Report 2016-132 All Recommendation Responses

Report 2016-132: Department of Water Resources: The Unexpected Complexity of the California WaterFix Project Has Resulted in Significant Cost Increases and Delays (Release Date: October 2017)

Recommendation for Legislative Action

To improve management of large and complex infrastructure projects, the Legislature should enact legislation requiring agencies to publicly report significant changes in the cost or schedule of such projects if they are expected to exceed their established budgets by 10 percent or schedules by 12 months.

Recommendation #2 To: Water Resources, Department of

To better manage large infrastructure projects, DWR should develop and implement a project-reporting policy requiring its management staff to document and justify decisions to proceed with such projects if they are expected to exceed their established budgets by 10 percent or schedules by 12 months. DWR should make these documented decisions and justifications publicly available and submit them to the Resources Agency for review and approval.

60-Day Agency Response

This recommendation does not make a distinction between the planning phase of a project and the design and construction phase. DWR believes this is an important distinction, as evidenced in the Report's findings for the planning phase of the WaterFix. The recommendation presupposes that an extension of time during a project planning phase is something that has a negative consequence. This recommendation has limited applicability here, since decisions regarding this project were made in response to stakeholder input and public comments to increase the range and scope to better meet the needs of the state. The planning process for large infrastructure projects is complex and subject to changing requirements and scope from a variety of sources including regulating agencies, project proponents, stakeholders, and the public at large. As seen with WaterFix, this results in increases in scope and schedules that are beyond the control of DWR. Limiting the Department's ability to be responsive to stakeholder input during complex "planning" efforts would be counterproductive.

  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Will Not Implement

Our recommendation does not presuppose that time delays have a negative consequence, rather that they should be thoroughly justified and vetted. The recommendation does not limit DWR's ability to be responsive to stakeholder input, but would require DWR to consciously and transparently consider that input before making decisions that affect project cost and schedule, whether during planning or other phases of the project.


Recommendation #3 To: Water Resources, Department of

To ensure it makes appropriate use of its growing surplus revenue balance, DWR should develop a detailed plan describing how it intends to use these funds.

60-Day Agency Response

DWR has already defined a process for use of expenditure of (b)(4) funds in December 2016. DWR is working on developing and implementing a business process to formalize comprehensive procedures for proposing, approving, and tracking projected Priority 4 revenues and associated uses with implementation to start by the end of the first quarter of 2018. We will have an outline for the detailed business process in place by the end of December 2017.

  • Estimated Completion Date: 4/1/18
  • Response Date: December 2017

California State Auditor's Assessment of 60-Day Status: Pending


Recommendation #4 To: Water Resources, Department of

To fully comply with state contracting law, DWR should ensure that it competitively selects architectural and engineering consultants based on demonstrated competence and professional qualifications. In addition, DWR should document in the contract file its evaluation of the competence and professional qualifications of all contractors and any subcontractors that are added to the contract subsequent to the competitive selection process.

Recommendation #5 To: Water Resources, Department of

To ensure that only qualified subcontractor are added to contracts after the initial award is made, DWR should make sure that contractors select their own subcontractors and that DWR subsequently approves the selection after it verifies their qualifications.

Recommendation #6 To: Water Resources, Department of

DWR should ensure that it retains adequate documentation in its contract files to support that contract prices are fair and reasonable and all deliverables are received.

Recommendation #7 To: Water Resources, Department of

To ensure that DWR manages WaterFix in an effective manner, DWR should compete both the economic analysis and financial analysis for WaterFix and make the analyses publicly available as soon as possible.

Recommendation #8 To: Water Resources, Department of

In order to prepare for the potential approval of WaterFix and to ensure that the project is managed properly during the design and construction phase, DWR should do the following: develop an appropriate governance structure so that it is prepared to oversee the design and construction of WaterFix in the event it is ultimately approved.

Recommendation #9 To: Water Resources, Department of

In order to prepare for the potential approval of WaterFix and to ensure that the project is managed properly during the design and construction phase, DWR should do the following: develop and update when necessary the associated program management plan for the design and construction phase of the project.

All Recommendations in 2016-132

Agency responses received are posted verbatim.


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