Modeling and Analyzing Cost Overruns, Delays, and Cancellations in Senate Bill 1 Projects
Research Lead: Michael Hyland
UC Campus(es): UC Irvine
Problem Statement: Accurate estimates of infrastructure project costs, duration, and risks are critical in making informed decisions that can significantly impact quality of life in California. Cost underestimates and benefit overestimates result in sub-optimal funding allocations and worsening project backlogs. Caltrans’ preliminary examination of progress reports for projects that have been funded by the Road Repair and Accountability Act of 2017 (Senate Bill 1, or SB 1) reveals severe underestimates in project costs and timetables. Notably, these occurred even before the COVID pandemic. For example, the latest Trade Corridor Enhancement Program (TCEP) project list shows that 18 out of 67 projects are at least six months behind schedule and that 13 projects underestimated the costs. Few projects are expected to finish under budget or before the estimated completion date. Furthermore, there may also be equity implications if such faulty estimates are more significant in some programs and locations than in others. Without sufficient understanding of the patterns and potential causes of these misestimates, and strategies to mitigate them, SB 1 funding programs may, in effect, be encouraging wasteful spending.
Project Description: This project will examine the difference between initial SB 1 project cost and duration estimates in grant applications with the actual costs and completion times using publicly available data from SB 1 progress reports to analyze the types of projects that are more likely to underestimate outcomes. Specifically, the research will look at which phases of a project are more prone to cost escalations and delays for different project types, infrastructure programs, and geographic locations. It will then compare the results with projects studied in the existing literature to provide useful insights into the global, national, and state-wide problem of project cost and duration underestimation. The results of the analysis may also shed light on spatial equity aspects of SB1 implementation for future SB1 funding decisions.
Status: In Progress