Rush to start Viaduct work resulted in millions in extra costs

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by SUSANNAH FRAME / KING 5 News

Bio | Email | Follow: @SFrameK5

KING5.com

Posted on February 21, 2013 at 11:38 PM

Updated Sunday, Nov 24 at 1:21 AM

The first job in the $3.1 billion Alaskan Way Viaduct replacement project was to demolish the southern mile of the Viaduct from South Holgate to South King Streets and replace it with two side-by-side bridges.

This phase of the work – a $114.6 million contract for work performed by California-based Skanska Construction - was touted as a huge success. State officials gathered at the project site last July to brag that this phase was completed a year early and on budget.

But behind the scenes this phase of the Viaduct project, called Holgate to King Stage 2, became chaotic as the contractor scrambled to keep up with a barrage of changes being made by the state that boosted project costs. A KING 5 investigation found that after a year of design work, the Washington State Department of Transportation (WSDOT) made a major, last-minute design change that affected nearly every element of this phase of the job.

The change resulted in an avalanche of change orders for Skanska, resulting in new work and re-dos.

State records show that Skanska was "inundated with changes right from the beginning." And that by “Issuing so many change orders at the start of the contract when the contractor was just gearing up for the project caused a cumulative effect on the contractor by WSDOT. This put WSDOT at an increased risk for added costs.”

"This seems to me like a bad way to kick it off. I think that's correct," said Dr. John Schaufelberger, chair of the University of Washington's Department of Construction Management.

"If you ask what's a good way to kick off a project, is to know what you're doing and to not have  a lot of change orders up front when the contractor's trying to get going," Schaufelberger said. “So it leads to chaotic management in the beginning. It’s sort of like every day you have a plan to do something, you come to work and that’s all thrown out and you have to do something else.”

WSDOT's top official on the Viaduct job, Linea Laird, said the state made a late decision to scrap a planned underground road and instead build an overpass. She said the decision was made with an eye toward long-term savings -- spend more early in the project to reap savings from a better design overall.

"We very carefully considered what that might mean and decided to make a wholesale change in the project because of the benefits that would overall result to the traveling public," Laird said. “This may not be the most traditional way of getting out of the gate in a contract but it was a business decision and it was understood.”

Because of the last minute change, designers did not have time to finish the new plans before the state wanted to get the project out for contractors to bid on it. Missing details, unfinished designs and changes to accommodate the overpass design added costs. The $114.6 million contract ended up costing the state $122.7 million. Some examples of the costs associated with unfinished plans include:

-    $135,000 for additional steel to shore up a bridge.
-    $250,000 for unplanned drainage work and soil for a bike path.
-    $251,000 to re-locate a water line to properly connect with the added overpass.
-    $420,000 to compensate Skanska for overtime and extra managers.
-    $1.7 million for electrical work designers didn't have time to finish.

So many changes in a short three month span raised concerns by another WSDOT official -- Jeff Carpenter, the state's top engineer.  "Who is making project decisions?" he asked in an email. “What is next? What risk elements continue on this project?”

Laird admited the flurry of changes appears problematic, but said the changes were a calculated risk that worked out well.

“If you just sat back and said ‘Oh my God, during the ad period (when contractors were bidding the work) they changed out almost every single plan sheet?’ We did. And we did that intentionally. We did that because we knew the results we were going to end up with was better overall on this project. For both time and money and that’s proven out on where we ended up on it,” said Laird.

The state reports that even with the unusual number of change orders in Holgate to King Phase 2, the overall project was delivered $3 million under budget.

Laird also said waiting for the new design to be complete before starting the work would have resulted in even costlier construction problems and delays.

"We're keeping that overall timeframe in mind so we can give a benefit to the traveling public," said Laird. "Our goal is to get in and out as quickly as possible."

But the rush to complete a new design also led to mistakes and costly do-overs. They include:

- $71,000 for digging up and reinstalling stretches of pavement and a sidewalk built at the wrong level.
- $250,000 to remove and reinstall a water line after the state realized it was installed in the wrong place.

Because the Viaduct project is funded with federal dollars, the U.S. Department of Transportation watches spending closely. The inordinate amount of re-performing work already completed prompted a Federal Highway Administration (FHWA) official to insist they figure out a better way to proceed.

“As we discussed, FHWA will be requesting a meeting with the AWV (Alaskan Way Viaduct) Team in the near future in an attempt to understand and discuss ideas to mitigate these “do-over” situations from happening as we move forward through this and other AWV contracts,” wrote Randy Everett, FHWA Major Projects Engineer.

Laird said the “do-overs” were part of doing business with the significant changes coming in so late in the process.

"Frankly we don't like re-work. Re-work to us is we might have missed something. In this case we planned to miss some things because of how we were putting it together," Laird said.

Contacted by KING 5, a top Skanska executive wrote that the company overcame challenges on the project and performed better than expected.

“Working in partnership with WSDOT, Skanska finished the viaduct well below the original WSDOT estimate budget and 12 months ahead of schedule, “said Todd Sutton, a Skanska Senior Vice President and General Manager. “Instead of letting upfront challenges stymie the project, our project team, WSDOT and other interested parties worked together and delivered a solid new highway 12 months before the original scheduled completion. Residents of our region can feel good about that.”

The state’s after-the-fact design change snowballed onto other phases of replacing the Viaduct from S. Holgate to S. King Streets. WSDOT also submitted several change orders related to the design switch to Seattle-based Gary Merlino Construction. Merlino was awarded an $8.5 million contract to relocate utilities in the area. This phase was called Holgate to King Stage 1. That contract ended up costing $10.2 million, which is a 19% increase due to change orders. According to construction management experts, that kind of contract price increase is far above accepted industry standards.

“I would say on a typical highway type project if the design was completed ahead of time 3 percent to 5 percent (increase) is probably what would be expected,” said Schaufelberger.

A WSDOT spokesperson, Travis Phelps, said despite the increase, the total project budget for this phase of the work came in below budget.

“These change orders help our contractors adjust construction means and methods to deliver projects in the most efficient way possible,” said Phelps.
 
The most complicated phase of the Alaskan Way Viaduct replacement project—digging the mile-long deep-bore tunnel under downtown Seattle—is yet to come. WSDOT is waiting for the boring machine, being built in Japan, to arrive in late-March. State transportation officials say tunneling should begin this summer and the tunnel should be open to traffic in late 2015.

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