Management Letter 16-02
May 27, 2016
Gregg Dal Ponte, Administrator
Motor Carrier Transportation Division
3930 Fairview Industrial Drive SE
Salem, OR 97302
Dear Mr. Dal Ponte,
This letter is in response to your request for Audit Services to review fiscal processes in
the Green Light and Scale Maintenance programs within the Motor Carrier Transportation
Division (Motor Carrier). We focused the audit on contract administration practices. To
complete this work, we reviewed two contract files, purchase orders, vendor invoices,
and interviewed staff. The two contracts are referred to in this letter as contract A and
contract B.
During our review, we looked to see if Motor Carrier’s contract administration practices
and invoice review held the contractor accountable to the contract terms and prices. We
identified weaknesses in contract administration practices related to managing
expenditure limits, reviewing invoices, and processing change orders. In addition,
contracted electrical work lacked documentation to show it was done by licensed
electricians. We made recommendations to improve these areas for the future.
The not-to-exceed (NTE) amount for a contract was substantially exceeded. Contract A
was signed in June 2010 with a total NTE of $396,505 but after three years, $1,338,293
had been expended. Its scope of work included building a new weigh station and on-going
maintenance at weigh stations across the state. The contract was initially for one year
and was amended twice extending it an additional year each time. Each of these
amendments was for time extensions only. OPO relied on feedback from Motor Carrier
on whether any changes were needed to the contract when processing the amendments.
Oregon Administrative Rule defines the contract price as “the maximum monetary
obligation that a Contracting Agency either will or may incur under a contract, including
bonuses, incentives and contingency amounts, if the Contractor fully performs under the
Contract.” 1 The procurement specialist identified Motor Carrier exceeding the NTE when
1

OAR 137-046-0110(9)
355 Capitol Street NE MS-52 ▪ Salem, Oregon ▪ 97301 ▪ (503) 986-4177

 OPO began processing the amendment to extend the contract in 2013. The contract
expired in June 2013 and OPO worked with the Department of Justice (DOJ) to ratify the
contract.2
Motor Carrier provided us a copy of the contract they used to administer the work. Motor
Carrier told us that they understood this copy of the contract was the final version. This
version was clearly not the final executed contract because it did not have all signatures,
was missing all attachments referenced in the specifications, did not include the NTE, and
did not have any prices. None of the invoices could have been verified against the
contract without the pricing information.
Procurement records showed that OPO emailed the notice to proceed and the final
contract to the vendor, with Motor Carrier management and the contract administrator
copied on the email. This copy of the contract included all signatures, attachments,
prices, and the NTE. The email was sent before any work was done by the vendor. Motor
Carrier had the information to know the NTE and ensure expenditures stayed within the
contract terms.
Invoices could not be matched to the pricing in contract B. Motor Carrier entered into a
new contract (contract B) with the same vendor in April 2014 for replacement and
maintenance of weigh stations. We reviewed 40 contract invoices that totaled $403,534
in payments and were unable to match $329,190 back to the pay items priced in the
contract. The contract pricing was per unit based but the invoices contained lump sum
items or items that weren’t included in the contract pay items. For all 40 invoices, we
were unable to match either part of the description of services performed or prices from
at least one item billed with the contract.
For example, lump sum items could not be verified against the contract because the labor
and materials weren’t broken out. One invoice line item was “Replace 60’ approach ramp
each end and tie into end walls smoothly” and another was “Labor and materials to
remove old 10’ x 16’ pit scale. Includes crane and disposal of old scale.”
Labor and equipment costs were broken out for some invoices but we still couldn’t match
them to the contract. Labor had an hourly rate in the contract. However, we saw multiple
invoices that billed labor without the number of hours or a rate. Lift equipment was also
priced by the hour in the contract but invoices didn’t show the number of hours or an
hourly rate.
2

Based on Oregon Statute and OAR, DOJ legal sufficiency review is required for contracts and amendments
above certain dollar thresholds. It must occur before a contract is binding or any payments are made. The
additional funds spent under contract A occurred before an amendment was signed with DOJ approval for
legal sufficiency. Ratification allows an agency to have DOJ retroactively review an amendment for legal
sufficiency. For contract A, DOJ approved for legal sufficiency an amendment that added $843,662.07 to the
NTE.

