Managing costs for Boston's "Big Dig"

Feb. 24, 2003
Management and organizational changes can still be made to Boston's Central Artery/Tunnel project that will save money and shorten the time to completion, a new National Academy report says.

WASHINGTON, Feb. 24, 2003 -- Management and organizational changes can still be made to the nation's most expensive public works undertaking -- Boston's Central Artery/Tunnel project -- that will save money and shorten the time to completion, says a new report from the National Academy of Engineering and the National Research Council.

The biggest boost for the project, commonly known as the Big Dig, would come from expediting the processing of about 3,500 disputed payments to contractors and approved changes to design and construction contracts, a steadily growing backlog that promises more delays and cost overruns if left unresolved.

Next in line is developing a process to make the transition from construction to operation and maintenance. The process should include an aggressive plan to retain only those staff consultants who are essential for finalizing and closing out all contracts and claims. A detailed plan for downsizing and eliminating management consultants is not yet in place.

The Central Artery/Tunnel project was conceived to improve traffic flow through downtown Boston, link several major roadways and transportation hubs, and replace a badly deteriorated elevated highway. So far, the 7.8-mile system of bridges and underground highways and ramps has exceeded the original cost estimate of $2.6 billion by $12 billion and is projected to be completed in 2005, seven years late. Project planning began in 1982, ground was broken in 1991, and the first major portion -- the Ted Williams Tunnel beneath Boston Harbor -- opened in 1995.

"With almost $2 billion in construction remaining, major projects to be completed, and a key element of the transportation system to be made operational, there's plenty of room for improvement," said John T. Christian, chair of the committee that wrote the report and consulting engineer, Waban, Mass. "The Massachusetts Turnpike Authority can save time and money by making the changes our study found to be achievable. Every opportunity for efficiency and improvement should be evaluated and acted on."

The study was initiated last August at the request of MTA, which was assigned oversight of the project in 1997 by the state legislature, to obtain an independent assessment of management and contract administration practices. The committee focused on the future -- what could be done to complete the project. It only considered past performance, cost and schedule escalation, and financing plans as they might affect future performance.

Cost- and Time-Saving Measures

There are about 3,500 unresolved construction and engineering contract changes and payment disputes, with a combined value of $230 million and an average age of 600 days. Claims in excess of $250,000 are sent to the legal staff before technical staff can resolve them. Many contractors also have not been paid yet for completed work. No documented plan exists for dealing with the backlog. The committee proposed a target date of July 2004 for the resolution of unsettled contractor claims. It also suggested going forward with paying contractors for direct costs from approved changes.

The Big Dig has been managed by an "integrated project organization" consisting of staff from MTA and the joint venture firm of Bechtel/Parsons Brinckerhoff (B/PB). With design essentially done and construction completion only three years away, the need for B/PB staff is rapidly diminishing. MTA should establish a process to assist its chief executive officer in guiding the transition from a construction organization dominated by consultants to an operations organization composed largely of full-time MTA staff. Two key elements will be the cooperation of all organizations involved in design, construction, and operation, and potential impacts on the transition schedule as staff changes take place and new staff become familiar with management processes and administrative procedures.

The committee made suggestions in other areas pertaining to cost and schedule.

• Despite an emphasis on reaching milestones on time, slippage continues, further eroding public confidence in the project's management. Project managers should evaluate schedules to identify critical tasks that must be done without fail and assess how long they will take, with modest allowances for new developments. The committee also could not find sufficient justification for accelerating the schedules of some construction projects. It called for a rigorous analysis of all additional costs to ensure cost-effectiveness and to accelerate tasks most critical to achieving key milestones.

• Large cost increases have resulted from changes in scope and design as well as from deficiencies in coordinating contract work. The scope, design details, and duration of contract modifications should be comprehensively reviewed. Project managers are also recovering costs from design engineers that could be attributed to errors and omissions in plans. Evaluation of cost-recovery issues has shifted from the technical to the legal staff, a process that emphasizes the resolution of legal issues before that of engineering issues and replaces a partnering-style relationship with an adversarial one. An effort should be made to resolve technical issues first and use dispute-resolution techniques.

• B/PB created a formidable computerized system to track almost every aspect of the project. Because of this, too much uncoordinated information can be provided to the project's senior management. Reports do not lend themselves to ready analysis, particularly regarding the uncertainty of scheduling forecasts and the trade-offs between reducing time and increasing costs. Scheduling estimates should be based on experience gained over the course of the project, and reports should focus attention on strategic and critical management issues.

• Independent peer review, which provides an outside perspective to identify issues that may have been missed, is often used as a means of quality assurance on complex engineering projects. Truly independent reviews have not been conducted on the Big Dig and at this time, a technical review would be of limited value since most design decisions have been made. However, with major construction still to be completed, MTA should establish an external, independent peer review program to address technical and management issues until transition to operations and maintenance is completed. The frequency of reviews and peer-review participants should vary with the issues to be addressed.

Other Improvements

MTA is substantially behind schedule in educating motorists about how to traverse the new system. A carefully planned, targeted, and repetitious stream of information transmitted well ahead of startup is required if drivers -- who must adapt immediately as they encounter new ramps and traffic patterns -- are to use the highway and tunnel system successfully and safely.

MTA needs to implement an education plan as soon as possible, the committee said. A media team should be formed, with technical assistance provided by project staff, to develop an innovative plan for educating the public. It should include actions for motorists to take during accidents, breakdowns, and emergency situations.

During a site visit, the committee perceived a lack of security personnel and procedures at construction sites. A comprehensive security program should be developed, immediately implemented, and maintained not only until the project is completed but also throughout its transition to operation.

Credentials should be required for all onsite personnel, and all project-access points should have security control. The state police force assigned to MTA should be considered for this task. MTA should also coordinate its efforts with those of the U.S. Department of Homeland Security in protecting the nation's transportation systems.

The study was sponsored by the Massachusetts Turnpike Authority and conducted through the National Academy of Engineering and the National Research Council. The Research Council's Board on Infrastructure and the Constructed Environment led the project, with collaboration from the Transportation Research Board. The National Research Council is the principal operating arm of the National Academy of Sciences and the National Academy of Engineering.

The National Academies are private, nonprofit institutions that provide science, technology, and health policy advice under a congressional charter. A committee roster follows.

The report, Completing the "Big Dig": Managing the Final Stages of Boston's Central Artery/Tunnel Project, is available on the Internet at Copies will be available for purchase this spring from the National Academies Press; tel. (202) 334-3313 or 1-800-624-6242. Reporters may obtain a pre-publication copy from the Office of News and Public Information (contacts listed above).

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