Costly detours: State errors delay completion of I-287; overruns push cost to $63M per mile
Source: http://www.lohud.com, May 1, 2011
By: Jorge Fitz-Gibbon and Jonathan Bandler
Multimillion-dollar mistakes, design flaws and obstacles for which state engineers failed to account drove the cost of the Interstate 287 reconstruction up more than $67 million and delayed completion of the decade-long project by two years, a Journal News investigation reveals.
Taxpayers have spent more than $63 million per mile of construction, as much as twice the average of similar public road projects in the region.
While motorists endured lane closures and sat in stopped traffic, the two Yonkers construction companies that won all five of the lucrative state contracts for the reconstruction collected millions in additional salaries and costs during the state-sanctioned delays.
Industry watchdogs say the pattern of problems is all too typical of large public-infrastructure projects, in which state agencies have nearly unchecked authority over millions in federal dollars that fund the bulk of the work.
Most at fault for the bloated $544 million cost of I-287: the billing practice that lets the state compensate for unplanned work by filing “change orders,” or requests for additional money, that have become the norm on public construction projects.
Records obtained by The Journal News show:
- The five state contracts on the project have gone as high as 22 percent over budget, with one rising in cost 65 separate times.
- In the first four phases of the work, the final cost far exceeded the next lowest bid on the original contract — and the highest bid in one case.
- The contractors faced no penalties for the delays, which the state considered justified. One contractor collected an additional $7.25 million in salaries and field costs for a recent 21-month delay.
- Nine companies bid on the I-287 contracts, but only two — Yonkers Contracting Co. and Ecco III Enterprises — were awarded work.
- The state spent an extra $6.8 million for 55,300 metric tons of additional asphalt, including 6,000 tons because engineers “incorrectly added up the total” needed.
“It certainly warrants state investigation and legislative oversight,” said Assemblyman George Latimer, D-Rye. “This certainly could be a question of systemic accountability here within the (Department of Transportation). Who at the top of the pyramid is watching how all this is being administered ?”
“Just on the surface of it, when you have that level of overruns, it clearly can’t just be explained away by somebody saying, ‘Well, you know, we hit more rock than we expected or it was harder to get the concrete,'” said Latimer, who sits on the Assembly Transportation and Governmental Operations committees.
Executives at the two Yonkers construction companies did not return numerous calls seeking comment.
Officials at the state Department of Transportation, which has overseen most of the work, concede there were delays, errors and overruns. But they said the problems were largely unavoidable and unexpected.
“We are disappointed that the completion date has gone beyond what we initially thought it was and that the cost has also gone beyond what we initially thought,” said George Santana, a design manager for the agency.
“As we’ve been going along, there’s reasons for things, and those are documented,” he said. “In the end, we get the product that we had hoped to get, I think.”
Still, the I-287 reconstruction is far from over: Last summer Ecco III was given the fifth and final contract.
And though the work has just begun, the state Comptroller’s Office reports that the work is already $33,800 over the contract due to unanticipated drainage changes and four electronic variable message signs.
Overall, the $63 million cost per mile of the I-287 work surpasses similar road projects such as the reconstruction of the Staten Island Expressway, which averaged $43.5 million per mile. The 4.2-mile extension of the Southern Expressway in upstate New York, which ballooned from $85 million to $128 million, still averaged just $30.5 million per mile.
The Cross-Westchester Expressway Comprehensive Reconstruction Project, originally estimated to end by 2010 and cost $350 million, was meant to address traffic congestion that long has plagued I-287.
As Westchester County’s main east-west artery, linking the New York Thruway with Interstate 95, I-287 is one of the region’s most heavily trafficked corridors.
As a precursor to the reconstruction, the state awarded a $69 million contract to Mount Vernon-based Halmar Builders in the late 1990s. It rebuilt bridges over the Saw Mill River and Bronx River parkways.
The official reconstruction, launched in 2000, called for I-287 from the landing of the Tappan Zee Bridge in Tarrytown to White Plains to be realigned, repaved and, in some cases, redirected.
More than a dozen bridges and overpasses were rebuilt, and exit ramps were redesigned to improve traffic coming on and off the road.
Though the last major portion of the work is under way and due to be completed by the end of next year, the project is still two years and millions behind schedule.
“It is the rule, not the exception, for transportation projects and infrastructure projects to be wildly over budget, and cost overruns to be the norm,” said attorney Barry LePatner, an advocate of construction-industry reform and author of the book, “Broken Buildings, Busted Budgets.” “This is a function of the fact that most if not all governmental agencies do not understand the way the construction industry operates. And the way contracts are structured with a highly inefficient construction industry, it makes construction cost overruns inevitable.”
“If you said to the government, ‘Do you know what the price of a computer is?’ They order a million of them a year. They know for $800 I can get an HP or a Dell or whatever, and we get a 20 percent discount,” LePatner said. “And yet they don’t know the prices of a road or a bridge or a tunnel, and that’s inexcusable.”