2

 We saw other recurring invoice charges that did not have a price in the contract.
Examples of this included mobilization, equipment for breaking concrete, and use of a
test truck. Concrete work was another recurring charge without a price in the contract,
although it was included in the contract scope of work.
Another invoice item that we could not match back to the contract was shipping. There
was no provision on if or how Motor Carrier would reimburse the contractor for shipping
charges. Without a provision in the contract, Motor Carrier cannot pay for the expense.
There were ten invoices that billed a total of $5,036 in shipping.
We did not identify any work outside contract B’s scope of work. However, without
adequate detail in invoices or more complete list of pay items in the contract, Motor
Carrier couldn’t ensure prices align to the contract terms.
Motor Carrier paid invoices causing overpayments under contract B. Motor Carrier paid
$1,949 in overpayments from 20 of the 40 contract B invoices we reviewed.
Overpayments were for per diem reimbursements, prices for parts, and incorrect labor
rates. Although the overpayments may appear small, they were identified only from the
$74,344 that we could match back to the contract. After we shared the overpayments
with Motor Carrier, they began taking action to correct the errors and recoup the
overpayments. The breakdown of overpayments can be seen in the table below.
Invoice Item
Per Diem
Labor
Scale Part

Count of Invoices with
Overpayment 3
15
7
2

Invoice Price
Contract Price
$150
$129
$90
$85
$895
$760
Total Overpayment

Overpayment
$1,375.50
$303.75
$270.00
$1,949.25

Invoices with per diem and labor could not be matched to the pricing in contract A.
Motor Carrier approved per diem reimbursement totaling $3,800 for 11 invoices,
although the contract had no provision for per diem reimbursement. All travel expenses
were supposed to be included in the labor rate. The contract listed labor as “Pricing for
one man/one day (minimum of eight (8) hours). Includes all travel expenses.” However,
these 11 invoices listed per diem and labor separately, billing labor on an hourly basis or
as a lump sum, and per diem per day. Because of the discrepancy between contract
pricing and invoice descriptions, we were unable to determine if the per diem or labor
charges complied with the contract.
Written approval for additional work was not documented according to contract terms.
Motor Carrier paid five invoices that included $15,199 in additional work. One occurrence
was from a purchase order and the four other occurrences were under contract A. The
3

Multiple overpayments could exist on an invoice.

3

 explanation from Motor Carrier was that the additional work was approved in the field.
Contract A terms stated that no work would be provided from an amendment until it was
in writing and signed with all approvals. This would include changes in price, scope,
schedule, or complexity of the work in the plans and specifications. However, there was
no written documentation of approvals prior to the work being done for any of the
changes under contract A. Standard purchase order terms require all amendments to be
in writing and signed by ODOT but do not include a requirement that they occur prior to
work being done. There was no written documentation of approval for this work either.
Motor Carrier paid for this work without completing the documentation as required by
the contract terms or standard purchase order language.
Manager exceeded delegated authority. We identified two purchase orders and an
invoice that a manager signed approving expenditures that exceeded the manager’s
delegated authority. The manager had been delegated $25,000 in expenditure authority
but the purchase orders were for $70,888 and $69,640. The invoice was for $42,740. It
should be noted that all three instances occurred in 2011.
Contracted electrical work lacked documentation to show it was done by licensed
electrical contractors. We reviewed project documentation for work done by two
vendors at weigh stations across the state. This work can include installing variable
message signs (VMS), open/closed signs, and license plate reader systems. We attempted
to determine if a licensed electrician completed the work, as required by state law. We
relied on feedback from Motor Carrier on whether some invoices included electrical work
or not. Since neither contractor whose work we reviewed was a licensed electrical
contractor, they would have to use a subcontractor or work with ODOT electrical staff to
complete electrical work.
Motor Carrier did not have documentation to show that an electrical subcontractor
completed the electrical work for any of the ten invoices that included electrical work in
the project. According to Motor Carrier, they relied on the contractor to procure a
licensed electrician when the contractor recognized the electrical needs on a given job.
For our review, Motor Carrier requested invoices from the contractors to demonstrate
that electrical subcontractors were used. Even with these additional invoices, the work
descriptions were too limited to tell what electrical work was done by the subcontractor.

