Idaho overpaid road builders millions for shoddy work. State says it won’t happen anymore.

The payments and bonuses may have amounted to $4.3M in a single year

By: - May 18, 2021 4:05 am
Crack in the asphalt on State Street in Boise

Asphalt cracks on the road in front of Idaho Transportation Department headquarters on State Street in Boise. (Audrey Dutton, Idaho Capital Sun)

Idaho has overpaid road builders for substandard work. For how long is unclear, but one estimate based on the Idaho Transportation Department’s asphalt paving budget suggests it may have overpaid $4.3 million in a single year.

The apparently deficient material remains on Idaho roads. The state has not issued penalties, required contractors to repave the roads or demanded they return bonus payments. The same contractors whose asphalt quality was suspect continue to do the state’s construction work.

State transportation officials say Idaho has worked to patch major accountability gaps that allowed the overpayments.

Idaho Gov. Brad Little on Monday signed a transportation funding bill into law that will direct $80 million annually of Idaho sales taxes to transportation. The funds would allow Idaho to issue up to $1.6 billion in bond debt to pay for Idaho road construction.

Meanwhile, the U.S. Department of Transportation’s Office of Inspector General continues a federal investigation into the discovery that people working for contractors, and in some cases for the Idaho Transportation Department itself, changed asphalt quality test results.

A draft report by researchers at Boise State University and Oklahoma State University confirms that those changes meant Idaho paid contractors bonuses for asphalt that shouldn’t have been poured in the first place.

The draft report, obtained through a public records request, describes a pervasive problem with asphalt quality testing in Idaho, discovered several years ago, and the potential financial ramifications.

“This analysis showed that there has been overpayment on a majority of analyzed construction projects across Idaho due to material testing data alterations,” said the 171-page draft report from December. “Overall, based on the available audit data, we found that overpayments ranged between $14,000 to (about) $360,000 in different projects.”

In a 2018 highway project where ITD overpaid contractors $361,000, the researchers found that test results were altered 94 times in parameters that have a major effect on payment; and another 54 times in parameters that didn’t have a major effect but may have had a moderate financial effect.

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The research project was commissioned by ITD about three years ago to examine why asphalt quality test results conducted by several contractors didn’t match those conducted by ITD. The transportation department’s staff are closely involved in the project, which is ongoing. A final report won’t be completed until at least the end of June.

Mojtaba Sadegh, assistant professor in the Boise State University Department of Civil Engineering, is the lead researcher on the project, after the former lead researcher moved to Oklahoma State University.

“I would really commend ITD on taking this on,” Sadegh said in an interview with the Idaho Capital Sun. He thinks “a lot of states don’t really want to get involved in things like this. I would imagine the data changes are not only in Idaho.”

State employees saw problems and spoke up

One major piece of the research project was to survey ITD engineers about their experiences with asphalt testing, ethics training and more. The anonymous survey went to ITD staff and to all other transportation departments in the U.S.

Front of the Idaho Transportation Department building in Boise
The Idaho Transportation Department headquarters in Boise on March 21, 2021. (Otto Kitsinger for Idaho Capital Sun)

Of the 48 employees at ITD who responded to a question about Idaho’s road quality, more than 60% said Idaho road construction projects built with asphalt usually don’t last as long as they should.

They told researchers that “deficient construction materials,” “errors by contractor” or factors related to the climate were three major reasons the roads failed early.

More than 60% of the employees who responded also said they believed asphalt test results “may not be representative of the actual materials used in the field.” They offered several theories as to why test results might be altered so that failing material would get a passing, or excellent, score:

  • “Pressure to affect payment factor in favor of the contractor”
  • “Avoiding scrutiny or conflict over results from the contractor”
  • “Unwillingness to reconduct the test”
  • “Strained workloads”
  • “Avoiding scrutiny or conflict over results from the department”

Employees said that when they observed “ethical violations,” they almost always reported them, according to the draft report. But about 14% of the 29 employees — so, four employees — who said they’d reported such problems told researchers they didn’t think their concerns were taken seriously by those in charge.

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The researchers said their findings showed “a clear need for further training and developing structured frameworks and protocols to address employee concerns.”

It isn’t the first time such concerns have been raised. A former asphalt testing specialist came forward in 2002, saying he was pressured to falsify test results, the Idaho Statesman reported last year.

