Three contracts to hire consultants for the city's rail transit project were in compliance with all applicable laws, but the city needs to provide more documentation and oversight to ensure transparency and public confidence as the project advances, according to an auditor's report.

Lack of proper documentation behind how contract decisions were made reinforces perceptions that “;the city's procurement decisions are predetermined”; and that there is “;favoritism among potential bidders,”; the audit stated.

The report, released yesterday by City Auditor Leslie Tanaka, listed nine recommendations for the city's procurement process.

In response to the audit, city Transportation Director Wayne Yoshioka said his

department and its Rapid Transit Division are in compliance with all federal and state contracting requirements, and noted that some of the concerns already have been addressed.

Auditors studied one contract relating to the alternatives analysis and draft environment impact statement and two contracts relating to the preliminary engineering and final environmental impact statement.

Among its suggestions, the report recommended continued vigilance regarding existing laws, providing more documentation of sources of information for contract cost estimates, providing timely and complete submissions to outside agencies to allow for proper review, considering more diverse media for advertising of bids, and improving documentation of reasons for contract negotiations and awards.

Other recommendations suggested areas that the city could address to try to maintain costs, such as specifying terms under which future “;Allowance for Extra Work”; would be established. The city argued that on a project of such size, there is no reasonable way to “;predetermine unforeseen needs arising during the project development.”;

“;Your recommendations are generally to continue our practice and, in parts, to expand procurement activities including more detailed documentation in the contract files, both noble goals to which we will aspire,”; Yoshioka wrote in his response.

In a news release, Mayor Mufi Hannemann said he was pleased with the audit and noted that the report listed areas for improvements that the rail transit project already has addressed, adding that issues raised were to point out potential areas to address in the process rather actual problems found.

“;The audit shows that the oversight and management of the project have been sound,”; Hannemann said.

The Federal Transportation Administration has approved the rail transit project to enter into the preliminary engineering phase. The city awarded the first construction contract last week.

On the net:
» The audit and the city's response can be found at www.honolulu.gov/council/auditor.