4

 Recommendations
Motor Carrier should:
1. Have staff with contract administration responsibilities and management
complete appropriate training as provided by OPO and Financial Services.
2. Work with OPO to ensure contract language includes all necessary pricing and
provisions for the work to be done by the contractor.
3. Require contractors to provide enough detail in invoices to be able to match them
with the contract terms, specifications, and prices.
4. Ensure the timing and documentation approving additional work occurs according
to the contract terms.
5. Ensure contract administration documentation demonstrates that completed
electrical work was done by a licensed electrical contractor.
Objectives, Scope and Methodology
Our objective was to review Motor Carrier’s fiscal processes in the Green Light and Scale
Maintenance programs and determine compliance with contracting laws and policies, in
response to a request from Motor Carrier management. Based on discussions with Motor
Carrier management and staff, we focused our review on two contracts with the same
vendor and payments to a second vendor. Our review included looking at change orders,
delegated authority, and electrical documentation. We conducted a limited review of
contract A invoices and a detailed review of contract B invoices.
The scope of the audit included invoices received between January 1st, 2010 and
October 31st, 2015. During that time, the Green Light and Scale Maintenance programs
had four other active contracts with approximately $2 million in payments that were not
included in our review. To fulfill the audit objective, our work included review of Oregon
laws, OARs, and state and ODOT policies for contracting and Oregon electrical laws. We
also interviewed staff from Motor Carrier, Building Codes Division, ODOT Procurement
Office, and ODOT electrical crews.
We conducted this performance audit in accordance with generally accepted government
auditing standards, except for the standards related to planning the audit. 4 Standards
require that we perform the audit to obtain sufficient, appropriate evidence to provide a
reasonable basis for our findings and conclusions based on our audit objectives. We
believe that the evidence obtained provides a reasonable basis for our findings and
conclusions based on our audit objectives.
4

We did not follow all of the planning standards due to the narrow audit objective requested by
management, timelines set for the project, and our judgment that the level of assurance would not be
impacted.

5

 We would like to express our appreciation to the management and staff at Motor Carrier,
the Procurement Office, and ODOT electrical staff for their assistance in our review.
Please contact me at (503) 986-4177 if you have any questions about this letter. This
review was conducted by James Hanseling, Senior Internal Auditor.
Sincerely,

Marlene V. Hartinger, MBA, CPA, CIA
Chief of Audit Services
Cc:

Audit Committee Members

6

 Auditor’s Evaluation of Management Comments
Management’s response to the audit is attached in the subsequent pages. Management disagreed
with our framing of the issues and the audit findings, although not the recommendations. We
evaluated the response as required by Government Auditing Standards and have the following
comments. First, we affirm the audit findings. The letter went through our internal quality control
process to assure that the findings are supported by sufficient, appropriate evidence. Second, the
audit’s focus was on contract administration practices within Motor Carrier, which are the division’s
responsibility. Motor Carrier mentions a ‘shared responsibility’ for the issues identified. However,
we did not see a clear delineation on what Motor Carrier’s understanding of its responsibility was or
the corrective action to be taken by Motor Carrier.
We asked ODOT’s Chief Procurement Officer to provide feedback on the contract administration
practices we noted in the letter. The following summarizes her comments:
Contract Administrator Role: The role of a Contract Administrator involves those activities
performed by government officials after a Contract has been awarded to determine how
well the government and the contractor performed to meet the requirements of the
contract. It encompasses all dealings between the government and the contractor from the
time the Contract is awarded until the work has been completed and accepted or the
contract terminated, payment has been made, and disputes have been resolved. DAS and
DOJ administrative rule require that a Contract Administrator be established in writing and
this is typically memorialized in the Contract itself.
Executed Contract: The Contract Administrator must maintain a copy of the final executed
(signed) Contract within their administration file so that he/she can refer to it throughout
the work to ensure proper performance by the contractor for all terms and conditions and
agreements made within the Contract which includes payments and invoice review.
Invoice Review: The Contract Administrator is responsible for insuring that the invoices that
are reviewed and approved are in compliance with the Contract terms regarding payment
and are congruent with the amounts agreed to in the Contract. They are responsible for
tracking the invoice amounts paid against the not-to-exceed amount of the Contract as the
work progresses and payments are made throughout the life of the Contract. Certainly, if the
Contract Administrator had been tracking the payments against the NTE, he/she would have
realized that the payments for the work were exceeding the NTE in the signed Contract and
could have initiated an amendment to the Contract. OPO does not have a written policy (for
procurement staff) to run spend reports every year prior to renewal of a contract.
Additionally, we want to note that Motor Carrier’s response concerning the Limited Maintenance
Specialty Contractor’s (LMSC) license is not relevant to the letter. The audit finding is not related to
work by Motor Carrier staff under the LMSC. It relates only to contractor invoices that included
work done by electrical subcontractors.

