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The hidden critical path in highway programs

Utility relocation delays remain one of the most common reasons highway projects finish late, because state transportation departments depend on utility owners and right-of-way agents they do not control. Leading agencies are managing every relocation as a dated, priced obligation, tracked from the first conflict notice to the last pole moved.

RoadsSegeta Insights
Roads
The number56%

of utility change orders trace to plan errors or bad utility data

What is at stake

A 60-day utility delay on a $$150 million urban interchange could carry about $$6 million in combined costs.

Where days are lost
  1. Design to utility owner
  2. Right-of-way to relocation
  3. Field discovery to contract change

A highway project depends on two kinds of work. The first is the construction that the state department of transportation (DOT) procures and controls through its contract. The second is the relocation of gas mains, water lines, power poles and fiber that belong to utility owners, who work to their own budgets, crews and priorities. On most urban projects the second kind sits on the critical path, yet agency schedules usually treat it as a precondition and record it as a single date.

The consequences of that treatment have been documented for decades. In a foundational 1999 study, the General Accounting Office (now the Government Accountability Office) found that about half of all federal-aid highway and bridge projects involved utility relocations, and that 44 states had compensated contractors for relocation delays by extending completion schedules.1 This article sets out why utility relocation delays matter more now, where the days are lost and what each day costs on a large urban interchange.

Construction inflation has raised the price of every open month

The Infrastructure Investment and Jobs Act (IIJA) provided $$379.3 billion for highway infrastructure between fiscal years 2022 and 2026, about 56 percent of its transportation funding.2 Construction prices absorbed much of that increase, because the National Highway Construction Cost Index rose 63 percent between fiscal 2021 and fiscal 2025, and the Bureau of Transportation Statistics estimates that cost growth reduced the buying power of IIJA highway funds by 32 percent over fiscal 2022 to 2025.2 As a result, every month a contract stays open carries more exposure to escalation, extended overhead and claims.

The underlying utility risk persists on current projects. In a 2024 National Cooperative Highway Research Program (NCHRP) study, 194 practitioners from owner agencies, consultants, contractors and utilities rated newly discovered utility conflicts among the most frequent construction risks, at 3.7 on a five-point scale, and contractors alone rated them at 4.5.3 The same study processed more than 150,000 change order and claim records from six state DOTs and identified 11,803 utility-related change orders.3

Utility relocation delays begin in design and surface in construction

Most utility-related change orders trace back to information that should have been settled before letting. In the NCHRP analysis, errors and omissions in plans, specifications and estimates, together with inaccurate data about existing or relocated utility facilities, explained 56 percent of utility-related change orders.3 The days are lost at three handoffs between the DOT, the utility owners and the contractor.

More than half of utility-related change orders trace to plan errors or inaccurate utility data.

Exhibit 1Plan errors and bad utility data drive most utility-related change ordersShare of 11,803 utility-related change orders by reason, percent
Plan errors and omissions33
Inaccurate utility data23
Owner/contractor changes12
Relocation scheduling11
Differing site conditions4
Constructability4
Deficient relocation work2
Right-of-way delays2

Source: National Academies, NCHRP Web-Only Document 396, Strategies to Address Utility Issues During Highway Construction, 2024

01Design to utility owner

Utility owners receive plan sets and conflict notices through letters, emails and portal uploads, and each owner works to its own budget, crew availability and capital program. In the GAO survey, 34 states cited utilities' lack of resources as a reason for delay, and 28 cited the low priority utilities gave to highway relocations.1 When a utility agreement is executed late, the relocation slides into the construction window that the schedule assumed would be clear.

02Right-of-way to relocation

Utilities often cannot move until the DOT has acquired and cleared the parcels where their new facilities will sit, so one holdout parcel can stall several relocations at once. Practitioners in the NCHRP survey rated delays acquiring critical parcels and delays getting utility owners to respond as equally frequent risks, at 3.7 each.3 These dependencies usually sit in a right-of-way tracking spreadsheet that the construction schedule never reads.

03Field discovery to contract change

When a crew finds a line missing from the plans, the contractor stops work on that activity, documents the condition and eventually files a change order or claim. The NCHRP authors note that agencies tend to underestimate these impacts, because contractors reshuffle crews before filing and reason codes often mask the true cause.3 Texas DOT records cited in the same study show utility-related claims took an average of 492 days to settle.3

A connected operating model manages each relocation as an obligation

Leading agencies and design-build teams are beginning to manage every utility relocation as an obligation with an owner, a deadline and a cost for every day it stays open. A live layer reads the systems and documents already in use, including Primavera P6, right-of-way spreadsheets, utility agreements, plan sheets and correspondence, and runs a four-step loop:

  1. Detect

    a conflict between a utility owner's stated availability and the construction schedule, such as a utility letter committing its crews elsewhere during the relocation window.

  2. Explain

    which activities, lane closures and contract milestones depend on that relocation, from the drilled shafts to the flyover opening.

  3. Recommend

    recovery options with owners and expected impact, such as resequencing the shaft work or redesigning around the line.

  4. Execute and track

    each agreed action to closure, recording the days and dollars retired in the same record the claims team will later rely on.

The same record can give utility owners, right-of-way agents and the contractor one current list of conflicts, dates and responsibilities, which is the purpose of the utility conflict management tools developed under the second Strategic Highway Research Program (SHRP2). Texas reported nearly $$10 million in savings and 38 months of project delivery time saved on five pilot projects that used those tools.4 Artificial intelligence does the reading, linking and drafting across letters, plans and spreadsheets, while utility coordinators, engineers and program directors remain accountable for every judgment and commercial decision.

