Web Conference: Subsurface Claims - Managing Project Impacts of Unexpected Conditions

Course Title: Subsurface Claims - Managing Project Impacts of Unexpected Conditions

When: Thursday, May 8, 2008, 11:30 a.m. to 1:00 p.m.
Where: Your Office or Conference Room (this is a web based training conference)

Cost: Government - $129

Sponsored by: Contract Solutions Group
Co-sponsored by: Washington Cities Insurance Authority

To register and view the course brochure, click here.

Improving integration of geotech reports, plans and contract clauses to reduce subsurface claims
• Reducing the common sources of subsurface condition claims
• Establishing the appropriate level of pre-bid investigation
• Avoiding and resolving claims from perspectives of geotech professionals who represent owners and contractors.

Federal Abuse of Credit Cards

In an audit released on April 8, 2008, investigators for the Federal Government Accountability Office (GAO) found significant abuse of credit card transactions by federal employees. Problems included unauthorized purchases, purchases for items that could not be accounted for, inappropriate purchases, and failure to follow procedures.

Last year, federal employees spent $20 billion using the “SmartPay” credit cards that are widely viewed as a means to streamline procurement methods. However, use of government credit cards comes with significant risks if not monitored carefully by supervisors and managers and if insufficient systems are in place for monitoring the use of the credit cards.

Inappropriate purchases uncovered by the federal auditors included payment for lingerie, gambling, iPods, Internet dating services, and a $13,000 steak dinner.

If your agency uses or is considering using a procurement credit card system, make sure that you have adequate systems and management controls in place that include regular reporting, blocking of purchases from certain categories of merchants, and that managers and employees are held accountable for their actions. Government credit cards are a decentralized method of procurement that is convenient, but can be risky, as the audit from GAO found.

For more information about the audit, see the article in the Washington Post.

Errors in March 2, 2008 State Prevailing Wages for King County

The originally published Washington State “Prevailing Wage Rates for Public Works Contracts for King County,” effective 03-02-08, contained multiple errors in the wage rates.

On or about March 7, 2008, the Washington State Department of Labor and Industries posted a corrected version of the King County prevailing wage rates to their website that included changes to the wage rates for at least 21 classifications including for the following major classifications:

• Electricians – Powerline Construction
• Elevator Constructors
• Fabricated Precast Concrete Products
• Industrial Power Vacuum Cleaner
• Modular Buildings
• Landscape Construction
• Plumbers & Pipefitters
• Power Line Clearance Tree Trimmers

The revised document is also labeled as effective 03-02-08 and there is no explanation from Labor and Industries on the errors on their website. I don’t know if there are similar errors for other counties. You may want to investigate this for other counties.

If you are in King County, you may want to review the bidding documents for any project that you bid with the 03-02-08 wage rates before March 7^th. Compare the hard copy of the wage rates with the wage rates included online at L&I’s website now. In the event you find that your bidding documents included the prevailing wage rates that L&I has since corrected, you may want to issue a no-cost change order incorporating in the correct wage rates.

Purchasing Jobs in Pierce County

Agency: Port of Tacoma

Position: Purchasing Manager

Salary: $62,250-$77,813 per year, DOQ.

Deadline: Open until filled. First resume review on April 11, 2008

Click here for job annoucement

Agency: Pierce Transit

Position: Purchasing Assistant

Salary: $35,487 - $47,558

Deadline: April 14, 2008 at 4:00 p.m.

Click here for job announcement

Training: Utility Coordination and Risk Allocation

Course Title: Utility Coordination and Risk Allocation training.

When: Friday, April 18th. 8:30 a.m. to 4:45 p.m.
Where: Washington State Convention and Trade Center (downtown Seattle).

Cost: Government - $219; Private Firm - $279

Sponsored by: Contract Solutions Group
Co-sponsored by: Washington Cities Insurance Authority

To register and view the course brochure, click here.

Summary: Learn how the October 2006 decision by the Washington State Supreme Court in the Scoccolo vs. City of Renton case changed the rules for utility relocation risk allocation.

