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

Romney tackled overruns while leading Olympics

By Sean P. Murphy and Raphael Lewis, Globe Staff, 2/28/2003


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

When he meets this morning with Adrian Zaccaria, the president of Bechtel Group Inc., Governor Mitt Romney will be renewing a business relationship that began in 1999 when Romney took over leadership of the Winter Olympics and promptly slashed the budget Bechtel had helped create.

Romney arrived in Salt Lake City with a mandate to straighten out problems left by previous executives -- and to do it fast.

At the time, the budget for the privately financed 2002 Games was steadily rising, and state leaders turned to Romney to rescue a faltering event.

One of the consulting companies Romney confronted in his new assignment was Bechtel, which had a $750,000 contract to develop the cost side of the budget, then pegged at $1.5 billion.

Romney spokesman Eric Fehrnstrom declined yesterday to comment on the governor's direct dealings with Bechtel in Salt Lake City, but said, ''The governor has a great deal of respect for Bechtel. It is one of the world's finest consulting firms.''

But Fraser Bullock, Romney's top assistant on the Olympic committee, said he and Romney, upon taking over the committee leadership, found Bechtel's budget to be ''too fat,'' and that it included a $50 million ''error'' involving inflation calculations.

''What Bechtel had done was capture the recommendations of the staff and put those in the budget,'' Bullock said. ''My task was to go through it and reduce it.''

Bullock, who now leads Sorenson Capital, a private equity investment firm in Salt Lake City, said Bechtel had budgeted $50 million to cover the cost of inflation during the years of preparation for the games.

''That was their math,'' Bullock said of Bechtel's estimate. ''And we felt there was already enough padding that the entire amount could be eliminated.''

He and Romney wound up trimming the budget, item by item, by $150 million, including the inflation reduction.

Bechtel spokesman Jeff Berger said Bechtel worked only on the cost side of the budget, not on the revenue side, in which sizable errors were made in estimating the value of in-kind contributions pledged by corporate sponsors.

Berger said Bechtel did its job well. And Bullock noted that a separate Bechtel task overseeing some of the construction for the Olympics went off without a hitch.

Today's meeting in Romney's office was called by the governor two weeks ago after the Globe published a series of stories on more than $1 billion in Big Dig construction cost overruns tied to Bechtel's management of the project.

Zaccaria, Bechtel's chief operating officer, was expected to present the company's views on Big Dig cost overruns to Romney, who has called for an independent engineering review of overruns on the $14.6 billion project.

''The purpose behind the meeting is to talk with Adrian Zaccaria about putting in place a credible independent review on cost recovery,'' said Fehrnstrom.

''[Bechtel] should look forward with enthusiasm to a professional independent review.''

Bullock said Bechtel had about 10 employees assigned to the Olympics, out of a staff of about 250.

Bechtel, along with Big Dig partner Parsons Brinckerhoff, currently has about 500 employees in Boston.

This story ran on page B1 of the Boston Globe on 2/28/2003.
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