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The Boston Globe OnlineBoston.com Boston Globe Online / Easy Pass

Lawmakers grill Artery managers on overruns

By Raphael Lewis and Sean P. Murphy, Globe Staff, 4/3/2003

   
 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
 


A panel of powerful state senators butted heads with the Big Dig's private-sector managers for three hours at a State House hearing yesterday, challenging the firm's assertions that it gave taxpayers their money's worth on the $14.6 billion project.

Pressed to assign a dollar value to the company's share of more than $1.6 billion in construction cost overruns, Bechtel/Parsons Brinckerhoff's top executive on the project testified under oath that the figure "may be in the millions, [but] I don't think it's tens of millions."

C. Matthew Wiley, often facing tough and repeated questions, took a defiant stand on the company's record, saying that virtually all mistakes committed on the Big Dig have been the fault of the state's project managers, or other contractors. He said Bechtel's stewardship made the project a success -- even though more than 10,000 construction cost overruns have blown apart its budget.

Senator Marc R. Pacheco, who has chaired the hearings held yesterday and Monday, was incredulous: "Do you consider 10,000 change orders a success?"

Wiley responded that the company never guaranteed perfection -- nor did its contract. Asked whether Bechtel kept internal estimates about how many errors the company had committed on the project, and their dollar value, Wiley said, "I have no clue," then added afterward, "We're not running from our responsibility. We'll wait and see where the facts are."

But the senators prodded Wiley and his colleagues about their role in the apparent failures of project officials to reveal the actual cost of the Big Dig before an overrun scandal exploded in early 2000.

Wiley and his colleagues testified that, in 1994 and 1995, Bechtel agreed to downsize the project's budget so that construction cost growth, on paper, would be 7 percent, even though it historically stood at roughly 15 percent. Today, it's about 25 percent.

William Edwards, Bechtel's budget chief, said the company considered the budget "aggressive but achievable," prompting a frustrated response from Senator Mark C. Montigny, chair of the Long Term Debt Committee.

"Am I missing something here?" Montigny said. " `Aggressive but achievable' was either foolish, or you blew it." He called Bechtel's answers a "whitewash."

Bechtel managers testified that they have made all the key recommendations and many important decisions on the project, managed the entire design and construction process, and created all financial analyses to date, and yet bear virtually no contractual responsibility for construction or design errors.

Pacheco, in particular, took the testimony as a cue that the state should "never again enter into this kind of relationship" with a private construction manager. He said he would look to etch his sentiments into the state's laws in the near future.

It would be just one of several statutory changes promised or enacted since the publication of a February Globe series that examined Bechtel's management, the state's cost-recovery failures, and political influence on the project. Wiley yesterday called the series the product of "misguided critics."

But the series prompted the Legislature last month to unanimously approve a measure that extended by 10 years the statute of limitations to recover money lost to Big Dig mistakes. Governor Mitt Romney signed it.

Wiley yesterday said Bechtel's lawyers may eventually mount a legal challenge to that extension, and warned the new law may drive up the cost of future projects because contractors may balk at taking on so much risk.

Pacheco, meanwhile, chided Big Dig officials for not telling "the whole story" in their testimony to the panel Monday. At that time, Turnpike Chairman Matthew Amorello, project director Michael P. Lewis, and chief counsel Kurt Dettman testified under oath that the project's cost-recovery committee got back nearly $200,000 from Bechtel and other contractors for the botched handling of asbestos at a demolition site. As it turns out, the project's cost recovery committee had closed its inquiry into the asbestos case by assigning no blame. It took the state attorney general's office, conducting a separate investigation, to get the money.

"In the absence of the attorney general's office," Pacheco said, "there would be no cost recovery. Isn't that right?" Dettman replied, "That's right."

Pacheco, who promised to file legislation to create an independent panel of state and federal officials to take over cost-recovery from the Big Dig and Turnpike officials, shot back, "Then we're back to 10,000 change orders on a $14.6 billion project and we've recovered only $35,707."

This story ran on page B4 of the Boston Globe on 4/3/2003.
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