FLASHBACK 1997: The Fast-Track I-15 Reconstruction Project lacks coordination but guarantees tens of millions in so-called "bonuses" to the contractor. 

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In commemoration of City Weekly's 40th anniversary, we are digging into our archives to celebrate. Each week, we FLASHBACK to a story or column from our past in honor of four decades of local alt-journalism. Whether the names and issues are familiar or new, we are grateful to have this unique newspaper to contain them all.

Title: Highway to Hell
Author: Andrea Moore Emmett
Date: Nov. 13, 1997

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Never before have so many Utahns come to such a collective consensus. At least those who live on or commute to the Wasatch Front agree: Life has been absolute hell trying to navigate from point A to point B anywhere in or around the Salt Lake Valley. And that collective agreement is one very large and continuous grumble.

It follows, then, that Tom Warne, executive director of the Utah Department of Transportation, has been busier than usual fielding questions. The most-asked question thus far has been why the parallel routes of State Street, Seventh East and Redwood Road have been under construction at the same time drivers had to adjust to the re-construction of Interstate 15.

The answer to that question, like many others, including the lack of independent quality control and huge bonuses to the I-15 contractor, is confusing.

Conflicting Explanations
Warne blames poor planning, explaining that the alternate routes were already scheduled for this time rather than being done sooner. "Then the I-15 project was moved up a year, causing projects to collide," he says.

And he is apologetic. "I've only been here two-and-a-half years. Not to malign my predecessor, but the scenario changed with getting things done for the 2002 Olympics."

Even so, Warne would like people to know, "We're not building I-15 just for the Olympics."

When asked the same question about the parallel routes, John Leonard, UDOT operations manager and spokesperson, offers a conflicting explanation. "The alternative routes were I-15 projects. Those would not have occurred without the I-15 project."

A source close to the project, who spoke only on the condition of anonymity, supports Leonard's explanation, saying that the parallel routes were folded into the I-15 project because UDOT didn't budget the money for the alternate routes. "...and so they were screwed because when they acquired right-of-way they had to get working. You can't just take parcels of peoples' property and let them sit."

To try and soothe drivers' frustrations, UDOT's public relations department started cranking out campaigns early on. Attempts so far have ranged from a miserably failed television ad campaign called "Satch," the supposedly kind, old spirit-guide who more closely resembled a dirty old man in a trench coat, to a free "rental" video available at local video stores or at libraries. In the video, Warne explains the obvious: The freeway is outdated, overloaded, not earthquake-safe and the bridges are crumbling. Most recently, the UDOT's PR department's informed us in a two-page centerfold newspaper ad how I-15 construction "...isn't experiencing any slowdowns."

Who's Calling the Shots?
A consortium, Wasatch Constructors, won the I-15 construction bid, and must complete North America's largest public-works project by October 15, 2001, just four years from start to finish. It's a daunting undertaking by any standard. And because of the exceedingly short time frame, UDOT chose "Design/Build," an experimental process where the project is being designed as it's being built, rather than working from a project blueprint of the completed design.

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Design/Build is also unique in that it is fairly new to the United States. Some states have laws against Design/Build simply because of the "seat-of-the-pants" aspect of doing a project without a pre-set blueprint. The I-15 project is the first Design/Build project that has been sponsored by a state government and is the largest ever done in this country. Bruce Wasell, UDOT design manager, reports that he and his staff design "in many small pieces which are released to the contractors who are able to instantly go to work."

Wasell sees several advantages to Design/Build. "Aside from the ability to accomplish more in a smaller time frame, there is the fact that the owner (UDOT) knows the cost up-front. There is an advantage to having the owner, builder and designer working side by side," he says. "It also has an advantage for political forces, in that they can see the final product within their term of office."

Wasatch Constructors is a "for this project only" consortium of 25 separate construction companies. The main companies include Kiewit Construction Company, a Delaware corporation; Granite Construction Company, a California corporation; and Washington Construction Company, a Montana corporation. Morrison Knudsen Corporation of Delaware has the contractual obligation to complete the project.

All departments on the project are considered "The I-15 Team" and include Wasatch Constructors, UDOT and Parsons Brinkerhoff, a world-wide consulting engineering firm who was hired by UDOT.

