Metro - File #: 2018-0779

• File #: 2018-0779
• Type: Informational Report
• Status: Agenda Ready
• File created: 12/7/2018
• In control: Construction Committee
• On agenda: 1/17/2019
• Title: RECEIVE AND FILE Office of the Inspector General Change Order/Modification Construction Spot Check Report.
• Sponsors: Board of Directors - Regular Board Meeting
• Indexes: Budget, Budgeting, Construction, Construction management, Construction Support, Contractors, Contracts, Crenshaw/LAX Transit Corridor Project, 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, Request For Proposal, Safety, Santa Monica, Strategic planning, Twenty-eight by '28 Initiative, U turns, Westside Cities subregion, Westside Subway Extension/Purple Line Extension Phase 1, Westside Subway Extension/Purple Line Extension Phase 2, Westside/Central Service Sector

Meeting_Body
CONSTRUCTION COMMITTEE
JANUARY 17, 2019

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 Check Report.

Issue
ISSUE

On January 25, 2018, the Metro Board directed the Office of the 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.

Background
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 January 2019 Program Management Major Project Status Report (File # 2018-0780), covering September, October, and November 2018. The information for the Spot Checks was collected from the Program Management Information System (PMIS) which is the department's database system. Also, in-person and telephonic interviews were conducted with Metro Program Management, Project Control, Bus Operations, and Procurement staff from each individual project office.

The OIG has reviewed four Change Orders for the period of September 1, 2018, to November 31, 2018; one processed from Crenshaw/LAX, one from Regional Connector, and two from Westside Purple Line Extension Section 2. For this quarter, the Westside Purple Line Extension Section 1 did not have any Change Orders above $500,000.

We found that all the Change Orders in this report 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 Metro's Independent Cost Estimate (ICE) and two w...