Audit Finds 'Accelerated' Schedule Pushed LAX Renovation Costs Over $1 Billion

LOS ANGELES (CBSLA.com) — An "accelerated" construction schedule added about $415 million to the cost of renovating the Tom Bradley International Terminal at LAX, pushing the project's cost over $1 billion, according to an report released Friday.

The findings were part of an audit conducted by the City Controller's Office, which blamed the extra costs on officials with Los Angeles World Airports, the city agency that manages Los Angeles International Airport,working to complete the project ahead of schedule.

While potentially costly change orders frequently happen on large city projects, City Controller Ron Galperin told KNX 1070 NEWSRADIO that city officials had "designed the terminal on the fly and pushed for completion on an accelerated schedule."

"It was predictable that costs would go up, but it really got very expensive simply because there was a rush to get things done," he said. "There were some reasons why they were rushing, but it cost the city quite dearly."

According to Galperin, who cited data from outside auditor KPMG, cities can typically see change orders account for anywhere between 5 percent to 10 percent of original contract values.

The terminal project made up the majority — about two-thirds — of the city's $602 million in project cost overruns over three recent years, he said.

Without taking into account the Bradley Terminal, the city's percentage is a "relatively modest" 4.8 percent, about $208 million in change orders, according to the audit.

But when the Bradley Terminal is factored in, however, that percentage goes up to $12.6 percent, translating to about $623 million.

"The lesson here is that we need to be cost-conscious and share information and experiences across city departments," said Galperin.

Auditors noted taxpayers would have saved as much as $12 million if city officials shaved as little as two percent from its final change order costs during the three-year period studied, according to Galperin's office.

The audit looked at large-scale construction projects built by external builders and overseen by the city's three proprietary departments - LAWA, the Department of Water and Power, and the Port of Los Angeles - and the Bureau of Engineering.

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