Honolulu rail project relying too much on consultants, finds auditor report

01 February 2019 Consulting.us 3 min. read

A recent report from the state auditor of Hawaii is critical of the Honolulu Authority for Rapid Transportation's (HART) reliance on outside consultants. The agency, tasked with building an urban rail project in the state capital, last year spent nearly $10 million on fewer than 20 contract workers from a single engineering consultancy

The cost of Honolulu’s 20-mile elevated rail project has now ballooned to $9.2 million from the original $5.1 billion estimate. The spiraling costs have led to an audit mandated by the state legislature.

One of the issues highlighted by the state auditor’s report is that HART is over-reliant on consultant contractors.

Nineteen senior management positions at HART are staffed by HDR Engineering Inc., a 10,000-employee consulting giant based in Omaha, Nebraska. The 19 contract workers were paid $9.6 million for their services last year - or $505,260 per worker. HDR consultants occupy four of the top six management positions overseeing the project - including project director and director of design - and answer directly to HART CEO Andrew Robbins.

Other third-party consultants working for the transport agency include CH2M Hill, a Colorado-based engineering consultancy that is now a part of Jacobs Engineering Group.

Honolulu rail project relying too much on consultants, finds auditor report

One of the major problems with the heavy reliance on consultants is that there is decreased oversight of those employees, according to the audit report. “[HART] does not evaluate the performance of the embedded HDR employees; HART does not even evaluate HDR, generally. But HART’s ability to complete the project within the current budget and by the current opening date is dependent on HDR’s employees.”

As such, HDR employees oversee and evaluate the work of the employees working in the government agency. This leads to “consultants managing consultants,” as the report puts it, with little monitoring or oversight from the agency itself. For a project that’s ballooning in cost, this is an issue.

HART has stated it hired the consultants for the typical reasons: a lack of relevant expertise in the bureaucratic talent pool, and an inability to attract the needed experts at government standard wages.

“It’s not unusual on a project like this that we would have seconded employees, embedded in our organization to provide the rail expertise that we need," Robbins said. “The kinds of people we would need ... we would not just generally find in a place that’s never had rail before.”

Robbins also said that because the project was “temporary,” it made more sense to hire consultants rather than employees who would have to be let go upon the project's conclusion.

Meanwhile, the state auditor’s report notes that the Federal Transit Administration (FTA) was also critical of HART’s reliance on consultants, with the FTA recommending that city employees be hired to eventually replace consultants, to create stronger ownership and control of the project.

HART says it will transfer 10-20% of consultant jobs to municipal employees over the next few years. As of December, the ratio of HART employees to consultants was 117:18.

Related: Santa Barbara hires consultancy Kosmont for downtown revitalization