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Huge consultant bill for Bay Bridge; Caltrans spent almost $500 million of overruns on outside help

August 26, 2004 Reposted from the Contra Costa Times
   By Andrew LaMar and Mike Adamick

SACRAMENTO - Nearly $500 million of the Bay Bridge's soaring cost overruns are due to expensive private consultants and engineers who are billing the state at rates far higher than expected.

Those unanticipated bills account for 20 percent of a $2.5 billion price spike on the bridge and weaken arguments by Gov. Arnold Schwarzenegger that the Bay Area should foot the entire bill because its choice of a fancy suspension span was to blame for the massive overruns.

News of the engineering costs comes 10 days after the state unveiled a revised $5.1 billion sticker price for the bridge. While Bay Area politicians acknowledge the design contributed to the cost overruns, they place most of the blame on delays and faulty state estimates.

The new engineering figures seem to bolster those claims. A confidential report prepared by the agency overseeing Caltrans, the state's transportation department, shows design and engineering services, estimated at $383 million three years ago, have swelled to $878 million. The increase is fueled primarily by private contractors overseen by Caltrans, the report said.

"That's why we believe the cost overruns have a lot do to with the way Caltrans is running the project, which is the reason it's so outrageous to suggest the Bay Area toll users pay the entire tab," said Steve Kinsey, chair of the Metropolitan Transportation Commission, a regional planning agency.

Caltrans defended the use of private engineers, saying it doesn't have the skills in-house to complete the span. For the Bay Bridge work, the state has hired divers, aquatic engineers, offshore oil drillers and other consultants with marine and bridge building experience, said Mark DeSio, Caltrans' communications director.

"It doesn't make sense to bring them in house because they only serve the needs for this project and then they're out," DeSio said. "You're not going to need those skill sets in Fresno."

The report, prepared by the Business, Transportation and Housing Agency, detailed rising costs for bridge retrofit work over the past three years. A key piece of the funding puzzle has to do with how much engineers are paid on the Bay Bridge.

For instance, it costs the state an average of $140,000 each year to use Caltrans engineers. The state had expected to spend $151,000 a year on private engineers and consultants, but wound up paying $250,000 each year, according to the report.

Moreover, the state now estimates it will need the engineers through 2012, five years more than first anticipated.

Experts said that a glut of road work contributed to a swell in civil engineer fees. Paul Meyer, executive director of the Consulting Engineers and Land Surveyors of California, which represents private engineers, said comparing the private salaries to those of state engineers is like comparing apples and oranges.

The Caltrans salaries don't include overhead costs, but private firms need to tack on extra charges to do the work and stay afloat financially, he said. And Caltrans can't hire expert bridge builders only to fire them once the project is done, he said.

"You can't necessarily move them around from project to project," Meyer said.

But the unanswered question is why the state so badly estimated the costs. Sen. Tom Torlakson, D-Martinez, said the rising private contractor fees must be investigated.

"It is one of the areas that we need to probe carefully in an audit," Torlakson said. "What are comparable rates? Are these normal? Why are they? What is creating this massive increase?"

The latest news about the state's beleaguered earthquake retrofit program comes as state lawmakers and the governor argue over a deal to keep the project afloat and as a state audit committee prepares to launch an investigation.

"We've got the accent on the wrong syllable," said Sen. Don Perata, D-Oakland, the Senate president pro tem-elect. "The accent ought to be on defining the problem, not paying for one we don't understand."

The Joint Legislative Audit Committee is scheduled to meet today and will likely approve a request to start an audit, said the chairwoman of the panel, Assemblywoman Wilma Chan, D-Oakland.

The governor blames the bridge's exploding costs on the fancy design, but even a Caltrans report released last week said only 53 percent of the cost increases are tied to the design. And, according to that report, the rest is attributed to rising steel prices, higher insurance and bonding costs and construction delays due to engineering problems.

"This is not the Bay Area's fault," Torlakson said. "This is a systematic failure to calculate properly, to estimate all costs in a reasonable range."

Contact Andrew LaMar at [email protected] or (916) 441-2101. Contact Mike Adamick at 925-945-4745 or at [email protected].

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