The Oregon Department of Transportation is unaccountable for routine cost overruns on major highway projects. Nothing it has done has acknowledged or solved this decades old problem, and giving it billions more will fuel further cost overruns.
ODOT’s Key Performance Indicators (KPI’s) misleadingly claim that 97 percent of projects are completed under budget.
ODOT is careful to define overruns only as costs after contracts are awarded: this conceals ODOT staff’s consistent pattern of low-balling cost estimates to get projects approved.
ODOT also has a practice of “re-baselining” a project—retroactively altering the initial cost estimate to conceal cost increases.
ODOT’s project database omits every large project that has experienced a cost overrun. The agency’s Transportation Project Tracker dashboard lists only six tiny projects as having experienced cost overruns. For example, there’s no mention of the Abernathy Bridge which has gone from $248 million to $815 million.
In recent correspondence with concerned citizens, ODOT staff simply omitted initial cost estimates, covering up a 47 percent cost overrun on the Iowa Street I-5 Viaduct project.
Accountability is the latest buzzword from highway builders:Â they claim that after decades of repeated cost-overruns, that somehow ODOT will suddenly become “accountable” and that this will rein in over-spending running in to the billions dollars.
A misleading, incomplete “Projects on Budget” performance indicator
OregonDOT has several “key performance indicators” (KPI) that it tracks. One purports to measure whether project’s are “on budget.” ODOT claims in its latest report that “97% of construction projects are on budget,” up from 88 percent a decade ago.
This is a misleading statistic in many ways, chiefly because it weights all projects the same, whether they are for $10,000 or $100 million. The fact that many small contracts are completed with less than a 10 percent overage is largely irrelevant if the agency routinely experiences a 200 percent increases on $100 million contracts–which is the case. But the problems go much deeper than this: ODOT’s definition of cost overruns excludes agency estimating errors, and allows the agency to retroactively change the “baseline” to hide overruns. It’s also apparent that ODOT databases actually simply leave out any data on many of the projects with multi-hundred million dollar cost overruns.
A definition that excludes ODOT’s estimating errors
ODOT has a very particular definition of what counts as a cost overrun. They define overruns as expenditures more than 110 percent of the “baselined construction budget.”
A project is considered “on-budget” if total construction expenses are less than or equal to 110% of the baselined construction budget.
It is important to note that the “baselined construction budget” is very different from the ODOT prepared cost estimates used in planning and approving projects. It appears that the baselined budget is the net construction authorization set at contract award. Thus, ODOT only counts cost overruns occurring after it has issued a contract to actually build a project. What this misses is that ODOT typically spends years before contract issuance designing and seeking approval and funding for a project. ODOT completely controls these estimates, but their KPI excludes any increased costs that occur during estimation, concealing the early “low-ball” estimates used to sell projects to the Legislature and the public. In short, ODOT’s KPI is constructed to exclude ODOT errors in project planning.
In addition, ODOT permits itself to change the baseline construction budget—”re-baselining”—after a project has started construction. This practice allows ODOT staff to retroactively change the base budget for the project, allowing it to claim that the cost of the project hasn’t increased, and hiding cost overruns.
ODOT’s current largest construction project the I-205 Abernathy Bridge shows how deceptive this KPI is. First, when it was approved for construction in 2018, ODOT estimated the project would cost $248 million. When bids were opened in 2022, the project cost doubled to $495 million–an increase that isn’t covered by the KPI measure (which hides ODOT’s initial low-ball estimate). But since then, the cost of the project has grown: first to $622 million in 2023, then to $750 million in 2024 and now to $815 million (with further increases expected). But because this is only one project, the half billion dollar increase in spending doesn’t affect the KPI; the fact that ODOT has brought a bunch of tiny repaving, or curb cut projects in under budget drives this performance measure.
ODOT’s Project Tracker leaves out Mega-project cost overruns
The Oregon Department of Transportation has a website, called the Transportation Project Tracker that is supposed to provide accountability about its projects. ODOT claims that:
The interactive Transportation Project Tracker shows how and where Oregon’s state and federal transportation funds are spent by local, state and federal agencies. . . . The Transportation Project Tracker shows the best available budget information, including project cost (the project’s cost at completion), estimated cost and amount spent-to-date. . . . We refresh the budget information shown in the Transportation Project Tracker daily to include the most recent data available.
The website includes a database of several hundred projects with details about location, completion, budgets and actual costs. The tracker includes performance indicators for each project, and allows you search for projects basen on whether they are “on budget” or “over budget.” We recently queried the tracker to identify “over budget” projects. The result of that query is shown below:
According to the tracker, just six projects, with an average estimated cost of a little over $3 million experienced cost overruns, averaging about 16 percent. There is no mention of any of the mega-projects with cost overruns, including, conspicuously, the I-205 Abernathy Bridge which has ballooned from $248 million to $815 million. Again: ODOT claims this website provides “the best available information” and is refreshed “daily.”
In addition, the tracker defines “on-budget” as any cost overrun of less than 10 percent, implying that ODOT’s expectation is that costs will routinely exceed budget estimates.
Iowa Street Viaduct: A 47 percent cost overrun ODOT is still hiding
ODOT likes to maintain it has changed its policies to be more accountable. But a recent exchange with a citizen shows the agency is still intent of hiding cost overruns. Portland resident Joe Rowe submitted an information request to ODOT staff asking about the initial and final costs of the I-5 Iowa Street Viaduct project in Southwest Portland, a project completed in 2014. ODOT staff wrote back to say that the project ended up costing about $47.6 million, pointing out this was less than the $49.8 million “programmed amount” for the project—implying that the project had come in under budget.
Programmed amount for the Iowa Street Viaduct Project was $49,782,799.
Final cost when the project was completed was $47,621,953.
Email:Â Dee Hidalgo (ODOT) to Joe Rowe, April 7, 2025
What ODOT repeatedly failed to do was answer Rowe’s simple question about what the estimated cost of the project was when it was authorized. But we know from contemporaneous press accounts—quoting ODOT officials—that in 2010, when construction began, the project was originally supposed to cost $32 million.
So, in reality, the Iowa Street viaduct experienced about a 47 percent cost overrun. The term “programmed amount” was the total amount finally set-aside from the project to pay costs at the end of the project, including about $15 million in cost overruns. In addition, the Iowa Street Viaduct project simply doesn’t appear on ODOT’s “Project Tracker.” A decade later, ODOT is failing to be transparent—and accountable—for its actual performance.
Why this matters
Appendix
A copy of the emails between Joe Rowe and the Oregon Department of Transportation related to the Iowa Street Viaduct project is provided here: