T contracting process for Green Line isn’t a sure bet
<?EM-dummyText [Drophead goes here] ?>
More than a decade ago, Massachusetts Bay Transportation Authority officials bet on a contracting method relatively new to the agency that they said could deliver one of its big projects quicker, and with fewer cost overruns than past endeavors.
The MBTA believed it could build a 17.8-mile commuter rail line to Scituate with a $252 million contract. But by the time the controversial Greenbush line opened in 2007, the project had been delayed about two years and the contract had ballooned to about $334 million — a 33 percent increase.
As the agency now continues to debate a $2.3 billion Green Line extension into Somerville and Medford, consultants hired by the MBTA say it should again use that contracting method — called design-build — to construct a new, scaled-down version of the project.
Yet while the T's experience on the Greenbush line appears to offer a cautionary tale, those involved say the process was marred by real estate and permitting issues that went beyond design-build. In fact, experts say the T's success could ultimately come down to proper training and management.
"The process is not a panacea, but that's true of any process," said Stephen Silveira, a senior vice president at ML Strategies who worked for the MBTA in the 1990s. "At the end of the day, it's the people who are involved that are managing these things that are going to be the difference between success and failure."
The design-build process differs from the design-bid-build method traditionally used in construction. That's when an agency gives a contract to one firm to design a project, then hires another company to build the first company's designs.
In the design-build model, firms join to bid on the project and work together throughout the process. Some prefer the process because it can speed up construction and allows the companies to catch cost overruns and design problems.
"Design-build, if done correctly, is a way to collaborate and be more efficient and integrated," said Brian Perlberg, senior counsel of contracts and construction law for the Associated General Contractors of America.
The process also makes accountability easier, since the firms have more of a responsibility to design a project that can fit within an agency's desires and budget. Perlberg said the more integrated team translates into a single point of responsibility, and less adversarial relationships among the owner, the designer, and the builder.
Frederick P. Salvucci, a transportation secretary under Governor Michael Dukakis who helped engineer the Big Dig, said that because the builder has to take on more responsibility for the design, it should be harder to shift escalating costs back to the agency.
"What a traditional process gives you is an apparently low bid, but then you'll have change orders" driving up the price, he said. "With design-build, you'll get to deal with surprises much better."
The method is far from uncommon, and design-build firms have proliferated in the residential market. In the public sector, highway projects and the federal government have also increasingly taken advantage of the method. The Massachusetts Department of Transportation has used design-build on 24 projects to date, including the Longfellow Bridge.
The process, however, has been relatively rare at the T. Officials chose the method for the Greenbush line into Scituate, a project that became a legal commitment after the Conservation Law Foundation sued the state in the early 1990s. At the time, officials were under pressure to finish the project quickly, since it had been delayed for more than a decade.
Altogether, the delays and additional negotiations pushed back the rail line's opening nearly two years. By the end of the project, the design-build contract's cost had jumped by more than $82 million. The project's total cost also jumped from an estimated $408 million in 2001 to nearly $519 million.
But the contracting method wasn't the primary problem: Local opponents challenged the environmental permits the T needed, communities got into battles with the agency and added more features to the project, and the T eventually halted construction because of scheduling and permit issues. At one point, then-governor Mitt Romney had to rethink his support of the project amid a state budget crunch.
"The unfinished real estate acquisitions and lack of permits delayed the contractor's work on the project and led to escalating costs," MBTA spokesman Joe Pesaturo wrote in an e-mail.
Mayor Joseph Sullivan of Braintree, who also serves on the MassDOT board, said that the contracting method shouldn't be blamed, but praised. Design-build made it possible to start building sooner, which was necessary for the project, he said.
"At that point, we had lost so much time that we needed to accelerate the ability to construct," said Sullivan, who was Braintree's state representative in the Legislature until 2003.
There are some reasons to believe that design-build could be a smoother process with the Green Line extension: For one, the MBTA and the Department of Transportation now have more experience with the method, and plan to require bidders to adhere to a cap on costs. And Joseph Aiello, chairman of the fiscal control board that oversees the T, said that because the agency has been working with the construction site for several years, there should be fewer environmental surprises that will increase the price.
"Unlike Greenbush, the MBTA already owns the right of way through which the [Green Line extension] would be built," Pesaturo wrote in an e-mail. "In addition, the environmental review . . . has been completed (no wetlands issues, no endangered species to be protected, etc)."
The recommendation to use design-build on the Green Line extension came after the project stalled for nearly a year as officials struggled to rein in cost overruns that were blamed in part on a complicated contracting method.
Consultants hired by the MBTA showed that the agency's overreliance on consultants, combined with lack of staffing and oversight, helped lead to escalating costs that are still threatening the future of the extension. They also found that the T had not correctly implemented the contracting method, called the construction-manager/general contractor method, which had never been used before by a public agency in Massachusetts.
Consultants have also told the MBTA that they now need to hire more than a half-dozen expert project managers — at a premium price — and take more than a year training 40 to 50 employees specifically in design-build. That compares with the T's original process with the Green Line project, where officials put only about 10 part-time people on the project and left the rest to consultants.
In the end, that may prove to be the most difficult part: making sure the agency attracts the right people who know how to manage a $2.3 billion project and its contracting method well enough. State Transportation Secretary Stephanie Pollack said on Monday that she did not want to move forward unless she knew the agency could handle the project.
Salvucci and other transit experts agree. "There's no magic silver bullet," he said. "The most essential thing is that you have very committed staff that's ready to work really hard and be focused on this."