SAO AUDIT RECOMMENDATIONS AND ACTION PLAN

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Port of Seattle State Auditor Report Responses And Action Plan June 20, 2008 The table below addresses 51 recommendations submitted to the Port of Seattle following the Washington State Auditor’s Office report focusing on Port construction practices. The first two recommendations, shown in blue (OA1, OA2), are overarching for the Port in general, and others, numbered 1 – 49, are specific to construction and contracting practices. The latest activities, listed under Action Steps, will be shaded orange, and then green as they are completed. Use the search feature to navigate through the document. Overarching Recommendations Latest Activity Action Completed ESTIMATED STATUS/ SAO RECOMMENDATION PORT RESPONSE ACTION STEPS ACCOUNTABILITY COMPLETION REMARKS RECOMMENDATION PORT RESPONSE ACTION STEPS ESTIMATED ACCOUNTABILITY COMPLETION STATUS/ REMARKS OA1. The Port should establish a The Port agrees this Port Chief Executive Officer (CEO) directed Deputy CEO 3/15/08 OA1 complete senior-level Chief Procurement recommendation has merit. A Port staff to review options and best as of 6/13/08. Officer (CPO) position. This official team is in place, and work is practices for procurement systems, and Procurement should report directly to the [Port] already underway to identify and recommend organizational and process Recommendation 6/3 Capital CEO and be responsible for evaluate procurement models in change to ...

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• Publié par: Apre
• Nombre de lectures: 20
• Langue: English

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Port of Seattle

State Auditor Report Responses

And Action Plan

June 20, 2008       The table below addresses 51 recommendations submitted to the Port of Seattle following the Washington State Auditor s Office report focusing on Port ’ construction practices. The first two recommendations, shown in blue (OA1, OA2), are overarching for the Port in general, and others, numbered 1 – 49, are specific to construction and contracting practices. The latest activities, listed under Action Steps, will be shaded orange, and then green as they are completed. Use the search feature to navigate through the document.     Overarching Recommendations Latest Activity Action Completed      

SAO RECOMMENDATION PORT RESPONSE ACTION STEPS       RECOMMENDATION PORT RESPONSEACTION STEPS

ACCOUNTABILITY   C ES O T M IM PL A E T T E I D O   N  S R T E A M T A U R S K /  S 

 ESTIMATED  ACCOUNTABILITYCOMPLETIOSTATUS/ REMARKS OA1. The Port should establish a 3/15/08 CEO ut De CEO directed Chief Executive Officer Port this reesThe Port a leteOA1 com senior-level Chief Procurementrecommendation has merit. A Port staff to review options and bestas of 6/13/08. Officer (CPO) position. This official practicesteam is in place, and work is Procurement for procurement systems, and   should re ort directl to the Port Recommendation and recommendalread underwa to identif and rocess or anizational6/3 Ca ital CEO and be res onsible for Team 15, 2008. March to CEO b e chan models inevaluate rocurementDevelo ment managing and overseeing allother organizations that engage inDivision rocurement-related activit . This ects. With roma or constructionfunctionall official should have authorit to hirethe hel of an outside facilitator 11/2007 facilitator with extensiveOA1.a Outsideestablished. trained and independentexperienced in capital projectprocurement expertise hired in    procurement officials who will bedelivery, the team is reviewingNovember 2007.   6/12 Nora Huey char ed with reviewin andand anal several zin tions o fornamed as a rovin all rocurement-relatedmission, role, ersonnel, re ortin 12/2007OA1.b Internal ProcurementDirector of transactions. Current delegations oflocation, and structure of a ChiefRecommendation Team assembled   Central authorit related to rocurement – or similarProcurement Officein December 2007. Team includes   Procurement contract awards, a roval of contractfunctional unit the next over from ma orre resentatives   Office. changes and amendments, and The Port’s CEOseveral weeks.procurement centers within the Port.   related activities involvinhas asked the team to rovide ex enditure of ublic funds related tohim with an outline of o and tionsOA1.c Procurement 3/13/08 Recommendation construction and constructiona preferred recommendationTeam meets weekly.   management – should be rescinded necessarywithin 90 days. A and re-assi ned to the CPO and her lannin lementationeriod of im functional centralizedIm lement6/1/08 or his staff.will follow, but the CEOprocurement office.   anticipates that the new unit or de artment can be o erational b descri are ob advertise, tion,OA1.d Pre3/15/08 June 1, 2008. The workin teamand select Chief Procurement   includes representatives from theOfficer.   Port’s executive, le al, ro ect   6/1/08 mana ement, en ineerin , and leteOA1.e Com or necessar anizational purchasing staffs.logistics.    

