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HomeMy WebLinkAboutDTS-08-043 - Audit of Engineering Projects~R .. , . Development& Technical Services Report To: Councillor C. Weylie, Chair, and Members of Development and Technical Services Committee Date of Meeting: March 17, 2008 Submitted By: Rob Browning, General Manager, Development DTS Prepared By: Rob Browning, General Manager, Development DTS Wards) Involved: All Date of Report: March 11, 2008 Report No.: DTS -08-043 Subject: AUDIT OF ENGINEERING PROJECTS RECOMMENDATION: That Council receive the Engineering Audit Report for the Victoria Street Reconstruction and Joseph/Gaukel Streets Reconstruction as prepared by the MMM Group and directs staff to develop an implementation plan for its recommendations. BACKGROUND: In 2002 and 2003, the City of Kitchener undertook two projects in the City's downtown area: The Victoria Street Project, which entailed road reconstruction and upgrade of the municipal underground services of Victoria Street from Park Street to King and Park Street from Devon Street to the CNR tracks; and The Joseph/Gaukel Streets Project, which included the conceptual and detailed design and contract administration for Victoria Park Entrance. During the execution of both projects, the extent of soil contamination was far greater than originally estimated and the quantity of non-hazardous to hazardous material was also far greater than anticipated. These issues caused significant delays to the construction schedule as well as increased costs relating to environmental cleanup. To further complicate the projects, additional project scope was added to the existing contracts for the reconstruction of neighbouring streets. Due to these projects, it was proposed that a comprehensive review of how projects are scoped, designed, constructed, managed and closed-out. In February 5, 2007, it was recommended that an expression of interest be issued, seeking an external reviewer to complete an engineering audit of these projects. In June, 2007, the City retained MMM Group Limited (MMM) to undertake an independent review of processes and methodologies used on the Victoria Street and JosephlGaukel Streets Reconstruction Projects. The City's requirements were outlined in Expression of Interest E07- 031 and work began in July 2007. The consultant reviewed existing documentation, interviewed staff and one of the consulting firms involved in the projects. An interim report was submitted by the consultant on November 26, 2007 to Council for their consideration and information. The final report was completed and presented to City staff on December 19, 2007 and is attached for Council's consideration. REPORT: In 2002 and 2003, the City of Kitchener initiated the Victoria Street and the Joseph/Gaukel Streets projects, two of the more complex infrastructure reconstruction projects in the City's recent history. Both projects were initially awarded to different Consultants through a public tendering process. Consultants were retained by the City to complete detailed design and tender packages and provide oversight during construction. Due to the complexities associated with the increasing scope of these projects, City staff faced many challenges including, but not limited to schedule and costs. The City's methodologies were evaluated underahe process group framework identified by the Project Management Institute (PMI), an organization generally recognized as determining good practices in the Project Management field. Within this framework, the engineering audit scope specifically reviewed the City's practices used during the Victoria Street andlor Joseph/Gaukel Streets projects and the audit focused on the following areas: Environmental components including the identification of hazardous and non-hazardous materials Project management Consultant selection Project cost estimating Staff and consultant project management Project risk management planning and mitigation Other project management processes The audit was conducted using generally accepted audit methodologies, which included interviews with City staff and review of representative samples from the City's project documentation. The audit findings revealed that there was general compliance with current procurement and project management policies. Some opportunities for improvement were also identified during the audit. These opportunities were focused in three process areas: 1) Planning; 2) Monitoring and controlling; and 3) Closeout. Plannin More detailed planning is required, especially during the Consultant procurement process. The City relies predominantly on the Consultant to ensure proper execution of the project; hence, the City should document in greater detail their expectation of the services to be provided by the Consultant in the Expression of Interest. Areas that should receive greater attention to detail include: reporting, risk management, cost control, quality requirements, documentation requirements, and environmental regulation compliance. Monitoring and Controlling More formalized communication is desirable between the Consultant and the City's project manager and also internally within the City between the project team and senior management. This can be achieved through regular and formal Consultant reporting on project cost, schedule and quality issues associated with the project. These reports can form the basis for other reports from City staff to senior management and Council as required. ('In~Pni it Finally, due to staff turnover, information regarding the two projects was difficult to obtain. This highlights the importance of standardized project filing and archiving procedures, as well as the need to carry out Lessons Learned sessions at the end of major projects or potentially at the end of each major phase of a project. There are areas where additional focus by the City may bring about improvements in the effectiveness of their Project Management Processes. The areas are centred mainly on the need for effective planning, increased reporting, and standardized filing, and archiving, and sharing of experience through Lessons Learned during and after project completion. Eight (8) specific recommendations are presented in no particular order for the City to consider and are as follows: 1. Implementing a Lessons Learned Process; 2. Evaluating the City's current practices relating to consultant procurement and selection and preparation of a detailed Expression of Interest to ensure the project management and environmental requirements are captured; 3. Specifying the Environmental Site Assessment work should be supervised by a Qualified Person as identified in the Environmental Protection Act (EPA); 4. Completing environmental investigations such as soil and ground water assessments on projects at risk well in advance of undertaking construction; 5. Ensuring that essential tools for the City to maintain overall project control are available to the City's project manager; 6. Training of City staff in the areas of environmental issues and the essential elements of project management; 7. Implementing an indexed filing system to improve the retrievability and completeness of project files; 8. Performing follow-up audits to evaluate program effectiveness after new process improvements are implemented. FINANCIAL IMPLICATIONS: None COMMUNICATIONS: None CONCLUSION: The City anticipates that they will be faced with complex infrastructure projects due to the industrial history of the City, changes in environmental legislation, and increased interest in the development of the City's core. As such, the City by completing this engineering audit it will to enable staff to be better manage future infrastructure construction projects. Rob Browning, General Manager DTS Grant Murphy, P. Eng., Director, Engineering