By Noel T, Braymer
The recent audit by the California State Auditor of the High Speed Rail Project does not call for ending the project. Most of the problems with managing construction for this project have their roots going back to at least the first California High Speed Rail Business Plan which came out in 2000. This was the basis of much of the assumptions of the construction costs, service levels and time required to complete the project which were promoted for passage of Prop 1A which approved $9.95 billion dollars in State Bonds to start the project in November 2008. Most of the partisan criticism against the project is based on the assumptions of the original poor planning. Much of this early planning was by consultants under contract to the High Speed Rail Authority which has since been found to be unrealistic. This assumed all new rights of way and dedicated tracks only for High Speed Rail Service. This is not typical of most High Speed Rail projects which often use dedicated High Speed Rail rights of way with few or no stations in low populated areas to save the most time traveling between major cities. In many places with High Speed Rail service, HSR trains often share tracks and stations in urban areas with existing regional rail passenger services to avoid costly new, duplicated track access in urban areas. This “blended”approach is now planned between Gilroy and San Francisco and well as between Burbank and Anaheim.
Much of the management of HSR construction hasn’t been done by the California High Speed Rail Authority, but by consultants. This was done by (Rail Delivery Partner) RDP Consultants. The following is from the State Audit of the California High Speed Rail Project ” Finally, just as the Authority staffed (Contract Management Support Unit) CMSU with RDP consultants to oversee contract manager compliance, it also staffed its separate administrative unit for supporting contracts entirely with RDP consultants, who filled all 17 positions as of June 2018. We question why using RDP consultants in place of state employees to perform contract management oversight and support is necessary. The Authority agreed that it should place state employees in these positions in the future.” RDP consultants were led by Parsons Brinckerhoff which has worked on the CA HSR project almost from the start.
What has greatly increased cost for this project and delayed construction has been the many change orders made at the request of management of the HSR Authority and not by the contractors. This is also a major factor in delaying construction of the project. The following are the recommended changes the State Auditor wants from the California High Speed Rail
Recommendations To improve its contract management, increase accountability, and justify the significant amount it pays for contracted services, the Authority should take the following steps by May 2019:
Prioritize contract management efforts and reduce the frequency with which contract management responsibilities shift among Authority staff by establishing a formal process for hiring and assigning full-time, experienced contract managers. These contract managers should have duty statements reflecting their contract oversight responsibilities, and they should report to supervisors who understand those responsibilities and have extensive knowledge about the contracts’ deliverables. In addition, those supervisors’ duty statements should clearly lay out their responsibility for addressing any contract manager noncompliance with the Authority’s contract management policies and procedures, whether reported by CMSU or identified by another means.
Require CMSU to establish a schedule to monitor individual contract manager compliance and report annually the results of this monitoring to Authority executive leadership. To help ensure the integrity of its oversight role, CMSU should be composed of state staff in place of RDP consultants.
Hold contract managers accountable for performing the duties that the Authority’s policies assign to them. Specifically, CMSU and, to the extent necessary, contract managers’ supervisors should require and review evidence from contract managers demonstrating their approval of deliverables, detection and resolution of contractor performance issues, and assessment of contract amendments for merit. The Authority should not accept observations and reports from its contractors or the RDP consultants in place of this evidence.
To prevent the inappropriate use of contractors to perform state functions, the Authority should develop procedures by May 2019 for evaluating whether new and existing administrative duties should be assigned to contractors or to state employees.
To ensure that contract managers’ invoice reviews are complete and that invoiced costs are allowable under contract terms, the Authority should amend its applicable procedures by May 2019 to require contract managers to document their review of invoiced rates and expenses.
To ensure the consistency and effectiveness of its efforts to monitor the performance of the oversight firms with which it contracts, the Authority should develop a formal methodology by May 2019 for using the performance evaluation tool it has implemented. This methodology should include procedures for assessing the sufficiency of the oversight firms’ review and approval of invoices for construction contracts.
To ensure that the oversight firms’ spending is reasonable, the Authority should develop a formal process by May 2019 for tracking any out-of-scope work that the oversight firms perform. To reduce the likelihood that its contracts with the oversight firms run out of funds prematurely as a result of this additional work, the Authority should also develop a formal process for amending the oversight firms’ contracts contemporaneously to change orders that significantly extend the timelines or increase the scope of work of the construction contracts that oversight firms oversee.
What the State Auditor is demanding is for more oversight and documentation by the California High Speed Rail Authority of the project and of what is being done or needs to be done. Because of its often confused management, construction is years behind schedule. The 119 miles of High Speed Rail construction which was suppose to be finished this year is now scheduled for completion by 2022, and it might not be done by then at the current slow rate of construction.
It is ironic that despite claims that “private enterprise” is always more economical and efficient than the “govmint”, this is just one example of this not always being the case. Going back as far as the Revolutionary War, some government contractors have overcharged and provided inferior products at inflated prices. Hence the phrase ” good enough for government work”. I think we all have thought we wished we knew then what we know now. Trying to turn around the California High Speed Rail Project is almost as hard as turning an Aircraft Carrier 180 degrees in a harbor without tug boats. Given the complexity of such a project and the lack of experience in building High Speed Rail in this Country, it’s no wonder why things go wrong. But even the auditor is not calling for ending this project. There has been some progress since 2014 and several construction projects are finished or nearly so. The pressure needs to be continued to get the work done faster, without delays. Hopefully before 2030 we should be seeing some High Speed Rail service at least in the San Joaquin Valley, as well expanded service between San Francisco to Gilroy and Burbank to Anaheim.