Government infrastructure spending beset with widespread cost overruns

This is a digital version of the original magazine piece plus a new sidebar and a response to the article. 

By Ken Wysocky

With cost overruns on bridge, road and other infrastructure megaprojects in Wisconsin as certain as death, taxes and Packers’ title-run failures, budget hawks are on high alert with new federal money about to inundate the state.

The Infrastructure Investment and Jobs Act is expected to spread an additional $5.4 billion out over the next five years, on top of the $1.4 billion to $2.2 billion in state and federal funding the Badger State has spent annually on highway construction alone.

“For many decades ... infrastructure projects and cost overruns have gone hand in hand,” says state Sen. Duey Stroebel (R-Saukville). “While some infrastructure projects have been far more egregious than others, we’ve historically seen cost overruns of 25 to 50 percent for transportation projects and projected benefits that often fail to fully materialize.” Even The New York Times, often a booster of government spending, warns of “Years of Delays, Billions in Overruns: The Dismal History of Big Infrastructure.”

And along with the waste, 10% — or roughly $540 million — of Wisconsin’s Infrastructure Act money could be used fraudulently, says Stephen Street, state inspector general for Louisiana and president of the Association of Inspector General.

Read the full article.

WisDOT officials defend some infrastructure practices – not responsive on others

This sidebar was left out of the print version of the magazine for space purposes.

By Ken Wysocky

During the next five years, the Wisconsin Department of Transportation (WisDOT) will have a lot to say about how to spend $5.4 billion state share of federal infrastructure funding.

WisDOT declined a request to interview someone about that spending and the agency’s dismal track record on cost overruns on major infrastructure projects. The department agreed to answer some of our questions by email while sidestepping others. The department did not respond to an email with follow-up questions.

For brevity’s sake, this is an edited version of the department’s statement, which amounts to a defense of its processes and procedures:

• The department uses a “thorough process” to document contract modifications that exceed the construction budget. Changes are only approved if needed to produce a quality product and/or to address issues that were unknown at the time of design.

Read the full article.

Article made unsupportable assertions about fraud and waste

By George Mitchell

“On the road to waste & fraud — Lost and squandered millions are as much a part of infrastructure projects as concrete and rebar.”

Those words headline the cover article in the Spring 2022 edition of Diggings, published by the Badger Institute. The cover states: “Paving the way for fiscal folly — Waste, fraud historically part of the hot mix that is infrastructure spending.”

The article asserts that fraud and waste are widespread in the Wisconsin Department of Transportation (WIDOT). It omits entirely a direct response from WIDOT to a series of questions posed by the article’s author. Further, in citing a 2017 Legislative Audit Bureau report it omits this key finding:

“We [the Legislative Audit Bureau] found that DOT generally had effective oversight of the processes for soliciting bids and awarding construction contracts and took steps to control construction costs.”

Read the full letter here.

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