Idaho paid bonuses for failing highway material

Before a team of construction workers pours hot asphalt onto a road, the asphalt undergoes a quality check.

A trained technician grabs samples of the asphalt mix and runs it through a series of tests. Those tests have been developed over decades by national experts to detect problems in the mix that can lead the highway to an early demise — causing potholes, cracks, ridges and other signs of deterioration.

For decades in Idaho, and in other states, contractors were able to hire their own technicians to do the testing and get paid based on those results — even when they didn’t match results from the same tests, conducted on the same material, by the state’s own technicians.

The state now pays contractors based on the state’s results — a policy change ITD made based on recommendations from the Federal Highway Administration. However, ITD continues to hire outside vendors to conduct most of its asphalt tests. Those vendors can work for the same contractors whose work they’re fact-checking; they just can’t work for the state and the contractor on the same project.

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One of the main goals of the research undertaken by Boise State was to try to learn more about the discrepancies that occurred, and why they occurred.

“Recent forensic investigations carried out by ITD and (Federal Highway Administration) on 13 selected projects showed 4% average difference in incentive pay,” between what it would have been based on ITD results and the contractor’s own results, the draft report said. “This data was subsequently extrapolated to the entire ITD asphalt program, and it was discovered that ITD had paid $4,300,000 extra in incentives in just one year. This alarming mismatch not only can impact pavement projects’ pay-factors, but also can have significant repercussions concerning the pavement service life and maintenance costs.”

Paper showing asphalt test results changed

The draft report shows this actual laboratory datasheet, submitted to Idaho Transportation Department during one of the paving projects that raised federal investigators’ interest. “As seen from the datasheet, the values in several fields were altered and over-written several times during the course of testing,” the draft report explains. “Some of this can be attributed to the possibility that scale readings were affected by the testing environment (such as excessive wind draft in the laboratory). However, repeated occurrence of such trends raises serious concerns about the quality of the test results.”

The draft report said that, upon further inspection, 40% of those 13 road construction projects “showed moderate distress two to five years after construction, whereas the design life of the pavements was 20 years.”

The researchers said this showed “urgent need” for ITD to modify its policies and practices.

They recommended an “in-depth inspection and analysis” of the discrepancies and what effect they have on Idaho’s construction costs, highway maintenance costs and pavement life.

State transportation officials said in an interview that they’ve made changes and are continuing to do so.

The state continues to do business with the contractors who used apparently deficient asphalt, and with outside vendors whose employees repeatedly altered the testing records.

The department hasn’t issued penalties or other sanctions. It awaits the results of the federal investigation, officials said.

“Most of the determination as to whether anything happened that was improper all rests with the (Office of Inspector General of the U.S. Department of Transportation),” said Dave Kuisti, ITD’s construction and operations division administrator.

But the department did hold a meeting March 9 with all the vendors who conduct asphalt testing for ITD “and made it very clear on our expectations on accountability,” said ITD spokesman Vincent Trimboli. “If they don’t do testing to the highest level of quality, and we find discrepancies … they will not do work for us anymore.”

Kuisti clarified that ITD would first examine the discrepancies to see if they fall out of line with ITD’s standards, before cutting ties.

They haven’t scrutinized the sections of road that were flagged as having unexplained anomalies in their test results.

“Every year, we go out and we look at our entire road system, the pavement conditions, and we look at cracking and rutting,” Kuisti said. “We haven’t seen anything out of the ordinary for those.”

Last year, 92% of the state’s pavement was rated in fair or good condition, Trimboli said.

That is above the state’s goal. It doesn’t necessarily mean that original pavements were high quality. When a road fails prematurely, it must be replaced earlier and requires more upkeep and maintenance, like chip-sealing, to prevent damage and patch holes and cracks in the meantime.

The Southern Idaho chapter of the American Society of Civil Engineers gave Idaho roads a C- grade in a 2018 infrastructure report card.

“Idaho is a unique place to maintain highways,” the report said. “There are extreme temperature fluctuations, flat and mountainous terrain, and numerous highway jurisdictions, which result in varied best management practices. While the Idaho Transportation Department (ITD) and local jurisdictions have done a commendable job preserving and restoring existing roads, they face growing needs and a continued funding shortfall.”

Idaho Transportation Department says it’s working to fix the problem

The department in late 2019 told Idaho Gov. Brad Little and the Idaho Statesman that it was in the process of making numerous changes to fix and prevent problems with Idaho’s asphalt quality.

