Meeting_Body
CONSTRUCTION COMMITTEE
OCTOBER 14, 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 June 1, 2026, to August 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 June 1, 2026, to August 31, 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
Findings
Spot Check #1 - The LAX Metro Transit Center Station Project
This OIG Spot Check report pertains to the LAX Metro Transit Center Station Project. (Contract 1197 MOD 00083) - Additional Construction Material and Spare Parts.
Change Order Detail
See Attachment A Spot Check #1 table.
Summary #1
Scope of Work - This contract modification authorizes the Contractor to procure, furnish, and turn over to Metro the construction materials and system spare parts specified in the Contract Documents. The Contractor submitted an itemized spare parts inventory for Metro's review and approval. These materials and components will support future operations and maintenance activities, including scheduled maintenance, corrective repairs, and the replacement of damaged or failed components.
In accordance with the Contract Technical Specifications, Metro-approved spare parts were to be funded through the Schedule of Quantities and Prices, Schedule B Provisional Sum (Item No. 20), which was allocated specifically for this purpose. However, the provisional sum was insufficient to cover the full quantity of spare parts required under the contract specifications, necessitating this change order to procure the remaining items.
The required inventory includes spare parts and materials for communication systems, CCTV and security systems, first-responder radio systems, electrical circuit protection, paint and coating systems, architectural finishes, and tile installations. This modification also compensates the Contractor for the labor and materials necessary to relocate and reinstall the sewer ejector pit sump pump control panel, including associated procurement and installation activities.
Budget - This Change Order MOD 00083 was negotiated in the amount of $1,916,740. The Contractor’s Cost and Schedule Proposal (CSP) was $1,916,740, and the Independent Cost Estimate (ICE) was $1,831,753. The negotiated amount was equal to the CSP and $84,987 (4.64%) above the ICE.
Schedule - The CEO Delegation of Authority process was utilized for this change order. The modification was awarded on June 11, 2026, and the staff completed all signature approvals within twenty-five 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 27 workdays to complete the transaction.
Safety - The LAX Metro Transit Center Station Project for the C1197 contract has 1,577,260 Project hours through June 2026, with a Total Recordable Injury Rate of 1.27 (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).
Recommendation/Lessons Learned - There are no recommendations by the OIG.
Spot Check #2 - The Purple Line Extension Section 1 Transit Station Project
This OIG Spot Check report pertains to the Purple Line Extension Section 1 Transit Station Project (Contract 1045 MOD 00294) - Additional Work Necessitated by the City of Beverly Hills Streetscape Standards Update.
Change Order Detail
See Attachment A Spot Check #2 table.
Summary #2
Scope of Work - This contract modification authorizes and compensates the Contractor for the procurement of materials and the construction activities to complete the La Cienega streetscape restoration in accordance with the City of Beverly Hills (COBH) updated design standards. Conformance with these standards is required under the Memorandum of Agreement (MOA) between Metro and COBH. The work includes relocating and refurbishing existing pedestrian light poles; constructing new 5-foot-by-5-foot tree wells and associated irrigation infrastructure; installing electrical outlets, pedestrian lighting, conduit, pull boxes, and foundations; providing designated spaces for bus benches and trash receptacles; and decorative scoring of sidewalk surfaces. Collectively, these improvements integrate the required landscaping, electrical, lighting, and pedestrian-amenity elements into the final streetscape configuration. Following completion of this work, future landscaping will be managed by the COBH.
Budget - This Change Order MOD 00294 was negotiated in the amount of $3,370,509. The Contractor’s Cost and Schedule Proposal (CSP) was $3,751,615, and the Independent Cost Estimate (ICE) was $2,992,118. The negotiated amount was $381,106 (10.16%) below the CSP and $378,391 (12.65%) above the ICE.
Schedule - The CEO Delegation of Authority process was utilized for this change order. The modification was awarded on June 11, 2026, and the staff completed all signature approvals within sixteen 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 25 workdays to complete the transaction.
Safety - The Purple Line Extension Section 1 Transit Station Project C1045 contract has 11,265,515 Project hours through June 2026, with a Total Recordable Injury Rate of .80 (the Bureau of Labor Statistics National Average is 2.3) and a Days Away, Restricted or Transferred (DART) rate of .12 (the Bureau of Labor Statistics National Average is 1.5).
Recommendation/Lessons Learned - There are no recommendations by the OIG.
Spot Check #3 - 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 1152 MOD 00160.1) - Additional Work, LADOT Traffic Controller Cabinet Replacement.
Change Order Detail
See Attachment A Spot Check #3 table.
