Audit Division

Audit Summary

 

Public Works Board

Lied Library Project

Report LA02-07

 

 

††††††††††††† Results in Brief

 

††††††††† The State Pubic Works Board did not always comply with existing project management standards.Furthermore, additional standards are needed to help ensure projects are completed within budget and on schedule.Additional costs and delays on the Lied Library project may have been avoided if the SPWB had adhered to appropriate project management standards.

††††††††† The Board lacks formal policies and procedures to ensure open competition and the proper evaluation of contractorsí qualifications.As a result, the SPWB did not use a competitive process to select the projectís architect or determine the qualifications of contractors that submitted bids.Furthermore, construction monitoring guidelines are not adequate.Key elements of an effective monitoring process include resolving problems that may result in reduced quality, missed deadlines, or additional costs; reviewing and approving contractor progress billings; and evaluating the contractorís progress.However, we noted problems in each of these areas that impacted the cost and timeliness of the project.Finally, formal guidelines for issuing completion documents are lacking.As a result, construction completion documents for the Lied Library project were subject to varying interpretations and modifications.Because these documents impact life-safety issues and the completion of work, formal guidelines should be established.

Principal Findings

 

       The SPWB did not use a competitive evaluation process to select the architect to design the Lied Library.Instead, the SPWB appointed the architect previously selected to conduct a study of the University and Community College Systemís library needs.A competitive contracting process provides the framework for selecting an architect on the basis of qualifications and it documents the contract was awarded fairly. (page 8)

       Although required by law, the SPWB did not establish a process to evaluate contractorsí qualifications.Consequently, the SPWB did not evaluate the qualifications of the contractors that bid on the Lied Library since criteria and procedures had not been established. (page 12)

       Change orders added $3.6 million to the cost of construction and more than 6 months to the project completion date.Noteworthy among the change orders was the construction of certain walls to meet fire-safety codes.Initial construction of these walls deviated from the building plans; but, approval from appropriate regulatory officials was not obtained.These deviations created several fire-safety issues requiring more than 1 year to resolve. (page 14)

       The SPWB issued the contractor four construction change directives to proceed with work related to fire-safety issues.Although these directives stated labor and materials were not to exceed $115,000, the SPWB authorized change orders totaling about $690,000 for this work.Despite the impact construction change directives have on a projectís cost, the SPWB lacks formal policies and procedures to help ensure they are properly monitored and controlled. (page 15)

       The architect did not approve seven progress billings totaling $4.7 million because of concerns regarding the extent of the projectís completion and the sufficiency of money to complete the project.Although Board policy and contract terms require the architectís approval of all billings, the Board paid these billings without documenting the resolution of the architectís concerns. (page 16)

       NRS 341.100 requires the Manager of the SPWB to advise the Board and the Legislature of the progress of all public works projects.However, information submitted to these oversight bodies was at times inconsistent with project records.Consequently, an accurate status of the construction problems associated with the Lied Library was not always communicated. (page 17)

       The date a building is deemed to be substantially complete is a key milestone.For example, the contract provides that liquidated damages cannot be assessed for work completed after this date.However, there is conflicting information regarding the date the Lied Library was substantially complete.This raises doubts about compliance with contract requirements. (page 18)

       The SPWB and the State Fire Marshal issued a conditional certificate of occupancy for the Lied Library effective July 6, 2000.This certificate was issued with four outstanding conditions relative to fire-safety.As of February 28, 2001, only one issue had been resolved; therefore, a final certificate had not been issued as of that date.Despite the importance of this certificate, guidelines have not been established to document the conditions that must exist in order to occupy a facility and resolve outstanding conditions. (page 20)

 

Agency Response

to Audit Recommendations

 

 

Recommendation

         Number       ††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††† Accepted††††† Rejected

 

††††††††††† 1†††††††††††††† Develop policies and procedures to ensure the architect selection

†††††††††††††††††††††††††††† process is competitive when projects are funded on the basis of a study. ††       X      ††††††            

 

††††††††††† 2†††††††††††††† Legislation be considered addressing contractor qualification criteria.††††††††       X      ††††††            

 

††††††††††† 3†††††††††††††† Adopt criteria and procedures for evaluating qualifications of

†††††††††††††††††††††††††††† construction firms bidding on projects as required by law.†††††††††††††††††††††††††       X      ††††††            

 

††††††††††† 4†††††††††††††† Develop formal guidelines for approval of deviations from construction

†††††††††††††††††††††††††††† plans.††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††       X      ††††††            

 

††††††††††† 5†††††††††††††† Develop policies and procedures for approving and monitoring

†††††††††††††††††††††††††††† construction change directives.†††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††       X      ††††††            

 

††††††††††† 6†††††††††††††† Obtain the architectís approval on each progress billing as required

†††††††††††††††††††††††††††† by Board policy.††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††       X      ††††††            

 

††††††††††† 7†††††††††††††† Develop policies and procedures to resolve progress billings disputed

†††††††††††††††††††††††††††† by the architect.†††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††       X      ††††††            

 

††††††††††† 8†††††††††††††† Ensure oversight bodies are provided reliable information regarding

†††††††††††††††††††††††††††† the status of public works projects.††††††††††††††††††††††††††††††††††††††††††††††††††††††††††       X      ††††††            

 

††††††††††† 9†††††††††††††† Develop formal guidelines for the issuance of a certificate of

†††††††††††††††††††††††††††† substantial completion and a certificate of occupancy.††††††††††††††††††††††††††††††       X      ††††††             ††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††

†††††††††††††††††††††††††††††††† TOTALS††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††††       9       †††††      0