7

  

UregOI-l Department of Transportation

Carner T1 ansportatlon 

 

Kate Brown, Governor 3930 Fairview Industrial Drive SE

Salem, OR 97302-1166

April 29, 2016 
FILE CODE: 

Marlene Hartinger, Chief of Audit Services
Oregon Department of Transportation 
355 Capitol Street NE, MS 11
Salem, Oregon 97301-3871

Dear Ms. Hartinger,

Thank you very much for your cooperation in responding to my request for a review of the
fiscal processes in-the Green Light and Scale Maintenance programs within the Motor Carrier
Transportation Division of ODOT with a focus on contract administration practices. I have
reviewed your resulting management letter with great interest. This situation distinguishes
itselffrom virtually every prior occasion I have solicited the assistance of ODOT Audit Services in
that I find that while {can generally accept and agree with each of your five recommendations, I
think the precedingnarrative was incomplete and misleading. It is my opinion that a
management letter resulting from a request for review should contain sufficient information as
to enable any subsequent reviewer to fully understand what has transpired in the past resulting
in the culminating audit recommendations. In myjudgment, that has not occurred in the
present instance despite repeated attempts to convey additional information from Motor
Carrier staff to the auditor. While additional content has been incrementally incorporated into
the evolving drafts ofthe management letter, it remains the case that less than a complete

 

expression of pertinent facts has resulted. And now, in the immortal words of the legendary
newscaster Paul Harvey it therefore falls to me to tell, ?The of the story.?

The first finding described in the management letter is, ?The not-to-exceed (NTE) amountfor a
contract was substantially exceeded. Contract A was signed in June 2010 with a total NTE of
$396,505 but after three years, $1,338,293 had been expended. Its scope of work included
building a new weigh station and an-going maintenance at weigh stations across the state.?
Here we are admittedly attempting to reconstruct what originally transpired six years ago and
that task is complicated by the fact the purchasing analyst assigned to the task by the ODOT
Office of Procurement is no longer employed by ODOT. Nevertheless, we can rely on file
documentation to make a credible showing that there was ample confusion created at the
outset of the contract arrangement and carried forward throughout the initial and subsequent
contract periods. It is inaccurate to create the impression that the admitted deficiencies
evident here result solely from mismanagement of the contract by MCTD personnel.

Form 735?97i70 (2?15) F.
300575 8

 make four observations that should appropriately be taken into consideration by any current
reviewer of this management letter. The first observation I would offer at this point is that the
auditor?s expression ofthe notion that $396,505 is the contracted sum for, ?building a new
weigh station and on-going maintenance at weigh stations across the state,? is so far from
any realistic estimate of what would be required to accomplish such new construction and
maintenance tasks, that it amounts to prima facie evidence that it was never anyone?s intent
that this was indeed the case.

The second observation I would offer in this regard is that MCTD program manager, David
McKane, communicated with me on this issue in an email dated June 27, 2013. That email in
combination with the accompanying communications in the associated email thread make it
very clear to me at least that the very existence of any Not to Exceed amount was legitimately
in question. The Procurement Specialist?s comments allude to her Own inexperience.

 

From: MCKANE DavidJ

Sent: Thursday, June 27, 2013 9:20 AM

To: DALPONTE Gregg 

Subject: Pwell Scale Contract - Contract 28552

Just an FYI in case someone from Support Services contacts you about our contract with Powell
Scale for scale work.

The Powell contract recently expired. We wanted to renew. ODOT Procurement asks us how
where did you get this contract because there are a few deficiencies in it. We proceed to tell
them we got from our contract people. Then they ask that we need to answer two questions
before we move forward. I highlighted the questions and our response below.

The limitations in the original contract that Janke refers to were never communicated to MCTD.
Even after being notified of the limitation three years later, we still have never seen this in the
written contract.

We are moving forward and are on the right track but this might come up in a conversation at
your level.