Parsons Brinkerhoff employee Pat Drennon is a Design/Build expert with experience in civil engineering going back 35 years. According to one source he is the "preeminent expert on Design/Build in the country." Drennon was part of the "Team" until July when he was let go. Warne explains that Drennon wasn't here for his road-building expertise. "We only needed him for his contract expertise," he says.

Mike Robertson, deputy technical support manager with Parsons Brinkerhoff, measures his words carefully. "Drennon's strong background wouldn't have hurt this project," he says. "Whether letting him go is right or wrong is yet to be seen."

When contacted in Virginia, Drennon responded, "I try to understand and work with the philosophy of many different DOTs and my primary job in Utah was to get the contract awarded." When asked if he thinks it's wise of UDOT to proceed without his Design/Build expertise, he replies, "Well, they're going to do it."

In fact, Drennon isn't the only Parsons Brinkerhoff employee who has been let go. "UDOT felt they didn't need my continuing efforts as well as some others," he continues. "UDOT wanted to go with a predominantly UDOT administration."

But a source reports that UDOT has lost control of the project and is allowing Wasatch Constructors to call the shots. There are indications that support that charge.

Guaranteed Incentives
According to the state's Request For Proposals documents, the Award Fee Procedures Manual and the contract obtained by City Weekly, the Award Fee of $50 million is an incentive for the construction company to perform at a "superior" level and for "striving to attain the highest standards of excellence" within four criteria: Timely Performance, Quality of Work, Management, and Community Relations/Maintenance of Traffic.

Parsons Brinkerhoff gave Wasatch Constructors an early audit in which Wasatch was given Cs, Ds and Fs for their performance, the source said. Reportedly, Wasatch told UDOT that the audit was unacceptable because it put the Award Fee in jeopardy and so Wasatch refused the audit. Our source continues: "Parsons Brinkerhoff was told by UDOT that they can no longer audit Wasatch and the public is being scammed with all the emphasis on fast moving construction, scammed into thinking that it's all that the Award Fee is for."

Cindy Privitt, UDOT media relationship manager, tells City Weekly that, "The Award Fee is not so much an incentive package as it is a built-in profit for the construction company."

Lindsey Ferrari, public information officer further explains, "Wasatch Constructors had to bid so low in order to be awarded the project that the Award Fee is their only profit."

However, those explanations are inconsistent with the state's Request for Proposals documents that say that the Department reserved the right to "accept other than the lowest price proposal." So, the "low bid" excuse doesn't wash.

Brian Mauldwin is Wasatch Constructors spokesperson and business affairs program director. Two weeks into his position, he explains, "The tough part is distinguishing what is profit." And while admitting that everyone on the job is making money, right up to top man, Conway Narby, Mauldwin says, "You can still pay employees and not make a profit. The Award Fee is the profit, not extra money as far as Wasatch is concerned."

When questioned about the Parsons Brinkerhoff audit, giving Wasatch Cs, Ds and Fs and the refusal of Wasatch to accept the grades, Mauldwin seemed to confirm the report. "In any project everybody can't always be happy with the way things are done. We have a lot of personalities on this project."

In addition to the $50 million Award Fee, there is also a seldom-mentioned "$5 million Supplemental Award Fee For Early Completion." The contract states that the Supplemental Award Fee will be given for an early completion date just 90 days short of the projected Oct. 15, 2001 completion date. The existence of the second Award Fee raises the question of why UDOT would provide two Award Fees. The first one, according to the contract, already includes timely performance; then a second one, specifically for timely performance.

When asked what the entire projected amount for the Interstate re-build is, David Downs, UDOT I-15 project director reports that it is $1.59 billion. He confirms that the amount includes both Award Fees.

According to the terms of the contract, disbursement of the $50 million Award Fee is set up to be given in Award Fee Determination Periods (AFDP), which are nine, six-month intervals stretched over the four years until the project is complete. The contract reads: "Any amount not awarded in one evaluation period will be not (sic) carried over into the next evaluation period, except that if the score for Timely Performance falls below eighty (80) points for any period, the total Award Fee for that period associated with Timely Performance will be carried forward to the next period only."

The first Award Fee period was to have ended on September 30, 1997 and was scheduled to be in the amounts of $500,000 for "Timely Performance" and $2 million for the "Other Three Criteria Elements." According to Downs, Wasatch Constructors and UDOT mutually agreed to extend the first period, despite the contract. Downs says that the first period will now end in mid-November, perhaps in the third week.

