CHATTANOOGA, TN (AP) The Tennessee Department of Transportation (TDOT) doled out an extra $207 million to contractors between July 1998 and September 2002, a comparison of TDOT spending and original bids for work shows.

A TDOT report for the 51-month period shows that 1,317 of 2,196 contracts — 60 percent — exceeded original bids when they were paid off.

While TDOT awarded bids totaling $2.64 billion, the total payout to contractors was $2.85 billion.

Some projects ended up costing less than original bids. That helped reduce TDOT’s extra payout to $207 million, or 8-percent more than the contractors’ original bids. Among the contracts that exceeded the bid price, the average overrun was 11.8 percent.

The state paid more than double the original bid on 14 contracts, six of them projects to build roads and the rest for items such as guardrail repair, crack sealing and vegetation removal.

TDOT said most bid overruns are caused by project changes made after work begins.

“In many cases a project will begin … and then add another lane,” said Gerald Nicely, who is in his sixth month as TDOT commissioner.

Nicely described the 8-percent overrun in bid estimates as “higher than it should be,” although not out of line with other states.

“I think we need to tighten it up,” Nicely said. He declined to set a target percentage.

A Federal Highway Administration (FHWA) spokeswoman in Washington said “5 to 10 percent is average” for bid overruns among state agencies that oversee highway construction.

A $235,528 contract awarded to Underground Technologies in Maryville ended up costing TDOT $605,895, or 257 percent of the original bid that got the contractor the job. The project was completed as scheduled by February 2002.

David Donaho, director of construction of TDOT, said the work in the Knoxville district to replace drainage pipes under the road ended up costing more because the “pipe was in worse condition than anticipated.”

Donaho said such discoveries are common.

He said contractors on bridge repair jobs often discover that “the deck may be in worse shape than anticipated” beneath the asphalt.

When contractors make such discoveries, they ask the project’s TDOT inspectors for “approval to go well beyond the contract price,” he said.

The TDOT report, which covers contracts from the administration of Gov. Don Sundquist, shows total pay-outs on 51 projects were at least 50-percent higher than original bids.

The report also identifies 306 projects that missed the completion deadline, about 14 percent of the total. But TDOT officials said projects that last longer than expected — although a major complaint of motorists — aren’t a significant factor in the cost overruns.

Contractors paid penalties totaling $3.28 million for projects that ran late. TDOT could not provide details on the contracts that were extended beyond original bid deadlines with no penalties assessed.

Nicely said about 25 percent of delays result from utility relocation work, and he predicted fewer problems in the future because of a change in state law to allow that portion of the project to begin before the roadwork contracts are awarded.

Britton Bridge Co. of Mt. Juliet is a subcontractor on the widening of a 5-mi. (8 km) span of Tennessee 153 in Chattanooga, originally a $29.6-million project that started in August 2000. The work was scheduled for completion in December 2002. Company Owner Jerry Britton, a subcontractor for Jones Brothers Construction, said design problems and rainy weather caused the delay. TDOT agreed to extend the deadline to September.

Jones Brothers referred questions to Britton, who said TDOT’s preliminary work caused much of the delay.

Britton said the design his company worked from was “disjointed” because TDOT did some of it and consultants did the rest.

Bob Brown, TDOT’’s regional director in Chattanooga, confirmed Britton’s experience.

“There were some design problems, some in house and there was a consultant involved,” Brown said. The director also said high traffic volume — approximately 70,000 cars a day — also has slowed the work.

While Nicely has said he will start assessing a penalty — up to $1,400 a day — if the 153 project is not finished by Sept. 1, Britton said that is a fraction of the contractor’s cost for a delay, which he estimated at “$8,000 to $12,000 a day.”

Britton predicted the project would be finished in November.

The total cost for the 153 project won’t be known “until the job is done,” Brown said.

Kent Starwalt, director of the Tennessee Road Builders Association, said TDOT has “moved more and more into outside consultants doing the actual inspection. That is somewhat relatively new. The book is still open on that.”

Records show TDOT has 4,885 employees, 720 fewer than in 1997.

Nicely said he has asked State Comptroller John Morgan’s office to review TDOT’s contract procedures. Morgan said the review is continuing and a report to the commissioner will be prepared when it is finished.

“I am going to really insist we reform our contracts,” Nicely said.

The most TDOT paid above the original bid was $7.5 million for construction on Tennessee 385, also known as Nonconnah Parkway, in Shelby County. The final project payment of $18.8 million was 166-percent more than the bid of $11.3 million. By contrast, 29 of the contracts exceeded the bid price by $100 or less.

Better control of bid overruns is just one of several TDOT changes that Gov. Phil Bredesen and Nicely are promising.

While TDOT is among most state departments caught in a 9-percent state budget reduction, it also is using approximately $100 million to help cover cost overruns and project extensions.

Road work is financed by the state highway fund, which gets its money from the sales tax on gasoline, diesel fuel and automobile registrations. TDOT has an annual budget of $1.4 billion, more than half of which comes from the federal government.