UH’s poor oversight adds costs to delayed project, audit says

When then-University of Hawaii President David McClain faxed Jack Tsui a list of priority capital improvement needs in early 2008, one stood out: revitalizing 93-year-old Cooke Field.

Tsui, a former president of First Hawaiian Bank, was chairman of the Clarence T.C. Ching Foundation, which sought to donate a portion of the $130 million realized from the sale of Kukui Gardens for a significant UH project.

Coming not long after quarterback Colt Brennan and football coach June Jones had made headlines by blasting the state of UH facilities and Jones had bolted for Southern Methodist University, the Ching Foundation envisioned its $5 million for the Cooke Field project — the largest sum ever pledged to UH athletics — as a "transformative gift."

Six years later, the Clarence T.C. Ching Athletic Complex, as it is known, is the unintended symbol of another kind. Mired in controversy, delays and cost overruns, the latest estimate is $3 million above its planned $13.7 million budget and is still at least a month away from completion, UH officials said.

A report by the UH Office of Internal Audit released Wednesday cited deficiencies in managing and monitoring the project as well as a lack of communication. Board of Regents member Jeff Portnoy has described the issues plaguing the facility as indicative of a "University of Hawaii-wide problem."

Portnoy told the regents, "These are such basic, systemic issues. I mean, saying the (school) and architect and contractor should be meeting on a weekly basis is like common sense. If I’m (adding) on to my house, I have weekly meetings."

Portnoy added, "These kind of problems are systemic in state projects, from underbidding to multichange orders to the lack of communications. And, unfortunately, the Ching (Complex) became another example."

The audit report cited 31 post-construction design revisions and at least 248 days in delays. It noted the overrun includes $1.1 million in change order proposals "not yet approved and change order proposals that are anticipated but not yet prepared."

The audit said if the latest anticipated cost of $16,719,416 is exceeded, the "Office of Facilities and Grounds will need to locate additional funding sources for development costs."

IN ONE INSTANCE, the board was told a design advisory panel requested changes in a canopy from the original plans that resulted in a six-month delay. In another example, rail-guards were determined not to be up to code and were sent back. They have yet to be installed, UH said.

The Ching Complex, which sits on the site of the former Cooke Field, is home to women’s track and field, cross-country, soccer and sand volleyball and is to also be used by football, intramurals and community groups. The facility is to have grandstand seating for 2,500 and volleyball seating for 800.

Some of the current regents questioned why the project was even allowed to go forward as is when the $10 million initially budgeted fell $3,388,000 short of the minimum bid by T Iida Contracting. Bids ranged up to $16,844,000.

"What I’m trying to get at is, this is not an infrequent (problem)," regents chairman John Holzman said. "We are suddenly confronted with projects we don’t have enough money for. It’s like, ‘What do we do now?’"

The audit report said when auditors asked why construction bids significantly exceeded the total development budget of $10 million, the Office of Facilities and Grounds, which manages development and construction, replied that "this is a consistent issue at the university, whereby construction documents are generally not prepared with the objective of ensuring that the resulting proposed construction costs would approximate available funds."

Holzman said, "Project decision-making from the very beginning has to be much more transparent. And when you decide to take these risks, which someone did decide, it has to be clear that we’ve decided to take risks. My guess is that if you made it clear, there would be a lot more scrutiny of those risks and we wouldn’t get into so much trouble."

The audit was critical of the Office of Facilities and Grounds on several counts, noting, "The internal audit was unable to determine what steps, if any, were taken to get the construction of the complex back on track from both a timing and cost perspective. Accordingly, as ‘owner’ of the project, OFG should consider being more active and aggressive when managing and monitoring the construction schedule and construction costs, including the oversight of construction managers."

While some delays, such as the detection of asbestos in underground conduits, were "unforeseen," the report said, "internal audit believes more comprehensive design plans reviews and increased and timely collaboration by OFG and its service providers with respect to construction expectations and costs could have reduced the number of delay days and cost overruns."

The facility, which is named for the late developer and UH fan Clarence T.C. Ching, took on urgency as part of the school’s athletic self-study required by the NCAA and was to address Title IX requirements. Because of delays in construction, the NCAA refused to grant UH full certification in 2012.

Last fall, as additional deadlines passed, a "last and final" deadline of Jan. 28 was set for key elements of the facility, including locker rooms and coaches’ offices, to be ready or UH would face sanctions, including its athletes and teams being barred from championship competition.

UH said a temporary certificate of occupancy was issued by the city Jan. 8, which the NCAA accepted and certification was restored.

Holzman said he was "flabbergasted" to find out that the athletic department had been largely unaware until April 2013 that the project was running so far behind.

Part of the problem was that UH had three people overseeing the athletic department in a 10-month span preceding April — Jim Donovan, Rockne Freitas and Ben Jay — and they were hard-pressed to get information.

Jay, who came to UH from Ohio State in mid-January 2013, said he was frustrated in early attempts to get updates on the project.

"I have had to plead for information and it is hard (to get)," Jay said. "I hate wasting money. I hate wasting time. We keep running up against these things and I think that sometimes (the school) could do a better job of the way we manage our projects and, I think, the communication."

At one point, he said, he personally decided to trim the planned number of sand volleyball courts from three to two after workers had encountered underground pipes that no one could account for.

"We were delayed almost six weeks trying to figure out what those pipes were for," Jay said. "We got to the point where I said, ‘I can’t delay this project anymore.’"

Tsui said, "I think more authority ought to be given to those people who should be in charge of these projects — in this case, the athletic director. If he has the proper staff and information, he could have come to grips with this a little sooner than, perhaps, those people who were in charge have now come to grips with it."

Les Murakami Stadium, which is barely shot-put distance away from the Ching Complex in UH’s lower campus quarry, stands as a three-story model to the way officials say they wish capital projects could be carried out and finished.

The 4,312-seat baseball facility required barely eight months from its June 1, 1983, groundbreaking to its Feb. 17, 1984, debut for $11.2 million. It is still on lists of the top college baseball stadiums in the country.

Through it all, Tsui said once the Ching Complex is completed, "we’re very optimistic that this will turn out to be something that the school is proud of and that the taxpayers and the state of Hawaii are proud of. Certainly as a trustee of the Clarence T.C. Ching Foundation, we will be proud of it also. It has our name on it."