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Transportation Departments are Outsourcing Damage Claims Recovery and Other Project Work to the Private Sector

Transportation departments across the country are feeling pressure from budget constraints to do more with less. Many of the projects that department leaders would like to initiate suffer from a lack of funding or other obstacles, such as human resources and expertise with particulars of a given project. In fact, not only are many agencies strapped for cash, but they are also often understaffed in their core and non-core business functions. Outsourcing some business functions is a typical way that state transportation departments are able to save money and do more with less.

Benefits of Outsourcing
For the most part, state agencies have relied on in-house staff to conduct all necessary work for a given infrastructure project, to design and build the roads as well as handle the administrative end. However, all those dollars can add up for states that are paying out salaries, benefits and other related costs.

According to the Virginia Department of Transportation, there is a growing trend to outsource some aspects of these projects. The trend is a result of the budget dilemma that state agencies face. Some outsourced jobs are small, while others are large. Sometimes, projects can be complex, particularly in the financial administration and damage claims worlds. Oklahoma based Claims Management Resources (CMR) recognizes the opportunity that state transportation departments need help with. CMR can complete the claims process affordably and efficiently with their expertise and resources.

The Virginia DOT said in their report that cost savings are the most immediate reason for outsourcing. However, efficiency, innovation, quality, speed, peak demand and risk management are also cited factors for outsourcing to the private sector to companies like CMR and others.

Infrastructure Outsourcing
According to the Reason Foundation, 34 state transportation agencies in the United States outsource infrastructure projects. They cited budget constraints as a primary reason. Lack of personnel and expertise was also cited. Nearly all states are facing the same scenarios, so outsourcing and public-private partnerships will likely continue to grow.

The Reason Foundation also made four key recommendations for agencies including recognizing potential benefits of outsourcing, recognize problems with cost comparisons, recognize a diverse array of project delivery methods and types of outsourcing and understand the importance of the private sector for public infrastructure work. Damage claims recovery is a very narrow and complex topic that requires specific industry experience that can be offered by the private sector to public agencies.

Damage Claims Recovery
Damage claims assessments can be complex, expensive and drawn out and the process that has traditionally been conducted by in-house staff at state transportation departments. It is now being outsourced to companies, like CMR, that understand the complexities of recovering damages from claims. This work involves making specific determinations, processing documents, coordinating with agencies and individuals, tracking down individuals after a determination, and attempting to collect on the claim, among other administrative tasks associated with damage claims recovery.

Damage claims recovery services provided by companies like CMR, therefore are helping save taxpayer dollars, along with unloading these burdens from overworked or understaffed state transportation agencies.

Claims Management Resources, Inc., is a full-service, damage claim recovery firm specializing in utility and governmental claims throughout the United States. Founded in 1988, CMR partners with in-house claims organizations and risk management departments of self-insured utility companies and governmental agencies to provide complete, efficient, cost-effective, outsourced damage claim recovery functions. For further information, please visit: www.cmrclaims.com.You also may follow us on Facebook (facebook.com/pages/Claims-Management-Resources-CMR/), Twitter (twitter.com/CMRClaims), and YouTube (youtube.com/user/ClaimsManagement).