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Group questions Big Dig savings

Panel says it doubts Bechtel assertions

By Raphael Lewis, Globe Staff, 2/22/2003

   
 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
 


An independent, national engineering group yesterday cast doubt on the cost savings the Big Dig's private-sector managers have attributed to their stewardship, and recommended that the state stop relying on the company to judge its own work.

The National Academy of Engineering, a congressionally chartered research group recruited by the Turnpike Authority last fall to review the Big Dig's management, also concluded that ''plenty of room for improvement'' exists to cut costs and get more value for the money being spent on the project and its management firm, Bechtel/Parsons Brinckerhoff. They proposed 15 changes to improve oversight by the state.

''The Massachusetts Turnpike Authority can save time and money by making the changes our study found to be achievable,'' said John T. Christian, the Waban-based engineer who chaired the panel.

The seven-member committee, whose work was reviewed by an anonymous panel of 10 other engineers and scholars, said the state has failed to develop a plan to reduce Bechtel staff numbers, even though the company's employees are paid by the hour, and not for specific jobs completed. The Turnpike, the report said, ''should implement an aggressive plan to downsize the [Bechtel] staff members who are not essential.'' Bechtel currently employs 512 people to run the Big Dig.

Turnpike Chairman Matthew Amorello said he planned to implement many, and perhaps all, of the academy's recommendations. He said remains confident that, with some changes, the state can complete the Big Dig within its current schedule and budget. Amorello said he would meet with the Turnpike's board next week to begin assessing how to proceed.

The Turnpike Authority did not ask the National Academy to review past management practices or cost overruns, arguing that the agency merely wanted to improve practices going forward. But the group's conclusions passed judgment on many long-standing problems at the Big Dig, which is now estimated to cost $14.6 billion.

Regarding Bechtel's assertion that it saved the public more than $1 billion by using a ''fast track'' plan that called for construction to begin before designs were finished, the committee doubted Bechtel's claims to cost savings.

''The committee does not believe that the full cost impact of changes, claims, and delays from incomplete coordination of work packages has been fully considered,'' the report states. The report goes on to say that various Bechtel managers could not agree on a definition of ''fast-tracking,'' as the plan has been dubbed.

The conclusions mirrored some of those published in the Globe's three-part series last week that scrutinized Bechtel's management of the project. The series concluded that Bechtel has no backup for its assertion that the company has saved taxpayers more than $1 billion. Instead, the series found that the decision to press forward with incomplete designs and inadequate research of work zones led to $1.1 billion in construction cost overruns.

The academy, in recommending changes to save money going forward, said one is particularly pressing: expediting payments to construction contractors for overruns, which have accumulated to a backlog of more than 3,500 claims worth more than $230 million. Current practices, which the committee said are too litigious and time-consuming, unnecessarily increase interest costs, weaken the state's negotiating position, and leave the project's true cost difficult to determine. The Turnpike Authority ''needs to move with much more vigor and urgency,'' Christian said.

Also, the committee concluded:

Big Dig schedules are unrealistic, promising opening dates for tunnels that continually slip. And ''failures in coordination'' have led to ''persistent scheduling problems,'' most notably delays in opening the Turnpike tunnel to Logan Airport.

Big Dig managers do not undertake ''sufficient analysis'' to justify expensive work acceleration to meet schedules, which results in higher costs, lower work quality, and unforeseen problems.

Because the Big Dig used state money to pay for insurance coverage for Bechtel, design firms, and contractors, any money recovered for management and design mistakes would likely come in part from public funds, making any awards more ''symbolic'' than actual.

Andrew Paven, a spokesman for Bechtel, said his company wanted to review the report carefully before addressing its findings point by point, but said that, in general, ''We look forward to working with Chairman Amorello and the [Turnpike Authority] staff to implement any recommendations the Turnpike Authority chooses to accept.''

Amorello said he was particularly intrigued by the idea of having a permanent peer-review program established to vet the Big Dig's management, construction, and design issues going forward. He said he has already commenced talks with the National Academy to see if the agency, a nonprofit that serves as a research arm of Congress, could stay on until the project wraps up in 2005.

''It is one I'm particularly keyed on,'' Amorello said.

When Amorello announced he would bring on the National Academy last year, controversy ensued because two of the Academy's six officers are retired Bechtel executives. Also, a Parsons Brinckerhoff executive chairs the Board on Infrastructure and the Constructed Environment, which had direct oversight of the Academy's Big Dig review.

But according to Academy President William A. Wulf, the Academy took pains to create an independent panel with no ties to Bechtel, Parsons Brinckerhoff, or the Big Dig. The report, he said, was generated with no editorial control by the Academy or the Board on Infrastructure.

Still, critics of the Big Dig's management said they were unhappy that the committee fell short of calling for a permanent body to oversee Bechtel's work at the project, a position commonly called an ''owner's engineer.'' The committee said that the Turnpike should ''make better use of existing management tools rather than add another layer of management or oversight.''

Christy Mihos, a Turnpike board member, disagreed strenuously: ''Look it, independent reviews of any type at this project are helpful and particularly desirable at this time, but we have to move on at this point with an owner's engineer.''

US Representative Michael E. Capuano, a Somerville Democrat who now holds a seat on the House Transportation Committee, said the project should act with due speed to clean up its image.

''Every time the Big Dig is brought up in Washington, it hurts Massachusetts,'' said Capuano, who is working with other members of the state's congressional delegation to secure crucial transportation funds for upcoming years. ''It's a hugely heavy rock to carry uphill, and I don't want it any heavier.''

This story ran on page B1 of the Boston Globe on 2/22/2003.
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