The Rail-to-Dulles Metro rail project is getting scarier and scarier. The likelihood of massive cost overruns increases with each passing day.
William T. Coleman, a senior partner of O’Melveny & Myers LLP, has written a devastating critique of the contract negotiated for the construction of Phase I of the Rail-to-Dulles extension of Metro heavy rail. The design-build contract was approved June 6 by the Metropolitan Washington Airports Authority (MWAA). Basing his analysis on a redacted version of the contract posted on the MWAA website, Coleman detailed his concerns in an unsolicited letter to Gerald Connolly, chairman of the Fairfax County board, dated June 14.
(I have obtained a copy of Coleman’s letter through a correspondent who informs me that it “was obtained through a FOIA request.” I have no knowledge of who might have filed that FOIA request or whose hands the letter might have passed through before reaching me.)
The proposed DTP Design-Build contract which was negotiated by the Commonwealth and then the Metropolitan Washington Airports Authority (MWAA) without competition on a sole-source basis with Dulles Transit Partners (DTP) — a consortium of Bechtel and Washington Group International — is not an advantageous contract for the taxpayer, Virginia governmental entities and toll payers, who must pay for 100 % of the contract costs and for any other final design and construction work.
The proposed DTP Design-Build Contract … is full of non-standard provisions that will certainly drive the current Phase I Dulles Corridor Metrorail Project much higher than the current disclosed budget of $2.647 billion, including:
– Inappropriate secrecy provisions
– Award of the construction contract without a fixed price
– Award of the construction contract prior to final design approval, without right to bid competitively the approved final design without penalty
– A supposed “fixed price” portion of the contract which really is not a “fixed price,” instead by its written terms adjusting automatically to price changes of major construction items, i.e. steel and concrete
– Uncompetitive procurement procedures for future sub-contractor “allowance” work
– