Meeting_Body
CONSTRUCTION COMMITTEE
JULY 15, 2026
Subject
SUBJECT: OFFICE OF THE INSPECTOR GENERAL CONSTRUCTION CHANGE ORDER SPOT CHECKS
Action
ACTION: RECEIVE AND FILE
Heading
RECOMMENDATION
Title
RECEIVE AND FILE Office of the Inspector General Construction Change Order Spot Check Report for the period March 1, 2026, to May 31, 2026.
Issue
ISSUE
On January 25, 2018, the Metro Board directed the Office of the Inspector General (“OIG”) to conduct random spot checks on change orders for the construction projects listed in the quarterly program management report to ensure that the CEO Delegation of Authority to approve Construction Change Orders Policy is performing in the manner desired by the Board of Directors.
Background
BACKGROUND
The OIG’s Construction Change Order Spot Check Program (“Spot Checks”) focuses on approved change orders and modifications that exceed $500,000. The four change orders in this report were selected from the Program Management Quarterly Major Project Status for the period of March 1, 2026, to June 30, 2026. The OIG gathers the data, reviews all the change orders over $500,000, and selects change orders from the major projects. The information for the Spot Checks was collected from the Program Management Information System (PMIS), which is the department’s database system. Also, virtual meetings and telephonic interviews were conducted with Metro Program Management, Project Control, and Procurement staff from each involved project office.
For each Spot Check, we summarized:
• Description of the change order,
• Change order detail,
• Scope of Work,
• Budget,
• Schedule (Time to execute the change order),
• Safety, and
• Recommendations (lessons learned are identified starting with this report).
Metro’s Program Control department has provided informal responses to this report before its issuance, and they are asked to provide written responses to the recommendations in this OIG Spot Checks Report within 30 days after this Report is issued. Included with this report is a spreadsheet with the status of responses concerning previous OIG Spot Check Report recommendations (Attachment B).
Discussion
DISCUSSION
Spot Checks Performed in this Quarter
Spot Check #1 -The Purple Line Extension Section 1 Transit Station Project
This OIG Spot Check report pertains to the Purple Line Extension Section 1 Project (Contract C1045 MOD 00282), Additional Work, Wayside Operational Signage Package
Change Order Detail
See Attachment A Spot Check #1 table.
Summary #1
Scope of Work - This change order, MOD 00282, in the amount of $1,727,681, is for additional scope of work on the Purple Line Extension Section 1 (PLE1) Project to support the procurement and installation of the Wayside and Operational Signage Package identified under ECI-069. The Contractor prepared and submitted all follow-up shop drawings required to fully complete the scope of work in accordance with the contract directive. Shop drawings were reviewed and approved prior to the commencement of any fabrication or installation activities. All work was performed in conformance with applicable contract documents, specifications, and governing standards for signage systems. Throughout the fabrication and installation process, the contractor maintained active coordination with Metro, ensuring timely completion and full compliance with project milestones and quality requirements.
The following scope items are included in this modification:
• Exhibit 1 - New station corner signs from the Regional Connector.
• Exhibit 2 - Revised tunnel directional signs from Regional Connector (per RFI-MTA-799 Response).
• Exhibit 3 - Summary of permanent signage types included in this change.
• Clarifications to interlocking and cross-passage signs (per RFI-MTA-813 Response):
• Temporary signage: Contractor to fabricate and install temporary signage as necessary in Reaches 2-4 to support live-car testing and maintain the project schedule.
Budget - This change order for MOD 00282 had an agreed-upon amount of $1,727,681. The initial Contractor's Cost and Schedule Proposal (CSP) was $2,277,317, and the Independent Cost Estimate (ICE) was $1,736,459. The ICE is $540,858 (23.75%) under the CSP, and the negotiated amount is $8,778 (.51%) less than the ICE. The project staff stated that funds for this change order are within the Life-of-Project budget.
Schedule - The CEO Delegation of Authority process was utilized for this change order. The modification was awarded on April 09, 2026 and the staff completed all signature approvals within two workdays. Under the prior Board approval method for change orders, assuming presentation at a July Board meeting date, it would have taken a total of sixty-eight workdays to complete the transaction.
Safety - The Purple Line Extension Section 1 C1045 has 11,211,308 Project hours through December 2025, with a Total Recordable Injury Rate (TRIR) of .80 (the Bureau of Labor Statistics National Average is 2.3) and a Days Away, Restricted or Transferred (DART) rate of .08 (the Bureau of Labor Statistics National Average is 1.5).
Recommendations/Lessons Learned - No recommendations by the OIG.
Spot Check #2 - The Purple Line Extension Section 2 Transit Station Project
This OIG Spot Check report pertains to the Purple Line Extension Section 2 Transit Station Project. (Contract 1120 MOD 00284) - Additional Work, Tunnel and Station Walkway Gap Signage
Change Order Detail
See Attachment A Spot Check #2 table.
Summary #2
This change order, MOD 00284, in the amount of $731,073, is for additional scope of work on the Purple Line Extension Section 2 (PLE2) Project to design, furnish, and install mitigation measures to notify passengers of the gap between the stationary train floor and the emergency tunnel walkway. The scope includes all management, coordination, professional services, labor, equipment, materials, and other services necessary to: (1) perform engineering analysis of horizontal gap distances across the full tunnel alignment to identify locations where the gap exceeds 10-inch and 12-inch thresholds; (2) produce design drawings, vehicle clearance analysis reports, and revised contract specifications for signage and mounting structures; (3) fabricate and install "Watch the Gap" warning signage panels at both bored tunnel segments simultaneously; (4) apply 4-inch reflective edge striping along the vertical face of the tunnel walkway edge, continuously along all walkways regardless of gap width; and (5) provide all associated survey, construction support, Design Services During Construction (DSDC), safety, and quality control services.
The scope defined in this modification was not included in the original C1120 Contract award. The work stems from a safety determination that physical notification measures are required to alert passengers to the gap condition between the train car floor and the tunnel emergency walkway at specific locations along the alignment. This effort is consistent with Metro fire/life-safety criteria and passenger-protection requirements for underground transit facilities.
Budget - This change order for MOD 00284 was negotiated to $731,073. The Contractor’s Cost and Schedule Proposal (CSP) was $1,450,434, and the Independent Cost Estimate (ICE) was $826,473. The ICE is $623,961 (43.0%) under the CSP, and the agreed-upon amount is $95,400 (11.54%) under the ICE.
The variance between the CSP and ICE is attributed to the contractor's equipment costs, which reflect the actual tunnel access logistics, including hi-rail truck coordination, crane picks at the tunnel access shaft, and simultaneous dual-tunnel execution, which the ICE modeled at lower utilization. The project staff has stated that funds for this change order are within the Life-of-Project budget.
Schedule - The CEO Delegation of Authority process was utilized for this change order. The modification was awarded on April 28, 2026, and the staff completed all signature approvals within eight workdays. Under the prior Board approval method for change orders, assuming presentation at a July Board meeting date, it would have taken a total of fifty-eight workdays to complete the transaction.
Safety - The Purple Line Extension 2 Transit Project for the C1120 contract has 6,138,874 Project hours through December 2025, with a Total Recordable Injury Rate of 2.15 (the Bureau of Labor Statistics National Average is 2.3) and a Days Away, Restricted or Transferred (DART) rate of .39 (the Bureau of Labor Statistics National Average is 1.5).
Recommendation/Lessons Learned - Earlier identification of construction task sequencing and its alignment with the project definition drawings could have resulted in cost savings.
Spot Check #3 -The Purple Line Extension Section 1 Transit Station Project
This OIG Spot Check report pertains to the Purple Line Extension Section 1 Project (Contract C1045 MOD 00290), Additional Work, Personnel Manning of the Emergency Management Panel at the Wilshire/La Brea Station
Change Order Detail
See Attachment A Spot Check #3 table.
Summary #3
Scope of Work - This change order, MOD 00290, in the amount of $913,405, is for additional scope of work under the Purple Line Extension Section 1 (PLE1) Contractor to provide a physical presence to staff the Emergency Management Panel (EMP) at Wilshire/La Brea Station as a safety redundancy to Metro Rail Operations Control (ROC) in the event of an emergency at Western Station during the final stages of construction at PLE1.
Coverage of the EMP was structured in two phases: (1) two persons per shift, 24 hours per day, from November 3, 2025, through February 22, 2026; followed by (2) single 12-hour-per-day shifts on weekdays, with weekends remaining at 24-hour-per-day coverage, through March 13, 2026.
Budget - This change order for MOD 00290 had an agreed-upon amount of $913,405. The initial Contractor's Cost and Schedule Proposal (CSP) was $1,563,102, and the Independent Cost Estimate (ICE) was $839,962. The ICE is $723,140 (46.26%) under the CSP, and the negotiated amount is $73,443 (8.74%) over the ICE. The project staff stated that funds for this change order are within the Life-of-Project budget.
Schedule - The CEO Delegation of Authority process was utilized for this change order. The modification was awarded on May 21, 2026, and the staff completed all signature approvals within four workdays. Under the prior Board approval method for change orders, assuming presentation at a July Board meeting date, it would have taken a total of forty workdays to complete the transaction.
Safety - The Purple Line Extension Section 1 C1045 has 11,211,308 Project hours through December 2025, with a Total Recordable Injury Rate (TRIR) of .80 (the Bureau of Labor Statistics National Average is 2.3) and a Days Away, Restricted or Transferred (DART) rate of .08 (the Bureau of Labor Statistics National Average is 1.5).
Recommendations/Lessons Learned - No recommendations by the OIG.
Spot Check #4 - The Purple Line Extension Section 3 Transit Station Project
This OIG Spot Check report pertains to the Purple Line Extension Section 3 Transit Station Project (Contract C1152 MOD 00177.1) - Speech Intelligibility Acoustical Treatment Improvements
Change Order Detail
See Attachment A Spot Check #4 table.
Summary #4
Scope of Work - This change order in the amount of $4,057,321.88 is for MOD 00177.1. It pertains to the Purple Line Extension Section 3 Transit Station Project (C1152). This contract modification authorizes the Contractor to perform construction-only work for Speech Intelligibility acoustical treatment improvements at the Westwood/UCLA Station and the VA Station, as directed by the designer in accordance with the requirements of the Acoustical Analysis Report and Specification Section 09 51 53.
The work encompasses the supply and installation of perforated metal ceiling panels in place of non-perorated metal ceiling panels at the Westwood/UCLA Station and Westwood/VA Hospital Station and spray-on acoustical finishes (Types A, B, C, C1, and D) at multiple station levels - Platform, Concourse, and Passageway - including ancillary mechanical rooms, voided spaces, train rooms, concourse underside structures, and entrance modules, as depicted on the Issued-for-Construction (IFC) drawing set referenced in Exhibit 2 of Change Notice CN-240-DU70 (dated 09/08/2025).
Acoustical treatment types are defined as follows:
• Install perforated ceiling panels in place of non-perforated ceiling panels at the concourse and lowbay platform areas
• Type A - Spray-on acoustic finish (standard absorption)
• Type B - Spray-on acoustic finish (medium absorption)
• Type C - Spray-on acoustic finish (high absorption; applied at seven inches above walkways and ceilings)
• Type C1 - Spray-on fire-resistive acoustic finish
• Type D - Spray-on acoustic finish (specialized; applied at plenum walls/ceilings and underside of concourse structure)
Budget - This change order MOD 00177.1 had an agreed-upon amount of $4,057,321.88. The Contractor’s Cost and Schedule Proposal (CSP) was $4,042,140, and the Independent Cost Estimate (ICE) was $5,045,118.54. The ICE is $1,002,978.54 (24.81%) over the CSP, and $987,796.66 (24.35%) over the negotiated amount. The staff stated that funds for this change order are within the Life-of-Project budget.
