Independent MGT review flags low bidder participation and frequent change orders; LA Unified facilities outline reforms

An independent analysis by consulting firm MGT, discussed at the Facilities and Procurement Committee on Dec. 2, raised questions about bidder participation on major LAUSD construction procurements and a pattern of substantial change orders on several projects. The report reviewed a sample of completed projects and recommended 20+ actions to improve competitiveness and project controls.

Committee members said the report noted that many large solicitations drew only one or two bidders and that five projects in the sample had more than 50 change orders each. "The report notes low bidder participation as one of the challenges," said Committee Chair Nick O'Brien.

Facilities staff disputed any implication that the report’s recommendations were wholly new; they said some recommendations are already being implemented and others are under active review. Isam Dadul highlighted several actions already in place: expanded early due‑diligence checklists, more destructive testing where necessary (balancing disruption to occupied campuses), use of allowances to cover known unknowns (asbestos, underground utilities), and a cross‑department task force to identify recurring patterns and fix root causes.

Facilities said they are rolling out more rigorous KPIs and monthly reviews of every bond project to flag aging change orders and budget variances earlier. Staff have also added outside cost‑estimating resources to accelerate resolution of disputed change orders and to close a backlog of aging items. "We're monitoring aging change orders and why they are not getting processed," a facilities official said, noting escalation paths to senior staff to break logjams.

Several committee members asked whether the MGT sample (10 projects drawn from 99 potential projects) was large enough to generalize; staff acknowledged sample‑size limits but said the report still surfaced useful themes. The committee asked for a follow‑up matrix that lists MGT's 22 recommendations with district agreement/disagreement and planned KPIs to track progress.

Why it matters: Low bidder participation can reduce competition and raise procurement costs. Frequent or large change orders can inflate final project costs and delay completion; staff said improved early site investigation and better allowance planning can reduce some of those unknowns.

Next steps: facilities staff committed to producing a response matrix to the committee that maps the MGT recommendations to district actions, clarifies where the district already acts on similar items, and lists planned KPIs and timelines for remediation.