 

From: FIFER David A

Sent: Thursday, June 27, 2013 9:07 AM
To: JANKE Debra Debbie 

Cc: MCKANE David 

 

SubjectzRE: Contract 28552
Hi Debbie,
Here are my responses;

The copy ofthe contract that we received did not have a "Do Not Exceed" amount noted
anywhere, nor was it ever brought to our attention. We were completely unaware that a DNE
existed until you mentioned it to me on the phone a couple of weeks ago, and believed that the
performance and payments these past 3 years were/are within the terms of the contract. The
fact that the contract survived the review for extension amendments 2 and 3 furthered that
belief as we certainly exceeded $150,000 within the first year. Had we been aware of the DNE, 7
we would have stayed within the amount limit or sought proper approval before exceeding it.

To help prevent similar occurances in the future, it would be helpful to have a copy of a
contract that includes all of its provisions

 

From: JANKE Debra Debbie

Sent: Wednesday, June 26, 2013 4:14 PM
To: FIFER David A

Subject:Contract 28552

Hi David,

i met with a team leader, Brian Nielsen, and my manager, Wynnette Gentemann this morning
about reinstating this contract. The main thing to accomplish is what is called Ratification of
Public Contracts, located in administrative rule 137-045-0090.

Here?s our situation: i think I should have separated out the one?time public improvement
project (the weigh station build), and the ongoing maintenance and installation, which is a
service contract. have three more years of experience since then and I have learned a lot
about public improvement contracts. The Not to Exceed (NTE) amount on the contract for what
was called Phase 2 (the ongoing work by Powell) is $150,000, which you have gone far beyond
(see attached spreadsheet). Anything over that amount required an additional review by DOJ.
This could have been done at Amendments 2 and 3. Since this wasn?t done, then I need to ask
DOJ to "ratify? the contract, basically asking for their approval, after the fact.

This is what was decided: We are going to amend the contract for six months, to give the.
procurement office time to solicit a trade services contract for the ongoing maintenance and
installation for the weigh stations. 1 will submit a combination reinstatement (of the expired
contract) and ratification to our Chief Procurement Officer, Melissa Canfield, for her review and
signature. i will process an amendment for time and send that to DOJ for review for legal

1O

 

sufficiency. I think we can get approval for six months, but pretty sure they would not approve a
reinstatement to the end of the contract term, which would have been 2015.

What I need from you: There are two responses I need from you in order to begin the
ratification process. They are:

An explanation ofwhy performance began or payment was made before the Public Contract
was approved by the Attorney General for legal sufficiency;

A description of the steps being ta ken to prevent similar occurrences in the future;

I also need a signed Purchase Requisition for the new solicitation. You can find that document
at:


=http%3A%2 Ftransnet%2Eodot%2Estate%2 
st%2Easpx

Send that back to me and I will forward to me team leader for assignment. 

Please let me know if you have any questions. lam gone next week, but Brian Nielsen will be in
the office.

Thank you,
Debbie

File: Spend June 2010 to June 2013.xls 

Debbie Janke, CPPB, OPBC

Oregon Department of Transportation

Procurement Office Procurement and Contracts Specialist

455 Airport Rd SE, Bldg. Salem, OR 97301?5348 (503) 986-2799

I have to wonder why at this point after having been disclosed to Procurement staff that the
business did no_t possess a contract that included not-to-exceed limitations that this issue was
not clarified in 2013. Further, standard procurement policy is to run a spend report every year
prior to renewal of a contract containing an annually expiring not?to-exceed limitation. in this
instance, Procurement renewed the contract three times before running the first spend report.
Clearly something was amiss in the process.

11

 

My third observation regarding the subject of a Not to Exceed amount derives from my second
observation. It is very clear from the 2013 email message attached above that there is a
disagreement between the program manager and the auditor on what the actual content ofthe
contract included. Therein lies the rub. have determined that there is not a single version of
the contract. There are in fact two versions. Version #1 was hand delivered to my employee by
the Procurement Specialist. (It is obvious to me that such a version exists because it is
referenced in the 2013 email and I was handed a copy of it in order to conduct my review of
your draft letter.) A couple days later, version #2 was emailed to the contractor with a cc: to
two of my employees. There never was any direct email of a second contract to any MCTD
employee. Version #1 is annotated on each page as ?page of 34? and version #2 starts out
with the first 26 pages annotated ?page'x of 34? andthen changes mid-document on page 26 to
being annotated ?page 27 of 39.? lnterestingly, the renumbered version #2 contains on page
31 Not to Exceed language that is not present in version The contract pages were obviously
renumbered by someone who did a poorjob of doing so and key information was added.