Summary #3
Scope of Work - This contract modification compensates the Contractor for the procurement of materials and necessary construction activities for the replacement of three Los Angeles Department of Transportation (LADOT) traffic signal controller cabinets at intersections near the Westwood/UCLA Station: Wilshire Boulevard/Veteran Avenue, Gayley Avenue/Midvale Avenue/Wilshire Boulevard, and Westwood Boulevard/Wilshire Boulevard. The cabinet replacements are required to incorporate the technical revisions identified during LADOT’s August 2020 design review and ensure compliance with applicable agency design requirements.
Budget - This Change Order MOD 00160.1 was negotiated in the amount of $486,753.54. The Contractor’s Cost and Schedule Proposal (CSP) was $493,354.22, and the Independent Cost Estimate (ICE) was $380,034. The negotiated amount was $6,600.68 (1.34%) below the CSP and $106,719.54 (28.08%) above the ICE.
The variance between the negotiated amount and the ICE was primarily attributable to limitations in the scope information available when the ICE was prepared. Certain cost elements-including site-specific field conditions, construction means and methods, and ancillary work-were not fully reflected in the initial estimate. Consequently, the ICE did not fully capture the cost of the work ultimately required to complete the modification.
Schedule - The CEO Delegation of Authority process was utilized for this change order. The modification was awarded on June 24, 2026, and the staff completed all signature approvals within sixteen 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 25 workdays to complete the transaction.
Safety - The Purple Line Extension 3Transit Project for the C1152 contract has 3,546,702 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 - There are no recommendations by the OIG.
Spot Check #4 - The SR-91 Eastbound Improvement Project
This OIG Spot Check report pertains to the SR-91 Eastbound improvement project to add an auxiliary lane (Contract C599228C1228 MOD 00008.1) - Additional Work, for noise and vibration monitoring at 28 noise sensitive locations.
Change Order Detail
See Attachment A Spot Check #4 table.
Summary #4
Scope of Work - This change order authorizes and compensates the Contractor for implementing a six-month noise and vibration monitoring program in support of the SR-91 Eastbound Improvement Project, which will construct an auxiliary lane within the City of Long Beach between the southbound I-710 interchange. The work includes the procurement, installation, operation, and maintenance of sound and vibration monitoring equipment at 28 designated noise-sensitive receptor locations, as well as the collection and documentation of monitoring data and the preparation of weekly reports. These services support the implementation of the Contractor’s Noise Control Plan and provide a systematic record of construction-related noise and vibration conditions throughout the monitoring period.
Budget - This Change Order MOD 00008.1 was negotiated in the amount of $663,925.28. The Contractor’s Cost and Schedule Proposal (CSP) was $664,594.35, and the Independent Cost Estimate (ICE) was $668,420.15. The negotiated amount was $669.07 (0.10%) below the CSP and $4,494.87 (0.67%) below the ICE.
Schedule - The CEO Delegation of Authority process was utilized for this change order. The modification was awarded on August 6, 2026, and the staff completed all signature approvals within three workdays. Under the prior Board approval method for change orders, assuming presentation at a September Board meeting date, it would have taken a total of 32 workdays to complete the transaction.
Safety - The SR 91 Eastbound improvement project for the C599228C1228 contract has 753 Project hours through June 2026, with a Total Recordable Injury Rate of 0.0 (the Bureau of Labor Statistics National Average is 2.3) and a Days Away, Restricted or Transferred (DART) rate of 0.0 (the Bureau of Labor Statistics National Average is 1.5).
Recommendation/Lessons Learned - There are no recommendations by the OIG.
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
VMT and VMT per capita in Los Angeles County are lower than national averages, the lowest in the SCAG region, and on the lower end of VMT per capita statewide, with these declining VMT trends due in part to Metro’s significant investment in rail and bus transit.* Metro’s Board-adopted VMT reduction targets align with California’s statewide climate goals, including achieving carbon neutrality by 2045. To ensure continued progress, all Board items are assessed for their potential impact on VMT.
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.
*Based on population estimates from the United States Census and VMT estimates from Caltrans’ Highway Performance Monitoring System (HPMS) data between 2001-2019.
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 OIG shall provide, every quarter, an ongoing spreadsheet of recommendations to Program Management and Program Controls. Program Management and Program Controls agree to respond to the recommendations of the OIG within 30 days. The OIG continues to meet periodically to discuss reports, recommendations, and the status of implementation of the recommendations with Project Management and receive updates. The list of OIG recommendations and Metro management responses is an attachment to this OIG report (Attachment B).
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