The succeeding seven Award Fees are scheduled to be $1.75 million for "Timely Performance" and $3.25 million for the "Other Three Criteria Elements." The final Award Fee is scheduled to be $3.375 million for "Timely Performance" and $4.125 million for the "Other Three Criteria Elements" with the Supplemental Award Fee of $5 million given for earlier projected completion.

Ruthless Condemnations
Attorney Robert Campbell believes Wasatch Constructors is ruthless in efforts to move fast in order to "line their pocket-books." Campbell's client, Abraham Markosian, knew he would have to move his steel plant and was in the arduous process, which included moving buildings. Suddenly, he got word that he'd have to vacate four months sooner than first told. Campbell got his client a small extension, arguing that Wasatch Constructors demanded an earlier vacation date from his client for the sole purpose of receiving the Award Fee.

Campbell goes back to court for his client later to settle the amount Markosian should receive for his property. Markosian has already had to borrow $1.5 million to buy new property at $10,000 per month interest. He has yet to pay attorney's fees and can't begin to estimate what the cost of his business being shut down for such a length of time has cost him.

But Markosian isn't alone. Dick Wilden heads a Murray development group known as 5300 Corporate Center that owns nine acres along the I-15 corridor. The group had plans to begin constructing two office towers and a hotel on the property. However, UDOT wanted six-tenths of an acre out of the nine-acre parcel for I-15 reconstruction.

After keeping the project on hold for over a year while UDOT initiated condemnation proceedings, the developer's conditional-use permit with Murray City expired. Then in October, UDOT took 5300 Corporate Center to court under Utah's eminent domain law in order to obtain the property. But the jury was sympathetic to the landowners, awarding them $475,000 for the property needed by UDOT and $2.25 million in damages for a total of $2.7 million.

Wilden is grateful for the jury's decision, but after losing more than a year on the project plus the cost of attorney's fees he doesn't feel his corporation came out even. "The amount is still not anywhere near what's fair," he says.

Mike Robertson is quick to point out that this latest jury award will not be an additional cost to taxpayers, as has been reported by local media. "We factored such contingencies into our right-of-way budget," he explains. Unfortunately, there are still more than 100 such lawsuits remaining connected to I-15 reconstruction, which will be determined case by case.

Quality Control?
Our source also notes that UDOT has buckled under Wasatch Constructors by planning to waive the requirement that Wasatch become ISO 9000 certified. And that, some say, spells trouble down the road.

ISO stands for The International Organization for Standardization (translated from French). It is a world-wide non-governmental federation of 100 countries for national standards established in 1947. The standards are documented agreements containing technical specifications or other precise criteria to be used consistently throughout a project to promote the development of industry-wide standardization within a particular industrial sector. Assurances of meeting requirements are carried out by independent auditing.

Downs responds, "It's in the contract that Wasatch Constructors have a year to become ISO 9000 certified, but as far as waving ISO, we're evaluating whether it's more effective for the Department [UDOT] to do those audits."

Tom Warne explains how this would be done within the Quality Control/Quality Assurance (QC/QA) requirement already established in the Request for Proposals document. "Wasatch may monitor and test its own quality control with UDOT taking care of quality assurance by going back and re-testing QC."

From what he's seen, attorney Bruce Baird isn't impressed with the quality of either UDOT or Wasatch Constructors. Baird represents business people along 2100 South and Indiana Avenue, whose businesses were completely blocked for construction. "They didn't do a traffic study and they didn't do a safety study when they closed off access without an alternative access to those businesses. No one could maneuver, not regular traffic nor their own trucks," he says. "The first time the business people there even knew it was happening was with a flashing yellow sign."

After a month-and-a-half delay before providing an alternate access, Baird says that it took calling the news media to a meeting with the business people and representatives of the I-15 Team before anything was done. Even so, the I-15 people barred reporters from the meeting. One person who attended and asked not to be identified said that UDOT had no authority during the meeting. "A Wasatch spokesperson did all the talking and only stopped long enough at one interval to say, 'I need a thought from UDOT here,'" he related.

Baird sums up: "UDOT is clearly overwhelmed by the magnitude of the job and not everybody in UDOT is up to the task."