We?re talking here of things that occurred six years ago but I ask you, if you were hand
delivered a c0py of a contract by your procurement agent and days later received an indirect
communication via a cc: only of an email addressed to someone else that purported on its face
to convey a copy of the same contract that you had been handed only a few days earlier, would
you compare the two documents to determine if any revision had been made absent any
further comment from the procurement agent? Do you think these circumstances may
reasonably account for what the auditor has noted? How does the auditor account for the
existence of two contracts and the errant numbering which supports my thesis here of what
actually transpired?

Finally, my fourth observation on this subject is additive and taken together with my preceding
three observations renders the issue of an alleged violation of any Not to Exceed component of
the contract immaterial. I possess copies of email Communication between ODOT Office of
Procurement and assigned counsel at DOJ dated October 29, 2013 and February 6, 2015 which
conclude with approval of a specific amendment for legal sufficiency and advising ODOT was
free to proceed with contract ratification. In an email to me dated March 23, 2016, the Office
of Procurement communicated to me that a contract ratification by DOJ made all payments
legitimate under Contract A. That email goes on to express the notion that because it took DOJ
15 months to get the ratification signed, an incomplete contract file then resulted. No contract
amendment was processed and signed by the Contract Procurement Officer concluding the I
ratification because the contract had expired and Contract was already in place. In other 
Words, there was no active contract to amend at that point. That all amounts to an
administrative processing issue when the DOJ direction was clear, 

12

 

From: Williams Mark 

Sent: Friday, February 06, 2015 8:39 AM

To: NIELSEN Brian 

Subject: FW: Ratification of ODOT Amd 4/ 28552/ WIM SWS Installation; 731400?


Brian,

I apologize. i remember reviewing this and remember (to the extent my memory is dependable)
approving this, but I cannot find any proof ofdoing so. it even was 

checked off my To Do list. I approve this amendment #4 for legal sufficiency pursuant to the
standards of OAR 138?045?0015. ODOT may proceed with ratification.

Mark

Mark A. Williams
Oregon Department of Justice
Attorney in Charge Business Transactions Section

503-302-0043

The most significant information have lastly shared is the Office of Procurement?s recent
communication, ?About the corrective actions taken on Contract A (contract ratification by DOJ
that made all the payments legitimate under that contract)." If that is the case, then in light of
all the confusion I have documented here to have existed it does not seem reasonable to
include some bUt not all of the description of the ?perfect storm" that served to create this
unfortunate circumstance. I?m simply suggesting that if we are going to memorialize the story
then let?s tell the full story. In my view it is enough that both the business line and the Office of
Procurement are all aware of the deficiencies that occurred in the past and have collaboratively
engaged to ensure that the third contract currently being constructed will have none of the
imperfections noted in the preceding two contract versions.

The second finding in the management letter is, ?Invoices could not be matched to the pricing I
in Contract I have examined Contract B. It is true that vendor invoicing could not
reasonably be matched to the incomplete delineation of pricing in the contract. I discussed the
situation with Office of Procurement management. Here again we have a situation of shared
responsibility. MCTD staff did not get a Contract to work with that would be sufficient for
anyone to achieve the standard of performance that the auditor is looking for in his review. In
that circumstance, the MCTD employee performed reasonably by requesting written estimates
in advance of work performed, comparing proposed charges against what pricing was available
in the contract, and then comparing resulting invoices to the estimates. There is concurrence
that the business should reasonably look to Procurement to negotiate and conclude a contract

13

 

that is adequate for the intended purpose. Learning has occurred as a result of this extended
review process and MCTD and the Office of Procurement are utilizing leSsons learned from
contract #1 and contract #2 as a third contract is currently being assembled.

The third finding is that, ?Motor Carrier paid invoices causing overpayments under Contract
The underlying detail is that the majority ($1,375) of this over expenditure resulted from
over?payment of vendor per diem charges which have since been recovered. I learned from my
conversation with the Office of Procurement that this issue also stems from an original
purchasing error as it is not the case that per diem charges should be included in any
solicitation as a bid item because ODOT standard charging should apply for per diem
reimbursement. only include mention of this so as to illustrate the continuing pattern of

shared responsibility for what has occurred in this matter. 