Officials told the Idaho Capital Sun in an April interview that they’re still actively making those changes.

“We’ve made it really clear to industry what our quality expectations are, and what our role will be (in) enforcing the specifications, and we’ve been very clear to the contractors on that …” Trimboli said.

Construction workers work on a project at the I-84 Northside Boulevard Nampa interchange
Construction workers on the job May 12 on Northside Boulevard in Nampa. The construction project, part of the state’s improvements along I-84 in Canyon County, included rebuilding the Northside interchange. (Audrey Dutton, Idaho Capital Sun)

Trimboli said the department has invested in its central laboratory to allow ITD to do more in-house testing.

“Obviously, some things that happened in the past, they led us to say, ‘What do we need to do to make it better?’ And we’re really working hard on that process now and what we need to do to make it better,” he said.

Kuisti said that, after the Federal Highway Administration sent a team out to Idaho in 2017 to conduct a forensic review of Idaho road projects, “we came up with a long list of things we think we needed to do” when it came to asphalt testing and quality control.

The department put those ideas in a draft and sent out the draft to contractors to look at, he said.

“There was a lot of change for them to digest at one time … a lot of changes they would have to make, and it was concerning for them,” he said.

The department formed a peer review advisory group that included members of the Idaho Associated General Contractors who do asphalt paving, some of ITD’s own staff and other stakeholders, he said.

Idaho AGC CEO Wayne Hammon says he “helped orchestrate” the creation of that group, because his members found the new ITD rules “almost impossible” to follow. For example, “in order to pass one of the tests, you had to put in high amounts of oil, and that then affects your test results on the other tests,” he said in an interview with the Idaho Capital Sun.

Kuisti says that group “worked through all those changes, and I’m not going to say we backed off so much, but we made changes to them to parse it out a little better so they could migrate to these new specifications that we want to put in place.”

The task force came up with “a negotiated stance” on the changes for the 2020 construction season, he said, and ITD’s negotiations with contractors are ongoing.

The department also recently created a new technical advisory group of 18 people, including contractors and ITD staff.

“We’ve hired three national experts to help us work through those concerns that everybody has and to reach reasonable solutions for the concerns,” Kuisti said.

After several months of work to refine the specifications contractors will have to follow, the department was ready to start a new construction season with them, he said.

“And that seems like that’s really positive — it has support from AGC, the payment contractors, it’s been vetted through the national experts, and our staff feel comfortable with those changes,”  he said. “So I think we’re making some good headway there.”

The department also named a new manager to oversee quality control and “help us have better oversight over our internal testing,” he said.

It’s not just happening in Idaho. Idaho just happened to confirm it.

Boise State researchers are still working on the report. ITD sent it back to them in December with comments, some of which seem to give contractors the benefit of the doubt.

For example, ITD suggested changing “suspicious alterations” to “unexplained changes.”

The department also suggested removing a lengthy discussion of fraud in the report’s introduction to avoid “leading the reader to a certain conclusion” about why numbers changed.

“It’s unclear the motivation for the corrections, perhaps fraud, perhaps laziness, perhaps didn’t want to get into trouble being outside the (acceptable range) for example, etc.,” a comment from an ITD manager said.

In another comment, the ITD manager suggested the researchers re-organize the report to “focus on all the good changes to improve the program.”

The university conducts research for public and private entities, and that research is independent. The project sponsor — in this case, ITD — can review the researchers’ work and “provide non-binding comments on (their) proposed publications and presentations,” according to the university. The researchers aren’t obligated to make those changes.

The manager who made the suggestions oversees a team at ITD but is not a top-level official.

The department placed him and two other ITD employees on administrative leave in 2018.

ITD officials previously told the Idaho Press that it placed three employees on leave after learning they added a function to the Excel workbooks that were used to submit asphalt test results.

Screenshot of an Excel workbook that tracked every time a person changed the value of a cell

This is a screenshot of the “audit log file” created when a lab technician entered data into an Excel workbook that contractors used to report asphalt test results to ITD. The technician didn’t know the log was being created as they altered numbers several times. Researchers found that altering numbers in certain cells often led to higher pay for contractors.

That function secretly recorded every time someone responsible for running asphalt quality tests changed a number — specifically, numbers with a direct tie to how much money the state would pay the contractor for that asphalt. The Idaho Statesman in 2019 obtained those workbooks through a public record request.

