The City’s main contractor for the Portland Building renovation is following contract requirements for three audited areas.
Most of the renovation activity is included in a design, build and relocation services contract with the City’s main contractor. The contract includes requirements for how the contractor will be compensated for costs, submit contract changes, and select subcontractors. The audit found that for these three areas:
- Costs billed by the contractor that auditors reviewed were mostly supported, accurate, and allowed by the contract. The contractor billed 60 percent of the $157.5 million contract amount during the audit period.
- Changes to the contract that auditors reviewed were supported. The City approved $10 million in changes after setting the contract price in December 2017.
- Subcontractors were selected by the contractor using sound practices. The contractor shows 140 subcontractors with contracts that total $122 million.
The audit identifies a few improvement areas. Auditors recommend specific actions to be taken leading up to the City’s final payment to the contractor. For example, the cost classification required by contract still needs to be completed, and interim calculations should begin now to identify potential cost savings. In addition, the audit identifies lessons learned for future City projects.
“It is vital that the City begin now to reconcile actual costs incurred by the contractor for payments made based on estimates,” said Auditor Hull Caballero. “Calculations for final payment will be time consuming and should not wait until the renovation is complete.”
The City Auditor contracted with construction audit experts, Sjoberg Evashenk Consulting, for her third audit of the Portland Building renovation.