Thursday, January 9, 1997
ASUCLA:
Extra spending on new UCLA Store due to ‘unplanned’ expensesBy
Frances Lee
Daily Bruin Contributor
Miscommunication and errors in judgement were the culprits that
led the university to bill the Associated Students of UCLA (ASUCLA)
an additional $3.2 million in unexpected building costs.
The cost for the new UCLA Store, which was projected to run
$600,000 over budget, has unexpectedly inflated by $2.6 million
 four times more than what the association had budgeted in
their financial turnaround plan.
"How did it get to this?" asked ASUCLA Executive Director
Patricia Eastman. "I don’t have an answer to that yet. (The
expenses) are legitimate, but it’s just hard to accept that it was
only discovered overnight."
According to Charles "Duke" Oakley, the director of Capital
Program’s design and construction department, the expenses arose
because of several different factors, which included extra
"unplanned" work which had to be done to bring the building up to
current codes and the completion of the UCLA Store was accelerated
 both of which added to the expense of the building.
In addition, the design of the store was changed in late 1994
after the project had already been awarded to a contractor,
complicating the situation even further, Oakley said.
"We were wrong with the estimate to ASUCLA (about the cost to
change the store design)," Oakley said. The work was getting done
on time, but "the cumulative impact of that (extra work) wasn’t
added up until after the work had been done," he added.
According to Oakley, all the changes and extra work were
approved by field managers on the construction site who were slow
in reporting the costs involved to the association. It was only
after the work had been completed that they were able to assess the
final cost.
"The system (of reporting the change orders) was stressed by the
speed at which it was done," Oakley said. "A lot of the overage
came (as a result of that). Unfortunately, I manage the group whose
failure was timely reporting."
When the costs were finally "added up," however, the total came
to an unexpected $3.2 million.
Further complicating the situation is that Capital Programs was
in charge of both the Ackerman Union expansion and seismic
renovation. How much of the extra money should be paid by ASUCLA
and how much is the university’s obligation remains an issue,
Eastman said.
"We don’t know how much of (the $3.2 million) was ASUCLA’s
responsibility," she added.
"I know Capital Programs has been doing a lot of work to answer
the first question  which budget does this belong in? And how
can we allocate the project cost between the two funding sources?"
she said.
Originally budgeted at $16.4 million in 1992, the price tag for
the Ackerman Union renovation jumped to its current $18.9 million
after costs for the interior design of the store increased.
The change further strained the finances of an association
already running in the red.
Burdened by money problems over the past few years, ASUCLA had
predicted a profit from the new store starting next year. Their
growing pains seemed under control last quarter when ASUCLA
unveiled its five-year financial turnaround plan, which would have
brought stability to the students association starting next
year.
But the recovery had been contingent upon the plan’s success,
which could now be jeopardized by this new development.
James Friedman, chair of the students’ association board, felt
that Capital Programs should have notified the association of the
overruns earlier in the project.
The financial turnaround plan was supposed to be presented to
the Board of Regents in January to finalize the association’s $6.4
million loan agreement with the university.
But with the additional $3.2 million unaccounted for, the
presentation was delayed until the March regent’s meeting. In order
for them to present it in March, however, the association must
finalize all budget plans within the next two weeks.
"We were told (of the extra costs) after the fact," Friedman
said. Capital Programs "can’t spend other people’s money without
permission."
But Oakley stressed all extra work had been authorized by field
managers, and in most instances, there was no choice but to do the
work.
"All the costs we incurred were always going to be there,"
Oakley added, "but I would have advised ASUCLA (if I had known
beforehand)."
According to Oakley, the original bid, which was awarded to the
Ray Wilson Co. in 1994, had been for a different store design.
After a series of events in which the students’ association
membership changed and new people came on board, a new store was
also designed.
Starting in April 1996, Capital Programs took over Ray Wilson
Co.’s subcontractors to supervise building the newly designed
store. Oakley feels that although the upgrade was expensive, the
changes are "superb and add to the value of the store."
Both sides stressed a strong desire to resolve the issue.
"The way this has been handled defies explanation," noted
Friedman, but it does no good to throw stones at or alienate
Capital Programs."