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STATUS/ ACCOUNTABILITY   E C S O T M IM PL A E T T E I D O   N REMARKS 

SAO RECOMMENDATION PORT RESPONSE ACTION STEPS     OA2. The Port Commission should Commission 2008, the Port Commission 8, JanuarResolution 3181 is the structural On re-evaluate the current delegation of a subcommittee to review the establishedframework underlying the authorit to the Port CEO of Commission authorit ation dele the Portrelationshi between currentl encom assed in Resolution 3181Commission and the CEO. described in Resolution 3181. and develop and issue a newResolution 3181 was adopted in delegation of authority resolution that has remained1994. It Davis and TarletonOA2.a Commissioners   more clearl defines the edsubstantiall unchan for thewill serve on the subcommittee.   Commission’s intent with respect topast 13 years. However, only one construction management and Subcommittee OA2.bof the five Commissioners who may retain outside re ortin to the Commission and the ex Resolution nedvoted on and si erts. ublic concernin construction3181 remains in office. e A chan activities. OA2.cof CEO occurred earlier this year. will report back to full Subcommittee Given these circumstances, it is Commission with ro osed a ro riate that the Commission amendments b June 30, 2008. and the CEO review the rovisions of this bedrockCEO directed Port staff to review and rovideGeneral Counsel document. Ultimatel , the es to thedetailed recommendations for chan Commission, in conversation withResolution 3181 provisions related to the CEO, will strike the balanceconstruction management and construction between olic direction and 15, 2008. b March ortinactivit re im lementation, as well as other   matters concerning the scope of team assembled andOA2.d Internal the CEO’s authorit . To advance review smeetin to rovisions ecific that effort, the CEO has askedand rocesses. members of his executive team, led b the General Counsel, to rovide him with recommendations for updating, clarifying and strengthening a variet of rovisions in Resolution 3181 within 90 da s. The CEO has directed the team to give s ecific attention to the results of this erformance audit and the 49 resulting recommendations. In

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          1/8/08           6/30/08       3/15/08              

          Complete.           Public meetings held Ma 1 st and June 10th. Additional public meetin scheduled for June 23 rd . Schedule to resent draft resolution to full Commission on Jul 1 st with first readin on Jul 8 th and second readin on Jul nd 22 .  

SAO RECOMMENDATION PORT RESPONSE ACTION STEPS    

ACCOUNTABILITY ESTIMATED STATUS/ COMPLETIONREMARKS

articular, the team is char ed with providing specific recommendations for rocess im rovements and enhanced checks and balances for project- wide contracting authority, as well as increased ublic visibilit and Commission participation for larger construction projects. The CEO then will share these recommendations with the Commission. The Port has implemented and strengthened Project i 1 m .   m W e e d   i r a e te c l o y  m im m p e l n e d m  t e h n a t t     a { n T d h   e Port] T or h d e e   r P  c o o rt n   t w r i o ll l     r p e r v o i c e e w d  i u t r s e  c s  h a a n n d g   e w   ill  control procedures for change orders as Management,  stren then control rocedures to im lement chan es where  follows: En ineerin & assure that En ineers’ chan e order warranted to ensure ali nment  Construction with industr  Immediate Action: k e n st o i w m l a e t d es  e a   r of e     t ( h a e )   c pr o e n p tr a a r c e t d o   r w s’ i   thout  Port has alr y e   a b d es   t b  p e ra u c n ti , c  a e n s. d      T wi h ll e     1. a e orders are double checked All chan (PMEC) ro osed amounts, and b chan e continue, to make im rovements  a er CM and Construction Manab a order estimates and cost analyses as part of the 37-point action plan Contract Administrator (CA) before they are full and com letel from the TKW erformance audit, are executed b the Port. documented. Where cost or rice and it will incor orate the e Performance Auditor’s additional  training to ensure compliance for1.b Provide a or n d a e ly r  s p is r   o is p   o u s s a e ls d ,     t [ o t   h e e v   a P l o u r a t] t   e s   h c o h u a l n d g  recommendations into that action  each Resident Engineer (RE), CM and re uire full and com lete lan as a ro riate. The Port  for chan eCA on current re uirements order estimates and document training that inde ndent i d n o c c lu u d m in e g n   t f a u t l i l o y  n d  o o f c  t u h m es e e n   t r e e d v   iews,  e a s g t r i e m e a s tes, cost a p n e alysis and  specifics. r r secondar reviews of contractor superviso y eviews and approvals.  chan e order ro osals are vital  Additional Action: to transparency and accountability etsayesnfo n toi fd t eoaulmoancvE  aula ditsee c t . a 1 mmendatioke recomsn  and will ensure that these  mas an estimates and reviews are well-  .for standardization and consistenc documented in the files.   1.d Establish a policy outlining when a change order request requires a

