LDSA Projects and the Construction Inspection (CI) Calculator — What You Need to Know

August 20, 2021

Ensuring that you adequately estimate all projects costs and request enough funding to cover all phases of your project is critical.  All projects using locally administered federal aid (LAFA) require full-time construction inspection which must be included in and paid for out of the project budget. If the construction phase budget is not adequate to cover the costs of the obligatory full-time inspection services, Sponsors may have to come up with additional local funding to pay for this essential and required project component.  The Construction Inspection (CI) Calculator is one tool to assist in accurately estimating the necessary full-time inspection costs and other ancillary costs that are necessary during construction, but are often omitted from the estimate resulting in an underfunded construction phase.  Use of the CI calculator will minimize this potential.

The 10-15% Misnomer

Historically, the NYSDOT Local Projects Manual (LPM) outlined that construction inspection should typically be budgeted at 10 – 15% of the project construction cost. While this rule of thumb is fairly accurate for large projects with higher construction costs, it does not necessarily hold true for small to medium sized projects with lower construction costs, and the majority of LDSA projects fall in this category.  The cost of construction inspection is based on the duration and complexity of a project and LDSA guidelines require a minimum of one full-time inspector for the duration of construction. The number of required inspectors increases as project complexity increases.  A fairly simple project with a low construction cost may take 6-8 months to construct due to staged construction, onsite constraints, utility relocations or other factors. In cases like this, the cost for full-time construction will likely exceed 10-15% of the construction cost and using this rule of thumb will result in your project being underfunded. The Sponsor must then supplement this budget with local funding.  If local funds are not available, the Sponsor could request approval of a scope change from the NYSDOT to delete certain components from the project to free up more dollars to apply to construction inspection. If neither of these options are determined to be viable, the Sponsor risks having to give all the federal funding back and forego the project.

The Fisher Difference

Recognizing the disconnect between construction costs and inspection budgets, Fisher led the efforts to create a tool which allows the user to walk through targeted questions to develop a more accurate CI budget for their specific project. The CI Calculator, accessible via a link in Chapter 6, Section 6.2.7 Estimate Cost of Consultant Work, of the Local Projects Manual (LPM) available on the NYSDOT website at https://www.dot.ny.gov/plafap, establishes the construction inspection cost based on the number of inspectors required for a project (refer to Table 1 in the LPM, Chapter 15, Section 15.3.3.2 Construction Inspection), the estimated duration of construction, and the estimated percentage of inspection overtime anticipated.  This is important as many contractors work 10-hour days plus Saturdays, and overtime costs for inspectors can add up quickly.  The CI Calculator also accounts for other important costs such as inspector’s mileage, construction inspection software licenses, and a variety of testing costs that may apply to your project and, therefore, should be included in your budget.  As the creator of this tool, Fisher has inherent knowledge of how it works and can guide you in use of the calculator to ensure that you request enough funding to cover the construction inspection phase of your project. 

For information about the Fisher difference and how to take advantage of Fisher’s expertise in applying the CI calculator and developing adequately funded projects, contact Emily Smith, PE, Vice President, Director of Transportation at Fisher Associates at esmith@fisherassoc.com.