Halawa prison project delays cost millions

A long-delayed project to replace the locks, video surveillance systems and other electronics in the Halawa Correctional Facility has turned into a multimillion-dollar headache for prison officials after work stalled because of problems with two subcontractors.

Corrections officials have emptied out entire modules in Halawa and shipped hundreds of inmates to a privately run prison on the mainland to clear the way for crews to install the new electronics, and so far the state has spent more than $11 million housing those displaced prisoners in Arizona.

The job is being overseen by the state Department of Accounting and General Services, and was originally supposed to be completed at least 15 months ago. It still isn’t finished, and prison officials this year are seeking an emergency appropriation for another $3.4 million to continue holding inmates out of state for another six months until the work is finished in June.

“I’ve been at DAGS for 29 years. I’ve actually never experienced something of this magnitude in terms of damage to the state on any project,” said Eric Nishimoto, acting construction management branch chief for DAGS.

“Yes, we have from time to time projects that have problems, but it’s usually worked through,” Nishimoto told the Senate Ways and Means Committee during a Jan. 14 hearing. “Not all of our projects have these kinds of high stakes in terms of completing on time.”

Data provided by DAGS shows the Halawa construction was originally supposed to cost $9.75 million, but the total contract was adjusted upward to more than $12.3 million.

But the delays on the project are costing the state even more than the construction itself because the prison system has to clear inmates out of one module at a time to make the way for crews working on the project.

Each module holds 248 inmates, and the displaced prisoners are being housed at the privately run Saguaro Correctional Center in Arizona because there is no room for them in Hawaii prisons.

Prison officials have been keeping one or another of the modules vacant since 2016 to allow for construction, said Nolan Espinda, director of the Department of Public Safety. As the project dragged on for many months more than expected, the costs of housing the displaced inmates in Arizona has soared.

State lawmakers approved $2.47 million in 2015 to cover those extra housing costs, and then provided another $3.34 million in 2017 and then another $5 million last year. Espinda said the administration will seek an emergency appropriation for another $3.42 million this year.

When asked whether the project will be finished by its latest completion date of June 30, Espinda told senators, “I cannot guarantee anything. What I can tell you is that the project itself has had three additional extensions from the original completion date.”

A spokeswoman for the state Department of Public Safety said the electrical and other work has been completed in two of Halawa’s four housing modules as well as in all of the prison’s nonresidential areas such as the administration offices, infirmary, food serv­ice area, program areas, gym and guard towers.

But the work has not been finished in two other modules, and is ongoing in Halawa’s Module 2. That module has been vacated by the inmates during construction.

The Halawa contract was awarded Oct. 20, 2015, and the contractor was given notice to begin work on Feb. 16, 2016, according to DAGS.

Espinda told senators Jan. 8 during a committee hearing that the job was originally supposed to take 11 months, but work started on the project six months late. Espinda said the original completion date was November 2016, but DAGS said in a written response to questions that the original completion date was Sept. 7, 2017.

The problems began when the security electronics subcontractor that was included in the original bid for the job discontinued that line of work and had to be replaced, Nishimoto said. “Then, unfortunately, we encountered a problem with their electrical side contractor.”

Nishimoto said an exterior electrical conduit that was installed by a subcontractor at the prison did not meet state requirements and required “a lot of rework, and that was a big portion of the delay.” The bonding company for that subcontractor is now paying to complete the work properly, he said.

Nishimoto told lawmakers the general contractor on the job is BCP Construction of Hawaii Inc., and DAGS has notified BCP it may be forced to pay liquidated damages for the delays in the project.

Typically, the state would recoup liquidated damages for failure to perform under a contract by withholding payment, but it is unclear whether that will work in this case because the costs to the state “are significantly higher than the amounts remaining in the contract,” he said.

The remaining contingency on the contract to cover unexpected expenses is only $584,441, according to data provided by DAGS, which suggests the rest of the money earmarked for the contract will be required to complete the project.

DAGS officials who testified Jan. 14 at a Senate Ways and Means hearing did not name the subcontractors that caused the delays, and refused to discuss the project after the hearing because “we are currently in negotiations with our contractor,” according to a statement from a DAGS.

The Honolulu Star- Advertiser asked Gov. David Ige’s staff to intervene and provide more information, and DAGS then released basic facts about the Halawa job that identified Architects Hawaii Ltd. as the prime consultant on the project and Buford Goff &Associates as the subconsultant for security electronics.

DAGS identified the subconsultant for detention hardware at Halawa as “Integress,” but state business registration records show no listing for a company by that name. Buford Goff was identified last year as a member of the project team now developing the new $140 million Hawaii State Hospital building.

Espinda said in an interview that the project is important to prison officials in part because upgrading security systems at Halawa will provide camera coverage of “all the nooks and crannies and corners that were dark spaces before.”

“It’s everything; it’s doors, locks, cameras. The institution is 1980s technology, and the new system will have camera coverage over the overwhelming majority of the institution,” he said.

Ways and Means Committee Chairman Donovan Dela Cruz asked administration officials whether the delays in the project will have any impact on the DAGS budget. “Does DAGS eat the cost for this? If the construction delay was because of DAGS, why does the delay (cost) have to come out of Public Safety?”

Dela Cruz has been advocating for public-private partnerships as a new and better way to handle government construction projects, and he went on to answer his own question: “DAGS is not going to eat that cost. Public Safety has to come over here and ask for that money,” he said. “Because of (DAGS’) inability, it’s costing other departments moneys.”