Louisiana Department Of Transportation and Development in-house versus consultant design cost study.
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1998-06-01
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Abstract:The use of consultants in providing pre-construction engineering design services for the state's Departments of Transportation has increased over the last twenty years. This has resulted in several investigations into the cost-effectiveness of this trend. This paper reviews past studies, examines their methodology, suggests improvements to certain parts of the commonly-used investigative process, and demonstrates their use in an application to the Louisiana Department of Transportation and Development.
The suggested improvements to methodology are described and used in this study. They include using the same project to compare in-house and consultant design costs (rather than the use of similar projects, as in most studies), performing a detailed analysis of overhead rates that are comparable between the State agency and consultants, and measuring comparative design costs as the ratio of in-house to consultant design costs (rather than the ratio of design to construction costs commonly used in past studies).
Most studies in the past have concluded that consultant design costs are higher than in-house design costs or that there is no significant difference in cost. The Louisiana study found that consultants are approximately twenty percent more expensive than in-house staff in preparing road and bridge designs but that the difference was almost entirely due to the extra cost of contract preparation and in-house supervision required for consultant designs.
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