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Caltrans, Builder Look to Arbitration

Thursday, February 18, 2016

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When it comes to expenses from construction of the new San Francisco-Oakland Bay Bridge, both the state transportation agency and the primary contractor feel they have money coming to them.

The American Bridge/Fluor (ABF) joint venture is asking for almost $50 million in overdue payments it says it is due from Caltrans for the project, SFGate reported Thursday (Feb. 11).

Photos: Caltrans

The primary Bay Bridge contractor say Caltrans owes it almost $50 million, while the project's oversight committee still seeks to recoup lost money it attributes to delays and material defects.

Although it hasn’t clarified what those charges are for, Caltrans acknowledges it is likely to have to pay at least some of that amount and is including the costs in the total $140 million in overruns it is reporting on the project.

Caltrans’ Worst-Case Scenario

Caltrans official Patrick Treacy reported his findings at a recent meeting of the Toll Bridge Program Oversight Committee. The panel is comprised of heads of Caltrans, the state Transportation Commission and the local Metropolitan Transportation Commission.

Treacy said he included the full amount of the joint venture’s payment claim in the project’s cost overruns to deliver a worst-case scenario.

“As a risk manager, I need to be conservative in my approach,” he said. “I’m trying to capture the pessimistic outlook.”

The actual amount, if any, the agency will be required to pay the contractor partners will be determined in arbitration, the news site reported.

The State Perspective

The joint venture contractor isn’t the only party asking for money. As reported earlier, the state DOT is also seeking penalties and damages for delays and quality of work, including the corrosion already found in the structure’s steel tower rods.

In late September 2015, the oversight panel gave permission for Caltrans to take the necessary steps to seek more than $15 million in penalties from ABF. The figure includes approximately $10.7 million in damages and $4.5 million for the material failure.

Of the $10.7 million, $8 million relates to a 2013 investigation into the failure of 32 of the east pier’s rods that required a $24 million “saddle retrofit” repair. Caltrans, ABF, and design-build team T.Y. Lin and Moffatt & Nichol were held equally responsible for this incident, according to the investigation’s findings, and would split the penalty.

Another $2.7 million is sought from ABF for delays in completing the contract.

Of the $4.5 million figure related to material failure, $1.5 million was to be held back in order to cover “capital outlay support costs” resulting from the delays. The balance, $3 million, relates to the failure of the 400 improperly sealed anchor rods in the tower foundation.

Caltrans Caltrans

As reported earlier in the project, Caltrans discovered water at the bottom of the tower where 424 rods anchor the span to the base. The 25-foot rods are protected by metal sleeves filled with grout and covered with caulk caps that are meant to keep them dry.

Because ABF challenged the penalty, this claim will also be part of the arbitration process, Andrew Fremier, deputy director of the Metropolitan Transportation Commission, told SFGate.

A start date for the arbitration process has yet to be scheduled, Bay Bridge spokeswoman Leah Robinson-Leach told Courthouse News Service reported Friday (Feb. 12). Similarly, there isn’t a timeline in place for when the state will begin close out the contracts.

ABF has not commented on the situation and did not appear at the recent meeting.

Covering the Overruns

Environmental protection efforts and construction delays are blamed for the $140 million deficit on the $6.4 billion bridge project.

As reported earlier, toll dollars are called on to pay for the ongoing repair work. The committee has confirmed again that available toll funds are in place to continue to pay for the work without having to raise tolls.

Meanwhile, Steve Heminger, executive director of the Metropolitan Transportation Commission and a bridge project board member, showed dismay that costs continue to climb, even as, he said, the panel attempts to cut costs.

“It’s not making sense to me—that [overhead] number continues to grow every quarter, no matter what we do,” he said.


Tagged categories: Asia Pacific; Bridges; Caltrans; Corrosion; EMEA (Europe, Middle East and Africa); Fluor Corporation; Latin America; North America; Program/Project Management; water leakage

Comment from Fred Wittenberg, (2/19/2016, 8:15 PM)

This bridge should be named "Boondoggle." Do any of the parties really know what's going on? It sounds like any additional costs will be passed on to the users in increased tolls. I'm glad I don't live there, as every crossing of the bay results in lightening one's wallet. Spending 20 years of my career writing government contracts, I'd love to know what this one looked like.

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