Report 2015-117 Recommendation 6 Responses

Report 2015-117: California Department of General Services' Real Estate Services Division: To Better Serve Its Client Agencies, It Needs to Track and Analyze Project Data and Improve Its Management Practices (Release Date: March 2016)

Recommendation #6 To: General Services, Department of

The division should develop and implement a process for preparing reasonable time frames and cost estimates for its projects within the building management branch. To better inform the development of this process, the division should evaluate the branch's structure, which should include a staffing analysis, to determine whether it is effectively organized and whether it should add cost estimator positions.

Annual Follow-Up Agency Response From October 2020

As of June 2018, the Facilities Management Division (FMD) has evaluated its structure and developed and implemented a Project Intake Committee (PIC) process for prioritizing projects and is using SAGE software to develop cost estimates for its projects within the FMD Direct Construction Unit (DCU). FMD evaluated its structure and completed a staffing analysis. It was determined that additional cost estimator classifications are not necessary at this time. FMD established statewide Architectural and Engineering (A&E) Firms on Retainer Contracts and are utilizing them to develop scope of work (SOW) and cost estimates for projects proposed for completion within 1-5 years. Depending on the project complexity, the A&E Contracts can be completed between 3-12 months and define the full scope, schedule and cost of the project. Once funding has been secured for the project, it can be sent for competitive bidding and award. DGS believes that it has materially implemented the recommendation.

California State Auditor's Assessment of Annual Follow-Up Status: Will Not Implement

Annual Follow-Up Agency Response From October 2019

As of June 2018, the Facilities Management Division (FMD) has evaluated its structure and developed and implemented a Project Intake Committee (PIC) process for prioritizing projects and is using SAGE software to develop cost estimates for its projects within the FMD Direct Construction Unit (DCU). FMD evaluated its structure and completed a staffing analysis. It was determined that additional cost estimator classifications are not necessary at this time. FMD established statewide Architectural and Engineering (A&E) Firms on Retainer Contracts and are utilizing them to develop scope of work (SOW) and cost estimates for projects proposed for completion within 1-5 years. Depending on the project complexity, the A&E Contracts can be completed between 3-12 months and define the full scope, schedule and cost of the project. Once funding has been secured for the project, it can be sent for competitive bidding and award.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

As we indicated in our previous assessment of DGS's annual response to this recommendation, although DGS documented its project intake process in its project management plan, which is dated December 2016, that plan lacks a process for formally estimating costs or time frames as we recommended. We stated that DGS will need to develop and implement such a process in order to fully implement this recommendation. In its most recent response, DGS did not provide documentation demonstrating it had established such a process. Further, DGS also did not provide evidence of its staffing analysis referenced in its current response. Until it addresses these shortcomings, we will continue to report this recommendation as partially implemented.

Annual Follow-Up Agency Response From October 2018

As of June 2018, the Facilities Management Division (FMD) has evaluated its structure and developed and implemented a Project Intake Committee (PIC) process for preparing reasonable time frames and is using SAGE software to develop cost estimates for its projects within the Direct Construction Unit (DCU) and FMD. FMD evaluated its structure and completed a staffing analysis. It was determined that the cost estimator classifications are not necessary.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

As we indicated in our previous assessment of DGS's annual response to this recommendation, although DGS documented its project intake process in its project management plan, which is dated December 2016, that plan lacks a process for formally estimating costs or time frames as we recommended. We stated that DGS will need to develop and implement such a process in order to fully implement this recommendation. In its most recent response, DGS did not provide documentation demonstrating it had established such a process. Further, DGS also did not provide evidence of its staffing analysis referenced in its current response. Until it addresses these shortcomings, we will continue to report this recommendation as partially implemented.

Annual Follow-Up Agency Response From November 2017

To improve the efficiency and effectiveness of its real estate operations, DGS has reorganized its real estate operations. In part, the extensive reorganization created two divisions: (1) a new Facility Management Division (FMD) that primarily includes the facility maintenance and direct construction functions and activities that were previously performed by the Building and Property Management branch and the Direct Construction Unit (DCU), respectively; and, (2) a new RESD with extensive revisions to the previous organizational structure including consolidating all real estate broker functions under the Asset Management Branch.

As a major step in improving DGS' management of the repair and maintenance of state-owned buildings, FMD engaged a project management/construction management (PM/CM) firm which provided professional architectural, engineering, and program management services. The consultant assisted FMD in upgrading its standards, systems, and processes for the overall management of its statewide portfolio of buildings.

A new Project Management Process (PMP) was developed, which allows DCU to track projects effectively. In addition, DCU also implemented a new estimating software program (Sage Estimating Software). The new process allows the Asset Management Branch, Sustainability, and ADA teams to better coordinate efforts on related projects.

FMD created and implemented its own Architecture and Engineering (A&E) contracts that now provide design, scope and management services to better serve its customers.

On the construction management front, the PM/CM consultant has completed providing project scopes, schedules and cost estimates while FMD develops its own internal estimating and scheduling capacity over the next few years. The contractor and FMD have created a process for evaluating, identified building needs, estimating costs, authorizing funding for projects, and scheduling project work. This project intake process is documented in the PMP.

California State Auditor's Assessment of Annual Follow-Up Status: Partially Implemented

As we indicated in our assessment of DGS's one-year response to this recommendation, although DGS documented its project intake process in its project management plan, which is dated December 2016, that plan lacks a process for formally estimating costs or time frames as we recommended. We stated that DGS will need to develop and implement such a process in order to fully implement this recommendation. In its most recent response, DGS did not provide an updated project management plan, nor did it respond to our request that it point us to where in its project management plan this process is described. As a result, we will continue to report this recommendation as not fully implemented.

1-Year Agency Response

To improve the efficiency and effectiveness of its real estate operations, DGS has reorganized its real estate operations. In part, the extensive reorganization created two divisions:

(1) a new Facility Management Division (FMD) that primarily includes the facility maintenance and direct construction functions and activities that were previously performed by the Building and Property Management branch and the Direct Construction Unit, respectively; and,

(2) a new RESD with extensive revisions to the previous organizational structure including consolidating all real estate broker functions under the Asset Management Branch.

As a major step in improving DGS' management of the repair and maintenance of state-owned buildings, FMD engaged a project management/construction management (PM/CM) firm which is providing professional architectural, engineering, and program management services. The consultant is assisting FMD in upgrading its standards, systems, and processes for the overall management of its statewide portfolio of buildings.

FMD is also working with the PM/CM and a retired annuitant with extensive organizational design experience to evaluate the specific field support and administrative services required to fully achieve FMD's mission. The team is developing workload tracking systems (on contracting, hiring, service requests, and maintenance and operations activities) that will be in place by September 2017. These systems will help us to correctly match workload with staff.

On the construction management front, the PM/CM consultant is providing project scopes, schedules and cost estimates while FMD works to develop its own internal estimating and scheduling capacity over the next few years. The contractor and FMD have created a process for evaluating identified building needs, estimating costs, authorizing funding for projects, and scheduling project work. This project intake process is documented in the Project Management Plan.

California State Auditor's Assessment of 1-Year Status: Partially Implemented

Although DGS documented its project intake process in its project management plan, that plan lacks a process for formally estimating costs or time frames as we recommended. DGS will need to develop and implement such a process in order to fully implement this recommendation.

6-Month Agency Response

To improve the efficiency and effectiveness of its real estate operations, DGS has reorganized its real estate operations. In part, the extensive reorganization created two divisions: (1) a new Facility Management Division (FMD) that primarily includes the facility maintenance and direct construction functions and activities that were previously performed by the Building and Property Management branch and the Direct Construction Unit, respectively; and, (2) a new RESD with extensive revisions to the previous organizational structure including consolidating all real estate broker functions under the Asset Management Branch.

As a major step in improving DGS' management of the repair and maintenance of state-owned buildings, FMD has entered into a long-term contract with a project management/construction management firm. In brief, the contractor will provide professional architectural, engineering and program management services as needed to assist FMD in successfully upgrading its statewide standards, systems and processes for the repair and maintenance of state-owned buildings. The implementation of this contract will fully address the state auditor's concerns with the adequacy of DGS' project management processes and systems, including those involving the preparation of reasonable project time frames and cost estimates. By September 2017, the contractor is expected to have a comprehensive system in place to accomplish its contractual responsibilities.

California State Auditor's Assessment of 6-Month Status: Partially Implemented

60-Day Agency Response

In February 2016, DGS began the process of reorganizing RESD to improve the efficiency and effectiveness of its real estate operations. In part, the extensive reorganization created two divisions: (1) a new Facility Management Division (FMD) that primarily includes the facility maintenance and direct construction functions and activities that were previously performed by the Building and Property Management branch and the Direct Construction Unit, respectively; and, (2) a new RESD with extensive revisions to the previous organizational structure including consolidating all real estate broker functions under the Asset Management Branch.

By September 2016, as recommended by the state auditor, FMD plans to develop a new process for preparing time frame and cost estimates for its projects, including, if deemed necessary, the use of department estimating staff.

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

All Recommendations in 2015-117

Agency responses received are posted verbatim.