Neither the contract manager nor the RDP consultants documented how they ensured that they accounted-and therefore avoided paying-for the contractor's repeated work. | The contract managers' insufficient tracking of deliverables also means that when the contract documentation alluded to issues with contractors' work products, we generally could not determine how the Authority identified the issues or confirm that they were resolved appropriately. When contractor deliverables are unsatisfactory, a contract manager must not only identify the unsatisfactory work, but also ensure the Authority does not pay for the hours spent to fix it. For example, in September 2017, a regional planning contractor in Southern California had to revise its design for a train station access road because it adversely affected a historical bridge. The Authority considered the hours spent revising the design as repeated work for which it had already paid. Although the contract documentation indicated that the Authority contract manager formally disputed the invoice that included charges for this work, it provided no further information. When we asked for details about the dispute, the contract manager stated that the RDP consultants were responsible for identifying the issue and determining the total amount that the Authority should not pay. However, neither the contract manager nor the RDP consultants documented how they ensured that they accounted-and therefore avoided paying-for the contractor's repeated work. |
In another example from January 2018, an RDP consultant expressed concern to his RDP supervisor about the quality and timeliness of a contractor's deliverables for a Northern California environmental planning project. When we asked how the issue was resolved, the RDP consultant stated that he did not dispute the related invoice because the contractor did not claim the deliverables for payment because of their deficiencies. To demonstrate this, the consultant provided an invoice from the contractor that showed hours worked for which the contractor did not bill the Authority. However, because of the lack of detail in the RDP consultant's tracking documentation and the fact that the contract manager had no additional documentation, we could not substantiate that the hours on the invoice accounted for all of the repeated work the contractor performed.
Both of these examples also demonstrate the Authority's overreliance on the RDP consultants to provide oversight of certain contracts. In the first example regarding the train station access road, the available documentation about the origin of the issue was limited to communications among the RDP consultants, and we identified no evidence that the contract manager took steps to independently evaluate the situation. Similarly, in the second example, the contract manager for the environmental planning contract asserted that because his background is engineering, he relies on the RDP consultants to recommend when the Authority should dispute invoices for environmental work. However, as of April 2018, the contract manager was still not aware of the issues the RDP consultants discovered in January 2018. Instead, the contract manager believed that the contractor had not had to repeat work on the contract.
Despite these and other quality concerns, the contract manager for only one of the nine contracts we reviewed requested that a contractor submit a recovery plan-a document Authority policy directs contract managers to request if deliverables have fallen behind, do not meet contract requirements, or may require repeated work. Specifically, the contract manager for the RDP consulting contract requested a recovery plan in December 2017 for a single deliverable for the development of cost management software. This deliverable had delays spanning multiple years. The contract manager communicated his expectations for the recovery plan in a formal letter to the RDP consultants, stating that he expected the plan to include a schedule with detailed implementation activities, a list of all remaining project scope items and necessary resources, and a detailed mitigation strategy should the RDP consultants miss any milestones. The contract manager's request was consistent with Authority contract management policies and procedures. However, because this example is the Authority's only use of a recovery plan for any of the nine contracts we reviewed, we are concerned that the Authority may have missed other opportunities to address untimely or unsatisfactory deliverables.
In fact, the RDP consultants missed deadlines for other deliverables for this same contract, suggesting problems may exist that the Authority has not actively tried to mitigate. The contract's current work plan was originally scheduled to be eight months, with the RDP consultants completing all deliverables by the end of February 2018. However, as of January 2018, the RDP consultants had reported submitting only 10 of 81 deliverables, despite spending nearly $70 million of the work plan's $90 million budget. According to the contract manager, the Authority extended this work plan twice, for a total of seven months, because the RDP consultants had not yet completed the deliverables. When it extended the work plan, the Authority also assigned additional deliverables and added funds to the work plan, now valued at $157 million. | Although the contract's current work plan was originally scheduled with the RDP consultants completing all deliverables by the end of February 2018, as of January 2018, the RDP consultants had reported submitting only 10 of 81 deliverables, despite spending nearly $70 million of the work plan's $90 million budget. |
Although the contract manager asserted that the Authority expects the RDP consultants to complete outstanding deliverables with no additional resources, the Authority added dollar amounts with the extensions that do not appear proportional to the additional deliverables it assigned. For example, the most recent extension added nearly $30 million but just eight new deliverables. As of October 2018, the RDP consultants reported to us that they had submitted 101 of the 111 deliverables due by the work plan's revised September 30, 2018 deadline. However, as we explain in the previous section, the contract manager provided acceptance notices for only 77 deliverables and has only recently begun proactively tracking the timeliness of the RDP consultants' work. Overall, the work plan's shifting deadlines and large dollar increases make us question why the Authority did not initiate the formal corrective actions that its policies and procedures indicate it should.
Given the types of challenges some of the contracts we reviewed have presented, we found the lack of formal intervention by the Authority concerning. | Given the types of challenges some of the contracts we reviewed have presented, we found the lack of formal intervention by the Authority concerning. Most of the contract managers, and even the RDP consultants who identified the quality issues that resulted in repeated work, insisted that there had been no need to establish recovery plans. Moreover, we identified evidence of formal invoice disputes for only two of the nine contracts we reviewed, and the disputed items generally had to do with incorrect billing rates or unsubstantiated costs for invoiced expenses, rather than deliverable quality. Some of the other contract managers explained the lack of formal intervention by asserting that when quality issues arose, they resolved them informally with the contractors. Although Authority policies allow for the informal resolution of issues as an alternative to formal documented disputes, the lack of documented deliverable review and tracking by contract managers, along with the deliverable delays we discussed above, creates the risk that the Authority is not detecting or resolving issues with contractor performance. Further, without the contract management documentation its policies and procedures require, the Authority cannot demonstrate that the hundreds of millions of dollars it has spent to date on these contracts-including for cost overruns-has been necessary and appropriate. |