State audit report makes recommendations to Sound Transit for improving planning and reducing costs of expansion program

The Office of the Washington State Auditor published a report looking at how Sound Transit could improve project planning and design to reduce costs associated with its expansion program.  

“Because Sound Transit has one of the most significant transportation funding packages in the country, some lawmakers have sought to increase accountability and oversight around how Sound Transit uses tax dollars,” the report reads.

The audit references cost estimate increases on two light-rail projects and a deficient design of an escalator on another, as well as the unknowns surrounding Initiative 976 that – if it survives legal challenges – could result in Sound Transit losing an estimated $328 million annually.

“Given this funding uncertainty and concerns about cost increases, controlling costs is imperative if the agency is to deliver its construction program on time and on budget,” said the report.

One area of focus was the amount and reasoning behind change orders. The audit found Sound Transit spent millions on change orders to address unexpected soil and groundwater conditions, as well as to address mistakes or missing information in its designs and contracts.

“Although Sound Transit has policies and procedures in place to minimize project changes, the agency still issued hundreds of change orders. We examined more than 300 change orders worth $172 million. We found Sound Transit issued more than 160 change orders, worth $100 million, to address mistakes or missing information in its designs and contracts,” said the audit.

The audit recommends spending more money upfront to complete additional planning, such as hiring full-time design reviewers, who could strengthen the agency’s design review process.

The audit also recommended Sound transit develop a lessons learned program that would ensure consistent use of best practices while also reducing the number of repeat mistakes on future projects.

“Although Sound Transit collected data from previous projects, it currently lacks a formal process to ensure the lessons learned inform future projects. It is in the early stages of renewing an agencywide lessons learned program,” said the audit.

In response to the report, Sound Transit concurred with several recommendations and notes it has begun to take action on those recommendations.

“We’ve taken lessons learned from the active construction work on our East Link Extension and Northgate Link Extension projects to inform the Lynnwood Link Extension project in order to identify design deficiencies sooner and correct them prior to construction. Additionally, we are intensifying focus on best practices and industry standards for implementing field investigations early in our design processes, which will help us better inform future project plans,” Sound Transit CEO Peter Rogoff wrote in the agency’s response letter.

Regarding change orders, Sound Transit agreed with the audit’s assessment that every dollar entrusted to the agency should be spent in the wisest way possible but notes its change orders are in line with industry norms.

“Our change orders already fall within industry standards, especially given the complexity of some of our work, such as tunneling,” explained Rogoff. “Our total change orders for $2.3 billion worth of construction projects amount to [eight percent] of contract values. This calculation, which yields results that are within typical ranges for our industry, includes but is not limited to the $172 million in change orders that your office reviewed. The $23 million in change orders for which your review identified design deficiencies represent only [one percent] of contract values. Had your scope of work and format allowed for a more in-depth exploration of some of the individual change orders, you would have seen many successes addressing the kinds of challenges that can and do arise in complex projects employing a variety of delivery methods.”