White-Skanska-Kiewit ousted from over-budget Boston Green Line extension project

Dive Brief:

After delays, cost overruns of nearly $1 billion, frustrated taxpayers, and concerns about their own ability to properly oversee the Green Line extension project, the Massachusetts Bay Transportation Authority is cleaning house and has terminated several contracts with lead project companies, including contractor consortium White-Skanska-Kiewit (WSK), according to the Boston Globe.
Urged on by consultants who recommend rebidding the project as a single package, the MBTA canceled contracts with: WSK, the construction manager-general contractor; HDR/Gilbane, the project manager-construction manager; Stanton Constructability Services, hired to estimate the costs of the project; and AECOM/HNTB, the final designer.
The Berkeley Group — outside consultants hired by the MBTA to diagnose the source of the project’s troubles — told the board last month that aside from being oblivious to rising costs, a staff shortage, an unfamiliar contracting process mishandled by MBTA officials and an unreliable budget were the main culprits. According to the Globe, the T has already spent $380 million on the project, including approximately $180 million for outside consultants, such as project managers.

Dive Insight:

MBTA officials, according to the Globe, have even considered abandoning the project. However, if they do so, they still would have to honor existing contracts and take delivery on 24 Green Line trolleys, which cost $182.7 million. The removed companies will continue working on their in-progress parts of the project.

"The decision marks the start of a transitional period, during which no new construction work will be awarded," the MBTA said in a statement. "During this time, however, much of the construction work that is already under contract and in progress will continue."

WSK issued a statement in response to the termination and said the consortium was "disappointed by the board’s decision to cancel the contract for convenience and that we will not be able to see this project through to its completion... We continue to be a collaborative partner with the MBTA and the Commonwealth as we focus on finishing the work that is already in progress for the Green Line extension project."

Sweden-based Skanska, one of the largest construction companies in the world, has seen a run of bad luck on some high-profile projects in the U.S. recently. Those include the Apple "spaceship" campus, where the contractor was also removed from the job, and the delayed Bayonne Bridge rehab.

However, the company's development division is booming, with two spec commercial buildings in Washington, DC, and an $88 million mixed-use high-rise in Boston.