Topics:

• Franchises - Use of Right of Way Issues
• Case Study - Planning Utility Coordination Efforts
• Utility Industry Perspectives - Best Practices
• Contractor Perspectives - Best Practices
• Design Phase - Best Practices
• Avoiding and Dealing with Construction Problems
• Questions and Answers with Panel
  

Sales Tax Increase for Various Washington Counties

Effective April 1, 2008, there are sales tax increases for the following counties: King, Kittitas, Mason, Spokane, Yakima. The Washington State Department of Revenue publishes quarterly updates to the sales tax rates by county and by city within each county. The chart may be found at the following website address for Local Sales and Use Tax Rates and Changes.

According to Washington State law (RCW 82.14.055), “A local sales and use tax rate increase imposed on services applies to the first billing period starting on or after the effective date of the increase.”

What is a Performance Audit?

On April 1^st, I attended a training session in Ocean Shores, Washington, sponsored by the Washington State Chapter of the American Public Works Association (APWA) and the Municipal Research and Services Center (MRSC) on issues related to performance audits. In November 2005, the voters of the State of Washington approved Initiative 900 that directed the Washington State Auditor's Office to conduct performance audits of state and local government agencies in the state. The initiative became effective on December 8, 2005. The State Auditor's Office has already conducted a couple of fairly high profile audits, most recently the highly critical audit of the Port of Seattle’s construction management and contracting practices that made front page headlines when it was release in late December 2007. There have also been performance audits on the construction management programs of Sound Transit and the Washington State Department of Transportation (WSDOT). The State Auditor’s Office will continue selecting various public agencies and programs to audit.

Speakers at the training session included a representative from the State Auditor’s Office, a principal from one of the consulting firms hired by the State Auditor’s Office to conduct the Sound Transit and WSDOT audits, and a representative from WSDOT.

Unlike an annual financial and compliance audit, a performance audit looks at issues of economy, efficiency, and effectiveness of the policies, management, fiscal affairs, and operations of state and local governments, agencies, programs and accounts. A performance audit seeks to identify areas of performance that could be improved in order to meet best practice and other criteria standards.

For each performance audit, the State Auditor’s Office identifies objectives for the audit, working in consultation with the agency. For construction management and contracting programs, the State Auditor’s Office is continuing to refine and develop the criteria that currently include the following, but that are adapted for each specific audit:

1. Over the most recent three-year period ending June 30, 2008, has the entity been effective, efficient and economical at planning, designing and managing the construction projects and construction contracts in order to:

1. Minimize all costs associated with its construction projects, including but not limited to engineering, land acquisition, environmental review, environmental mitigation, permitting and construction?
2. Minimize unnecessary change orders and delays that result in extra costs?
3. Keep projects on schedule?
4. Minimize risk by identifying it, eliminating it, minimizing it or sharing it with the contractor through good contract terms and contractor management?
5. Obtain the best quality, timeliness, workmanship and other value?
6. Minimize building maintenance and utility costs through cost-effective floor and building designs (decreases in future maintenance and utility costs should exceed the additional construction costs necessary to achieve them)?

2. How effective was the entity at soliciting, procuring and managing its Engineering, Consulting and Construction Management Contracts related to construction projects in order to minimize costs and maximize the value and quality of services provided?

3. How effective has the entity been at complying with the State’s and its own bidding and procurement requirements?

In preparing for a performance audit, an agency should identify those issues that may become the subject of the audit, evaluate the risks associated with the current practices, identify how the agency currently measures performance, etc. It may be useful for an agency to conduct a pre-audit of its own practices, either with in-house personnel or by hiring an outside consultant to conduct the audit. A pre-audit can help an agency identify areas that need improvement prior to a formal performance audit.

Once an agency has been selected for a performance audit, it’s a good idea for the agency to develop a communications plan for how they will interact with the auditor, elected officials, the public, etc. In addition, the agency should identify resources to help manage the interactions with the auditor.

If you’re interested in more information about performance audits, I would be glad to strategize with you about other key issues to be aware of and to share other information gleaned from the training. The State Auditor’s Office website has a special section with more information about performance audits, including a copy of the audits that have been completed thus far.