Business & Economy

Auditor: State construction projects ran late and over budget

Workers complete the Vermont Psychiatric Care Hospital in Berlin before its opening in 2014. File photo by Roger Crowley/for VTDigger
Major state construction projects went over budget and missed deadlines, sometimes by several years, according to a new report by the state auditor.

The report also says the reasons for those delays and excess expenses are unclear because the Department of Buildings and General Services lacked an adequate tracking system.

The auditor’s office reviewed 10 construction projects the department worked on between 2012 and 2016.

They included building the Vermont Psychiatric Care Hospital in Berlin, expanding the Lamoille County Courthouse and addressing mold growth at the Vermont Veterans’ Home. The estimated costs of the projects added up to about $92 million.

According to the report, released Monday, the projects were completed between two and 42 months later than expected. One project was still in progress.

Of the nine projects that were finished, the costs ran over the expected budget by a median of 31 percent, according to the report. Combined, the cost for the nine completed projects was $24.6 million higher than projections.

Doug Hoffer
State Auditor Doug Hoffer. File photo by Anne Galloway/VTDigger
Auditor Doug Hoffer said Monday it is not surprising that major state construction projects with multimillion-dollar price tags have changes along the way. However, he said, BGS does not have a system to effectively track those changes.

Recording the progress of projects and keeping data on the factors that cause delays or drive up costs is important to inform future undertakings and potentially avoid similar issues, he said.

“Every project is an opportunity to learn something, and the current system does not give them that,” Hoffer said.

Because of the department’s inconsistent tracking system, he said, it was difficult for members of his team doing the audit even to find the full cost of the projects.

“The practical effect is, no accountability,” Hoffer said.

Extending the timeline for finishing projects also has a financial impact, he said.

“Delays in projects equal increased cost, if for no other reason than inflation,” Hoffer said.

According to the report, project managers attributed delays to changes in code requirements, unforeseen conditions, changes in project design and delays in getting necessary appropriations.

Two projects were delayed by more than three years: the public health lab in Colchester, delayed 45 months, and a public safety facility in Westminster, delayed 41 months. Those projects’ schedules were affected by recovery from Tropical Storm Irene, because personnel or money was redirected to other locations that needed to be rebuilt, according to the report.

The auditor’s report found that BGS failed to identify the “root cause” of deviations from project plans, because of the lack of consistent documentation.

Though BGS has said in annual budget requests since fiscal year 2013 that the department assesses performance in meeting construction project targets, those results haven’t been reported to the Legislature.

Chris Cole
Chris Cole is the head of the Department of Buildings and General Services. Courtesy photo
The auditor’s research also turned up instances where BGS had not gone through a competitive bidding process required by the state.

BGS Commissioner Chris Cole, who took the post earlier this year under Gov. Phil Scott after serving as secretary of transportation in the Shumlin administration, said he believed the auditor “made some astute observations” about capital construction projects and the lack of documentation.

“I came to the same independent conclusion,” Cole said.

Already, Cole said, the department has begun implementing a system for scheduling, which he said will improve estimates for the length of time projects will take.

The department is also adopting a system for project tracking, which will help streamline information including finances.

A few months after taking over the department, Cole orchestrated a reorganization. In the course of that, the department built a new process for a planning phase early in a project when potential constraints are identified. He believes the new process will help set more accurate estimates.

Cole said some of the projects the auditor reviewed were delayed because of legislative decisions made in the aftermath of Tropical Storm Irene and were beyond the control of project managers to some extent.

However, in general Cole said he sees room for improvement in the management of state infrastructure projects.

“I think the tools that we’ve already deployed are going to help us do that,” he said.

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Elizabeth Hewitt

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  • Steve Baker

    Well put Gary. We have large jobs going in six States. There are all kinds of incentives you can build into the job.

    • Gary Murdock

      Steve, all I could do is shake my head in disbelief when reading this article. I mean come on…this stuff is covered in PM 101, and the solutions are well known and readily available…the wheel need not be reinvented. If this doesn’t define the ailment Stateemployeeitis nothing does!

  • Steve Baker

    Hurricane Irene was in August of 2011. If you look at the storm path, many other areas were hit as badly or worse…. It’s the “New Vermont Way” keep making excuses from 6 years ago. The the way to move forward.

  • Keith Stern

    The inefficiencies and lack of suitable planning can be summed up in this joke: A man is watching a highway crew driving along a street. One guy gets out and digs a hole and the other guy is behind him filling it in. This continues repeatedly until the guy goes over to them and asks what they’re doing. One said that they were supposed to be planting trees but the guy who was supposed to plant them is off today.

  • Gary Murdock

    Yes, I’m aware of the market factor adjustment, but the adjustments are to small on a wage that is to small. The result is a workforce that is willing to work for that wage in lieu of the private sector, where an employer must pay 6 figures for the required skills…many of which never set foot in a college classroom…but that’s for another subject. Bottom line, in my private sector world, the plethora of problems you cite in the article would be unacceptable from what you call a “Great Staff”. In reading your article, I get the impression that Mr. Cole has identified many of the problems, but the biggest obstacle to implementation of the cure is the collective bargaining agreement, including the market factor adjustments, and union protection of staff that should probably find a new line of work.

    • Steve Baker

      Maybe we should write down the Names and phone numbers on the trucks in the adjacent state and hire Great Contractors…Doug come on over to Rt242 and watch the small bridge work being done. Which be the way happens to be a year after the Road was fixed!

    • DougHoffer

      It appears you don’t understand what I said. The staff in question consists of professional auditors who work for me in the Office of the State Auditor. They conduct the audits. The problems identified were in the Dept. of Buildings & General Services. Furthermore, there is no evidence whatsoever that the collective bargaining agreement (CBA) has anything to do with the problems at BGS. If it did, how come the Agency of Transportation (where Commissioner used to work) has modern project management tools? They too are covered by the CBA.

  • walter sobchak

    The team within the department of Purchasing and Contracting are a joke at best. As a Director of Purchasing for a large company, I decided to apply for positions within that department twice.

    The first time I applied for an agent position, I was granted an interview with the Department Director and a small panel of fellow employees. The Director was standoff-ish almost to the point of hostility. During that interview, she asked if the salary being offered was something I was willing to work for. It is against my better judgment to discuss salary at a first interview, but that was a road she wanted to go down so I obliged. I brought up being hired into range and a market factor. No sooner than I finished that thought, they wrapped up the interview and gave me the bum’s rush out the door. It took three weeks of calls to finally get them to tell me they hired someone else AND they never updated my application status within HR’s website to reflect this.

    Knowing who was already in the department, I waited a few more weeks and checked the staff list, I found it updated with the name of the agent they hired instead of me and out of curiosity I looked them up on LinkedIn. They had a fraction of the experience I had. It appeared to me that the Director was not interested in someone who’s skills could assist this department to move forward and address the deficits to the record keeping process highlighted by this article. Instead, the goal appeared to be to pay the lowest wage possible for a ‘seat filler.’

    Fast forward to this year and the same department was looking for a Purchasing & Contract Procedures Specialist. This job description was essentially what the last 4 years of my professional life has entailed. The Director wouldn’t even grant me an interview. Maybe it’s time for some fresh faces in that department as it seems some are too comfortable to do an effective job.

    • Edward Letourneau

      Its the old story of what is wrong with Vermont; First rate people hire first rate people. Second rate people, hire third rate people. We have a lot of second rate people in important jobs in this state.