State should pay tunnel contractor for groundwater troubles, dispute board says
A dispute-review board says Washington state should pay its contractors millions of dollars for dealing with severe groundwater flows, at the Highway 99 tunnel machine’s launch pit in Sodo.
Seattle Times transportation reporter
In a decision that foreshadows a long tug of war for taxpayer dollars, a dispute review board says Washington state should pay its contractors for tackling severe groundwater flows at the Highway 99 tunnel machine’s launch pit in Sodo.
Seattle Tunnel Partners (STP) seeks $20 million, according to a change-order request filed two years ago, which the state denied.
The dispute board didn’t say how much the Washington State Department of Transportation (WSDOT) owes, only that it should shoulder the bill because groundwater conditions differed from data the state gave contractors.
Fortunately for WSDOT, the $1.44 billion tunnel-construction contract already contains a $40 million fund for unexpected soil conditions and major interventions, such as breaking boulders in front of tunnel-boring machine Bertha.
“This can be paid for without what is considered a cost overrun in the budget,” said Todd Trepanier, the state’s Highway 99 administrator, at a House Transportation Committee meeting Thursday afternoon.
But other struggles are on the way. This month’s recommendation proves that the state can’t continue to presume taxpayers will be safe from cost increases. Bertha has been stalled near Pioneer Square for more than a year, awaiting repair.
The dispute-board opinion is an early step among many, which could include negotiations, arbitration or lawsuits to determine who pays for added costs.
He took a more nuanced line Thursday: “Even with this being a design-build contract that transfers risk to the contractor, there will still be disputes. There will still be disputes and a need for a way to solve them,” he told lawmakers.
Change-order requests by STP have reached $210 million, including $125 million STP seeks for Bertha’s repairs and delays, Trepanier told lawmakers. The state holds $144 million in contingency and intervention funds, he said.
Rep. Jesse Young, R-Gig Harbor, asked an uncomfortable question: If $20 million is slipping away, what happens after $210 million in claims, if the state losses exceed the tunnel’s reserves?
That prompted Chairwoman Judy Clibborn, D-Mercer Island, to ask that members take detailed questions “offline” after the hearing.
Trepanier replied that the state has already denied three-fourths of the money contractors requested.
He reiterated the state will continue to hold STP responsible for fixing its broken tunnel drill, which overheated as the seals on its main bearing failed Dec. 6, 2013. Hitachi-Zosen, which built the $80 million machine, is currently funding new parts and repair work, STP project manager Chris Dixon has said.
But at the Sodo launch pit, the dispute board sided with contractors, who cited “differing site conditions.” In other words, the groundwater’s behavior differed from the data WSDOT supplied before tunneling began.
Seattleites know the city’s history, that the industries and stadiums south of downtown were built over weak fill soil, where the Duwamish River flowed through tideflats into Elliott Bay.
“It was very clear to all, in all the contractual documentation, that the area had a lot of groundwater in it,” said Matt Preedy, deputy Highway 99 program administrator for WSDOT.
However, the board accepted the idea that “the various [groundwater] strata are in different locations than what had been portrayed,” he said.
Several months ago, ponds of water formed at the floor of the tunnel’s south operations building site, mostly underground between CenturyLink Field and the tunnel’s south entrance. Besides extensive pumping there, STP encountered leaks in the launch pit itself, where a cut-and-cover roadway slopes toward the future tunnel.
But the dispute board earlier sided with WSDOT in another matter, saying contractors should absorb the $5.5 million cost to strengthen the foundations of the old Alaskan Way Viaduct, where Bertha would eventually pass beneath at Yesler Way.
There was some good news Thursday: Workers have excavated 106 feet of the 120-foot-deep access vault near South Main Street, where a giant red crane will hoist Bertha’s front end to the surface for repairs. Despite the digging and groundwater pumping there, the soil settlement in nearby Pioneer Square has remained stable since Thanksgiving at around 1 inch, Trepanier reported.
He also said STP is hiring more minority- and women-owned businesses, awarding some $50 million in subcontracts to date toward the $90 million target. A year ago, the federal government issued a scathing civil-rights report, and state Transportation Secretary Lynn Peterson declared STP in breach of contract, for failing to hire enough “disadvantaged business enterprises,” such as small trucking firms.
The state didn’t release the dispute-resolution board’s recommendation to The Seattle Times, saying lawyers are reviewing the document.
The view of the three-member panel of independent tunneling experts, chosen and funded by the state and STP, will likely carry weight in any lawsuit down the road.
Rep. Clibborn, a key backer of the 2009 bill choosing a deep-bore tunnel, complimented Trepanier and WSDOT Chief Engineer Linea Laird on Thursday.
“Thank you for keeping a cool head. Thank you for staying the course. We expect to get it done. We expect to get it paid for, without the taxpayers taking a huge hit,” Clibborn predicted.