Whistleblower lawsuit alleges $20M in rail project change order abuses

Former contractor says companies dinged HART for $20M in change fees without approval

HONOLULU (HawaiiNewsNow) - A whistleblower lawsuit alleges that contractors charged the Honolulu rail project for hundreds of change orders that added more than $20 million to the project.

Jeff Werner was a claims manager for engineering firm Stantec Consulting Services Inc., where he oversaw change orders for the $9 billion rail project.

In a suit filed in Orange County, Calif., Werner alleged that contractors charged for “hundreds of change orders” without getting approval from the Honolulu Authority for Rapid Transportation.

“HART delayed processing approval or obtaining cost estimates for these change orders until long after contractors had begun work, and sometimes even completed work,” the suit said.

He said he was terminated by Stantec after he raised questions about the alleged abuses. Stantec denied Werner’s allegations. HART did not respond to the lawsuit, but said it has an extensive review process for change orders.

The whistleblower suit comes as the rail authority faces a criminal investigation and as the City Council is calling for a forensic audit of the rail system, whose costs have nearly doubled in the past several years.

A forensic audit typically looks for fraud and mismanagement.

“The value of doing a forensic investigation is not only seeing if there was fraud but if there were, we should understand whether there’s a potential from recovery and restitution," said Hawaii Kai resident Natalie Iwasa.

HART’s board of directors debated the value of an another audit.

“We’re accountable to the people of Hawaii so what is it going to look like if we say no to a forensic audit? I don’t think the board wants to look like we’re putting our head in the sand," said HART board member Michele Brunngraber.

But others worry that another audit will cause further delays.

“The concern I have about a forensic audit is to cost but mostly to the delay that would be engendered,” said board member Hoyt Zia.

In the end, the HART board postponed taking a position on the audit.

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