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High stakes: Bertha contractor, state at odds over labor dispute costs

After a longshoremen picket line caused delays last year, Seattle Tunnel Partners asked the state for more money and time to complete the Highway 99 tunnel project.

To make up for costs and delays that a dispute with a labor union caused last summer, the contractor digging the Highway 99 tunnel in downtown Seattle is pressing the state for $17.6 million in additional compensation for the troubled project.

Major mechanical woes with Bertha, the machine boring the tunnel, now promise to delay the project for over a year. Those problems have long since overshadowed last summer's conflict between the contractor, Seattle Tunnel Partners, and the International Longshoremen and Warehouse Union's Local 19. But deciding who will foot the bill for the labor dispute remains unresolved. Under the current contract terms, WSDOT has agreed to pay Seattle Tunnel Partners $1.4 billion to complete the technically challenging underground roadway project. The contractor's request for more money has the potential to add to that amount.

The standoff between Seattle Tunnel Partners and the ILWU crescendoed when the longshoremen picketed Terminal 46, which is adjacent to the tunnel site, for 28 days during last August and September. The union said its members were entitled to four jobs, on each of two shifts, loading excavated tunnel muck onto barges at the port terminal.

Washington State Department of Transportation and the contractor are negotiating over whether the state should pay some or all of the costs related to the union unrest. The contractor asked WSDOT for the extra compensation and a 32-day schedule extension in four “change order requests” submitted in November and December of last year. Crosscut obtained the documents through a public disclosure request.

Asked if the state could end up paying some or all of the money Seattle Tunnel Partners has requested, a WSDOT spokesperson, Laura Newborn, said: “We are in negotiations right now, so it’s a difficult question to answer.” She also said that WSDOT and Seattle Tunnel Partners are talking directly about the change order requests, not through lawyers or third party negotiators, and that there is currently no timeline for completing the negotiations.

Seattle Tunnel Partners declined to comment on the matter, saying only that they are in negotiations about the change order requests with WSDOT.


An overview of the Highway 99 tunnel site. The muck conveyor (highlighted in yellow) is designed to carry excavated soil from the back of the boring machine to waiting barges at Terminal 46. Image: WSDOT 

Correspondence attached to the change order requests offers a glimpse at Seattle Tunnel Partners' readiness to play hardball with the state over contract clauses and money — and WSDOT’s willingness to push back. The still-unsettled disagreement could provide some indication of how the two parties will handle any similar situations that arise in the future. WSDOT officials have pointed repeatedly to the ability of the project's design-build contract to shield taxpayers from cost overruns.

The negotiations about the labor dispute costs are set against the backdrop of Bertha's mechanical problems.

Seattle Tunnel Partners said on Monday that the machine is not expected to start digging again until late March 2015. Bertha has already been at a near standstill since last December. If the March 2015 restart date is accurate, the total length of the delay will be about 16 months. The stoppage is due to problems with Bertha's main bearing assembly. Seattle Tunnel Partners is planning to dig a roughly 11-story deep, 83-foot-wide pit near South Main Street to access and fix the machine. Construction of the pit is scheduled to begin in late May and repairs are slated to get underway in October. In a meeting with The Seattle Times Editorial Board on Tuesday, a representative for the contractor said that the cost to repair Bertha and get the machine digging again could total around $125 million.

The costs Seattle Tunnel Partners earlier included in the change order requests are related to delays and inefficiencies that they say the picket line caused and the agreements that were forged afterward to settle the labor dispute.


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Comments:

Posted Wed, Apr 23, 12:18 a.m. Inappropriate

Typical, no one involved in the contract details even thought about labor union turf--and everyone else knows the waterfront has been Longshore forever....

richardw

Posted Wed, Apr 23, 8:21 a.m. Inappropriate

Muckloading is what the new term for "let the public pay".

Scrap this project, bury Bertha, and build a new Viaduct. We cannot afford this financial mess, but we sure can afford a beautiful new Viaduct.

Full disclosure: I do not own any of the real property surrounding the current Viaduct and will not make any financial gain if the bore tunnel is built. However, I will save a huge amount of tax dollars if a new Viaduct is built.

