limited tracking of “key performance indicators” throughout the department. 

“While there are some ways to manage performance and reward employees within the constraints of State Civil Service, clearly defined KPIs and related data are essential for holding employees accountable and enabling DOTD to use those tools,” the report’s authors say.

Other state agencies also limit the department’s flexibility and efficiency, according to the report. For example, DOTD does not have control of its data or technology and must go through the Division of the Administration’s Office of Technology Services. 

So, what’s next? The report’s major recommendations, all of which are easier said than done, include:

— Collaborate with stakeholders and figure out ways to expand revenue. 

— Improve processes and communication within the capital program to increase effectiveness, transparency, and efficiency of program execution.

— Prepare the organization to leverage consulting partners for a new influx of capital. 

— Improve maintenance and operations performance.

— Enable the organization by developing employee performance metrics and identifying constraints tied to Civil Service, the Office of State Procurement and the Office of Technology Services. 

— Conduct a detailed organizational assessment to ensure that DOTD has the right number and mix of people in the right roles, with compensation and incentive structures aligned to preferred outcomes.

— “While many of these recommended actions require an increase in funding …  DOTD must first take steps to strengthen internal processes and reform itself to deliver on its mission more efficiently, which will, in turn, help build the credibility and trust needed to make the case for additional funding.”

— In the short term, goals include communicating the vision along with measurable outcomes, right-sizing the project delivery pipeline, strengthening partnerships with consultants, and conducting process reviews to cut red tape. 

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