Change Leader Full Interview: Technology Can Improve Construction Close-Out and Accountability

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Si Katara, president of Pavia Systems, is helping DOTs across the country meet accountability requirements using his firm’s infrastructure technology solution. 

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V1 Media: Please provide a brief background of your education and career before Pavia Systems.

Katara: I graduated from the University of Washington with a bachelor of science in computer engineering, and then ended up going to work for a startup company in Silicon Valley doing embedded systems software engineering. We ended up getting acquired by Cisco Systems, worked there for a few years, and then realized that big companies weren’t really my speed. So I connected with George White, the other co-founder of Pavia Systems, to talk about some opportunities, and I decided to leave Cisco, spin off the first University of Washington startup company out of civil engineering in 2005, Pavia Systems, and I haven’t looked back since.

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V1 Media: What does Pavia Systems do, and what is your role with them?

Katara: Pavia Systems provides technology for the transportation industry. Transportation is fundamental to the way we live our lives. It impacts how we get to see our families and how we get to work. If you think about commerce, the food we eat, even the healthcare we receive, it’s all founded on the idea that we’ll have a strong infrastructure and foundations in order for us to live a high quality of life. But the reality is that transportation infrastructure is a late adopter of technology, mainly because there hasn’t been technology purpose-built for the industry, and it’s been doing things the same way for so many years. So the ultimate lens and opportunity that we see in the industry is how do we take technology to impact this industry so we can deliver a high-quality reliable transportation infrastructure system. And that’s where all our efforts from a research perspective come together, from a product perspective and a services perspective—taking technology to really help provide value to transportation.

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V1 Media: What are some of the specific technologies you provide?

Katara: The latest one is what we call the Headlight project intelligence platform. For owners—basically departments of transportation—when they’re building a big heavy highway construction project, their role is to administer that project and deliver it to the traveling public. But they don’t actually do the physical work—that’s what contractors do. Owners’ role is to have oversight and make sure all the work being done is of high quality, and it’s being done so the infrastructure is very safe and reliable in the future, and to make sure that taxpayer dollars spent on infrastructure are being spent in a very responsible way.

Traditionally, that business process is done and administered—with all the oversight—literally with pen and paper. In 2018, most of the agencies we talk to still are using pen and paper in the field to do oversight for quality and safety. Our technology helps them leverage mobile tablets to electronically capture all the information related to payments, project quality and progress of how those projects are being built. Then it allows them to “push a button” and do all the administrative aspects of the role, such as daily reports and pay estimates. And if claims or issues or questions come up, instead of digging through paper boxes the old fashioned way, they can push a button in our technology and get to the information they need to answer those questions.

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V1 Media: What do you do at Pavia?

Katara: I’m president and co-founder of the company. I’ve been here since the beginning in 2005. Latest roles have been on the business development side of the business—on the sales side. Also, I have oversight into marketing as well as some of the customer experience capabilities of the company. But from the beginning, co-founder and president means head janitor all the way up to sales, product development and technology. That’s where it started. As we started to scale the company, we were able to have oversight and hire amazing people to run different parts of our division. A big part of my value now is just getting the word out there about our capabilities as a company, and how to onboard additional partners and customers to grow the business.

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V1 Media: When you started, what was the hole in the market you saw that you thought you could bring a new business to?

Katara: We actually started with different products, so we ended up licensing a lot of online training materials that were interactive learning tools from the University of Washington back in 2005. There’s been a lot of progress in how people train, but one of the biggest challenges the industry still has is how do you fill the gaps between the talent available versus the talent needed to help deliver all the things this industry needs to do. There’s a big gap today, and there’s going to be a bigger gap tomorrow, when it comes to finding a stable workforce to help contribute to the industry. Training, know-how, onboarding—if that expertise isn’t there inherently, you’ve got to be able to teach people how to do it. So that was the original genesis of the company: let’s provide a more-efficient way to help train the future workforce for this industry. Since then, we’ve transitioned to doing a lot of other research for state agencies and the federal government.

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V1 Media: What does it mean that “construction projects often remain open longer than necessary”? What does it mean to “close out properly”?

Katara: The Federal Highway Administration (FHWA) has a couple roles; one of them is to provide federal funding to states to build projects. The states have the burden of building and implementing and getting those construction projects built. When FHWA gives federal money to a state or a city or county, there’s some oversight and “strings” that come with that money. What it means for construction projects to “remain open” is, basically, a construction project will have an end date when there’s no more work that’s being done. The period from when a construction project ends with no additional work to when an actual project closes out is the period we’re talking about. That’s the window where FHWA has oversight into making sure all the “i’s are dotted and t’s are crossed” with how that construction project was built and implemented.

FHWA will say “alright, there’s no more work being done; we want to make sure that what we’re paying for with federal dollars to the state is being done in the right way.” Is there proper justification for the payments made to contractors? If I ask for three box culverts, did you actually get three box culverts delivered and built as part of this project? Show me the evidence you have for that—that’s one example.

So they’ll go and check to make sure those taxpayer dollars are spent responsibly, and that all the accounting on the finance side and all the quality from the delivery side were done in accordance with the upfront expectations. So that’s a big burden for state DOTs to deliver that kind of oversight and accountability. Traditionally, the state would provide FHWA with all their records, which, in most cases, are physically printed pieces of paper that will show you all the things that were done from a project perspective and a quality perspective.

