Our audit of the California High‑Speed Rail Authority and its contracting and cost control practices highlighted the following:
» Although the Authority has secured and identified funding of over $28 billion that it expects will be sufficient to complete initial segments that funding will not be enough to connect those segments, or finish the rest of the system—estimated to cost over $77 billion.
» It has incrementally modified its plans for a fully dedicated high-speed rail system since 2012 and now intends to share—blend—existing transit infrastructure wherever feasible. Although blending is less costly, it subjects high-speed trains to lower speed limits and may require sharing time on the tracks with other rail operators.
» The fact that it has now exhausted all feasible options to use existing infrastructure raises concerns about its ability to mitigate future cost increases.
» The risk of additional cost increases is high. Costs to date have been significantly greater than originally projected because the Authority moved forward before it completed many critical tasks such as purchasing land, planning how to relocate utility systems, or obtaining agreements with external stakeholders.
◦ This risk contributed to $600 million in changes to construction contracts.
◦ The Authority estimates that finishing the construction that is currently underway will require another $1.6 billion.
◦ If the Authority does not complete construction by the federal government's December 2022 deadline, it may need to repay $3.5 billion.
» It needs to improve its contract management to control soaring costs—it currently has 56 contract managers throughout its organization, but these individuals generally do not serve in contract management roles full time. Moreover, it has placed portions of its oversight of large contracts into the hands of outside consultants.
◦ In reviewing nine planning, engineering, and consulting contracts, few contract managers could provide evidence of reviewing each monthly invoice for accuracy, none maintained tracking logs of deliverables, and most were unable to demonstrate how they ensured the quantity and quality of the work for which the Authority paid.
» Although it has estimated the environmental impacts of its current construction, it has not comprehensively evaluated its performance against those estimates.