Auditor: State construction projects ran late and over budget

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Posted on July 29, 2018 in Press Releases

Major state construction projects went over budget and missed deadlines, sometimes by several years, according to a new report by the state auditor.The report also says the reasons for those delays and excess expenses are unclear because the Department of Buildings and General Services lacked an adequate tracking system.The auditor’s office reviewed 10 construction projects the department worked on between 2012 and 2016.

They included building the Vermont Psychiatric Care Hospital in Berlin, expanding the Lamoille County Courthouse and addressing mold growth at the Vermont Veterans’ Home. The estimated costs of the projects added up to about $92 million.

According to the report, released Monday, the projects were completed between two and 42 months later than expected. One project was still in progress.

Of the nine projects that were finished, the costs ran over the expected budget by a median of 31 percent, according to the report. Combined, the cost for the nine completed projects was $24.6 million higher than projections.

Doug Hoffer

State Auditor Doug Hoffer. File photo by Anne Galloway/VTDigger

Auditor Doug Hoffer said Monday it is not surprising that major state construction projects with multimillion-dollar price tags have changes along the way. However, he said, BGS does not have a system to effectively track those changes.Recording the progress of projects and keeping data on the factors that cause delays or drive up costs is important to inform future undertakings and potentially avoid similar issues, he said.

“Every project is an opportunity to learn something, and the current system does not give them that,” Hoffer said.

Because of the department’s inconsistent tracking system, he said, it was difficult for members of his team doing the audit even to find the full cost of the projects.

“The practical effect is, no accountability,” Hoffer said.

Extending the timeline for finishing projects also has a financial impact, he said.

“Delays in projects equal increased cost, if for no other reason than inflation,” Hoffer said.

According to the report, project managers attributed delays to changes in code requirements, unforeseen conditions, changes in project design and delays in getting necessary appropriations.

Two projects were delayed by more than three years: the public health lab in Colchester, delayed 45 months, and a public safety facility in Westminster, delayed 41 months. Those projects’ schedules were affected by recovery from Tropical Storm Irene, because personnel or money was redirected to other locations that needed to be rebuilt, according to the report.

The auditor’s report found that BGS failed to identify the “root cause” of deviations from project plans, because of the lack of consistent documentation.

Though BGS has said in annual budget requests since fiscal year 2013 that the department assesses performance in meeting construction project targets, those results haven’t been reported to the Legislature.

The auditor’s research also turned up instances where BGS had not gone through a competitive bidding process required by the state.  BGS Commissioner Chris Cole, who took the post earlier this year under Gov. Phil Scott after serving as secretary of transportation in the Shumlin administration, said he believed the auditor “made some astute observations” about capital construction projects and the lack of documentation.

Chris Cole

Chris Cole is the head of the Department of Buildings and General Services. Courtesy photo

“I came to the same independent conclusion,” Cole said.

Already, Cole said, the department has begun implementing a system for scheduling, which he said will improve estimates for the length of time projects will take.

The department is also adopting a system for project tracking, which will help streamline information including finances.

A few months after taking over the department, Cole orchestrated a reorganization. In the course of that, the department built a new process for a planning phase early in a project when potential constraints are identified. He believes the new process will help set more accurate estimates.

Cole said some of the projects the auditor reviewed were delayed because of legislative decisions made in the aftermath of Tropical Storm Irene and were beyond the control of project managers to some extent.

However, in general Cole said he sees room for improvement in the management of state infrastructure projects.

“I think the tools that we’ve already deployed are going to help us do that,” he said.

This article was first published online June 19, 2017.

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