Audit Report on the Department of Buildings’ Compliance with the High Risk Construction Oversight Study

Audit Report In Brief

Construction Codes and the zoning regulations to ensure the safe and lawful use of buildings and properties. In July 2008, DOB initiated the High Risk Construction Oversight (HRCO) study in response to two fatal crane collapses earlier that year as well as an increase in the number of construction accidents in New York City since January 2006. A March 15, 2008 collapse resulted in 4 fatalities and a May 31, 2008 collapse resulted in 2 fatalities. According to the Fiscal Year 2009 Mayor’s Management Report, the number of construction-related accidents increased from 83 in FY 2006 to 123 in FY 2008. Using emergency procurement procedures, DOB entered into a $3.91 million contract with CTL Engineers & Construction Technology Consultants, P.C. (CTL) that started July 7, 2008 and ran through July 6, 2009, to perform the study. The goal of the study was to make recommendations for improvements to DOB’s regulatory framework and construction industry practices to improve safety.

CTL submitted the HRCO report (HRCO Report) to DOB on June 5, 2009. In the report, CTL outlined the study’s findings and made 65 recommendations. To address these recommendations, in September 2009, DOB developed HRCO Implementation Milestones, a document that presented an implementation timeframe for each of the recommendations. According to the HRCO Implementation Milestones, DOB was to implement 49 of the recommendations within a two-year period, and indicated that the remaining 16 recommendations needed additional analysis.

To assist with the implementation of the HRCO Report’s recommendations, DOB awarded a second contract to CTL (the Implementation Contract) at a cost of $1.90 million, this time using the negotiated acquisition method of procurement. The contract term was from December 14, 2009 through December 13, 2010. In its Pre-Solicitation Review submitted to the Mayor’s Office of Contracts, DOB asserted that it “has an urgent need to retain services of the incumbent contractor to institutionalize construction safety improvements recommended under the existing emergency contract.’ In total, the amount expended in connection with the two contracts was $5.81 million.

Audit Findings and Conclusion

Despite the critical public safety concerns that prompted DOB’s retention of CTL to make and implement the HRCO Report recommendations, our audit found that DOB has failed to fully implement them in the more than four years that have passed since the HRCO Report was issued. Our audit found that, more than four years after the preparation of the HRCO Implementation Milestones document, only 8 of the 65 (12 percent) recommendations were fully implemented, 17 of the 65 (26 percent) recommendations were partially implemented, 18 of the 65 (28 percent) recommendations were in progress, and 22 of the 65 (34 percent) of the recommendations were not implemented.1 Additionally, the audit identified serious weaknesses in DOB’s internal controls and oversight of the implementation process for the HRCO Report recommendations, including DOB’s lack of a single point of responsibility (either a person or a group). Although DOB officials have stated that implementation of the HRCO Report’s recommendations was a high priority, that commitment appears to have faded. This raises the question as to whether some of the $5.81 million in public monies that was expended may have been wasted. Moreover, the failed attempt thus far to address what have been identified as high risk deficiencies in the DOB’s regulations and oversight may continue to expose the public and construction site workers to accidents and injuries.

The audit also identified weaknesses in DOB’s oversight of the Implementation Contract it entered into with CTL and with CTL’s performance. Under the Implementation Contract, CTL was responsible for producing a variety of deliverables to be used by DOB to implement the recommendations in the HRCO Report.2 However, our review found deficiencies in the deliverables submitted to DOB. Based on our review, we estimate that the value of the work not performed totals more than $357,000, approximately 19 percent of the $1.9 million Implementation Contract. Also, DOB’s documentation of the scoping and negotiation of the Implementation Contract was inadequate. Although the audit team did not find any evidence of impropriety, the failure of DOB to document and justify its contract decisions and negotiations leaves it vulnerable to fraud and abuse.

Audit Recommendations

This report makes a total of 8 recommendations, including that DOB:

• Review the HRCO Report recommendations to ensure they are still pertinent to DOB’s goals and current construction practices and environment. This review should be comprehensive and capture the full content of each recommendation as put forward by CTL in the HRCO Report.
• Develop formal tracking and reporting requirements for recommendation implementation.
• Create a project management team responsible for independently verifying recommendation implementation status as well as performing the tracking and reporting function. Ensure that this team has the necessary technical knowledge to head up this endeavor.
• Ensure that all actions (e.g., reviews, analyses, meetings, etc.) are formally and properly documented.
• Maintain appropriate files of deliverables, meeting minutes, communications with industry and CTL, training session attendance sheets, etc.
• Adequately monitor consultant contracts to ensure that all tasks are completed and completed in a way that provides value to the agency.
• Ensure that all contracts specify when a consultant’s work product is the property of the agency and that this be required in all contracts, except for documented extraordinary circumstances.
• Ensure that significant actions and decisions connected to establishing the scope of a contract, along with their justifications and/or authorizations when required, are formally and properly documented.

Agency Response

In its response, DOB agreed with seven recommendations and partially agreed with one recommendation. Despite this consensus, DOB stated, “While your input can help further our commitment to providing quality public service and maximizing our resources, we disagree with some of your findings and recommendations. In actuality, we find some of your conclusions to be very misleading and/or inaccurate. The audit did not properly reflect the overall outcome of the HRCO recommendations, and did not consider all the things that were accomplished by the Department of Buildings (the Department) based on this study. A few things that were ignored included, for example, the Department creating and staffing a Concrete Unit and having an in- house Curriculum Specialist who prepares customized training curriculums for Department staff.”

Auditor Comment

DOB fails to explain its assertion that some statements made in the audit report are “misleading and/or inaccurate.” This statement appears inconsistent with DOB’s overall agreement with all of the recommendations in whole or in part in one instance. The audit examined all documentation provided and testimony given by DOB that was relevant to the audit objective. The fact remains that the HRCO recommendations have not been fully implemented notwithstanding initiatives such as the creation of the Concrete Unit and the position of Curriculum Specialist.