Grand Jury Joins in Finger-Pointing : Airport: The county, the prime contractor and the hired project manager all share the blame for John Wayne expansion cost overruns, the county grand jury says.


Design changes and poor management by the county, its prime contractor and its hired project manager all contributed to cost overruns and delays in the John Wayne Airport expansion project, according to an Orange County Grand Jury report released Monday.

The expansion was scheduled to open April 1, but its debut was postponed until Sept. 16, and that delay will cost the county $5.6 million in revenue from airport tenants, including the airlines, the 22-page report adds.

Although it is cautiously worded, the report assigns plenty of blame for the delays and overruns, tagging each of the main players in a project bedeviled by problems. Nevertheless, the grand jury tentatively concludes that the revised opening date--as well as its current budget projection of $310 million--are on track at this point.

County officials had cautious reactions to the report.


Assistant Airport Manager Jan Mittermeier complimented the grand jury for what she said was “in general, a good job.”

Airport Commission Chairman Gary Proctor said he would wait until he saw the report to comment, but he said that in general, the grand jury’s criticism of project participants for not monitoring the effects of redesign work more closely sounded correct.

“Even until the last six months,” Proctor said, “we didn’t know how many people working per day it would take to finish this project.”

County supervisors were not available.


Officials of embattled airport prime contractor Taylor Woodrow Construction California Ltd. declined official comment, although one of the firm’s project executives said privately that the new passenger terminal project should have been rebid once the county decided on a major cost-cutting effort that included significant architectural changes. “We never knew what we were going to build until the last minute,” the project official said.

The grand jury’s chief findings:

* “At the start of the Airport Improvement Project, the authority and staffing were diffused among several agencies. . . . This appeared to diminish the ability of county agencies to monitor and control the project.”

* County officials’ obsession with meeting the original construction schedule and April 1 completion date “had the detrimental effect of inhibiting consideration” of alternatives that could have actually helped meet the April 1 date.


* “The design process was not adequately controlled. . . . This project began cost-reduction efforts for the terminal building when the design was complete and the construction contractor (Taylor Woodrow) already selected. The late timing . . . limited the practical options. . . .”

* “Another example of the apparent lack of control over the design process was the deficiency in the steel design for the terminal. The design errors were discovered by (the) Environmental Management Agency rather than by the designer (Leason Pomeroy/Gensler) or the program manager (a three-firm consortium known as HPV).”

HPV Project Director John McCarney said he had never heard that the county Environmental Management Agency had found design errors that HPV had failed to spot.

Leason Pomeroy headed the architectural-design consortium for the project. But the firm was fined $775,000 in 1988 for delivering late, incomplete and inaccurate blueprints. In addition much redesign work was done in the field as the terminal building was being constructed.


The grand jury criticized county officials for lacking a formalized plan for the cost-reduction effort. “Thus, the terminal building contract was not ever formally rescheduled and re-estimated,” the panel wrote. “If it had been, the impact of the changes on the schedule and budget may have been identified sooner and managed more effectively.”

Taylor Woodrow came under fire in the report for being understaffed at critical junctures and for not having rescheduled construction tasks when it became clear that the county’s cost-reduction efforts were going to affect the schedule.

County documents, however, show that Taylor Woodrow often warned the county of scheduling difficulties because of the lack of a final design.

Both Taylor Woodrow and HPV, which was hired to manage the airport expansion program at a cost of more than $23 million, were cited for staff turnover in key positions early in the project.


And although the grand jury report states that the airport staff and HPV have made “reasonable allowances” for increased costs because of change orders or other factors, the panel warns that the project “requires further investigation to assure the people of Orange County that the revised budget and scheduled opening dates are reasonable.”

With the assistance of the Coopers & Lybrand consulting firm, the grand jury also studied how future public works projects should be managed. It concluded that bids should be required to include a list of references, contain proof that subcontractors have committed to the project for agreed-upon prices, and also that the county should confirm the “financial stability” of the firms involved.

Throughout the airport project, Taylor Woodrow has appeared to have had internal cash-flow problems, although company officials insist that the company is financially sound. The firm was late in completing problem-plagued projects in Glendale, Anaheim and Oceanside.

The grand jury also recommended that the county choose an in-house agency to run future projects or, as an alternative, have a hired manager act as if the firm was an in-house staff, with incentive and penalty clauses in its contract.


Some of the recommendations, Mittermeier said, were already being implemented before the report was released. Among those is a suggestion that officials conduct regular updates of the airport’s major contract projects. The updates are being provided to the Board of Supervisors every week.

The design problems, Mittermeier said, were the result of trying to speed up the schedules.