Taxpayer Tab for DOT Road Report: $2.37 Million

March 4, 2015

Investigative Reports

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PotholeTaxpayers are on the hook for nearly $2.4 million awarded to a Massachusetts-based firm that prepared a plan projecting more than $70 billion in transportation needs in South Carolina to 2040, records obtained by The Nerve show.

CDM Smith, a global engineering and construction firm that has a downtown Columbia office within walking distance of the State House, initially was awarded $1,771,875 in 2012 to produce the report, according to documents from the state Materials Management Office, which is part of the S.C. Budget and Control Board. The records were provided last week by the BCB to The Nerve under the S.C. Freedom of Information Act.

CDM in 2012 submitted a proposal of $2.26 million to develop the plan, which was nearly $500,000 more than the initial agreed-upon price. But in 2013, a state procurement officer approved a contract change that added $601,577 in costs, bringing the total contract award to $2,373,452, or $105,525 more than the firm’s initial request, records show.

The report, titled “Multimodal Transportation Plan – Charting a Course to 2040,” was adopted by the S.C. Department of Transportation (DOT) Commission in December.

To put the nearly $2.4 million contract award to CDM in some perspective, it would cover the cost of filling about 16,000 potholes in Greenville County, based on an average repair cost there of approximately $150, according to information provided Tuesday by the county to The Nerve.

The Nerve last month reported that CDM has received a total of nearly $13 million in state payments since fiscal 2012, primarily from DOT and the State Transportation Infrastructure Bank, based on state comptroller general records.

Those records didn’t specify whether CDM was paid for the transportation plan. After neither DOT nor the Governor’s Office responded to The Nerve’s initial written requests for the cost of the report, The Nerve submitted an FOIA request to DOT, which was referred to the BCB’s Procurement Services Division.

The governor appoints the DOT secretary, who is a member of her Cabinet.

Neither Chaney Adams, spokeswoman for Gov. Nikki Haley, nor DOT spokesman Pete Poore responded to written questions this week from The Nerve about the high cost of the report and why it couldn’t be produced by DOT staff. DOT Secretary Janet Oakley’s annual salary is $156,220; 50 other agency employees make at least $100,000, according to the BCB’s state employee salary database.

The BCB last week provided The Nerve with about 120 pages of documents under the FOIA, though another approximately 100 pages of requested records had not been released by publication of this story. The total number of hours worked by CDM staff was not specified in the documents provided to The Nerve, though the change-order records listed separate totals of 3,532 and 484 hours worked for that part of the contract, which equated to average hourly rates of $146 and $116, respectively.

A spokeswoman at CDM’s corporate headquarters in Cambridge, Mass., did not respond this week to a phone message from The Nerve seeking comment.

The final CDM report adopted in December estimated “total highway, bridge and transit needs” in South Carolina to 2040 at $70.45 billion, including nearly $60 billion for the “expansion, preservation, and modernization needs of South Carolina’s 41,500 miles of state-maintained roadways.” It also included $2.4 billion for the proposed, controversial Interstate 73 project, and $1.2 billion for “bicycle accommodations.”

The plan projected a nearly $43 billion collective funding gap to 2040, or an annualized shortfall of about $1.5 billion. Haley in January proposed an increase of 10 cents, or nearly 60 percent, over three years in the state’s current 16.75-cent-per-gallon gas tax, in exchange for restructuring DOT and lowering the state’s income-tax rate to 5 percent from 7 percent over 10 years.

The Nerve in January reported, citing documents used by Haley as the basis of her proposal, that the average income-tax bill would drop by just $100 over the 10-year period under her plan, while the projected yearly average 1 million filers owing no taxes wouldn’t be exempt from her recommended gas-tax hike.

When Haley, a Lexington County Republican, was a state House member before her first election as governor in 2010, she worked as a consultant for the Columbia-based Wilbur Smith Associates engineering firm, which merged with CDM in 2011.

In 2012, Haley faced a House Ethics Committee hearing over allegations that she illegally lobbied for Wilbur Smith from 2006 to 2008 when she was a House member, and failed to publicly disclose $48,000 in income from the firm.

The committee ruled she did not use her office for personal gain, rejecting the claims involving Wilbur Smith, and separate allegations that she pressured lobbyists or their clients to donate to the Lexington Medical Center Foundation, where she was a $110,000-a-year fundraiser while a House member.

Reach Brundrett at (803) 254-4411 or rick@thenerve.org. Follow him on Twitter @thenerve_rick. Follow The Nerve on Facebook and Twitter @thenervesc.