2008-01-AU Limited Scope Performance Audit Report Department of Public Works CIP Contract Change Orders and Supplements for FY 2006-2007

Home

o Of the 28 professional services and construction contracts in our audit sample, 18 contracts or 64% remain open and exceed their original contractual completion dates, and 14 contracts or 50% remain open and exceed their current contractual completion dates. Please see Appendix for: Table 5.3, Audit Sample — Construction and Professional Services Contracts — Time Analysis. o With regard to escalation fees: Change Order C.000056.1 for $136,238 was issued for escalation fees relating to the County's delay in executing a $375,000 construction contract for planning, design and construction of a new warehouse addition for Ka`u baseyard improvements. Change Order C.000056.2 in the amount of $17,068 for additional escalation fees has been approved by the County and is pending approval by funding source U.S.D.A. If approved, the combined escalation change orders will reflect a 41% increase in contract price. Change Order C.000641.1 (which totaled $1,131,225) included $147,848 directly related to escalation fees due to delayed execution of a $6,409,034 construction contract for the East Hawaii Regional Sort Station. The change order reflects a 2% increase in contract price. However, delay in contract execution was attributable to lack of available funding and not within the direct control of the Department of Public Works. Audit Obiective No. 3: Determine the extent to which contract supplements and change orders could have been avoided. • Contract supplements and change orders could have been avoided, or significantly reduced in number and dollar value, with additional project scoping. Based on project documentation provided by the Department of Public Works, the auditors determined that a significant number of contract supplements and change orders issued for the audit period related to work that could have been foreseen during the initial scoping of a professional services contract or the initial scoping and design phases of a construction project, and should have been included in the original procurement. Among them were: o Contract Supplement No. C.000045.2 for $178,248 for structural engineering services to develop multiple sites considered for a West Hawaii Traffic Building. o Change Order Nos. 000644.1 to 000644.4 totaling $99,758 for additional work related to site assessment and plan deficiencies in large capacity cesspool conversion projects in Ka`u and North and South Kona. 17