Officials Back Hospital Construction Audit

UNC-system President Molly Broad called for the audit Monday to examine why the hospital projects are two years overdue and cost about $166 million. When the projects were started in 1997, officials pegged costs at $138 million.

Although there is still construction to be completed, hospital officials are expecting to accept patients later this week.

UNC Hospitals officials attribute the construction delays and higher costs to weather and labor shortages.

Jeff Davies, UNC-system vice president of finance, said the audit will be an asset to further construction.

The UNC system is facing years of intensive construction projects as the $2.5 billion higher education bonds, which voters approved in November 2000, are administered to UNC campuses.

Davies said the hospital audit will include gathering different outlooks on the construction.

"The additional work we are engaged in is conversation with major construction firms to take a fresh look," Davies said. "We haven't signed a contract, but we hope to be doing this very quickly. (Getting a new look from an outside firm) will begin in a month."

Davies emphasized the amount of caution system officials have used in carrying out construction plans, including those funded by the bond.

"(The audit) is one more step to effectively manage bond funding in capital program," he said. "We are taking the right approach by going the extreme mile to carry out the program effectively."

UNC Hospitals spokeswoman Karen McCall said hospital officials agree with Broad's decision and believe an audit will benefit the hospitals. "We all can learn lessons with a project this size for smoother administration on this project."

McCall said the cost of the project will come in just under $166 million, but she was unable to give the difference between actual costs and estimated costs.

She said there were many problems in the construction process. "The problems were with site preparation, problems with design, labor shortages, weather -- a number of things," McCall said.

McCall attributed the main problem to the multi-prime construction system requirement. Using this type of system requires separate contracts for major components of the project, including plumbing, electricity and heat, which allows room for disputes among contractors and delays in the entire process.

"We wanted a single-prime contractor," she said. "We couldn't have one under the state's contract, and we had to get a multi-prime contractor. We think (a single-prime contract) would have made a great deal of difference."

This summer, the N.C. legislature passed a bill legalizing single-prime contracting.

Despite the delays and the call for an audit, McCall said officials are excited about the hospitals' opening and the contribution they will make to women and children in North Carolina.

Sen. Bill Purcell, D-Scotland, said he thinks the audit is a good idea for future construction in the UNC system due to the amount of underestimation. "I was surprised by how much overrun there was," Purcell said. "We passed legislation that allows for a single-prime contract. I think it will help in a situation like this."

The State & National Editor can be reached at stntdesk@unc.edu.