Report 2018-108 Recommendation 11 Responses

Report 2018-108: California High‑Speed Rail Authority: Its Flawed Decision Making and Poor Contract Management Have Contributed to Billions in Cost Overruns and Delays in the System's Construction (Release Date: November 2018)

Recommendation #11 To: High-Speed Rail Authority, California

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.

6-Month Agency Response

The Authority's Project and Construction Management Consultant Performance Evaluation Policy POLI-CMAN-01 and Procedure PROC-CMAN-01 were issued in May.

California State Auditor's Assessment of 6-Month Status: Fully Implemented

The Authority implemented procedures that lay out processes by which PCM contract managers are to assess the PCMs' performance on at least a quarterly basis. The procedures set forth performance categories and rating criteria to guide contract managers in using the templates we discuss in our report, and prescribe meetings to help ensure consistency across the three active construction projects.

60-Day Agency Response

The Authority has developed a specific policy and procedure that provides consistent guidance to contract managers, including an enhanced performance-based evaluation dashboard for its PCM firms. This is currently in draft form and will be completed and implemented by May 2019. Once completed, the existing policy and procedure (POLI-FIS-034 and PROC-FIS-034) will be revised to reference the newly adopted policy and procedure. The Contract Performance Monitoring and Reporting Policy POLI-FIS-034 and Procedure PROC-FIS-034 are being revised to document this formal methodology. The draft revision is being circulated for comment and finalization.

In addition to the Authority's PCM Manual, a PCM Contract Management Manual, that includes the PCM's processes and roles and responsibilities for evaluating design-builder invoices has been developed. The Authority's contract manager and quality team for each Construction Project evaluates the PCMs for compliance with this process. Authority Contract Managers check this each month as part of their final invoice approval.

California State Auditor's Assessment of 60-Day Status: Pending

The Authority provided the draft language for the revision to its oversight firm manual, which states that the Authority is committed to providing a consistent method and process for evaluating the oversight firms' performance. However, the Authority did not provide any of the guidance for contract managers that it describes having developed in its response, nor any accompanying policy revisions. As part of our future evaluation of the status of this recommendation, we will expect to review those documents as well as additional evidence that the Authority's contract managers are using the methodology and that the methodology accounts for the oversight firms' reviews of construction invoices.

All Recommendations in 2018-108

Agency responses received are posted verbatim.