Rarely on budget
Contracts for public projects are typically awarded to the lowest bidder after a public-bidding process. But the actual cost of the work rarely comes in on budget.
That’s because the state routinely files “orders on contract” — or change orders — that direct contractors to do extra work or buy additional materials.
“‘Order on contract’ is a process that is controlled by the department,” Melissa Slater, a spokeswoman for the DOT, said in an email.
Slater said the process typically begins in the field, where state engineers and inspectors identify a need, occasionally in consultation with contractors. From there the request works its way up the department’s hierarchy , requiring signatures from the regional construction engineer, finance officer and a representative from the DOT’s Department of Audit and Control.
The department could not say whether any change order requests from the field were rejected for I-287.
A representative of the Federal Highway Administration also is required to sign the request, Slater said.
But though funding for the I-287 work came almost entirely from the FHA — part of nearly $33 billion in federal funds spent on roadwork every year — the money was channeled through the state DOT and the New York Thruway Authority, which ultimately had control over all the funds.
Doug Hecox, a spokesman for the FHA , said federal audits of public projects can be conducted if the agency suspects misuse of the money, but most often only after the entire project is finished.
2 firms win jobs
Most of the money spent on the I-287 project has gone to Yonkers Contracting, a multimillion-dollar firm with a checkered past that has gotten $307 million in I-287 contracts, which it has exceeded by $44.5 million.
That included a 22 percent, $31 million overrun for work on a heavily trafficked stretch of the road in White Plains — $1.9 million higher than when The Journal News first reported delays and overruns in February.
That stage of the work, originally slated for completion in November 2009, is now due to end in August.
A review of approved change orders shows that millions of dollars in added costs were the result of overlooked details or simple errors by state DOT engineers and other staffers. In stage III alone, the state filed 65 change orders containing more than 160 requests for new materials or equipment, and additional labor costs, all of which were approved.
For instance, the state approved an extra $5.4 million for 43,268 tons of asphalt and pavement, some of it miscalculated “due to engineers incorrectly adding up the numbers,” according to one of the change orders.
Another called for $687,500 in additional excavation “required for omissions in the engineer’s estimate, unforeseen field conditions and to account for work added to the contract after the time of bid.”
The latest overrun, approved March 29, totaled nearly $1.9 million, for work on a retaining wall, cleaning culverts and $1.4 million for still more asphalt, another 12,000 metric tons.
DOT officials contend that delays and cost overruns on the I-287 project included unexpected field conditions — for instance, a rock that proved unstable and couldn’t support a retaining wall, and pavement that wasn’t able to withstand the traffic redirected onto the shoulder.
“I don’t know that we didn’t scope it out in good enough detail,” said the DOT’s Santana. “I think what happens a lot of times is that one thing leads to another. There’s a chain of events.”
“Those are not typical,” Santana added. “Errors in calculation and things like that, when they happen it’s unfortunate. But I wouldn’t consider them typical.”
Despite repeated construction delays, DOT officials said fines were not levied for missed deadlines because the delays were considered justified. In fact, Santana said the original completion date was pushed back as obstacles surfaced, which he said is not unusual.
“The completion date that we put on the contract when it goes out, it’s updated during construction due to field conditions,” Santana said. “So there’s a new approved completion date in the field office for the changed conditions, and based on that revised completion date, there are no penalties if you meet the approved completion date.”
But on I-287, those delays cost millions of dollars.
In one instance, Yonkers Contracting received $285,000 to pay for an “accelerated schedule” to speed up work on the North Broadway Bridge in White Plains. That was due to a delay from Verizon’s failure to move utility lines, which “led to a delay to the start date of the construction of the bridge by more than a year,” state documents show.
Yonkers Contracting and Ecco III are major players in the region’s heavy construction industry, winning state and New York City contracts for a wide array of public and private projects.
Ross Pepe, president of the Construction Industry Council of Westchester & Hudson Valley, said the two were “reliable, longstanding, traditional” firms. “They understand the conditions locally, they understand the marketplace, they understand the labor unions,” Pepe said.
Ecco III has avoided major controversy in its 40 years in business. But Yonkers Contracting, founded in 1946, has dealt with indictments, allegations of payoffs and other controversies for decades.
On the I-287 project, Yonkers Contracting was shut down for months after an errant dynamite blast sent tons of rock crashing into a nearby neighborhood. Though the company was cleared by regulators at the U.S. Occupational Safety and Health Administration, state transportation officials noted that the mishap and subsequent work stoppage was one reason for delays and the resulting overruns.
Ecco III has not run into a similar construction mishap, but the company has hardly been immune from overruns and delays on I-287. The company has been awarded three contracts on the project for nearly $170 million.
Two of those contracts, for stages II and IIA of the work, were completed in 2006 and account for more than $116 million. The remaining $53 million is for the contract Ecco was awarded in July, for a part of the work known as stage IV.