Remember Syncrete
In September, UDOT announced that a stretch of Redwood Road that had been poured last spring just might have to be torn up and re-done. State highway inspectors discovered clay balls in the concrete, ranging from golfball-size to five inches in diameter. UDOT hired Wadsworth Construction of Draper and subcontracted cement from J.B. Parsons of Weber County for the Redwood Road project. Wasatch Constructors was not involved, but the incident raises questions concerning the plan to put concrete on I-15 with foreboding, nightmarish flashbacks of the Syncrete fiasco.

In 1989, UDOT had visions of revolutionizing the future of road surfaces with an untested, experimental, synthetic-based substance invented by developer Steve Creamer. It wasn't long before large chunks of the stuff were flying into cars and windshields. As if dodging Syncrete frisbees weren't bad enough, motorists were hitting unavoidable cavernous potholes at freeway speeds. Finally, it was torn up again for a more-conventional surface. The Syncrete experiment cost the state millions. John Leonard says the public doesn't need to worry about the concrete on I-15 being infected with clay balls. "We're very prophylactic on this project and as far as Redwood Road, we caught the problem very early," he says. "We have nothing to hide."

But our source says that in their effort to hurry the project, Wasatch Constructors have made hasty and costly mistakes in the field. "For instance, a noise wall was erected near 90th South, blocking the view of a business district. Noise walls can't block business districts from the view of potential patrons, so it had to come right back down."

When asked about these allegations, including the noise wall, Mauldwin reported back that no one at Wasatch can verify that the noise wall mistake ever occurred.

However, Downs seemed to be aware of the incident. "As far as the noise wall, with Design/Build we put the responsibility with the contractor and sometimes they will have to stop, re-assess and change. That's consistent with this type of project."

Recently, there have been concerns raised about the high-density polyethylene pipe being installed under I-15 for drainage. It was pointed out that the same type of pipe had floated from underground and surfaced in a Riverton neighborhood. There were also concerns that the pipe could become flammable in the event of a tanker spill or spark.

However, Brent Bennett, Riverton public works supervisor, says that the pipe in the Riverton neighborhood was not installed properly and only had two inches of dirt-fill over it. "Any airtight pipe will float if water gets under it and it doesn't have enough cover," he says. As for being flammable, Bennett reports that the pipe won't burn without a source of oxygen.

That's just one example of the lack of oversight. UDOT is lax for not insisting that Wasatch Constructors incorporate Total Quality Management (TQM) into the project, our source says. TQM is a program that was started in Japan and incorporates good business practices for large projects with hundreds to thousands of personnel.

When asked if TQM has been implemented in the project, Mike Robertson laughs, "On this project?" After a moment he adds, "Well, some TQM recommendations have been, such as the Award Fee and Quality Assurance/Quality Control."

No Guarantees
Our source also reports that within UDOT it's become somewhat of a joke that, in two or three years, Wasatch will file a change order asking for several more million dollars to finish the project and that, in fact, UDOT is already counting on it.

Downs responds that change orders are normal occurrences. "With any project there are change orders but with Design/Build we believe we'll see less of those," he says. "We could have change orders that are actually cost decreases rather than cost increases."

The last time Kiewit Construction Company and Granite Construction Company worked together in a joint venture was for the construction of the San Joaquin Toll Road in Orange County, California. That project was one of the only two other much smaller Design/Build projects that have been done in the U.S. The San Joaquin Hills Transportation Agency (local rather than state DOT) reports that there was a change order for a 1 percent cost increase to finish the project.

When it comes to paying for the I-15 reconstruction, national politics put Utah on a slippery road in September. Dueling Republicans in Washington got caught between balancing the budget and a six-year, $103 billion transportation bill. Utah had been expecting $584 million for I-15 reconstruction, airport expansion, commuter rail and other transportation costs associated with the Olympics. But, rather than causing a split within the Republican Party, a compromise was reached by putting off the issue until next spring. As transportation finances stand now, Utah will spend half-a-billion federal dollars before actually receiving those federal dollars.

Gov. Mike Leavitt has reassured Utah that his budget plan, to be released in December, will not include new tax-increase proposals for I-15 or any other highway projects. And if the federal transportation bill bombs out next spring, will the governor then hit Utahns with a tax increase? Vicki Varela, spokesperson for the governor says, "We can't make a decision like that at this point."

Happy driving, Utah.