January 23, 2008

Bechtel and Parsons Brinckerhoff Reach Settlement on Big Dig

John MacDonald, chairman of the Bechtel/Parsons Brinckerhoff (B/PB) joint venture, issued the following statement:

We have reached a full and final settlement of claims by the Commonwealth of Massachusetts and the U.S. Attorney for the District of Massachusetts. Protracted legal proceedings would have served no one well, and we believe that this resolution is in the interests of all concerned.
We have always said that we take responsibility for our work. We understand and acknowledge with this resolution that our performance did not meet our commitment to the public or our own expectations. Above all, we deeply regret the tragic death of Milena Del Valle in the I-90 tunnel.
Our companies have a long history of delivering safe, high-quality engineering and construction services. Our willingness to scrutinize our own performance and learn from experience has been a major factor in our success. Going forward, we will implement a number of specific measures to apply lessons learned to our future work, such as improving quality management systems, more-extensive and mandatory training for field engineers, and additional standardized specifications for design and construction.
The Boston Central Artery/Tunnel project remains one of this country's most remarkable infrastructure achievements. It will serve the people of Massachusetts well into the next century.

Under the terms of the agreement, Bechtel Infrastructure Corporation (BINFRA) will contribute $352 million toward the settlement, with Parsons Brinckerhoff (PB) contributing $47,230,500, which includes funds intended for future repairs and nonroutine maintenance of the Central Artery/Tunnel. Both BINFRA and PB will take specific actions to enhance their existing training, compliance, and quality assurance programs in order to improve long-term performance and ensure that future work benefits from lessons learned during the Central Artery/Tunnel project. The agreement also provides remedies in the unlikely event of a future major incident for which B/PB is liable.

Notes to Editors – Contents

Roles and Responsibilities
I-90 Connector Tunnel Ceiling Panels
Slurry Wall Construction 
Slurry Wall Breach
Oversight of Time and Materials Billing
Concrete Program
Programmatic Upgrades
About Bechtel
About Parsons Brinckerhoff

Roles and Responsibilities

• To build the Central Artery/Tunnel, the Massachusetts Highway Department (MHD) and later Massachusetts Turnpike Authority (MTA) engaged 38 different section design consultants and 142 construction contracts. MHD/MTA selected and awarded all of the design and construction contracts.
• Section design consultants prepared, stamped, and were responsible for the final designs. Construction contractors were responsible for building the facilities and meeting all of the requirements of their respective contracts with MHD/MTA. B/PB was responsible for monitoring the contractors' compliance with terms and conditions of their respective construction contracts.
• In 1999, just as construction activity was peaking, the MTA converted from a traditional program management model to an integrated project organization, which led to the management shifting to MTA. Although adopted for the stated purpose of streamlining the management structure and trimming costs, it also had the effect of blurring accountability and responsibilities, and discouraging proactive project management. 
• Describing the functional effect of the IPO, a National Academy of Engineers report stated: “…during the transition to the IPO structure in 1997-1999, the best-qualified person available for a particular managerial position was selected regardless of organizational affiliation (the position of project director, who reports to the chairman of the MTA was reserved for an MTA employee). In effect, B/PB is no longer in the role of a project Management Consultant but supplies highly qualified people to augment the staff of the MTA.”

I-90 Connector Tunnel Ceiling Panels

• The most comprehensive expert review of the tunnel ceiling-panel collapse was conducted by the National Transportation Safety Board (NTSB), which released its findings on July 10, 2007. In addition to noting B/PB actions that contributed to the ceiling-panel collapse, the NTSB singled out Powers Fasteners, the company that packaged, marketed, and distributed the epoxy; the MTA; Gannett Fleming, the section design consultant; and Modern Continental, the construction contractor. Powers Fasteners has since been indicted by the Commonwealth of Massachusetts for involuntary manslaughter.
• The NTSB faulted Powers Fasteners for failing to provide the Central Artery/Tunnel project with sufficiently complete, accurate, and detailed information about the suitability of the company’s Power-Fast Fast Set epoxy for sustaining long-term tensile loads and for failing to determine that the anchor displacement was due to the use of this epoxy, which was known by the company to have poor long-term load characteristics.
• The NTSB faulted MTA for failing to implement a timely tunnel inspection program that would likely have revealed the ongoing anchor creep in time to correct the deficiencies before an accident occurred.
• The NTSB faulted B/PB, along with the section designer, for failing to identify potential long-term creep in the anchor adhesive and to account for possible anchor creep in the design, specifications, and approval process for the epoxy anchors used in that portion of the tunnel. It also faulted B/PB, along with the construction contractor, for failing to continue to monitor anchor performance in light of earlier anchor displacement.
• The NTSB also noted a general lack of understanding and knowledge in the construction community about creep in adhesive anchoring systems.
• Bruce A. Magladry, director of the National Transportation Safety Board’s Office of Highway Safety, said of his investigation of the ceiling collapse, “There's no malice we find in the efforts of any of the people involved in this construction project. These are conscientious people, trying to do a job.” 