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            1/24/08       3/5/08           6/5/08  

Part of this work is currently on oin under TKW Item 7. Rec. 1 com leted 6/4/08 Complete.       Complete.           Complete.         Complete.

SAO RECOMMENDATION    

PORT RESPONSE

 STATUS/ ACTION STEPS ACCOUNTABILITY   C ES O T M I P M L A E T T E I D ON REMARKS 

se arate estimate in lieu of a direct evaluation of the existing contractor’s chan e order ro osal.   1.e Coordinate policy and procedures with the Chief Procurement Office.   1.f Update CM and CA manuals to reflect new processes and procedures.         1. Provide trainin to CMs, CAs, Port Construction Services (PCS) and Project Mana ement Grou PMG on new cost estimate rocedures.  

2.  We recommend that [the Port] The Port has begun a review of  l The    P id or e t n   t w if il y l   i r n e c vi o e n w si   s c t u e rr n e ci n e t  s p   r a o n je d  c n t  o tr t e e  nd      undertake a review of all major change orders and trend logs to  ogs,  tive actions or evaluate recent and on oin ro ects to identif similarities between Port  correc identif cases where en ineers’ estimated costs and contractor  recommendations. estimates and contractors’ proposed proposed amo  a u c n t t i s o .  n     T a h s e Port will    Immediate Action:    Construction  amounts are consistentl the same take remedial and, in such cases, undertake a a ro riate and also a l the 2.a Identif all cases where en ineers’Mana er further evaluation of the underlying process improvements described esatnd aeimstsrotrp ’noc cart ts amoun ed  a opos lt ytsnenoiserc  nd amesae th   causes; followed by remedial actions above in Recommendation 1. determine underlying causes.   5    

8/31/08         3/5/08        

              Complete. 6/2/08 Revisons to the CM SOP manual coordinated with CPO.   Complete. Trainin course and content in development. Construction and Contract Mana ement training com leted Ma h d 30 t , June 2 n and June 19th.             Com lete.        

SAO RECOMMENDATION PORT RESPONSE     as appropriate.

ACTION STEPS

STIMATED STATUS/ ACCOUNTABILITY   C E OMPLETION REMARKS 

   Additional Action: Internal Audit 2.b Review matches identified and Mana er recommend remedial action.  Internal Audit 2.c Provide report to Senior Management. Manager  Construction 2.d Take appropriate remedial action as Manager directed by Senior Management.   3. We recommend that the Port The Port has be un revisin its  The Port will revise its Standard O eratin PMEC revise its SOP Manual to include construction Standard O eratin  Procedures manual to include s ecific guidelines for proper and accurate change specific guidelines for proper and Procedures Manual as part of its  order docu ntation, and will take the accurate change order TKW performance audit action  me documentation. The Port should lan. S ecificall , this revision will  followin ste s: rovide trainin to its consultant include more uidelines for staff/construction managers to change order negotiations and  Immediate Action: im rove the manner in which the documentation. Port staff will   Port is documentin ro ect chan e receive necessar trainin to 3.a Provide trainin uirements on current re orders. support these new guidelines. ge order documenatitnof ro C   sM ,  rofnahc d ans RE s.CA   Additional Action: 3.b Establish team to evaluate current ractices.   3.c Establish minimum change order documentation re uirements and rovide chan e order review checklist.   3.d Review current documentation of chan e order ne otiations and develo standard format.   3.e Provide training to inspectors, REs,

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  TBD     TBD   TBD                   3/5/08         6/5/08                      

    Internal audit on oin . Draft report presented to staff on 6/16/08. Part of this work is currentl ongoing under TKW Item 11a.   Rec. 3 com lete 6/4/08.   Com lete         Complete.     Complete.                

