Metro - File #: 2018-0583

• File #: 2018-0583
• Type: Informational Report
• Status: Agenda Ready
• File created: 8/29/2018
• In control: Construction Committee
• On agenda: 10/18/2018
• Title: RECEIVE AND FILE Office of the Inspector General change order/modification construction spot checks report.
• Sponsors: Construction Committee
• Indexes: Budget, Budgeting, Construction, Contractors, Contracts, Crenshaw/LAX Transit Corridor Project, Governance, Informational Report, Los Angeles International Airport, Metro Crenshaw Line, Metro Exposition Line, Metro Green Line, Metro Purple Line, Metro Rail C Line, Metro Rail D Line, Metro Rail E Line, Metro Rail K Line, Metro Vision 2028 Plan, Procurement, Professional Services, Program management, Project, Project management, Project Status Report, Purchasing, Safety, Strategic planning, Twenty-eight by '28 Initiative, Visibility, Westside Subway Extension/Purple Line Extension Phase 1, Westside Subway Extension/Purple Line Extension Phase 2

Meeting_Body
CONSTRUCTION COMMITTEE
OCTOBER 18, 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 Office of the Inspector General change order/modification construction spot checks report.

Issue
ISSUE
On January 25, 2018, the Metro Board directed the 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 has developed a spot check program ("Spot Checks") that primarily focuses on approved change orders and modifications that exceed $1 million. The change orders in this report were selected from the October Program Management Major Project Status Report (File # 2018-0623), covering June, July, and August 2018. The information for the Spot Checks was collected from the Program Management Department's database PMIS system. Also, in-person and telephonic interviews were conducted with Metro Program Management, Project Control, and Procurement staff for each individual project office.

The OIG has reviewed five change orders for the period of June 1, 2018, to August 31, 2018; one processed from Crenshaw/LAX, three from Westside Purple Line Extension Section 1, and one from Westside Purple Line Extension Section 2. This quarter the Regional Connector did not have any change orders above $500 thousand.

We found that all five change orders were negotiated/approved/executed on average faster than the former Board approval process would have taken. In addition, the negotiated cost for one Change Order was lower than the independent cost estimate (ICE) and four were higher than the Metro's ICE, but were lower than the contractor's proposed price. For th...