Four years ago — in the wake of an over-budget children’s hospital project plagued by design changes, construction delays, mismanagement, and cost overruns — University of Iowa Facilities Management assumed oversight control of all forthcoming UI Health Care construction to, among other things, “mitigate any future challenges.”
But the UI shift in leadership and decision-making power has meant “significant” challenges for the $525.6 million hospital campus it’s building in North Liberty, according to an Oct. 18 audit by Baker Tilly, provided to The Gazette through an open records request.
“A significant challenge on this project is the communication between UI (Facilities Management) Design & Construction and UIHC Capital Management,” according to the audit, reporting a “gap in understanding between UI (Design and Construction) and UIHC and their respective ownership of responsibilities, which has caused a potential lack of information sharing throughout the project.”
“The key disagreement between the two departments is who the true owner of the project is.”
UI Health Care is the “ultimate owner” of the 469,000-square-foot hospital rising on a 60-acre plot near the intersection of Forevergreen Road and Highway 965.
But JE Dunn’s construction management contract is with UI Design and Construction, making JE Dunn “contractually obligated to defer to the UI D&C team.”
“This has created challenges due to UIHC's expectations from JE Dunn and caused constraints to overall project management,” according to the audit, flagging spending discord on things like furniture, medical equipment and information technology.
“There appears to be a gap in procedural understanding with UI D&C on how UIHC arrived at these budget amounts or how they are managed,” according to the audit, which the audit presented in generalities and bullet points to the Board of Regents in November.
When asked whether any regents requested or read the full audit report provided to The Gazette upon its request, board spokesman Josh Lehman said regents received the public presentation at the November meeting and had the opportunity to ask questions.
As part of the recent audit, Baker Tilly reported the construction piece of UIHC’s North Liberty contract obligation sits at $359.1 million, and UIHC — through Sept. 30 — had spent $184 million, putting spending at about 51 percent of its budget.
That matches the timeline of the project — which started in September 2021, with a scheduled 2025 opening.
But a lack of “transparency, clear and open lines of communication, and a ‘mutual trust’ culture between stakeholders” could lead to cost and schedule overruns, according to the audit.
Those were among the issues that afflicted the UI Stead Family Children’s Hospital project and compelled an oversight change, according to an investigation by The Gazette.
The 14-floor, 563,250-square-foot Children’s Hospital budget started at $270.8 million and swelled to $360.2 million, with its completion date shifting from 2015 to December 2016 to February 2017.
Due to long-running and ongoing disputes with contractors on the project — including another verdict against the UI this year, which the university appealed and the Iowa Supreme Court retained this week — Children’s Hospital costs ballooned to more than $400 million.
And a subsequent discovery of cracking and damaged windows on levels three through 11 of the new hospital — which now need replacing — has added another $45 million to the project, bringing the cost near $450 million.
A 2019 UI Finance and Operations review aired “widespread confusion throughout campus about why the Children’s Hospital project experienced design problems and delays.”
“The committee was pleased to learn that all future UIHC building projects will now be overseen by (Finance and Operation), rather than solely within UIHC’s administration, which will allow the extensive experience of F & to benefit the entire campus,” according to the committee report.
But UI officials in the recent North Liberty audit acknowledged communication problems have followed, and they expressed efforts to “improve our lines of communication between UIHC and UI (Design and Construction).”
Those efforts have included hiring The Knowledge Collaborative to “facilitate working sessions that will clearly define communication protocols and channels between the two organizations.”
An Arizona-based consultant founded that company in December 2020. It doesn’t have a website, and UI officials didn’t immediately provide The Gazette with its contract or payment amounts to The Knowledge Collaborative to date.
But UI Facilities Management in October 2021 reported using it for an assessment of “current project management capabilities and needs” of its design and construction department.
The collaborative’s more recent UI work began in August, according to the audit, expecting to wrap in late fall and “provide a clear road map for improved and more effective modes of communication, a clear understanding of project roles and responsibilities, and a framework that will provide future projects clear project plans.”