The last finding on which I will comment is, "Contracted electrical work lacked documentation
to show it was done by licensed electrical contractors.? This is another area that suffers from
confusion, misunderstanding, and misinformation provided to MCTD employees by subject
matter experts located elsewhere in the Department. MCTD staff assert as a summary
statement that any bona fide "electrical? work performed on a job site was done either by a
licensed electrical contractor or performed by or under the supervision of ODOT electricians or
performed by or under the supervision of MCTD employees working at the time under a limited
electrical license extended to MCTD employees by ODOT subject matter experts. Part ofthe
confusion here results from the fact that some tasks that sound on the surface like they involve



?electrica work requiring a licensed electrician do not in fact, installing electrical conduit



in which fiber optic cable will be run does not equate to ?electrica work requiring the
involvement of a licensed electrician. The MCTD employee overseeing the work performed
under this contract disputes the statement, ?Motor Carrier did not have documentation to
show that an electrical subcontractor completed the electrical work for any of the ten invoices
that included electrical work in the project? and reports none of theten invoices mentioned
included any qualifying ?electrical work" necessitating the participation of a licensed electrical
contractor. Since the management letter goes on to admit, ?Even with these additional
invoices, the work descriptions were too limited to tell what electrical work was done by the
contractor,? I think it is rather clear that the auditor made a judgment unsupported by the
invoice under examination that it was referencing ?electrical work? requiring the use of a
licensed contractor. It appears here that the auditor made the assumption in this instance that
the ?installation? of a sign included electrical work when it fact all that was transpiring was
erecting hardware.

_14

 

Beyond that, MCTD was provided notice on February 16, 2012, by the ODOT Region 1
Electrician that MCTD employees were authorized to perform or supervise performance of
limited electrical maintenance work under the authority of LMSA License No. 1066LMS.

 

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Region Elevated

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(flackam as OR 

Flume: (5371] 553-5201

171:. 67.1.4202

 

FILE 
1.6, 201.2

To; Buii?ing Codes Division
From; Kim Sarcasm, 01:an Dayan-33m: 0f Transpma?oa

Re; ODOT maplnyaes ?oils-lug under LMSC 34:41:39: No. 

In accordance with 0R3 ?@9430 I am pm??iztg 11.1: ?rilowi?g list of Oregon Depmm-mt 01'
employers an: nummim to perform cimm?aal work under ourLimitcd
Maintenance Specialty Cosimmrs license number l??fiLMS.

Paul Tiller

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Lonnie McDonald
Craig Sungcr
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Lowell Younghlood
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Years later, MCTD was notified that this authority was conveyed in error and should no longer
be relied upon. MCTD immediately stopped performing any limited electrical work under this
license when notified to cease. However, at all times prior to the notice to cease MCTD relied
upon the advice and direction of ODOT subject matter experts.

15

 

My point here is simple. This subject matter is not trivial and requires careful examination to
understand what is required under any given individual project circumstances. The auditor has
confirmed that one cannot rely upon an after the fact examination of paper know
whether or not the correct decision was made in every instance and I therefore ccinclude that
greater reliance should be placed on the recollection of the MCTD employee that made the
operational decisions in the first place. Incorrect direction given to MCTD by ODOT Electricians
only further adds to the confusion.

I hope that the comments I have shared here are received in the spirit in which they are
intended. My thesis is that whenever we set out to tell the truth, we should work diligently to
tell the whole truth. While I do not question the good intentions of the auditor, was left with
the distinct impression that the information left out of the management letter left the reader
with the impression that the real deficiencies that exist are entirely due to the inadequacy of
the MCTD practitioner handling the contract. An old Nigerian proverb suggests that it takes a
whole village to raise a child. 1 think the underlying sentiment has application in this instance.
In this context, it takes the entire village of ODOT partners coming together to properly
orchestrate, operate, and administer a contract providing statewide maintenance support for
one ofthe crown jewels of inventory of infrastructure. The whole village can
collectively get it right or, as it seems to be in this case, get it wrong. When i call for a review by
ODOT Internal Audit I am not doing so in orderto be able to place blame. lam genuinely
seeking to understand where improvement can be made and what corrective actions need to
be undertaken. Here a "perfect storm? of intersecting actions arising in distinct work groups
both in and outside of ODOT culminated in a less than desirable contracting experience. All
parties to the transaction are keenly aware of the earlier shortcomings in process and execution
and are utilizing the lessons learned to perform much more appropriately in the fUture.

Internal Audit has played a vital role by asking probing questions and helping to shine a light on
the various areas needing attention. 1 genuinely thank you for your assistance.

Respectfully,

Gregg Dal Ponte, Administrator
Motor Carrier Transportation DiVision

16