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FOLLOW-UP

Bechtel blamed for $65m mistake

State inspector points to overrun

By Sean P. Murphy and Raphael Lewis, Globe Staff, 2/13/2003

   
 THE SERIES

PART ONE
Bechtel's mistakes drive up cost overruns, and company profits.

Graphics
Bechtel's fee overruns
Map of major conflicts
History of the contract
Contract modifications
Cross section of roadway
Construction cost overruns


PART TWO
State officials overlook and excuse Bechtel's mistakes for a decade.

Graphic
Cost recoveries initiated


PART THREE
Powerfull allies help protect Bechtel and its bottom line.

 FOLLOW-UPS

This series has generated strong response from the state, the public, and Globe columnists.
More Globe coverage

 GLOBE DEFENSE OF SERIES

On Feb. 20, 2003, Bechtel/Parsons Brinckerhoff issued a document disputing the findings of the "Easy Pass" series. Globe editor Martin Baron responded with a defense of the Globe's reporting.
Read Bechtel's statement
Read the Globe's statement

 PHOTO GALLERY

Building a reputation
Bechtel has never shied away from big construction projects, but worldwide achievements are accompanied by controversy.
See past Bechtel projects

 FROM THE ARCHIVES

2001
Review cites flaws at Big Dig
Cerasoli charges Big Dig coverup
$1.4b overrun known in '99
Firm rejects call to offset costs
'99 memos warned of tunnel leaks

2002
Officials disclose more defects
Lawsuit raises Big Dig questions
State to reopen deal with Bechtel
Big Dig hires quality manager
US knew of hidden expenses
Big Dig overrun just plain big
SEC probers to target Big Dig
Big Dig review to target overruns
Turnpike, firm set deal on leak cost

2003
Contracts to be reviewed

 RELATED LINKS

Central Artery/Tunnel Project
www.bigdig.com

Bechtel
www.bechtel.com

Parsons Brinckerhoff
www.pbworld.com

State Inspector General reports
On the history of the Central Artery/Tunnel project's finances:
www.state.ma.us/ig/publ/cat01ex.htm
On the Central Artery/Tunnel project's attempts to recover money for mistakes:
www.state.ma.us/ig/publ/catcrex.htm

About "Scheme Z" bridge design
libraries.mit.edu/rotch/artery/

State oversight of the Big Dig
www.state.ma.us/catocc/

Mass. Turnpike Authority
www.massturnpike.com

The Artery Business Committee
www.arterybusiness.com

 ONLINE CHAT

On February 11, 2003, Globe reporter Raphael Lewis chatted with Boston.com readers about the Bechtel series.
Transcript of chat

 CONTACT THE GLOBE

Any tips? Let us know.
Phone: 617-929-3379
E-mail: bigdigtips@globe.com

 MORE BOSTON.COM COVERAGE


Beyond the Big Dig   What happens to the ribbon of land being created by the depression of the Central Artery? A joint effort between The Boston Globe, MIT, and WCVB-TV explores.
A special report


Progress updates on the Big Dig. Info
 


State Inspector General Gregory W. Sullivan yesterday issued a detailed report blaming the Big Dig's private-sector managers for making a $65 million error on one small area of the project in 1997, and then recommending to state officials that taxpayers pick up the tab.

The cost overrun, which Sullivan said stemmed from a construction method designed by the managers, Bechtel/Parsons Brinckerhoff, occurred because the ground beneath South Station heaved so much that the nearby Red Line subway platform moved.

But instead of taking responsibility for the flawed design method, Bechtel recommended that the state pay $65 million to fix the problem, the report said.

And the state did just that, the report says.

''This is a quintessential example of where the Big Dig stops right before it gets to Bechtel when it's looking for liability for overruns,'' Sullivan said in an interview.

A Globe investigation into Big Dig cost overruns published earlier this week revealed that construction work throughout the project began when designs were still far from complete, making costly problems in the field a virtual certainty. The revelations have sparked numerous calls for investigations, including a pledge by Governor Mitt Romney to hire an outside firm to review Bechtel's management.

Top Bechtel managers acknowledged that the South Station contract, in particular, was awarded when the designs were ''substantially incomplete,'' but disputed that the overruns were due to Bechtel's errors.

''We strongly disagree with the inspector general's conclusions,'' said Andrew Paven, a spokesman for Bechtel. ''This is not a Bechtel/Parsons Brinkerhoff error. We stand behind our work and have never shied away from our contractual obligations.''

In the report, Sullivan quotes Bechtel as saying the company's efforts in the South Station contract actually saved taxpayers money by keeping the work moving forward.

The report disagrees, saying Bechtel ''failed to anticipate and plan for grout heave'' when it directed contractors to inject concrete grout into the soil to stabilize the ground where work was taking place.

The report also blamed Bechtel for providing inadequate documentation to support its recommendation that the state pay the bill for a problem that Sullivan said was of Bechtel's making.

Sullivan went on to accuse the firm of shifting the financial burden of the mistake away from the company, saying Bechtel officials went out of their way to blame contractors and other firms involved in the design process, and then called the company's own problems inevitable.

Sullivan's report said Bechtel's engineer quickly labeled the trouble with the heaving earth a ''differing site condition,'' which meant the problem was related to unforeseeable conditions deep beneath street levels, and not human error. Bechtel did so, Sullivan said, without investigating the situation, or attempting to find evidence.

Bechtel ''shifted the financial responsibility for the claims onto the Commonwealth,'' the report says.

Sullivan also criticized the state officials responsible for holding Bechtel accountable for its errors, saying they never attempted to collect any of the $65 million from the company. In fact, the state only yesterday began its investigation into the South Station overruns, prompted by Sullivan's report.

Michael P. Lewis, the Big Dig's project director, declined to be interviewed yesterday. Matthew Amorello, chairman of the Turnpike Authority, which oversees the project, was away on vacation yesterday and could not be reached for comment, according to project spokesman Sean O'Neill.

Kurt Dettman, the project's chief counsel, said he opened an investigation within hours of the release of Sullivan's report -- even though Sullivan made the Turnpike aware of his findings last October.

''We're not chargined, we are pleased,'' Dettman said. ''The bottom line is that Matt Amorello committed himself to bringing the inspector general into the process, and I see this as the first step in that process.''

Both Dettman and Lewis have, at different points in the project's recent history, controlled the Big Dig's cost-recovery process. In more than a decade of construction on the Big Dig, during which cost overruns piled up to more than $1.6 billion, the cost-recovery effort has returned just $35,707 -- none of it from Bechtel. The Globe series found that the cost recovery committee, which was chaired by Lewis, failed to convene any meetings for two years between 1998 and 2000.

Yet the Globe's investigation determined that as much as $1.1 billion of the overruns can be tied to mistakes and questionable decisions made by Bechtel over the course of construction.

Bechtel's design director, Anthony Lancellotti, acknowledged that the South Station tunnel contract's designs were ''substantially incomplete'' when the contract was awarded. He said that happened because the project was in danger of missing federal funding deadlines for that work.

Sean P. Murphy can be reached at smurph@globe.com. Raphael Lewis can be reached at rlewis@globe.com.

This story ran on page A18 of the Boston Globe on 2/13/2003.
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