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

Bechtel says report on overruns was unfair

By Scott Bernard Nelson, Globe Staff, 2/21/2003


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

Bechtel's fee overruns
Map of major conflicts
History of the contract
Contract modifications
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.
More Globe coverage


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


Parsons Brinckerhoff

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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Phone: 617-929-3379
E-mail: bigdigtips@globe.com


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

The engineering company in charge of the Big Dig released a point-by-point defense of its work yesterday, calling allegations that $1.1 billion in overruns was tied to its mistakes ''not only false but deeply unfair.''

The company, Bechtel/Parsons Brinckerhoff, issued its 17-page report in response to a recent Globe series that highlighted construction problems and cost overruns on the project to move Interstate 93 below ground in Boston and remake the city's waterfront. The company titled its report ''The Boston Globe's Big Dig: A Disservice to the Truth,'' and specifically rebutted 30 allegations that appeared in the series.

''Unfortunately, the Globe's reporters never understood the fundamentals of the engineering and construction industry,'' the report stated. ''Their stories do not accurately explain either B/PB's contractual responsibilities on the project or the work performed. They misstate key facts and resort to half-truths and innuendo to indict B/PB unfairly.''

Globe editor Martin Baron denied that charge, saying the Globe stands by its reporting that $1.1 billion of the $1.6 billion in construction cost overruns to date are tied to Bechtel/Parsons's management.

''Bechtel/Parsons itself acknowledges that $736 million in contract modifications resulted from proceeding with construction before designs were completed,'' Baron said. ''The other $350 million was rung up because contractors found different work zone conditions than the designs stated.''

Responding to the company's contention that it saved taxpayers up to $1.7 billion by getting the project in position to be finished ahead of schedule, Baron said Bechtel ''lays claim to hundreds of millions of dollars in `fast track' savings without documenting savings of that magnitude, or any `fast track' plan.''

The Big Dig management company at the center of the storm is a joint venture of San Francisco-based Bechtel Group, one of the world's largest construction companies, and New York-based Parsons Brinckerhoff, an engineering and management firm with 200 offices worldwide. The company has been in charge of the Big Dig since 1986, overseeing the largest and costliest urban highway project in US history.

Yesterday, Governor Mitt Romney's spokeswoman, Jodi Charles, said Romney wants ''answers and explanations.'' He is due to meet Bechtel chief operating officer Adrian Zaccaria next week.

Bechtel issued its rebuttal on the eve of the scheduled release of a National Academy of Engineering review of Big Dig management. The Massachusetts Turnpike Authority, which helped finance the Big Dig and oversees Bechtel/Parsons, hired the engineering group to conduct the review, including an evaluation of the cost overruns.

In addition, state Inspector General Gregory W. Sullivan has requested that Bechtel turn over thousands of pages of documents related to six specific cases of cost overruns. The state Senate also voted 38-0 to extend the statute of limitations for recouping money lost to poor decisions and flawed work by the project's managers, and the House is expected to follow suit.

US Representative Michael E. Capuano, meanwhile, has asked the inspector general of the US Department of Transportation to investigate the $1.6 billion in construction cost overruns that have sent the Big Dig's budget skyrocketing in recent years.

In its response yesterday, Bechtel alleged that the newspaper has oversimplified the situation and wrongly attributed routine processes to company mismanagement. The company's rebuttals focused largely on differing interpretations of contract requirements, as well as on who bears ultimate responsibility for Big Dig decisions.

The company referred to itself, for example, as a ''management consultant'' to the Massachusetts Turnpike Authority and said it was responsible only for preliminary design, management of the construction process by other contractors, and reporting on the project's cost and schedule.

''The state has always maintained authority and responsibility for policy-level decision making, direction of the project, and oversight of B/PB,'' the report stated. Referring to Big Dig subcontractors, Bechtel said, ''each designer and contractor is responsible to the [Massachusetts Turnpike Authority] for its cost, schedule, and work quality.''

Baron disputed the company's charge that the Globe wrongly laid the blame at Bechtel's feet.

''According to its contracts, the company had an obligation to `evaluate the completeness, currency, and accuracy' of mapping and surveying information before designing began,'' Baron said. ''Regarding its responsibilities for the final designs, Bechtel/Parsons was obliged contractually to `perform formal reviews of all design submittals' for `conformance with accepted professional standards for quality.' Bechtel/Parsons was to do this when drawings were 75 percent complete and 100 percent complete, although by the company's own admission, many designs were not 100 percent complete until after construction began.''

Bechtel did not dispute the $1.6 billion cost overrun figure, but said that figure was the result of factors other than company mismanagement.

It cited factors such as the state government ordering changes in the alignment of the Interstate 90 tunnel and other state-mandated changes, as well as numerous instances of ''differing site conditions - obstacles to site development that could not be known or specified in advance.''

Bechtel also chafed at an assertion in the newspaper series that forgetting to include the FleetCenter in the original designs ultimately required nearly $1 million in plan modifications.

''In this case as elsewhere, the Globe completely misconstrues the roles and responsibilities of the project manager,'' the company said. ''The design consultant, not B/PB, stamps and is responsible for its final design. The state took authority for approving final designs. Contrary to the Globe's account, B/PB was not responsible for alleged flaws in the final design of this or any other part of the project.''

Globe researchers found that at least one of Bechtel's original design plans excluded the FleetCenter, and that the mistake apparently carried over to the design consultant's plan. In any case, Baron said that according to the contract language, Bechtel was, in fact, responsible for supervising the subcontractor and the design plans that excluded the sports and concert arena.

Regarding other cost overruns, such as a $307,000 change to the Ted Williams Tunnel stemming from a 4-foot gap left between tunnel sections, Bechtel argued that it was responsible for only $9,000 of the overrun.

Bechtel also denied a Globe assertion that inspectors from the Federal Highway Administration rated overall work quality ''unsatisfactory'' at one point, although the newspaper has a copy of the report stamped with the label.

In a number of cases, the contractor also said the series relied too heavily on a fragmentary paper trail of documents that didn't tell a complete story. It also chided what it called the reporters' lack of appreciation for ''the complexities of underground construction in a historic urban area.''

Bechtel officials disputed that any part of the $1.6 billion in construction cost overruns to date resulted from mismanagement or deficiencies in its designs. They attributed about $1 billion in overruns to justifiable expenses that cropped up as they confronted engineering challenges and community concerns.

The remaining $550 million in overruns, they said, was the cost of shortening the project's schedule from late 2007 to mid-2005.

Romney has said he wants an independent consulting firm to review the cost overruns and seek reimbursements for the state.

The cost of the Big Dig has risen from $2.5 billion to an estimated $14.6 billion as a result of inflation and changes in the project's scope, but the Globe's series dealt only with apportioning responsibility for $1.6 billion in cost overruns due largely to modifications in construction contracts.

Scott Bernard Nelson can be reached at nelson@globe.com.

This story ran on page A1 of the Boston Globe on 2/21/2003.
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