SAO RECOMMENDATION    

PORT RESPONSE

ACTION STEPS ACCOUNTABILITY  ESTIMATED STATUS/  COMPLETIONREMARKS

CMs, CAs, Pro ram Leaders, Pro ect Managers, PCS, Facilities & Infrastructure, internal desi ners and internal auditors on new rocedures.                   3.f Coordinate rocess with new Central Procurement Office (CPO), which will rovide ualit control, oversi ht and continuous im rovement.   4. We recommend that the Port As noted in the Port’s res onse to  The Port will develo standard o eratin PMEC develop Standard Operating Recommendation 3 t ,  s t   he r   o P c o e r d t  u h r a e s s     p r r a o c c t e ic d e u s r   e a s n  t d h   a w t i   ll a   l t i a g k n e     w t i h th e    f b o e ll s o t  w in in du   s s t t r e y  s:  Procedures SOPs that ali n with be un revisions to i industr ractices.    to better conform toCurrent Port manual SOPs do not provide adequate  Immediate Action: information regarding change order  industry best practices. ta dna C b     aMC the PorA before b  eiwllwedeerivion tiatary summa.4ogen A   negotiations.   executes any change order.   4.b Provide trainin in con unction with chan e order trainin described in 3.a.   Additional Action: 4.c Determine best industr ractice for change order negotiations.   4.d Identify differences, if any, between best

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                          7/31/08           1/24/08       3/5/08     6/5/08        

  Complete. Trainin com leted 5/30, 6/2, & 6/19. Construction and Contract Management training scheduled for Ma 30 th and d June 2 n .   3.f com leted on 6/2/08. Rec. 4 completed 6/4/08.     Complete.       Com lete.     Com lete.       Complete.

SAO RECOMMENDATION    

PORT RESPONSE

ACTION STEPS ACCOUNTABILITY   C ES O T M IM PL A E T T E I D O   N  S R T E A M T A U R S K /  S 

industr ractices and those a licable to Port operations.   4.e Develo and/or revise current Port standards.   4.f Provide trainin to a ro riate staff.  

5. [Port] management should take The Port will review its practices  The Port’s response to change order PMEC immediate ste s to assure that the of contract schedule enforcement  estimates is addressed under Port ri orousl enforces all and the evaluation of time  Recommendation 1. contractual schedule requirements. extension requests to identify wh e uests further im rovements can  Port mana ement will immediatel ensure e T x h t e e n n , sion e s n     a r re made,  f t o h r  e ti   m c e a   n and b w e h   e m re a   de.  The Port will a  that the Port enforces, consistent with best  ev specific attention to the practices  practices, all contractual requirements for s o P h v o o e rt r u ] s l   i d s   h b h o t e   u   o l p f d r     t o a h l p e s e   o r C l   y p h r a o n vi a d l e u   e a   O t m r e d o d e r .  r e       [The  of other state and local agencies  t p a r k e i p n ar  t a h ti e o  f n o   l a lo nd w   i s n u   b s m te iss s i : o   n of schedules by  with res ect to schedulin and r enforcement when conducting this p pr o o c p e er s l s y     t c o r   e e a n t s e u d r   e a   n th d  a u t  s e e s d ti .  mates are  review.   Immediate Action: 5.a Provide trainin on current contract schedule re uirements for CM and CA staff.   5.b Review all active ro ects for com liance with contractual schedule requirements.   5.c If any contracts are not in compliance

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            6/5/08

                      3/15/08       4/4/08     4/4/08

      Com lete.     Trainin course and content in development. Construction and Contract Management trainin com leted Ma 30 th and June 2 nd & 19 th .                       Com lete       Com lete.     Complete.