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EditorialOur View

City’s $30M overrun a warning

Exceedingly sloppy management by the city has resulted in a gigantic waste of tax dollars to make sure that the police radio system works like it should. The incoming city administration must ensure that the lackadaisical treatment of the radio system contract will not justify concerns by opponents of Oahu’s rail transit that its cost will greatly exceed today’s estimate.

A contract initiated in the final months of the Frank Fasi administration in 1994 to install a police radio system was intended to be completed in three years at a cost of $34 million. It ended up $30 million overbudget, at a cost of $64.8 million, and took 11 years — through the Jeremy Harris terms and halfway through the Mufi Hannemann administration — to complete the 800 megahertz system. That expenditure of tax dollars amounts to more than one-third of the entire annual operating budget of the Hono-lulu Police Department.

An audit ordered by the City Council seven years ago and completed last month determined that design flaws and poor management of the telecommunications system project caused the cost overruns and system problems. The audit found that the city approved changes and time extensions to the contract with Ericsson-General Electric Mobile Communications.

The contract stated that the city could have fined Ericsson-General up to $500 a day, with a total cap of nearly $10 million for failing to meet deadlines. The city blew it "because it approved the time extensions for the project, approved the change orders and contract amendments, accepted the system and approved the contact as complete," the audit noted.

Unbelievable. And now, the statute of limitations has expired.

The city’s Department of Design and Construction was the project manager so should have been in control of the contract’s implementation, but this was bureaucracy at its worst. Ericsson-General Electric occasionally would propose that HPD make changes exceeding the contract’s original specifications, and HPD was allowed to request changes without the city design agency’s sign-off, according to the audit.

Along the way, screw-ups abounded. The original plan specified the wrong equipment, and some became obsolete during the period of the work. Design flaws were spotted and changes made that were "necessary for officer safety, especially where criminal activity was high," the audit explains. Thirty-one change orders and four contract amendments were issued.

And now, after all that, the age of the system is "an emerging risk," the audit warns. In the interest of safety — of both the public and police officers — a risk-management analysis is being urged.

This fiasco, particularly in such trying financial times, is frightening when considering the numerous contracts to be involved in design and construction of the rail transit project, now estimated to cost $5.5 billion. Mayor-elect Peter Carlisle should make sure early that the roles of city agencies and, if adopted by voters, the semiautonomous transit authority will not turn into an overlapping fiscal nightmare.

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