MS. REBECCA SHEIR
Welcome back to "Metro Connection." I’m Rebecca Sheir and our next story on this week's Debt show has to do with the cost of a huge construction project, the Silver Line. It's time to think about Phase II of the Metro Rail extension to Dulles Airport. Friday the 19th is the deadline for contractors to submit their bids for the project. Joining us to talk about the next step is WAMU transportation reporter Martin Di Caro. Welcome back to the show, Martin.
MR. MARTIN DI CARO
I'm glad to be here.
All right. So as we mentioned this is the second phase of the Silver Line, a multi-billion dollar project. I'm guessing you've got to be a pretty big name in the construction biz to even put in a bid, right?
Yes. There are five prequalified construction consortiums that are going to be bidding on Phase II of the Silver Line and they are among the biggest names in the construction industry. And choosing the right contractor is so important here. So we have five teams. Bechtel is one of them. And Bechtel is building Phase 1 of the Silver Line. And that's gone very well. They all have to submit their bids to the Metropolitan Washington Airports Authority or MWAA, which is in charge of the Silver Line, by April 19. And most important here, lowest bid wins.
I thought it was about the quality of the company. Why would the lowest bid win, if you want the best contractor for the job?
This is where we get into the all important issue of price. There are other ways to bid a mega project like this. And I asked the executive director of the Dulles Rail Project, Patrick Nowakowski, why low bid was chosen.
MR. PATRICK NOWAKOWSKI
One of the most obvious benefits is getting the lowest possible cost for whoever's footing the bill. In this case the taxpayers of Fairfax County, Loudon County, the toll-road users.
So for months the five contracting teams have been meeting with Nowakowski's office to make sure their design plans meet the standards established in the Airport Authority's design scheme. And now they're ready to submit their bids.
So it's kind of a balance here between the quality of the designs, but also the fact that the bid is low.
Well, that's right. And that is why some believe the Airport's Authority is inviting some trouble. The quality of any one contractor's design, will not give it an advantage over a competitor who might have an inferior design. Lowest bid wins, period. Brian Petruska is the attorney for the Laborers International Union of North America, which supplied workers in the construction of Phase I. He says the low-bid process opens the door for price escalation down the road, which the Airports Authority will wind up paying for.
MR. BRAIN PETRUSKA
And maybe those costs are foreseeable, but they're not in the actual contract. So that means the contractor may know there's foreseeable additional costs that will go in eventually. On bid day you don't include those.
But how can a contractor escalate the cost of a project?
Two words, change orders. Now, a contractor can request a change in the construction plans to build something differently. And on large projects change orders are very, very common. There are many reasons why a change order can be requested. Many are legit. And Patrick Nowakowski says his office has protections in place to prevent unnecessary change orders from driving up the Silver Line's price.
I worry about change orders from the day I sign the contract to the day I end it. It's not a function of the low-bid procedure. It's a function of how well were the contractor documents written, how well do you manage the project from the day you start until the day you finish.
Virginia transportation secretary Sean Connaughton says it'll be use to MWAA to hold the contractor to the terms of the contract.
MR. SEAN CONNAUGHTON
Why price is so important here is that any overages, any price escalation is passed almost directly onto the toll-road users.
It sounds like these big construction firms can have a lot of power over the final price tag for a project that is going to affect so many local residents. You mentioned Bechtel, but can you tell us more about the companies that are bidding on Phase II of the Silver Line?
That's right. We've already mentioned Bechtel, which is building Phase I. Among the other firms that have built projects in northern Virginia, some have mixed records when it comes to staying on budget. Now, let's just take a look at contracts ordered by the Virginia Department of Transportation over the past 10 years, 61 large highway contracts over $20 million each, 62 percent went over budget. A smaller percentage were at least 5 percent over budget. Now, out of all those over-budget contracts, more than a third involved contractors or subsidiaries that are bidding on the Silver Line second phase. Clark Construction, Archer Western and Skanska USA.
So should we be worried then if one of those contractors wins Phase II?
Well, we started off this conversation talking about how important it is to get the right contractor on the job. But to answer your question over whether we should be worried, not necessarily. Here's Patrick Dean, the president of the Associated Builders and Contractors of Virginia, which represents the interests of construction firms.
MR. PATRICK DEAN
You know a newspaper or a radio show or anybody can spot off and say, hey, there was a problem on a job and they name the contractor or the subcontractor. Typically, they don't get into the details because that news is old by the time anything's ever figured out on why something occurred to the negative.
So on this project, Phase II of the Silver Line, what happens after the bids are submitted?
Well, the Airport's Authority will announce the winning bidder in May. Then preliminary work will begin later this year. Completion date for Phase II of the Silver Line to Dulles is 2018.
Well, Martin Di Caro, thank you for coming in and bringing us up to speed.
Thanks, Rebecca. Anytime.
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