Posted Wed, Apr 23, 4:34 p.m. Inappropriate

Not if it only cost 125 million extra to complete the project. That would be minor compared to shutting down the project and then spending a Billion dollars to replace the Viaduct with a new one.

acbytesla

Posted Wed, Apr 23, 6:41 p.m. Inappropriate

abcytesia, where oh where do you get your figures from? The Viaduct would not cost a billion dollars.

But rest your soul, you know if Berths continues on, we'll spend another billion in a heartbeat, and continue on spending foolishly until finally either damaging a building so severely that stops the project or discovering that Bertha simply isn't going to work.

Posted Wed, Apr 23, 8:37 a.m. Inappropriate

Good news that STP is presenting bill -- start to pull plug on the Tunnel without having to say so.

WSDOT will say "No".

STP will (eventually) claim that it cannot continue work unless it is paid.

Negotiations/lawsuits etc will drag on for years but no work under ground effectively killing the project without any politicians having to say it much less argue for it.

STP/WSDOT gets out of nightmare project.

Win-win for everyone.

---

The key point is that while STP pockets are deep, it would have been foolish to fully back partners' financial statements. As to bonding companies...they have very good lawyers and will find some way to escape.

No, this may not be the beginning of the end but it is likely to be the end of the beginning. Follow the money; and there will not be enough money to re-start this project.

Posted Wed, Apr 23, 4:33 p.m. Inappropriate

You call that win win when the State has already spent a billion dollars and got nothing out of it? Seriously?

acbytesla

Posted Wed, Apr 23, 6:47 p.m. Inappropriate

Yes, abc, cutting your losses makes strong business sense. You must either be a politician or work for a governmental agency ... or you would understand this sensible concept.

Posted Wed, Apr 23, 6:46 p.m. Inappropriate

Sucher, but of course.

Posted Wed, Apr 23, 10:26 a.m. Inappropriate

People ought to be looking at these numbers. We have become inured to large numbers but these are breathtaking.

We are spending $125 MILLION simply to REPAIR Bertha and re-start the project.

And we are about 1000' feet into an 8000' boring. Lots more room for problems.

If the STP wasn't worried then, they ought to be worried now -- about getting paid. They'd be crazy to simply keep working without the money actually in their account. Look at how the State defaulted on WPPSS bonds -- and it didn't hurt us. Default with design-build contractor which knew (or had to know) of the dangers offers little moral hurdle to refusal to pay.

Time is the enemy of the deal. Every new delay slows down the deal. At some point perception will shift and it is cheaper to stop than to go forward.

A realistic scenario:

A smallish earthquake -- enough to require closing the Viaduct but no loss of life and still repairable. (Everything is always repairable.) WSDOT will be _forced_ to do emergency 24/7 repairs sufficient to re-open it and keep it safe for next 20 years. We have just further weakened our resilience by un-funding METRO. So we need transport by private vehicle. And since we MUST repair the Viaduct, why bother with Tunnel? And then we avoid the surface/transit debate.

Posted Wed, Apr 23, 4:31 p.m. Inappropriate

Well, all of this is game of chicken.... I once heard the use of lawyers like the use of nuclear weapons. MAD..or Mutually Assured Destruction. What are the details of the contract. The state seems to believe that the contract is pretty firm on who is responsible for any cost over runs. And it looks like STP is trying to call repairing Bertha "a change order"...which would make whoever requested the change to be responsible for it. Hard to believe that you could actually call this a change order. That said, STP could fold and then the question would be could you make the parent companies responsible. As in Dragacos S.A and Tutor Perrini. Dragados has deep pockets..and of course there are insurance companies and this project is bonded.

125 million dollars is a lot of money..but this was in total a 4 Billion dollar project. Is 125 million a lot of money in that context?

acbytesla

Posted Thu, Apr 24, 4:07 p.m. Inappropriate

Actually, "we" are not spending $125 million yet. Hitachi is still on the hook since they still "own" the machine. It had to pass another 500?? (Perhaps more, perhaps less, I forget,) feet before it became STP's machine.

