San Francisco wastes money on contractors with subpar performance records
This SFPUC contract was just one example. The report also highlighted a case study from the San Francisco International Airport, in which a construction crew botched a welding job performed as part of a $15 million contract to build a pedestrian bridge and mezzanine to an airport terminal. The report outlines what went wrong, citing "inadequate installation and missed steps in the welding procedures; bolt holes were misaligned and measured incorrectly." As a result, SFO issued 59 noncompliance notices.
A contractor hired by the Department of Public Works, for a $5.2 million neighborhood branch library project, was reportedly "aggressive and argumentative ... focused on preparing a claim instead of the project," and "left the job midway through the project," the audit notes. After that went south, the city spent $85,000–$100,000 on litigation, finally completing the job with the city's own workforce.
The coming decade promises to be golden for city contractors who work in the construction sector. San Francisco has budgeted more than $25 billion for ambitious projects under its capital improvement plan, so many lucrative construction opportunities will arise.
The Controller's City Services auditor has kept a watchful eye on construction over the past couple years, Director of City Audits Tonia Lediju told the Guardian. That led to the discovery that the city lacks a process for tracking contractors' past performance when making hiring decisions.
"Given what we learned from our previous audits, not to mention ... our reliance on contractors to accomplish our city's capital plan, the Controller's Office decided to conduct this audit to more formally assess the adequacy of the departments' contractor evaluation processes," Lediju explained.
As part of the audit, the Controller's Office surveyed construction management staff at various city agencies, finding that a full 70 percent of them reported encountering poor-performing contractors "at least occasionally."
To address the gaping problems in the construction contracting system, the Office of the Controller recommended that city agencies work with the Mayor's Office, the Board of Supervisors, and the City Attorney's Office to strengthen the law by requiring contractor performance evaluations to be completed — and to consider those evaluations when awarding contracts. With $25 billion in spending over the next 10 years, this might be a wise move.