The Legislative Auditor General's Office targeted the performance of the state Division of Facilities Construction and Management (DFCM) in the planning, funding and building of the Games' Athletes Village. Alleged mismanagement has cost the state millions of dollars to settle subsequent claims by architects and contractors.
However, the report presented Wednesday to the Legislative Management Committee's audit subcommittee, citing ongoing litigation, did not parcel out degrees of blame.
"We found that DFCM, its architect, the University of Utah and several contractors all share responsibility for the problems that occurred on the project," the audit concluded, while acknowledging "some contractors were impacted financially by the project and the manner in which the division responded to their claims."
From the turning of the first spades of dirt in mid-1998, the project seemed cursed with problems. Contractors first complained the project was poorly designed, then said they were not paid after several buildings had to be redone to comply with the Americans With Disabilities Act.
In all, auditors estimated there were up to 700 change orders for the project due to "errors and omissions" in design.
Nelson Trucking sued for $3.2 million for the extra work it put in under pressure to "fast track" construction to meet Olympic deadlines. The Midvale company settled for $1.2 million in May 2003.
Clark Mechanical - owned by state Rep. Steve Clark, R-Provo - finally collected $1.6 million of a $2.2 million claim; Design West, architect for the project, sought up to $2 million, but later accepted $1 million.
While faulting DFCM oversight, auditors also said responsibility for "numerous delays and cost overruns" rested at least in part with some under-qualified contractors - a problem since corrected by implementation by the DFCM of a contractor "prequalification" procedure.
That said, auditors directly blamed "delays in the project schedule and confusion about the project's designs" for increased construction costs and, as the project's budget was stretched, new and unexpected claims for reimbursement.
"[Ten] contractors filed bankruptcy shortly after their involvement with the Student Housing Project," auditors admitted, but they stressed that six "of the firms were already facing financial difficulties when the project began and others suffered a financial loss because of their own mistakes."
Auditors criticized the DFCM's former methods for dispute resolution, saying they actually encouraged claimants to sue rather than participate in informal settlement talks. "As a result, some of the claims took several years to resolve," the audit found.
The audit also found DFCM has since "learned from its mistakes" and has become a well-managed agency that "provides quality construction management" for the state.
"This is a much better, well-run organization now," audit supervisor James Behunin testified in presenting the report.
Nonetheless, auditors did fault DFCM for failure to provide effective management for the 12-acre, $120 million housing project. During the Games, the six-building dormitory complex just east of the U. of U.'s main campus housed athletes from around the world; it now serves as student housing.
New DFCM director F. Keith Stepan and deputy Ken Nye acknowledged that in hindsight, the project was "a huge test for the division's management skills" that numerous procedural, administrative and bidding process reforms have since made the agency better able to handle.
"We are working hard to implement [the audit's] suggestions," Stepan said.
bmims@sltrib.com
