tate lawmakers grilled Turnpike Authority managers yesterday about their failure to recover Big Dig funds lost to mistakes, saying that any new recovery effort should be conducted independent of the agency.
Bechtel's mistakes drive up cost overruns, and company profits.
Bechtel's fee overruns
Map of major conflicts
History of the contract
Cross section of roadway
Construction cost overruns
State officials overlook and excuse Bechtel's mistakes for a decade.
Cost recoveries initiated
Powerfull allies help protect Bechtel and its bottom line.
This series has generated strong response from the state, the public, and Globe columnists.
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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
Building a reputation
Bechtel has never shied away from big construction projects, but worldwide achievements are accompanied by controversy.
See past Bechtel projects
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
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
Contracts to be reviewed
Central Artery/Tunnel Project
State Inspector General reports
On the history of the Central Artery/Tunnel project's finances:
On the Central Artery/Tunnel project's attempts to recover money for mistakes:
About "Scheme Z" bridge design
State oversight of the Big Dig
Mass. Turnpike Authority
The Artery Business Committee
On February 11, 2003, Globe reporter Raphael Lewis chatted with Boston.com readers about the Bechtel series.
Transcript of chat
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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.
In the first of what some called historic hearings, Turnpike Authority chairman Matthew Amorello, testifying under oath, acknowledged that cost-recovery efforts to date "have not inspired confidence." Only $35,000 has been recovered in the $14.6 billion project.
But he said the agency's new team, led by a retired family court judge, offers "the best approach to making cost recovery work." The first of several witnesses to testify under oath yesterday, Amorello also cautioned that relationships with the project's private-sector managers, Bechtel/Parsons Brinckerhoff, must be kept "collaborative and intact" in order to finish the project, adding that the Authority is best positioned to do that.
Such statements drew sharp criticism from Senator Mark Montigny, chairman of the Long-Term Debt Committee, who said Amorello's in-house review sent "red flags . . . flying all over the room." He called the $35,000 recovered on the $14.6 billion project "peanuts," "an embarrassment."
"You have to work with them. We don't," Montigny, a New Bedford Democrat, said of Bechtel/Parsons. "I would be very hesitant to bless anything that's internal, because even if we collected $200 million, the public would question if there was more."
The Globe reported last week that legislative leaders and Governor Mitt Romney have already agreed on a plan to create an independent cost-recovery process, one that does not include the Turnpike Authority.
The provisional deal, worked out last month, would create a panel that includes members from the governor's administration, the state auditor's office, the inspector general's office, some representatives from the Federal Highway Administration, and a few people from the private sector. Those panelists would probably oversee a private contractor who would examine the $1.6 billion in construction cost overruns, looking for mistakes.
But if the process going forward has been largely mapped out, plenty of questions, such as how much money could be recovered, remain unanswered. Testimony from officials yesterday, given under oath, began to create a clearer picture.
Asked to cite a "ballpark" estimate for the amount of money the state could hope to recover, Amorello refused, but said, "It's not in the hundreds of millions," but "in the millions" of dollars.
Inspector General Gregory Sullivan said he believed $150 million would be the most the state could recover, citing liability cap provisions in the Bechtel/Parsons contract. That cap, however, does not cover the work of the several dozen design firms and contractors, who may have committed avoidable mistakes. Sullivan also said that the Legislature should immediately commence a breach of contract lawsuit against Bechtel/Parsons for failing to inform the Legislature about the "true" cost of the Big Dig in the late 1990s. Doing so, Sullivan said, was part of the company's obligations after the Turnpike Authority took control of the project in 1997.
Bechtel/Parsons spokesman Andrew Paven disagreed. "That statement [by Sullivan] is not correct. Our contracts contain no provision authorizing us to report independently and directly to the state Legislature."
The hearing, chaired by Senator Marc R. Pacheco, head of the Post Audit and Oversight Committee, was the first of two sessions that will attempt to determine why the Big Dig has recovered little money for mistakes since construction began in 1991, and who is to blame. The hearings, prompted by a February Globe series that highlighted Big Dig cost-recovery failings, took place in a packed room. Senators questioned witnesses from the Big Dig, the Turnpike, and other agencies. The next hearing is tomorrow.
At one point, Senator Steve Baddour, cochairman of the Joint Transportation Committee, said he was frustrated that state oversight agencies have filed thousands of pages of scathing reports about the Big Dig, but "with very little results." At that, Sullivan said, "We are a watchdog agency. All we can do is bark, growl, and occasionally bite."
Secretary of State William Galvin, who along with Sullivan called the hearings historic and crucial to recover any funds lost to mistakes, testified that the Turnpike Authority destroyed important e-mails and contract documents in defiance of a July 2000 order from the state attorney general's office to retain records. His office is investigating.
"If we discover records were deliberately destroyed," Galvin said, "we will make referrals to the attorney general's office for criminal prosecution. We take it very seriously." Turnpike officials said they could not comment until they saw a list of the documents Galvin was referring to.
Andrew Natsios, former Authority chairman and now director of the US Agency for International Development, was asked to testify but declined, saying in a letter, "I am currently directing the relief and reconstruction effort in Iraq." Bechtel Corp., the majority partner in the Big Dig's management joint venture, is one of three finalists for a $600 million infrastructure rebuilding contract in Iraq, according to yesterday's Wall Street Journal.