Slurry Wall Construction

• Most of the tunnel walls on the I-93 mainline tunnel contracts were slurry walls. (Slurry, a viscous liquid containing bentonite clay, holds excavations open prior to the placement of concrete and is not part of the final concrete wall.) Approximately 230 concrete slurry wall panels were constructed on C17A1, one of the Central Artery/Tunnel's mainline tunnel contracts.
• While the slurry was found to be out of specification in a number of instances, the deviations from the specified tolerances were slight, and in many cases the “out-of-spec” slurry on C17A1 would have met the slurry tolerances for other sections of the Central Artery/Tunnel.

Slurry Wall Breach

• In September 2004, a breach occurred in I-93 northbound tunnel wall, in one of the deepest areas of the tunnel. The breach was unrelated to the "out-of-spec" slurry.
• This wall breach resulted from a series of construction contractor errors, compounded by inadequate oversight. B/PB missed an opportunity to direct the contractor to correct the specific wall problem ahead of time. 
• B/PB publicly acknowledged its responsibility at the time, and the tunnel wall was repaired at no cost to the state.
• To minimize the possibility that similar problems might arise elsewhere, project teams conducted physical inspections of approximately 1,600 tunnel wall panels. Of these, only one additional panel required major repair. These inspections and repairs were carried out at the expense of the contractor and B/PB. 

Oversight of Time and Materials Billing

• Part of B/PB's contractual obligations after October 1, 2001 included providing qualified personnel to staff the project's Claims and Changes Department. These personnel worked under the management, supervision, and direction of MTA. The Claims and Changes Department was responsible for reviewing contractors' claims for payment for time and materials (T&M) expenses and approving the claims for payment.
• Contractors submitted T&M slips to the department, as well as spreadsheets summarizing the information contained on the T&M slips, to support their claims for payment. 
• A small number of contractors, seeking to increase their payments, submitted T&M slips that recorded apprentice workers as journeymen workers, which B/PB failed to catch.
• Three employees of one Central Artery/Tunnel contractor have pleaded guilty to federal criminal charges for falsely categorizing apprentice workers as journeymen.

Concrete Program

• B/PB’s concrete testing program was reviewed and approved by MTA, MHD, and the Federal Highway Administration (FHWA). The concrete quality assurance program on the Central Artery/Tunnel met the applicable standards required for highway construction, and MHD conducted regular independent assessments of the testing program.
• In July 2007, concrete supplier Aggregate Industries agreed to pay $50 million for conspiracy to defraud the federal and state government in the delivery of non-specification concrete to the project. In addition, Aggregate Industries will provide up to $75 million in insurance coverage for potential future structural maintenance costs related to its conduct.
• Aggregate Industries concealed this fraud by falsifying concrete batch slips delivered to Central Artery/Tunnel inspectors and/or general contractors' representatives.

Programmatic Upgrades
For BINFRA, these actions include:

• adopting a quality management system certified to ISO 9001:2000 for all work for FHWA and/or the Commonwealth of Massachusetts; 
• prohibiting the use of adhesive anchors in overhead applications where public safety might be at risk, pending revision of current industry standards;
• adopting and implementing design and construction specifications for slurry walls, and waterproofing and leak mitigation in tunnels and underground structures; and
• making mandatory for all BINFRA field engineers an update of its existing course, “Ethics for Engineers,” and a new course, “Quality Management for Engineers.”

For PB, these actions include:

• maintaining its ISO 9001 quality management system certification;
• prohibiting the use of adhesive anchors in overhead applications where public safety might be at risk, pending revision of current industry standards;
• adopting and implementing design and construction specifications for slurry walls, and waterproofing and leak mitigation in tunnels and underground structures; and
• enhancing and expanding PB’s current ethics training, quality assurance training and technical certification programs.

About Parsons Brinckerhoff

Founded in 1885 and headquartered in New York City, PB is a leader in the development and operation of infrastructure to meet the needs of communities around the world. The firm provides strategic consulting, planning, engineering, and program and construction management services to both public and private sector clients. For more information about PB, visit www.pbworld.com.

For additional details, please see background information. 

For more information, contact: 
Andy Paven
Francis Canavan
1-617-439-2600

About Bechtel

Bechtel is a trusted engineering, construction and project management partner to industry and government. Differentiated by the quality of our people and our relentless drive to deliver the most successful outcomes, we align our capabilities to our customers’ objectives to create a lasting positive impact. Since 1898, we have helped customers complete more than 25,000 projects in 160 countries on all seven continents that have created jobs, grown economies, improved the resiliency of the world’s infrastructure, increased access to energy, resources, and vital services, and made the world a safer, cleaner place.  

Bechtel serves the Energy; Infrastructure; Manufacturing & Technology; Mining & Metals; and Nuclear, Security & Environmental markets. Our services span from initial planning and investment, through start-up and operations. www.bechtel.com