Penalties and bonuses provide backdrop for Bertha delays
by Bill Lucia
Crews drill to look for an obstruction in front of the tunnel-boring machine on Seattle's waterfront. Credit: Washington State Department of Transportation
Traffic is scheduled to be flowing through the Highway 99 Tunnel in 665 days. If the tunnel is not open by then, the contractor building it will have to pay daily penalties to the state and will edge toward losing millions of dollars in early completion incentives.
When the Washington State Department of Transportation requested proposals for the project in 2010, they asked bidders to complete the project by Nov. 1, 2016. Seattle Tunnel Partners, which won the bid and is now digging the tunnel, said they could finish the job 316 days earlier, on Dec. 21, 2015.
If the contractor fails to meet that deadline, they’ll start to pay $50,000 per day in penalties, known as “liquidated damages.” In the project contract, those damages are capped at $75 million. It would take 1,500 days — more than four years — of penalty payments to reach the cap.
Seattle Tunnel Partners, which is a joint venture between Dragados USA and Tutor Perini, is also eligible for a $25 million early completion bonus. To receive the full bonus they’ll need to have the roadway open by Feb. 25, 2016, which is 66 days after the tunnel’s currently scheduled completion date, according to the terms of the project's contract. After the 66 days are up, the state will subtract $100,000 per day from the bonus.
Bertha, the boring machine digging the tunnel, has a set of damaged bearing seals and has moved about 4 feet in the last 11 weeks. The seals protect Bertha’s main bearing, which allows the machine’s 57.5-foot wide cutter-head to spin. Repairing the seals will involve digging up the front of the machine. State officials expect the fix to take “months.”
When the machine was boring, Seattle Tunnel Partners submitted monthly schedule updates to WSDOT, according to deputy program administrator Matt Preedy. The agency has not shared these schedules with reporters. Program administrator Todd Trepanier cautioned in a recent conference call that project schedules change constantly and are therefore almost immediately out of date.
Were it not for Bertha’s mechanical problems, Preedy said last week that the machine would probably be near a location called “Safe Haven Three,” just south of Yesler Way.
Bertha currently sits about 60-feet below Pioneer Square, west of the Alaskan Way. The machine has mined a total of about 1,022 feet from its "launch pit," Preedy said. Measuring 1,022 feet from the front edge of the pit places the machine just beyond the midpoint between South Jackson and South Main Street. From that position, Yesler Way is about 740 feet north and South Washington Street, which is one block south of Yesler Way, is about 415 feet north. Safe Haven Three would lie somewhere between these two points.
In early February, shortly after Seattle Tunnel Partners discovered the failed bearing seals, project manager Chris Dixon said he believed it would still be possible to finish mining the tunnel as scheduled, on Sept. 30, 2014. The planned tunnel drive is 1.7 miles, or about 9,000 feet, and ends in South Lake Union. So far, Seattle Tunnel Partners has installed 923 feet of concrete tunnel liners behind Bertha, according to WSDOT. The contractor has said that when the machine is running smoothly it can tunnel 65 to 72 feet per day.
The contractor’s bid price for the deep bore tunnel was $1.08 billion. The state awarded $71 million in technical credits, lowering the originally proposed price to $1.01 billion. Of those credits, $15.8 million would’ve been awarded for the early completion date. The equation used to calculate credits valued each day of early completion at $50,000.
Seattle Tunnel Partners' bid was about $32 million less than the one submitted by Seattle Tunnel Group, the only other competitor for the project. Even without the credits for early completion the bid still would’ve been $16.2 million lower.
State officials have said repeatedly that Seattle Tunnel Partners has not presented any evidence that indicates that taxpayers will get stuck paying for cost overruns associated with the current repairs and delays. The contractor and the state do disagree however, about whether a steel well pipe, left in the ground by a WSDOT contractor in 2002, could have contributed to Bertha’s current mechanical woes. As of Dec. 31, 2013, according to WSDOT, the state had paid Seattle Tunnel Partners $832 million.
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