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US knew of hidden Big Dig expenses

Policy reversal could affect state

By Raphael Lewis, Globe Staff, 06/14/2002


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


Any tips? Let us know.
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

he Federal Highway Administration has known since 1994 that Big Dig officials kept the cost of state workers off the project's accounting books but condoned the practice until now, acting state Inspector General Gregory Sullivan said yesterday, citing newly discovered documents.

Sullivan came out with the paperwork as the federal agency considers adding $30 million to the $14.6 billion price tag of the Big Dig, on the grounds that the project's managers had kept the cost of state employees off the accounting books from 1986 to 1996 to make the overall expenditure appear lower.

Because the federal government capped its contribution to the Central Artery project at $8.5 billion in 2000, after a series of overruns drove the cost up by $2 billion, any additions to the project's price tag now would eventually have to be paid for by state taxpayers.

"At a time when the Commonwealth is in dire financial straits and struggling," Sullivan wrote, "the Commonwealth can ill-afford any further reduction in federal funding or increase in the Commonwealth's share of project costs."

Sullivan said his office has found several documents dating back to 1994 and 1995 that reveal that Big Dig officials and the project's managers told the Federal Highway Administration that they were leaving out the staffing costs.

Sullivan also said that a federal "Cost Review Team" had "officially recommended that the costs be included" on the books in April 1995, but that "FHWA officials in Massachusetts rejected that recommendation."

"It's troubling that FHWA is now seeking to reverse this long agreed-upon policy," Sullivan wrote in a letter to the Turnpike Authority, which oversees the Big Dig.

Stan Gee, regional administrator of the federal agency, said his office has yet to decide on the issue, and said he could not comment on Sullivan's findings because he was not made privy to them.

But Gee said that, even if his office had known about the Big Dig's accounting practices, that may not be relevant. Last year, Gee said, his agency insisted that the Big Dig add $15 million to the project's bottom-line cost for audit fees that had never been included, even though the federal government was well aware that they hadn't been.

"This is a question of how we account for costs," Gee said. "If we've looked at this issue before, I'd of course want to know what we came up with. But we're looking at where is the appropriate place to show costs."

Gee did note that he was fully aware of the Project Cost Review Team's work, but said he was not sure if the team had in fact looked into the staff payment issue.

Matthew Amorello, chairman of the Turnpike Authority, said he was pleased that Sullivan had waded into the situation, adding that he feels the cost shift would be "absurd" and "hard to comprehend."

"I'm heartened by an outside agency looking at the past practices at the Artery, and raising the same issues I raised" in a June 5 Globe story. "I think it's a little absurd to go back 15 years to charge us, so I appreciate the Inspector General's review."

This story ran on page B2 in the Metro/Region section of the Boston Globe on 06/14/2002.
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