Schedule - The CEO Delegation of Authority process was utilized for this change order. The modification was awarded on May 15, 2026, and the staff completed all signature approvals within twelve workdays. Under the prior Board approval method for change orders, assuming presentation at the July Board meeting date, it would have taken a total of forty-seven workdays to complete the transaction.
Safety - The Purple Line Extension Section 3 has 3,101,703 Project hours through December 2025, with a Total Recordable Injury Rate (TRIR) of 1.12 (the Bureau of Labor Statistics National Average is 2.3) and a Days Away, Restricted or Transferred (DART) rate of .25 (the Bureau of Labor Statistics National Average is 1.5).
Recommendations/Lessons Learned - No recommendations by the OIG.
FINANCIAL IMPACT
This report will have no financial impact on the Agency beyond what is described above.
Impact to the Budget
For all of the construction change orders reviewed, Metro stated the funds are within the approved budget and will utilize the contingency funds to cover the cost from the Life-of-Project budget.
• Spot Check #1) $1,727,681 Purple Line Extension Section 1 Transit Project
• Spot Check #2) $731,073 Purple Line Extension Section 2 Transit Project
• Spot Check #3) $913,405 Purple Line Extension Section 1 Transit Project
• Spot Check #4) $4,057,321.88 Purple Line Extension Section 3 Transit Project
Equity_Platform
EQUITY PLATFORM
In the opinion of the OIG, we considered whether these change orders presented any equity-related issues on their face. The OIG did not receive any data concerning community impacts. The OIG observed no obvious disparate impacts created by these change orders on small businesses or low-income persons or by the performance of the work in a manner that impacted a disadvantaged community beyond what is typical and usual when conducting any construction.
Vehicle_Miles_Traveled _Outcome
VEHICLE MILES TRAVELED OUTCOME
While this report does not directly encourage taking transit, sharing a ride, or using active transportation, it is a vital part of Metro Program Management, Safety in Construction, and effective financial management. Because the Metro Board has adopted an agency-wide VMT Reduction Target, and this item generally supports the overall function of the agency, this item is consistent with the goals of reducing VMT.
Implementation_of_Strategic_Plan_Goals
IMPLEMENTATION OF STRATEGIC PLAN GOALS
The Office of Inspector General reviews large change orders over a calendar quarter and makes recommendations as appropriate to support Metro’s Strategic Plan Goal #5: Provide responsive, accountable, and trustworthy governance within the Metro organization and CEO goals to exercise fiscal discipline to ensure financial stability. The OIG mission includes reviewing expenditures for fraud, waste, and abuse in Metro programs, operations, and resources. For each selected change order reviewed, the OIG evaluates whether there are red flags of fraud, waste, or abuse taking place. We report the details of the significant change orders and make recommendations consistent with the OIG's Construction Best Practices report dated February 29, 2016, and supplemental report in 2023, more particularly focusing on safety, lessons learned, improving efficiencies, and prudent spending.
Next_Steps
NEXT STEPS
The Office of Inspector General reviews large change orders over a calendar quarter and makes recommendations as appropriate to support Metro’s Strategic Plan Goal #5: Provide responsive, accountable, and trustworthy governance within the Metro organization and CEO goals to exercise fiscal discipline to ensure financial stability. The OIG mission includes reviewing expenditures for fraud, waste, and abuse in Metro programs, operations, and resources. For each selected change order reviewed, the OIG evaluates whether there are red flags of fraud, waste, or abuse taking place. We report the details of the significant change orders and make recommendations consistent with the OIG's Construction Best Practices report dated February 29, 2016, and supplemental report in 2023, more particularly focusing on safety, lessons learned, improving efficiencies, and prudent spending.
Attachments
ATTACHMENTS
Attachment A - Change Order Details for Spot Checks in this report
Attachment B - OIG Recommendations and Responses Tracking Sheet
Prepared_by
Prepared by: Stuart Bermudez, Construction Specialist Investigator, (213) 244-7324
Reviewed_By
Reviewed by: Karen Gorman, Inspector General, (213) 244-7337
