Read the executive summary on this page and download the pdf for the full report.
What we found
This report follows our previous work on the Central Courthouse and Health Department Headquarters projects as they move through the construction phase. These two projects have a combined budget of $418.6 million, of which $311.2 million is budgeted for construction. We reviewed best practices to identify some of the contract features and tools that are used to keep construction costs in check.
- The construction contract is the first line of defense in cost control. The two construction contracts generally followed best practices in terms of monitoring and oversight.
- The project delivery method, where the contractor is brought into the project before design is complete, fit the projects and the County benefited from the method’s impact on the construction schedule and risk reduction.
- The Portland area construction boom limited the contractors’ ability to take advantage of competition in subcontracting out construction work.
- We applied some construction auditing best practices to the review of pay applications and found relatively few errors, but we were not able to test significant portions of the work due to the volume and complexity of the data.
- The County’s internal system for processing payment applications and contract amendments was sufficient to limit the risk of payment delays.
Why we did this audit
This is our second in a series of County capital construction audits that began with reports on the planning process for these two projects. We chose to audit these projects for a number of reasons, including: the inherent high risk of undertaking projects of this size; the relative lack of experience the County has with high rise construction; and the fact that the County was starting two projects at the same time.
What we recommend
In general, the construction of the Central Courthouse and the Health Department Headquarters has gone relatively well. But, the County and the Facilities and Property Management Division could make important improvements for the future:
- In order to get the most value out of the County’s actual cost reimbursement contracts, a review of project books and records by a specialist construction auditor is required.
- To benefit from future cost-based construction projects, the County should build the expectation that construction audit standards will be applied to any future projects.