But the UI shift in leadership and decision-making power has meant “significant” challenges for the $525.6 million hospital campus it’s building in North Liberty, according to an Oct. 18 audit by Baker Tilly, provided to The Gazette through an open records request.
“A significant challenge on this project is the communication between UI (Facilities Management) Design & Construction and UIHC Capital Management,” according to the audit, reporting a “gap in understanding between UI (Design and Construction) and UIHC and their respective ownership of responsibilities, which has caused a potential lack of information sharing throughout the project.”
“The key disagreement between the two departments is who the true owner of the project is.”
UI Health Care is the “ultimate owner” of the 469,000-square-foot hospital rising on a 60-acre plot near the intersection of Forevergreen Road and Highway 965.
But JE Dunn’s construction management contract is with UI Design and Construction, making JE Dunn “contractually obligated to defer to the UI D&C team.”
“This has created challenges due to UIHC's expectations from JE Dunn and caused constraints to overall project management,” according to the audit, flagging spending discord on things like furniture, medical equipment and information technology.
“There appears to be a gap in procedural understanding with UI D&C on how UIHC arrived at these budget amounts or how they are managed,” according to the audit, which the audit presented in generalities and bullet points to the Board of Regents in November.
When asked whether any regents requested or read the full audit report provided to The Gazette upon its request, board spokesman Josh Lehman said regents received the public presentation at the November meeting and had the opportunity to ask questions.
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As part of the recent audit, Baker Tilly reported the construction piece of UIHC’s North Liberty contract obligation sits at $359.1 million, and UIHC — through Sept. 30 — had spent $184 million, putting spending at about 51 percent of its budget.
That matches the timeline of the project — which started in September 2021, with a scheduled 2025 opening.
But a lack of “transparency, clear and open lines of communication, and a ‘mutual trust’ culture between stakeholders” could lead to cost and schedule overruns, according to the audit.
Children’s hospital
Those were among the issues that afflicted the UI Stead Family Children’s Hospital project and compelled an oversight change, according to an investigation by The Gazette.
The 14-floor, 563,250-square-foot Children’s Hospital budget started at $270.8 million and swelled to $360.2 million, with its completion date shifting from 2015 to December 2016 to February 2017.
Due to long-running and ongoing disputes with contractors on the project — including another verdict against the UI this year, which the university appealed and the Iowa Supreme Court retained this week — Children’s Hospital costs ballooned to more than $400 million.
And a subsequent discovery of cracking and damaged windows on levels three through 11 of the new hospital — which now need replacing — has added another $45 million to the project, bringing the cost near $450 million.
A 2019 UI Finance and Operations review aired “widespread confusion throughout campus about why the Children’s Hospital project experienced design problems and delays.”
“The committee was pleased to learn that all future UIHC building projects will now be overseen by (Finance and Operation), rather than solely within UIHC’s administration, which will allow the extensive experience of F & to benefit the entire campus,” according to the committee report.
Communication help
But UI officials in the recent North Liberty audit acknowledged communication problems have followed, and they expressed efforts to “improve our lines of communication between UIHC and UI (Design and Construction).”
Those efforts have included hiring The Knowledge Collaborative to “facilitate working sessions that will clearly define communication protocols and channels between the two organizations.”
An Arizona-based consultant founded that company in December 2020. It doesn’t have a website, and UI officials didn’t immediately provide The Gazette with its contract or payment amounts to The Knowledge Collaborative to date.
But UI Facilities Management in October 2021 reported using it for an assessment of “current project management capabilities and needs” of its design and construction department.
The collaborative’s more recent UI work began in August, according to the audit, expecting to wrap in late fall and “provide a clear road map for improved and more effective modes of communication, a clear understanding of project roles and responsibilities, and a framework that will provide future projects clear project plans.”
Audit: UI internal disagreement, communication has been ‘significant challenge’ in hospital project
The University of Iowa shift in leadership and decision-making power has meant “significant” challenges for the $525.6 million hospital campus it’s building in North Liberty, according to an Oct. 18 audit by Baker Tilly, provided to The Gazette through an open records request.
www.thegazette.com