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CONSTRUCTION KNOWLEDGE BLOG

July 9, 2012

Two Stories that are Cautionary Tales
Filed under: Innovation in Construction — Tags: — nedpelger

My ENR Daily News Alert today (have you signed up for this useful service?) listed two top stories that seem to have no connection. California approved the $168B high speed rail program and Palm Beach, FL just spent $150M on a jail that doesn’t seem needed and isn’t going to be finished.

A train system and a jail, located at opposite sides of the county, with a thousand fold difference in project cost don’t seem too related. As I read both stories, though, I thought about the folly of our public construction project decision making process.

To start, the consultants doing the feasibility studies often end up doing the project design. It’s like asking the barber if you need a haircut. These consulting firms do the feasibility studies as loss leaders, knowing they will get fat fees if the project proceeds.

A simple rule that bars the firm studying the project feasibility from working on the future project in any way would go far to reduce this clear conflict of interest.

After deciding if the project really is needed, the complexities of managing a large design and construction project often overwhelm public agencies. When the Sun Sentinel studied the jail project, they found the following:

* Consultants hired by the county wrongly predicted an increase in inmates, fueling the grand expansion plan.

* Architectural designs — submitted by the HOK firm and approved by county officials — failed to meet state building codes. That set off a domino effect of changes that helped escalate costs.

* County officials approved a staggering 180 changes to the project for the lead contractor, Broward County-based Moss & Associates. Most of these “change orders” were submitted in amounts low enough that they didn’t require County Commission review. But together they nearly reached $9 million.

* The contract allowed Moss nearly $900,000 for contractors’ travel and relocation expenses — without requiring contractors to document how much they actually had spent.

So now they have an unfinished jail project that isn’t really needed if it gets finished…for which there is no more money. This failure to manage the development process needs to be improved for public projects.

As I’ve written before, innovative funding which allows private investors to fund projects helps assure the project feasibility and oversight is reasonable. The use ¬†of design/build single source project delivery methods also helps.

Will we be reading about the grand project failure in the CA train project in a few years? I hope not, but that’s where the odds look highest to me.

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