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Coast Guard Can't Back $74M Bridge

Tuesday, March 3, 2015

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Missing paperwork on a $74 million U.S. Coast Guard-funded upgrade to a railway bridge means that the project may have been mismanaged by millions of dollars, the federal government reports.

After work was finished in 2012 on the Burlington Northern and Santa Fe (BNSF) Railway bridge in Burlington, IA,  the Coast Guard requested an audit of the sharing of costs, known as the final apportionment of cost, to determine its accuracy.

However, the Coast Guard then could not provide proper documentation to support the final apportionment for the bridge alteration, of which $74 million was allocated to the Coast Guard and $8 million to BNSF Railway, the Department of Homeland Security's Office of Inspector General concludes in United States Coast Guard's Alteration of the Burlington Bridge Project.

BNSF bridge
CC BY-SA 3.0 / Bigal888

The OIG says the Coast Guard does not have proper documentation to justify that it was appropriate to pay $74 million to alter the BNSF Railway bridge over the Mississippi River in Burlington, IA.

As a result, the Coast Guard cannot be certain that it was appropriate to pay $74 million as the federal share of the project's final cost.

Main Issues Found

OIG's primary concerns included:

  • The Coast Guard did not properly document its review of the construction contractors who bid on the new bridge.
  • Final documentation for changes to originally planned work did not always support the cost of the work.
  • The Coast Guard did not have a process to evaluate or verify BNSF's reported salvage value or expected savings in maintenance and repair costs.

The OIG suggested that the Coast Guard obtain supporting documentation for bridge alteration costs and review its internal policies and procedures. The Coast Guard concurred with both recommendations.

Navigation Needs

Originally built in 1868, the 2,000-foot-long bridge was updated in 1891 and had major refurbishments in 1928 and 1962. However, its outdated design became an obstruction to Mississippi River marine navigation.

In 1991, the Coast Guard determined that the bridge unreasonably obstructed navigation and ordered BNSF Railway to alter the bridge. Between 1992 and 2001, vessels struck the bridge 92 times.

The alteration order required BNSF to reconstruct the opening span so that it generally aligned with the old span but had new clearances.

U.S. Coast Guard

In 1991, the Coast Guard determined that the bridge unreasonably obstructed navigation and ordered BNSF Railway to alter the bridge. Between 1992 and 2001, vessels struck the bridge 92 times.

Under the Truman-Hobbs Act of 1940, the government and bridge owner are to share alteration costs.

Sharing the Cost

Under the law, BNSF was to submit all contractor bids for bridge design and construction, as well as its recommended bids, to the Coast Guard for review and approval. Once BNSF entered into a contract, the Coast Guard was to review and approve any changes to the contract.

BNSF was also responsible for costs associated with direct and special benefits its would gain from altering the bridge, expected savings in repairs and maintenance, increased carrying capacity, requirements of highway and railroad traffic, and the expired service life of the old bridge.

The Coast Guard was responsible for the balance of the costs, including those attributable to the necessities of navigation.

The total cost of the bridge was $82,514,939. The Coast Guard was responsible for $74,313,742, and BNSF was responsible for $8,201,197.

Evaluating 'Best Value'

Although the Coast Guard documented its authorization of BNSF's recommended construction contractor, it could not provide documentation of its review of the four qualified construction bidders or pre-approval discussions with BNSF, the OIG found.

Burlington Bridge
Public Domain

Originally built in 1868, the 2,000-foot-long bridge was updated in 1891 and had major refurbishments in 1928 and 1962.

Coast Guard bridge program officials said those conversations did take place, but since they weren't documented, the OIG could not determine whether contractors' costs and expertise were thoroughly evaluated and that the selected contractor was the best value for the government.

Work change directives (WCDs) were also not properly documented. BNSF was supposed to maintain documentation related to WCDs, but the documentation did not adequately support the cost of the work done under some of the changes, the OIG found.

Change Orders

During the bridge's construction, 68 WCDs were incorporated in 15 change orders. The WCDs accounted for an additional cost of $16 million to the original value of the construction contract. Of those 68 WCDs, the Coast Guard approved 20, totaling about $10.9 million. The WCDs were missing documentation, such as estimates for expected costs of labor, materials and overhead.

"Without such support, the Coast Guard cannot be certain of the cost of work done under these WCDs," the OIG found.

In its response to the OIG, the Coast Guard asserted that complete, accurate and reliable documentation was maintained throughout the project. However, the Coast Guard acknowledged that some of the documents did not fully meet audit requirements.

   

Tagged categories: Bridges; Funding; Government; Government contracts; North America; Program/Project Management; Rail

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