State construction projects frequently go over budget, sometimes by millions of dollars, and drag on for longer than expected, according to a report released Monday by the Vermont state auditor’s office.
Auditor Doug Hoffer and his staff examined 10 construction projects led by the Department of Buildings and General Services between 2012 and 2016.
One project is ongoing and under budget, but the nine finished projects went over budget cost by a median of 31 percent and collectively cost $24.6 million more than expected. All 10 missed their completion deadlines.
The Public Health Laboratory in Colchester took 45 months longer than expected and cost $9.8 million more than the original estimate of $29 million. (The report notes that more than half of the delay stemmed from the destruction of state offices during Tropical Storm Irene, which diverted funding from the project.)
Among the other projects examined in the report: The district heat plant in Montpelier, which went $4.6 million over its original $15 million budget and took a year longer than expected to complete; and the state offices in the National Life building in Montpelier, which cost $9.6 million after an original estimate of $6.3 million. That project, though, only took two months longer than expected.
The audit faults BGS for failing to address the underlying reasons for cost overruns and delays, concluding that, “The department has not systematically analyzed why projects may exceed cost estimates or schedule timeframes.”
Department staff did provide various explanations for why particular projects suffered from cost increases and delays, including changes to code requirements, unexpected events, additional requests from the future tenants, design changes, and delays in legislature-approved funding.
BGS doesn’t have a consistent method for monitoring project costs, Hoffer said, which means it can’t answer “some very prosaic, straightforward things like, ‘How do you determine the cost of the project when you’re in the middle of it?’”
“Some of the audit staff, when trying to find the necessary information, found literally just pieces of paper,” he noted.
Hoffer also observed that BGS lacked guidelines for the state employees who draw up cost estimates and manage construction projects. “For reasons that are unclear to me, over time the engineers who were responsible for these kinds of projects created their own systems,” he said.
In a formal response, BGS Commissioner Chris Cole, who was appointed in January, pledged to improve the monitoring and documentation of project costs. While he didn’t dispute the substance of Hoffer’s audit, he did note that factors outside the department’s control often change the course of projects.
That may be true, but Hoffer still thinks the department can do better — “It really serves everybody’s interests to have a much better idea of what the project is going to cost at the outset,” he said.