That’s a lot of paperwork for FHWA to go through and for state DOTs to provide. So it’s really an onerous process in that window—that those projects are “open.”

From an accountability standpoint, how do we do that process in a more-effective manner so states can collect that information more easily, and the FHWA can have that oversight and view, from an accountability perspective, to know that everything was done right, and that federal taxpayer money being given to the states is for work that was performed correctly—that’s the window we’re talking about.

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V1 Media: Apparently there was legislation passed in 2014 to combat “poor stewards of taxpayer dollars.” Would you describe that legislation, why it wasn’t enforced originally, and how changes in 2018 improved the situation?

Katara: The big legislation was oversight that said “there’s going to be a time constraint for when project closeout actually has to occur.” It wasn’t enforceable, because the systems used to track when a state’s project, for example, was actually done from a construction standpoint, there was no end date in the technology they used to track that. So in February 2018, they implemented technology so you can track when construction was completed for a particular project.

So now the FHWA can actually enforce that idea of a project closeout; a project is done from a construction standpoint, now we have X amount of time to complete the project. Closeout and oversight to make sure we get this bundled up, wrapped and archived directly for FHWA. So the legislation has been there for a while, and states do their best to try and adhere to those timelines. But now there’s an actual enforcement component that FHWA can start to plot, to enforce true timelines and get things fully completed from a closeout standpoint.

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V1 Media: How do they enforce those regulations? Is it cutting off funding or are there other elements?

Katara: There are other elements—part of it is funding related, and that’s a great question for the FHWA, so I’ll leave the majority of enforcement discussion to them. But every state has a local FHWA resource, and their job is to do that oversight, to make sure project closeout can be done correctly.

The current challenge has been two-fold—I’ll give you an example of what FHWA asks for. They’ll pick, for example, one “bid item”—usually in a medium-sized project there are maybe 200 to 300 of these things called “bid items.” Essentially, it’s a budget that’s tied to every item of work that gets done on a job. So FHWA will come to the state and say, “Let me take a look. You guys have completed this particular bid item.” So FHWA will track a bid item from inception to project closeout. They’ll track all the payments that were made across the scope of the project; is there the proper record keeping for each payment to calculate and justify the quantity amount that you actually paid for?

It’s a big overhead from a record-keeping standpoint to make sure all those records are properly kept. In some cases, a state DOT, because there’s so much that goes on with the construction project—maybe there are a few paper gaps that they don’t have—so the state has the burden to actually fill those gaps, and sometimes they’ll actually have to call the inspector and the project engineer, and say, “Hey, do you remember what happened with this? Do you have any notes in your paper, physical paper field book?” to get the information that FHWA is asking for?

So that process can take a really long time, especially when the information needed isn’t available out of the box. That’s the opportunity: if you use the right innovation, you can make it much easier to collect that information so you can ensure that information is available. Then how do you find it when needed? Traditionally, you’re digging through paper boxes to get the information you need to justify those quantities.

Now, with innovation, you can use the equivalent of what a quick Google search would be to push a button and correlate all the information from start to finish on that bid item to justify every single quantity that was collected with that bid item. So that’s where the opportunity comes in to use innovation in a way to really help FHWA and the states do project closeout much more efficiently.

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V1 Media: How can construction teams better comply with these federal requirements?

Katara: There are two parts: How do you collect the information so it’s available when you have to get to project closeout. And how do you find the information in this haystack, to do that random sampling and audit, so you can quickly access and get the answers you need throughout that project-closeout process.

Construction teams can do this much more effectively if they have the right kind of innovation. That’s where our technology really helps, but, more broadly, this idea of project intelligence is providing a central place that really is streamlined for field people to quickly collect the information they need. For example, leveraging a tablet, where you can snap a photo, everything’s GPS time-stamped, and then, with that morsel of information, you can associate it with that particular bid item or a particular contractor, so you know visually and quickly what work was done, where it was done and when it was done.

That information then gets stored in a central place that, two years from now when the project is done, it’s very simple and easy now to go back and find and correlate all the information you need, for that particular bid item, or for every payment that was computed, or for passing or failing materials tests. All that information is now push button instead of asking the question, “How did I get to this number?” and having to dig through paper boxes to get to that answer. So that’s one of the key ways construction teams can do that, but also anybody who needs access to that information to do their role in oversight now has a central place to find and correlate the quality and payment information they need to quickly execute project closeout.

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V1 Media: Is there anything you feel like we missed?

Katara: I think this is a really important issue to touch base on, just because it’s really challenging for both parties, for states and FHWA to just make sure this is done the right way. I think both parties are looking for innovative ideas to help them, and what’s great about this is it supports the spirit of which FHWA and state DOTs work together to deliver our national transportation infrastructure. It’s truly a partnership: federal and state.

And with the right innovations—and hopefully Headlight can be a part of this—the right innovation will really help FHWA and state DOTs continue to strengthen those partnerships, because those folks can work from the same information, the same playbook, and have access to it much more quickly, which will facilitate how both parties can communicate back and forth. That’s the bigger vision. That’s what we want to try and support as a company. That’s going to save millions of taxpayer dollars, which will help us invest in more of the infrastructure we need. So that’s the broader vision, and that’s why we’re super excited that we can help contribute to the industry.