Time will tell, I doubt Hitachi will eat the whole cost, but they will eat a big chunk of it.

Personally, I doubt the viaduct is repairable. We have already torn down the primary approach to it and the temporary approach is not up to the task for another 20+ years. The core problem is that the viaduct is sinking and drilling piling under existing supports is darn near impossible if not ridiculously expensive.

Posted Thu, Apr 24, 6:08 p.m. Inappropriate

WSDOT’s consultant T.Y. Lin said a retrofit of the viaduct would cost $2.3 billion. The state estimated a new viaduct would cost between $2.2 and $3.3 billion. The estimate for the tunnel and the interchange in SoDo (gotta’ collect those tolls) was $ 4.25 billion (at least it was back then).

Aside from being less expensive the viaduct actually works, and has for 60+ years. The tunnel, if it can ever be constructed, will not handle nearly the capacity of the viaduct and provides no bypass or access to the downtown core, Ballard or West Seattle.

So it’s misleading to keep saying that the tunnel is a replacement for the viaduct.

It clearly is not.

jmrolls

Posted Thu, Apr 24, 10:07 p.m. Inappropriate

Incontrovertible historical fact:
Over the past 3-4 years SDOT spent about $165 million to retrofit the Spokane Street Viaduct.

Incontrovertible unanswered question:
Why was the Spokane Street Viaduct so much different than the AWV? Why could we not have done the same thing for the AWV as we did for the SSV? (And nobody here actually has an answer so don't bother.)

And just for flavor -- why would anyone believe WSDOT's numbers for repairing the AWV when WSDOT had already received clear political direction to build a Tunnel? Doesn't anyone here in Seattle have even a hint of skepticism? (Not you Rolls, of course, but the rest of the panting liberal hordes.)

Posted Fri, Apr 25, 10:25 a.m. Inappropriate

The overnoise factor, shade limits tree scape, street reconfiguration options cut in half to accommodate piers, dark areas, blind corners, above all, the constant noise. Forget it.
Where do yew live, Hickville?

Aim bertha at the Box portal 2 blocks north, possibly add 3rd level small parking lot from Coleman Dock. Employee, electric recharge stalls, etc.

Wells

Posted Fri, Apr 25, 2:08 a.m. Inappropriate

hear, hear

Posted Fri, Apr 25, 10:05 a.m. Inappropriate

"The tunnel, if it can be constructed, will not handle 'half' the capacity of the old viaduct,
no bypass to Ballard, no access to downtown."

I've never disagreed with that point, agreed, an important point.
The contrary tunnel-type which keeps the direct Ballard route would work out to handle traffic,
ie, any of the Cut/Cover types. But, the BOX/SEAWALL was the 'nearly' only one possible
while the AWV remained in place. BOX was 'concealled' from referendum voters 2007,
during glad their gone BushJr wasted years. Critical public information concealled in 2007,
yet made the FEIS as obviously best. Who was lying?

Yet Seattle still won't consider how a strong Seawall Box:

=[solid earthquake barrier]=
=[solidifies unstable waterfront soils]=
=[better overall waterside habitat type]=
=[perfect utility corridor]
=[several other justification-isms]=

Seattle highway planners are confidently incompetent liars.
Plug the plug on bertha... pass it around...

Wells

Posted Fri, Apr 25, 1:38 p.m. Inappropriate

?????????

I'm thinking this might help out: http://www.straighterline.com/online-college-courses/english/english-composition-i/

Lily32

Posted Fri, Apr 25, 3:06 p.m. Inappropriate

Try to NOT appear bimbo-ish, my advise, Lily dear.
Your DOTs are NOT to be trusted.

Wells

Posted Fri, Apr 25, 10:14 p.m. Inappropriate

Something else to think about:

Why was there never a design-build proposal to retrofit the Alaskan Way Viaduct?

There was (still is) a great deal of debate about the real cost to retrofit the Alaskan Way Viaduct. There were numbers all over the place and were extremely influential in public perception.

Interesting that WSDOT never answered the question by going to the marketplace through a design/build construction process (as it did for the Tunnel.)

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