Hammon told the Idaho Capital Sun that one of AGC’s members evaluated the data and found that ITD’s own asphalt tests had the most alterations. The Sun’s own review of the data found that was not true.

“I don’t think it’s fair to say it’s a bunch of greedy contractors, when most of the errors were within the ITD system,” he said.

Hammon told the Sun that uncertified staff ran asphalt tests at ITD’s Boise-based central laboratory, that the laboratory was “so gosh-darn filthy that the (asphalt tests) were contaminated,” and that ITD fired much of the lab’s staff after discovering testing anomalies. ITD officials said the lab’s accreditation process requires staff to be certified, although some technicians may have allowed certifications to lapse; that the lab’s facility is much improved; and that the lab’s turnover consisted of some retirements and “a few people” who left.

The tracking function gave ITD a huge amount of data that no other state transportation department has been able to capture.

“The data that was collected was unique,” said Mike Copeland, the newly named asphalt quality program manager at ITD. He also is the department’s project manager for the BSU-led research project.

Eventually, the workbooks and data were handed over to federal investigators.

How does Idaho know its asphalt is as good as it looks on paper?

Copeland was one of the employees who developed the workbooks, with the track-changes function built in.

“It was, at the time, part of an audit trail within that workbook,” he said. “What prompted it is, there’s some federal guidance from 1989 on source documents and electronic records” that indicated the state needed to have some way to audit how it was spending federal highway dollars.

That audit trail revealed that test results tied to contractor pay were being changed — not once or twice per project, but many times, and for asphalt that many different contractors used on Idaho roads.

According to public payroll records, Copeland and the other ITD employees were placed on administrative leave after the construction season when those data were collected.

The department then ceased collecting the data.

But those employees returned to their jobs and are now involved in the research project, as well as the process of revamping Idaho’s asphalt quality rules.

“We’re closely monitoring asphalt production and materials testing,” Copeland said.

One of ITD’s three employees who discovered the altered asphalt test results is an ITD business analyst who agreed to talk with the Idaho Capital Sun but did not want his name used.

“We’ve been putting a lot of effort into educating our staff and laying out expectations, and providing training and new information on high-risk areas to pay attention to,” he said.

For example, asphalt tests now must be recorded on paper with a carbon copy, and ITD requires a box of asphalt mix to be taken from every road project and wrapped in a tamper-proof security tape “so that we can have more confidence in those samples,” he said.

“And we’ve had a lot of really good responses from our consulting communities to work with us and improve their (standard operating procedures),” he said. “A lot of them have updated their (quality assurance) programs to assure us that they’re taking active steps to address it as well.”

But there is no longer an electronic audit trail — the tool that enabled ITD to discover “suspicious alterations” in the first place, and enabled researchers to extrapolate that Idaho highway contractors may have won millions of dollars in bonuses for substandard work.

The Idaho Capital Sun asked whether ITD can be certain now that asphalt quality is as good as contractors say it is.

“We can never really know for sure that individuals aren’t changing test results, right?” Copeland said. “But we’ve done a lot to make it harder for someone to change test results.”

Sadegh, the lead researcher for Boise State, praised ITD for taking on the project.

ITD employees were much more willing to fill out a survey about Idaho road quality and ethics, than were their peers in other states, he said.

“A lot of other agencies, a lot of other states, they don’t necessarily want to open this can of worms,” he theorized. Or they might be “just under the impression that this doesn’t exist, (or) they don’t want to acknowledge this exists.”

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Audrey Dutton
Audrey Dutton

Audrey Dutton, senior investigative reporter, joined the Idaho Capital Sun after 10 years at the Idaho Statesman. Her favorite topics to cover include health care, business, consumer protection issues and white collar crime. Dutton hails from Twin Falls. She attended college at Hamline University in St. Paul, Minnesota, and received a master's degree in journalism from Columbia University in New York City. Before coming home to Idaho, Dutton worked as a journalist in Minnesota, New York, Maryland and Washington, D.C. Dutton's work has earned dozens of state, regional and national awards for investigative reporting, health care and business reporting, radio journalism, data visualization and much more. Her resume also includes fellowships from the Association of Health Care Journalists, Idaho Press Club, Idaho Media Initiative and Investigative Reporters and Editors. Dutton also teaches an upper-division journalism course at Boise State University. She resides in Boise with her husband, young daughter and two cats.

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