Southwest Light Rail audit reveals Met Council did not enforce key parts of contracts
The Minnesota Office of the Legislative Auditor released its latest findings on the construction of the Southwest Light Rail, which is currently a decade behind schedule and is about a billion dollars over budget.
The latest audit states that the Metropolitan Council, which runs the project, “has not adequately enforced several aspects of its key Southwest LRT construction contracts.”
The report summarized several recommendations to the council meant to get the project back on track and prevent further ballooning costs.
Those recommendations include requiring workers to “meet contractual obligations related to change orders” and “hold contractors accountable for change order requirements.” This is in response to change orders reviewed by the auditor that showed the council did not hold the civil construction contractor accountable to estimate change order costs and “allowed potential schedule delays to remain unresolved.”
The report defines a change order as “A document authorizing a change in the work from what was initially defined in the contract, and which often results in changes to the amount paid to the contractor or time needed to complete the work.”
Other findings show that the council agreed to pay the contractor with “little or no explanation” that the proposed costs were reasonable, even when independent cost estimates for the same change orders were significantly lower.
The report focuses on two key contractors, Lunda/C.S. McCrossan Joint Venture (Lunda-McCrossan) and AECOM Technical Services, Inc. (AECOM).
Lunda-McCrossan is the council’s primary civil construction contractor, while AECOM designed the Southwest Light Rail line and served as the cost-estimating consultant.
By the year 2020, the report states that the council directed AECOM to systemically increase independent cost estimates (ICE) it prepared for change orders. For most of these orders, the adjusted ICE was 10% to 50% greater than the consultant’s original ICE.
In response, the auditor recommends that the council “should reform its processes for determining and justifying final change order costs.”
The Office of the Legislative Auditor is set to give a presentation to lawmakers Wednesday morning.
5 EYEWITNESS NEWS will continue to monitor Wednesday’s developments and will update this story as more information becomes available.
The full report can be viewed here.
An archive of related coverage on the project can be found here.