MDOT fails to evaluate road warranty program since 2011, audit finds
A state auditor found the Michigan Department of Transportation was lacking in some areas of its warranty program because it failed to notify or set a time frame for corrective action needed on a handful of roadwork projects under warranty.
The auditor general also found the transportation department had not evaluated its warranty program since 2011, when the evaluation was "inconclusive" about the program's value.
The state road and bridge department said its warranty enforcement was sometimes hindered by factors outside of its control, such as weather restrictions, labor disputes, contractor lockouts and the COVID-19 pandemic. But all projects noted in the report have either had corrective action completed or are in the process of being completed, according to the department.
"While MDOT agrees with some of the conclusions in the audit released today — including that an evaluation of the state's warranty program could be beneficial — the department notes that it is holding contractors responsible and requiring corrective action when warrantied work does not meet performance requirements," the department said in a Wednesday response.
The audit reviewed 44 warrantied segments that required corrective action between October 2017 and March 2020 and found the department had ensured completed corrective action on about 86% by September 2020.
But for about 72%, or 32 of the 44 projects reviewed, contractors failed to complete corrective action before the expiration of the warranty on the projects, according to the audit.
About 11%, or five of the 44 projects, weren't sent notice of corrective action until after the warranty expired, the audit said.
For another six warrantied segments of roadwork, the contractors' responses to MDOT's notices were delayed. Four of the response periods ranged from 163 to 182 days, while there were two instances with no documented response from the contractors, according to the audit.
The state Department of Transportation agreed with the auditor's recommendation to create firmer timelines for corrective actions, but it noted pressures such as weather, traffic, disagreements over the warrantied issue and contractor workload could slow action.
"This audit was conducted during a timeframe when statewide labor disputes affected contractors and a pandemic affected all parties," MDOT said in response to the audit. "The labor disputes and pandemic led to project shutdowns and delays that made call backs for corrective action difficult to plan and/or complete."
The report also noted that transportation department has not evaluated its warranty program for pavement and bridge painting projects since 2011, when the evaluation was "inconclusive." Other states have completed evaluations of their programs and found them ineffective, the report said.
"An evaluation will help MDOT determine whether warranties result in a cost savings or improve the quality of road and bridge inspection," the report said. "In addition, any conclusions related to the evaluation will provide meaningful insight to the Legislature for future policy decisions concerning the warranty program in Michigan."
But MDOT argued even national evaluations of road warranty projects were mixed and could prove inconclusive. The evaluations could prove meaningless amid the Legislature's push for warranties, the department argued.
"MDOT considers any reevaluation of the warranty program a low priority and does not agree to prioritize limited resources for further evaluation at this time," the agency responded.
The audit also found some access controls to the agency's software to monitor warrantied road project were lacking.
Three of the 28 people who with access to the system were considered to have improper access, an issue MDOT said it fixed in November by implementing a bi-annual review of people with access to the program.