Federal monitor cites contractor relationship as major cause of San Francisco Central Subway issues

Dive Brief:

The San Francisco Municipal Transportation Agency's (SFMTA) $1.6 billion Central Subway project will start service 428 days later than the deadline in its Federal Transit Administration (FTA) Full Funding Grant Agreement, according to a federal monitor's report. With approximately 85% of major work complete at the end of April, outstanding claims of $102 million for changes will exceed available contingency funds of $47.6 million, the report from the FTA's Project Management Oversight Committee (PMOC) said.
A global change order settlement agreement with contractor Tutor Perini is critical to meeting the revised revenue service date (RSD) of May 20, 2020, but the PMOC expressed concern that "the ongoing unproductive working relationship" between the contractor and the SFMTA has made a settlement thus far impossible, although Tutor Perini offered one in February. This lack of progress is affecting execution of contract changes and resolution of important issues like traffic control plans.
A change in SFMTA staff and the continuity of institutional knowledge about the Central Subway project is also a concern of the PMOC, especially in light of another upcoming attempt at a settlement with Tutor Perini.

Dive Insight:

If the project runs out of federal dollars, it could be forced to come up with the remaining money itself, the San Francisco Examiner reported. And as to the reported contentious relationship between Tutor Perini and the SFMTA, the agency told the Examiner that they were trying to resolve their issues.

In a letter from Tutor Perini published in the Examiner in April, the contractor accused the SFMTA of misleading the PMOC as to where the blame lies when it comes to mismanagement and project delays.

A major dispute revolves around the type of track Tutor Perini and its subcontractor Con-Quest Contractors installed. The agency said the contractors were supposed to install track made of high-strength steel in certain areas and demanded they replace the track — estimated at $2.6 million — at their own expense. An argument then ensued as to whether the agency had called for the high-strength track in the project's specifications. The Examiner said it had seen documents indicating that the SFMTA might have known the contractors planned to use standard-strength steel as early as the time of purchase.

Tutor Perini is a firm negotiator when it comes to contract changes on its many public projects. For example, when the contractor was not able to begin work on the California bullet train because the California High-Speed Rail Authority had not secured enough land to proceed, the authority paid the contractor $63.6 million in delay charges and fees.