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EASY PASS | PAST BIG DIG COVERAGE

Review cites flaws at Big Dig

Faults managers for cost overruns

By Thomas C. Palmer Jr., Globe Staff, 01/08/2001

   
 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
 


t the end of almost nine years of ongoing review of Big Dig management problems, state Inspector General Robert A. Cerasoli concluded last May that identifiable management failures were, and continue to be, responsible for many of the project's extraordinary cost increases.

An "integrated" management structure created in 1997, designed to streamline decision making and cut costs, in practice "is an invitation to fraud, waste, and abuse," Cerasoli said in a letter on May 3 to Turnpike chairman Andrew Natsios. That management structure, which Cerasoli deems deeply flawed, remains in place today.

"The resulting organization scheme has the potential to be an accountability nightmare," Cerasoli concluded, after reviewing the overall relationship of the Turnpike Authority with Bechtel/Parsons Brinckerhoff, the private consultants hired in the mid-1980s to manage the Central Artery/Ted Williams Tunnel project.

The May 3 letter and the results of the inspector general's review of almost a decade of design and construction management problems were released by the Turnpike authority late on Friday. Cerasoli's office was in the process of sending the thick document out to legislative leaders and making it public.

Natsios received the critical letter and report about two weeks after he took the reins of the Big Dig. Governor Paul Cellucci appointed him to replace James J. Kerasiotes after huge and previously unacknowledged cost overruns became public.

Natsios has since negotiated a new contract with Bechtel/Parsons, and some of the issues that raised Cerasoli's concerns were addressed, but not the basic structure, in which Bechtel/Parsons reviews and evaluates much of its own work, and employees of the private consultant are intermingled in the hierarchy with public employees.

"The Commonwealth's excessively broad project management contract with Bechtel/Parsons Brinckerhoff has impeded effective cost control and oversight," Cerasoli said in the letter. It also "undermined public accountability . . . and eroded the Commonwealth's contracting leverage."

Asked about Cerasoli's strong criticism, Turnpike spokesman Bob Bliss said, "It's pretty clear there isn't any turning back from the structure that the project has."

However, he said, the changes that Turnpike officials insisted on in the latest contract with Bech tel/Parsons, including a reduction of its fee from 11 percent to 7 percent, "indicate that a different approach is being taken and the recognition that cost-consciousness is being brought to the fore of everyone."

The inspector general's office, like other oversight agencies, is funded in part by the Big Dig itself. Cerasoli's office has received $3.4 million since 1992 to do independent oversight, to address concerns of the Legislature about the megaproject, and to provide technical assistance to project managers themselves.

Most of the thick volume that was released on Friday concerned assistance that Cerasoli's office provided on 22 separate management problems since 1992. It was requested by project officials, and Cerasoli's staff's response is a mixture of guidance, opinions, and criticism.

As both Cerasoli and Natsios made clear, project officials accepted some of the recommendations and critical comments, and rejected others.

In a letter to the governor and legislative leaders summarizing its findings, Cerasoli said the project's response to its suggestions had been mixed, but had been excellent specifically in finding ways to improve consulting and design contracts.

However, the strong letter written last May summarizes not only the assistance given to Big Dig managers but also Cerasoli's broader, independently undertaken assessment of the overall management structure.

The conclusion goes deep and borders on being scathing. "The Commonwealth's near-total dependence" on Bechtel/Parsons "has eroded its negotiating leverage to the detriment of the public interest," Cerasoli said.

The letter cited as problems:

- Bechtel/Parsons' duty to identify the causes of major cost increases and delays, which means relying on the consultant "to review problems even when such problems are associated with B/PB's own work."

- The contract with Bechtel/Parsons, under which it is paid largely on the basis of a fee that grows with the cost of the project. Although incentives have been included in the most recently negotiated contract, even Turnpike officials privately say they are weak.

Since 1985, the state has paid Bechtel/Parsons nearly $2 billion.

"The current management organization . . . undermines the essential arm's-length relationship between the Commonwealth" and its consultant, the letter said.

This story ran on page B4 in the Metro/Region section of the Boston Globe on 01/08/2001 .
© Copyright 2002 Globe Newspaper Company.


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