Strategic Resource Evaluation Study

Balmoral was retained by the Florida Department of Transportation to evaluate critical highway construction materials, the outlook for timely supply and cost-feasible availability, and the estimated quantity of each material needed to meet the FDOT Work Program. The scope included evaluation of the influence on supply or cost of: • Producer/materials location: existing and future/planned
• Transport & Distribution issues affecting supply chain
• Land use/ Environmental issues
• Competition
• Foreign materials and markets
• Policies, regulations or laws affecting supply or cost
The Balmoral Group obtained historical data from FDOT and other public and private sources to first estimate the total quantity demanded for each material by project type, scale and geographic location. Statistical relationships were used to identify variation by total project cost, length (lane miles), complexity, project type (bridge replacement/resurfacing/new alignment etc.) or other factors, and used to develop coefficients for estimating future materials needs for undersigned projects in the work program. Once quantities estimates were established, Balmoral’s economists built an econometric model of bid prices dating to 1993 while conducting extensive surveys and interviews of producers/suppliers and contractors. Models were established for each material and market/District in Florida, as well as statewide. Key events like Hurricane Katrina, the onset of the Gulf War, and 9/11 were identified to statistically tease out the effects of economic shocks on FDOT’s costs and lead times. Balmoral’s economists were able to identify the key parameters affecting FDOT’s costs and supply availability, and the monetary effects of each. In turn, discussion with interviewees found several steps FDOT could take in its approach to specific design specifications to mitigate negative effects and increase competition. Following the recommendations from our initial report, FDOT reviewed design specs and identified areas across each material that could be modified, resulting in improved control over materials costs, and fewer project disruptions. Balmoral has continued to prepare materials quantities and cost estimates annually for the Department, and a review of past forecasts has found our projections to be highly accurate.
In addition to quarterly and annual economic analysis, Balmoral has conducted rapid turnaround analyses for FDOT, including:
• assessment of data regarding imported cement;
• analysis of the effects of environmental rules;
• materials estimates for specific geographies.