Report 94024 Summary - March 1995

State Architect


Contracting Practices Need Improvement

Results in Brief

The Division of the State Architect (DSA) within the Department of General Services is partially responsible for the design and construction of state facilities (capital outlay program). Under the capital outlay program, the DSA is responsible for designing a project, selecting architectural and engineering consultants, bidding and awarding construction contracts, supervising and inspecting construction, preparing the project budget, and managing the overall project. To carry out its responsibility, the DSA awards three types of contracts-architectural and engineering contracts, construction contracts, and contracts for retainer services.

Our review focused on whether the DSA complied with the state contracting laws and regulations in awarding its contracts. Additionally, the DSA was responsible for a major construction project that involved the seismic upgrading of the Armory and Ahmanson buildings owned by the California Museum of Science and Industry (CMSI). We reviewed whether the DSA followed the appropriate building codes and consulted with the required advisory boards before making decisions that resulted in the demolition of a major building. Specifically, we noted the following:


The DSA should take full advantage of the benefits that are realized when contract work is awarded through a competitive process. Before simply adding significant new work to existing contracts, the DSA should thoroughly assess whether or not it would be more prudent to seek competitive bids or proposals first.

To ensure that it receives a fair and reasonable price, the DSA should prepare an estimate of services before negotiations and not rely on the consultant contractor's cost proposals.

To ensure that it does not limit competition in selecting its consultant contractors, the DSA should advertise all contracts in the California Contracts Register and through publications of professional societies.

To ensure that it does not expose the State to potential financial liability for work performed if the contract is not approved, the DSA should take the following steps:

Agency Comments

In its response, the DGS states that it will take appropriate actions to address our recommendations. However, the DSA also responds that it disagrees with some of the conclusions of our report. For example, the DSA contends that its decisions to amend existing contracts, instead of performing a new selection process, were in the best interest of the State. In addition, the DSA disagreed that it exposed the State to potential monetary liability when its consultant contractors started work before the contract was approved.