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GRAND JURY <br />COUNTY OF ALAMEDA <br />COURT HOUSE, OAKLAND, CALIFORNIA' 94612 <br />REPORT OF THE 1975-76 ALAMEDA COUNTY GRAND JURY <br />The Alameda County Grand Jury has investigated the matter of possible <br />irregularities in bidding and change order procedures in connection <br />with the current Eden Township Hospital construction program. <br />It appears to the Grand Jury that certain practices contrary to the <br />intent of the section of the State Health and Safety Code pertaining <br />to Hospital Districts were employed. <br />First: Code Section 32132 limits the total amount of all change orders <br />to five percent (5%) of the basic contract. This amount was exceeded <br />by approximately $166,000 by hospital board figures. <br />Second: Change orders, of substantial amounts, which would materially <br />change the scope of the work as set forth in the basic contract, were <br />proposed to be let without competitive bids. This appears to be <br />contrary to the Health and Safety.*Code. <br />-Third: After the five percent (5%) limit on change orders was exceeded, <br />further change orders were broken into several small parts,. Each part <br />_-was less than the $3,500 limit on work that may be done without com- <br />petitive bids. Payment was then authorized by issuance of purchase <br />orders, apparently to avoid calling them change orders. <br />Also, letting work directly to sub -contractors, as was done in this <br />case, relieves the general contractor of his overall responsibility <br />for these aspects of the work. <br />While the Grand Jury feels that the hospital board's intent was to <br />make Eden a complete and efficient hospital, it cannot condone and <br />must censure practices which appear to circumvent the spirit of the <br />law. <br />Dated this 15th day of January, 1976. <br />S�J.0 <br />PATRICIA M. NISBET <br />Foreman <br />ameda County Grand Jury <br />