Metro - File #: 2018-0191

• File #: 2018-0191
• Type: Informational Report
• Status: Agenda Ready
• File created: 4/11/2018
• In control: Construction Committee
• On agenda: 5/17/2018
• Title: RECEIVE AND FILE this Office of the Inspector General report on Change Order/Modification Construction Spot Checks for the period ending February 28, 2018.
• Sponsors: Construction Committee
• Indexes: Budget, Budgeting, Capital Project, Construction, Construction management, Contractors, Contracts, Crenshaw/LAX Transit Corridor Project, Design build, Elevators, Escalators, Informational Report, Los Angeles International Airport, Metro Blue Line, Metro Crenshaw Line, Metro Exposition Line, Metro Gold Line, Metro Green Line, Metro Purple Line, Metro Rail A Line, Metro Rail C Line, Metro Rail D Line, Metro Rail E Line, Metro Rail K Line, Metro Rail L Line, Metro Vision 2028 Plan, Procurement, Program management, Project, Project management, Project Status Report, Regional Connector Transit Corridor Project, Tanks (Containers), Traffic control, Twenty-eight by '28 Initiative, Westside Subway Extension/Purple Line Extension Phase 1, Westside Subway Extension/Purple Line Extension Phase 2, Westside Subway Extension/Purple Line Extension Phase 3

Meeting_Body
CONSTRUCTION COMMITTEE
MAY 17, 2018

Subject
SUBJECT: OFFICE OF THE INSPECTOR GENERAL CHANGE
ORDER/MODIFICATION CONSTRUCTION SPOT
CHECKS

Action
ACTION: RECEIVE AND FILE

Heading
RECOMMENDATION

Title
RECEIVE AND FILE this Office of the Inspector General report on Change Order/Modification Construction Spot Checks for the period ending February 28, 2018.

Issue
ISSUE

On January 25, 2018, the Metro Board directed Office of Inspector General ("OIG") to conduct random spot checks on the projects listed in the quarterly program management report to ensure that the delegation of authority to approve construction change orders policy is performing in the manner desired by the Board of Directors.
Discussion
BACKGROUND

I. SUMMARY

The OIG made four Spot Checks of approved Change Orders/Modifications exceeding $1 million each from four major transit construction projects: Crenshaw/LAX, Regional Connector, Westside Purple Line Extension Section 1, and Westside Purple Line Extension Section 2. We found that these Changes Orders were approved/executed on average 31.5 workdays (14, 35, 37, and 40 days) faster than the former Board approval process would have taken. In addition, the negotiated cost for each Change Order appears reasonable:
* First Spot Check - approved negotiated amount was $4,925 or 0.38% over Metro's independent cost estimate (ICE),
* Second Spot Check - approved negotiated amount was the same as the ICE,
* Third Spot Check - approved negotiated amount was $222,174 or 9.2% under the ICE, and
* Fourth Spot Check - issued a unilateral change that notified the Contractor to commence work while cost is being negotiated.

For the Change Orders/Modifications the OIG reviewed, some of the Spot Checks have shown that the delegation of authority has, in certain cases, resulted in:
* Minimizing/reducing delay costs,
* a negotiated amount that was reasonable for the work to be done; and
* Minimizing construction delays.

This report a...