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

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of billings and work performed in the form of inspector's log books or project engineer's progress reports. Often the only regular assessments of percentages of project completion were statistics provided by contractors /vendors in their billing statements. Audit Obiective No. 7: Determine whether examination of additional issues arising during the limited scope audit is warranted. • The Department of Public Works' lack of standardized project documentation, reporting and communication has contributed to delays and increased costs in its delivery of services to the public. Standardized documentation, reporting and communication of project progress and oversight are lacking in project files provided to the auditors. In interviews with DPW administrators and section chiefs, the auditors were told that project inspectors keep daily log books or notebooks documenting daily work progress including manpower, material and equipment usage, project delays due to inclement weather, other natural events or unanticipated site conditions, and contractor performance or contract compliance issues. However, the auditors only consistently found such documentation for projects funded by federal dollars and overseen by another department or agency such as the County Office of Housing and Community Development for its Community Development Block Grant (CDBG) projects and the State Department of Transportation (DOT) for federal -aid highways projects. DPW managers stated that the State DOT inspector log book is standardized to be of a particular size, color and binding. However, DPW does not require a particular type of inspector's log book, nor do DPW managers verify the existence of or review inspector's log books or notes. Project inspection logs provide an indispensable record of verbal requests for additional work or corrections to work; contemporaneously documented reasons and responsibility for work delays; daily on -site statistics relating to personnel, material and equipment; and documentation of performance and compliance issues essential for contract enforcement and resolution of disputed charges as well as protection of the County against unwarranted claims by contractors or vendors. • The Department of Public Works' practice of bundling work has contributed to a concentration of work with a relatively small number of professional services consultants and construction contractors. While it is understandable that the Department of Public Works bundles or groups necessary work in order to gain economies of scale and reduce time and costs for bid preparation and /or contract negotiation, this practice can be harmful to the County in a number of ways. The practice raises concerns of compliance with HAR §3- 122 -13 (a) (2) and (4) cited above, which require that project specifications allow for competition and provide for an equitable award at the best value. The argument has been offered that being an island economy, Hawaii County has access to only a limited number of contractors and consultants who can qualify and perform the work required. However, if this is the case, it is even more important for the County to consider the impacts of bundling when scoping a project. For example, while grouping several roadway improvement projects into one contract may be less costly in 23