Contract blunders over 10 years cost the state millions of dollars on a sewer system at Fort Flagler State Park, a state whistleblower-prompted audit has found. The report comes out just as the state is talking about closing some parks, potentially Fort Flagler.

"It is absolutely one of the most egregious examples of waste that we have ever come across," said Washington State Auditor Brian Sonntag, who has been in office 18 years.

The project started in 2000 as a $140,000 project to replace a recreational vehicle dump station on the park's beach, but escalated through change orders and new contracts to more than $7 million authorized for the design and construction of a new sewer and water distribution system encompassing the main park area, where the historic buildings are located.

Sonntag estimated the dollar loss at “about $5 million.”

The audit was particularly critical of the lack of oversight and accountability applied to contractors Friberg Construction of Ferndale, Wash., and Parametrix of Auburn, Wash.

On the other hand, a local contracting company involved, Seton Construction of Port Townsend, was responsible for work that built the part of the system that is functioning as expected. For a design cost of $1.3 million and a construction cost of $3.2 million, according to state auditor spokesperson Virginia Painter, “that money went to a system that’s functioning.”

Sonntag said it wasn’t just the dollar amount that was egregious, but the length of time it took Washington State Parks and Recreation Commission to find and fix problems.

“We’ve seen bigger dollar amounts, certainly, and frauds that total more dollars, but here we are looking at a 10-year period of contract after contract after contract of not fixing anything,” Sonntag told the Leader.

Failure after failure

The 13-page audit details failure after failure of oversight of the project, which included payment to one contractor for an RV dump station and drain field that wasn’t built, failure to bid on services, failure to enforce terms of contracts, unauthorized change orders, and failure for one contractor to meet safety requirements.

Local rangers at Fort Flagler State Park were not involved in the project, referring comments to the park’s commission spokesperson in Olympia. Painter said the supervisor for the original sewer project left state employment. He said the manager was “disciplined and subsequently left the agency.”

The state received an anonymous tip Jan. 1, 2009, according to state auditor spokesperson Mindy Chambers. “They said the contracts hadn’t been properly bid and didn’t finish the project, and that the contractor was paid,” Chambers said.

Painter said that, to her knowledge, untreated sewage never was released into Puget Sound.

Timeline of woes

Problems surfaced after the RV sewer system design didn’t work, and then a drainfield also failed. Painter said state law allows architect and engineer contracts to be amended if projects need to be changed or expanded.

“You can change the scope [of a project],” said Painter. “But it needs to be overseen by more than one person with internal controls.” Oversight didn’t happen, both the auditor’s office and park commission agreed.

A timeline detailing the contracts from 2000 to 2009, which the Leader obtained through the auditor’s office, shows that an architect and engineering contract to Auburn’s Parametrix for $154,481 in August 2001 was amended eight times and ended up costing $525,217 by March 2005.

In April 2004, the state awarded a contract to Friberg Construction of Ferndale for $985,197. After 10 change orders, Friberg was paid $1,422,131 for its work, according to the timeline. Friberg damaged a tank and then was paid to repair it, according to the audit report.

But in September 2005, the Environmental Health Department of Jefferson County Public Health shut down the newly installed system, the report said.

Parametrix was given another contract for $49,025 to provide consulting services in August 2006. After nine amendments, the total cost of the contract ended up being $1,343,596, according to the auditor’s timeline.

Parametrix spokesperson Lorie Lee said the files in question have been archived and the company could not respond by the Leader’s deadline. She referred comment to Painter.

In September 2009, the commission selected Seton Construction to install a system for $3,037,707, not including sales tax. Seton was paid $3,260,104 for its successful work. The park had previously been closed to campers for the winter of 2008-09 until spring of that year to make repairs.

The lengthy timeline is available for review at

ptleader.com.

Park commission response

The audit report lists actions the park commission says it has taken to “improve processes, policies and staff training.”

“The commission takes seriously the findings of the report around weaknesses in agency documentation and oversight, and has made significant changes in agency structure, in updating internal controls and politics and procedures, and in providing training to staff all over the state,” said Irene Frisch, state parks director of administration, finance and technology.

Sonntag said he is pleased with the Washington State Parks and Recreation Commission's response.

Built in 1897, Fort Flagler has been eyed as one of the parks the state might close because of budget woes.

Fort Flagler was the first of three U.S. Army Coast Artillery forts built to protect the entrance to Puget Sound. It has been a state park since the 1950s. The park is about 21 road miles from Port Townsend.