State audit says Michigan DOT aggregate study influenced by stakeholders

Oct. 24, 2019

The audit says the study's influence from stakeholders may have undermined its credibility and usefulness to the department

The Office of the State of Michigan's Auditor General (OAG) recently released an investigative audit report detailing its findings related to the Michigan DOT's (MDOT) procurement of the Michigan Aggregates Market Study, which concluded that the department "allowed industry stakeholders considerable influence" in the commissioning and scoping of the study.

The Auditor General's office said it had received allegations back in June 2019 that MDOT allowed undue influence from an industry stakeholder when commissioning the study back in May 2016 and did not follow its procurement procedures. The complaint also alleged that the vendor who conducted the study did not meet contract deliverables.

According to OAG, MDOT's former director commissioned the study to determine whether current permitted aggregates would be sufficient to meet the needs of MDOT's future highway construction program. The former director wanted the study to present to the 21st Century Infrastructure Commission, which was charged with providing infrastructure-related recommendations to the governor. 

The investigative audit concluded that MDOT's allowing considerable influence from industry stakeholders in the study may have undermined its credibility and usefulness to the department and policymakers since the industry stakeholders involved had previously disclosed their position in favor of expanding permitted mining for aggregates in local communities.

The audit also concluded that MDOT inappropriately split the study into two separate procurements, violating its selection guidelines for service contracts. It also concluded that the department did not ensure that the selected vendors for the study provided all contract deliverables. 

Following the release of the audit, the Michigan Aggregates Association (MAA) released a statement noting that MAA perceived the report to be a vindication for the aggregates industry. "This audit again vindicates the aggregates industry because it shows that MDOT, under the previous administration, sought input from MAA, that MDOT's decisions when using that information were theirs alone, and that there is zero evidence for sensational claims that the actual independent authors of the study were affected in their work by MDOT's missteps," MAA spokesperson John Sellek said in a statement. "The fact is, all state departments seek input from stakeholders, but only departmental leaders can decide how to use that input, as was the case here. It is unfortunate for all taxpayers that internal MDOT disputes between its staff and management resulted in decisions which are now under fire." 

The OAG says its findings demonstrate opportunities for MDOT to strengthen its contracting and contract management practices. The OAG also said that in light of the scoping limitations and what it determined to be limited usefulness of the study, it said the $100,000 cost of the study "does not appear to have been an effective use of the State's financial resources."

The OAG said it offered MDOT an opportunity to respond to the report, to which the department declined.


SOURCE: State of Michigan Office of the Auditor General