Keep An Eye On This Major Seattle Project
On January 6, 2011, the Washington State Department of Transportation (WSDOT) signed a contract with Seattle Tunnel Partners for the biggest piece of the SR 99 Viaduct replacement project, the 1.7 mile long tunnel carrying traffic from the south end of the Seattle waterfront to near the Seattle Center. This is a design-build contract with an estimated value of about $1.35 billion.
The SR 99 viaduct was built in the 1950s and concerns have been expressed about its ability to survive a major earthquake, in part because its foundations rest in part on fill materials that may liquefy in such an event. After studying various options, WSDOT has decided to replace the viaduct with a bored tunnel, which will require the use of one of the largest tunnel boring machines ever built. The SR 99 replacement project has many other parts, some of which are already in the preliminary phases of construction.
The WSDOT website has lots of interesting information about the project, including video simulations of how the existing viaduct and nearby seawall might collapse during a major earthquake and how it will look to drive through the completed tunnel.
Be careful what you ask for Idaho
In the last two decades, the Idaho State Legislature has authorized design-build contracting for many different types of public projects. It appears that the Legislature will continue this trend for highway projects. In February, a House committee voted to print a bill that would allow the Idaho Transportation Department (IDT) to award design-build contracts for highway projects. A similar measure nearly became law last year.
For the most part, the Legislature’s acceptance of the design-build process is good thing. Several years ago, I worked for a commercial contractor. In 2001, I visited our largest project at that time -- a $500 M design-build facility in California. When I asked the project lead whether he liked design-build projects, he was quick to praise the process. He believed that design-build projects equated to fast results, decreased change orders, and less litigation. To him, it was a no-brainer. Many of my colleagues agree.
Since then, I have been involved with several design-build and design-bid-build projects. Although some design-build projects have been successful, that’s not always the case. The moment an owner enters into a design-build contract, it loses something that can be very important to a successful construction project: control. This lack of control – which is caused in large part by undefined design requirements – can lead to significant cost overruns and delays.
To avoid such results, owners should focus on two important actions: careful planning and diligent execution. On the topic of planning, design-build owners should spend significant time defining the project requirements. The design-build contract documents must include, among other things, detailed project design criteria, program requirements, performance specifications, and deliverables. Absent such defined requirements, design-builders are free to run wild.
Professional execution of the plan is equally important. Owners must prudently monitor the design-builder’s work. Too often, owners in design-build projects overlook this task, believing that such role is limited in design-build projects. In fact, the opposite is true. Because the design-builder has more flexibility in design-build projects, owners must arduously monitor the budget and schedule.
Design-build projects present many benefits. IDT, however, should know that it will not be less work for them. The key is for IDT to clearly define the project programs and performance requirements before the contracts are signed, and to monitor the design-builder’s compliance with these requirements throughout the project.
Government Involvement Has Consequences (Part 2)
Here is list of laws that may apply to projects in which the federal government is involved.
These reflections about government involvement are prompted by recent changes to the Federal Acquisition Regulations that give federal contractors an affirmative duty to disclose any “credible evidence” that comes to their attention of (a) the violation of certain criminal laws (e.g., those involving fraud or bribery), (b) violations of the civil False Claims Act, and even (c) “substantial overpayments” from the government. Contractors are also required to train their employees to ensure that misconduct will be detected and reported. This regulation reminds us that working with the government can trigger serious legal issues. As public-private partnerships and other forms of government involvement become more common, it is important to find out whether the government is involved in your project and, if it is, what consequences that has for your company.
Government Involvement Has Consequences (Part 1)
In an effort to stimulate the economy, federal and state government agencies are seeking to promote new construction projects. This trend of government involvement in construction projects is likely to continue. When the government is involved, it is important to know whether this involvement causes public contracting laws to apply.
Governmental involvement in a construction project can range from outright ownership to a behind-the-scenes role in financing. Multiple governmental agencies may be involved in a single project. If you have a project in which a federal or state agency is involved, you risk substantial penalties for failing to follow applicable public contracting laws.
There are many federal and state laws that may apply if the government is involved in a project. In Part 2 of this post, I’ll link to a list of some of the federal laws.
A sign of hope: rental car garage at Sea-Tac to proceed
Puget Sound Business Journal reported this week that the Port of Seattle has announced that it will re-commence work on its 23-acre, $419 million dollar rental car facility at Seattle-Tacoma International Airport. The project was put on hold in December 2008 due to the anemic long-term bond market. According to the Port, it has now sold $317 million in revenue bonds to finance construction of the remainder of the massive parking structure, an optimistic sign that the finance markets (or at least the public bond markets) are starting to loosen up.
WA Supreme Court Confirms Right to Claim Liens over Improvements on Public Property
It is well known that public property is not lienable in most states, including Washington. However, it has been generally assumed that under Washington’s mechanic’s lien statute (RCW 60.04), improvements constructed on public property are lienable. In Estate of Haselwood v. Bremerton Ice Arena, Inc., No. 80411-7 (June 25, 2009) the Supreme Court of Washington, by a 7-2 majority, issued a decision holding that a subcontractor’s lien attached to an ice arena built on property owned by the City of Bremerton. However, the court noted that, pursuant to RCW 60.04.051, the attachment of a lien to improvements on public land is limited “to the interest of the person who requests the labor or materials, or that person’s agent.” In this case, under the terms of a concession agreement between the city and Bremerton Ice Arena, Inc., the latter party owned the arena for the duration of the concession agreement, while the city retained ownership of the underlying land. Therefore, in determining whether an improvement on public property in Washington is lienable, it is important to inquire into the precise nature of the interest owned by the person that commissions the construction work. The Haselwood Court also held that Washington’s lien priority statute applies to liens over such improvements on public land, such that a mechanic’s lien has priority over a deed of trust where work or professional services commenced or materials were provided prior to the date the deed of trust was recorded. The majority, concurring and dissenting opinions can be read here.
Exciting Times at the Boring Machine
The $1 billion Brightwater wastewater treatment plant in north King County is experiencing delays. The attached video describes a problem with one of the large boring machines. The project, which includes several long tunnels and a central treatment plant, is divided up among several large contracts.
