Objectives

To determine if the Office of General Services (Office) is adequately monitoring construction management contracts to ensure they meet the terms and requirements, and if the oversight and administration costs associated with carrying out this function are supported and related. The audit covered construction management contracts that were active between April 2015 and July 2020 and additional information provided by the Office through August 2021.

About the Program

The Office facilitates the work of State agencies through the provision of architectural, engineering, and construction management services for buildings statewide. To achieve its mission, the Office’s Design & Construction Group (D&C) provides State agency clients a full range of architectural, engineering, contracting, and construction management services, including managing projects’ schedules, costs, quality, safety, scope, and function.

Construction contracts are managed by D&C staff or construction management consultants who fulfill all or portions of D&C’s responsibilities to complete the Office’s construction projects. After completing the bid process for services, the construction management consultant with the highest score is awarded the construction management contract, and must adhere to the contract, which includes compliance with the Office’s minority- and women-owned business enterprise (MWBE) participation goals. Between April 1, 2015 and March 31, 2020, there were a total of 3,238 ongoing construction contracts with a value of approximately $3.3 billion and 25 active construction management contracts assigned to construction projects valued at approximately $308 million.

Key Findings

• For the five projects we audited, we determined that, generally, the Office adequately monitors construction management contracts to ensure that the terms and requirements are met, and that costs are supported and related; however, we identified several areas that need improvement.
• One construction management consultant’s bid proposal, for a contract valued at approximately $1.8 million, did not meet the criteria outlined in the Request for Proposals (RFP), yet this was not reflected in the Office’s evaluation and scoring.
• Three of the five construction management consultants used a State-certified women-owned business enterprise (WBE) and claimed credits toward each of their contracts’ MWBE goals. However, the WBE subcontracted out all of its approved services to an independent contractor (non-MWBE) and therefore the WBE did not provide a commercially useful function. As a result, the $207,316 paid to the WBE should not have been claimed as credits toward the MWBE goals.

Key Recommendations

• Continue efforts to revise the RFP templates and requirements to ensure all information required to validate proposal submissions is obtained.
• Verify the accuracy of the information in the proposals submitted to the Office.
• Develop and implement a process to ensure that MWBE subconsultant payments claimed to meet MWBE participation goals are for MWBE work that has served a commercially useful function.