Bechtel/PB to pay $407m for negligence at Big Dig project, others $51m

The US Department of Justice and the Massachusetts Attorney General have announced a settlement in which joint venture project managers Bechtel/Parsons Brinckerhoff (B/PB) will pay $407m (Bechtel at least $352m, PB at least $47m) for negligence at the Big Dig project of the Massachusetts Turnpike Authority. 24 other companies that did shoddy engineering work as section designers will pay $51m in a related 'global settlement' of federal and state claims.

The penalties being imposed must be some of the largest ever for contract malperformance. The Big Dig has suffered huge cost overruns, major and continuing water leakages, substandard concrete, and a fatal ceiling collapse that required weeks of closures for repairs. The project took 17 years and has cost federal and state taxpayers and the Turnpike $15b. It was initially under the control of the Massachusetts Highway Department but was soon transferred to the Massachusetts Turnpike Authority. Throughout the bulk of the staff to manage the project were from the B/PB joint venture paid on a cost-plus basis.

US attorney in charge of the case Michael Sullivan said at a press conference Wednesday announcing the settlement that B/PB had been entrusted by the people through the two governments "to act as their eyes and ears," adding: "They grossly failed to meet their obligations and responsibilities to the citizens of Massachusetts and the United States."

A Bechtel/Parsons Brinckerhoff statement released today quoted joint venture chairman John MacDonald: "We have always said that we take responsibility for our work. We understand and acknowledge with this resolution that our performance did not meet our commitment to the public or our own expectations. Above all, we deeply regret the tragic death of Milena Del Valle in the I-90 tunnel."

They said they would implement measures to apply lessons learned from the experience.

B/PB will pay the US Government at least $23m and the state at least $40m to settle charges of false claims, and will pay at least $335m to a warranty fund to help fund future repairs to the Big Dig. If there is a catastrophic event in the future related to B/PB's work costing more than $50m in repairs, the US and state governments have the right to pursue further claims against the companies.

Specifically the US and state say B/PB "failed to provide adequate services on four aspects of the Big Dig: 1) the construction of slurry wall panels in the I-93 tunnel; 2) the installation and monitoring of the epoxy ceiling bolts in the suspended ceiling of the I-90 Connector tunnel; 3) claims for payment by contractors on time and material contract modifications, and 4) oversight of the concrete delivered to the slurry wall construction by a large concrete supplier."

In comments the state attorney general Martha Coakley said she decided not to pursue a manslaughter charge because the maximum penalty for corporate manslaughter in the state is only $1,000. Coakley said today the settlement was "not perfect" but was "the best resolution."

Civil claims can still proceed. These have been filed by the family of Milena Del Valle killed in a car ride to Boston airport in the I-90 Tunnel ceiling collapse.

The companies are not subject to any debarment in seeking future work with the state or US Government. Instead they enter into "corporate integrity agreements" being worked out with the state.

CAVEAT: Despite the poor management of the project and continuing serious problems the roadways of the Big Dig are now open and providing people who use the central business district of Boston and the airport with hugely improved mobility. The concept of modern underground roads is vindicated as a solution to congestion by the excellent performance of the Big Dig as an efficient mover of people and their vehicles. Boston and its main airport now have an excellent downtown road network.

Hopefully there will be some kind of analogy with New York's Brooklyn Bridge. Built amid rampant corruption and scandals, with terrible suffering and loss of life in the 1870s, it nevertheless became recognized as a great, historic construct.

see the full Bechtel statement: http://www.bechtel.com/2008-01-23.html

see the USDOJ statement: http://www.usdoj.gov/opa/pr/2008/January/08_crt_048.html

TOLLROADSnews 2008-01-23