A utility delay on an urban interchange costs about $$100,000 a day

The cost of a utility relocation delay is the daily exposure created when a relocation is unfinished on the date construction needs the space, including contractor extended overhead, the agency's own engineering and inspection costs and the road user costs of a work zone that stays in place longer.

A 60-day utility delay on a $$150 million urban interchange could carry about $$6 million in combined costs.

Exhibit 2. Estimated daily cost of a utility relocation delay on a composite $$150 million urban interchange

ComponentBasisEstimate per day
Contractor extended field overheadStated assumption: general conditions of 10 percent of a $$150 million contract, spread over a 900-day scheduleAbout $$16,700
Agency construction engineering and inspectionAlabama DOT 2025 calendar-day liquidated damages rate for contracts above $$10 million 5About $$3,350
Road user delay costStated assumption: 80,000 vehicles a day each lose 1.5 minutes in the work zone (2,000 vehicle hours), 90 percent cars and 10 percent trucks, at Texas DOT 2026 values of $$39.61 and $$54.84 per vehicle hour 6About $$82,300
TotalSum of the three componentsAbout $$102,000

Source: Segeta estimate based on Alabama DOT and Texas DOT data; assumptions are illustrative.

On these assumptions, a 30-day slip costs about $$3.1 million and a 60-day slip about $$6.1 million, and roughly 80 percent of that cost falls on the traveling public. Agencies often convert part of the contractor component into no-cost time extensions or negotiated settlements, which limits the cash outlay but leaves the road user cost untouched. Few agencies recover anything from utility owners, since GAO found only seven states using monetary penalties to hold utilities to relocation schedules.1

What DOT program directors and contractors can do now

  1. 01Map every relocation as a dated obligation

    For each project in the next two lettings, list each utility owner, the relocation it owes, the parcels it depends on and the date construction needs the space, with a named owner on each side.

  2. 02Invest in utility data before letting

    Subsurface utility engineering addresses the plan errors and data gaps behind most utility change orders, and an FHWA-sponsored Purdue University study of 71 projects found $$4.62 in savings for every dollar spent.7

  3. 03Read utility correspondence against the schedule

    Check every letter, email and portal update about crew availability against the activities it affects on the day it arrives.

  4. 04Price each relocation before it slips

    Attach a daily cost, including road user cost, to every relocation on the critical path, so a revised utility date is discussed in dollars at the next coordination meeting.

  5. 05Code utility delays accurately in change orders

    Consistent reason codes show program directors which owners and handoffs generate delay, and they give a defensible basis for future utility agreements and claims.

State DOTs cannot direct utility owners' crews or shorten condemnation proceedings, yet they can control how quickly a revised utility date becomes a recovery decision. Agencies and design-build teams that manage each relocation as a live, priced obligation are likely to reduce claims, shorten work zone durations and recover part of the buying power that construction inflation has taken from the program.

Questions leaders ask

What causes utility relocation delays on highway projects?

Most utility relocation delays begin well before construction starts. A 2024 NCHRP analysis of 11,803 utility-related change orders found that plan errors and omissions and inaccurate utility data explained 56 percent of them. Utility owners' limited crews, the low priority they give highway work, late utility agreements and unacquired right-of-way parcels push relocations into the construction window the schedule assumed would be clear.

How much does a utility relocation delay cost a state DOT?

On a composite $$150 million urban interchange, a day of utility delay could cost about $$102,000, combining contractor extended overhead, agency engineering and inspection, and road user costs. A 60-day slip would then carry about $$6.1 million. Roughly 80 percent of that cost falls on travelers, and contractor claims can take more than a year to settle.

What is a utility conflict matrix?

A utility conflict matrix is a shared list of every point where a planned highway feature conflicts with an existing utility facility, with the owner, the proposed resolution, the responsible party and the target date for each. It was promoted through the SHRP2 utility conflict management program, and Texas reported nearly $$10 million in savings on five pilot projects.

How does subsurface utility engineering reduce highway delays?

Subsurface utility engineering locates and maps existing utilities to defined quality levels during design, so conflicts are resolved on paper before crews reach the field. That addresses the inaccurate data behind many utility change orders. An FHWA-sponsored Purdue University study of 71 projects found $$4.62 in construction savings for every dollar spent on it.

Notes and sources
  1. US General Accounting Office, "Transportation Infrastructure: Impacts of Utility Relocations on Highway and Bridge Projects," GAO/RCED-99-131, June 1999, govinfo.gov.
  2. Bureau of Transportation Statistics, "Increases in Highway Construction Costs Reduced the Economic Value of Transportation's IIJA Funding by 32 Percent," US Department of Transportation, June 2026, bts.gov.
  3. National Academies of Sciences, Engineering, and Medicine, "Strategies to Address Utility Issues During Highway Construction," NCHRP Web-Only Document 396 (NCHRP Project 15-69), 2024, nationalacademies.org.
  4. AASHTO, "SHRP2 Final Product Closeout Report: Utilities," American Association of State Highway and Transportation Officials, April 2019, shrp2.transportation.org.
  5. Alabama Department of Transportation, "General Application Special Provision No. 22-LD0001(2): Liquidated Damages," December 2024, dot.state.al.us.pdf).
  6. Texas Department of Transportation, "Road User Costs," accessed October 2026, txdot.gov.
  7. Purdue University for the Federal Highway Administration, "Cost Savings on Highway Projects Utilizing Subsurface Utility Engineering," FHWA-IF-00-014, January 2000, rosap.ntl.bts.gov.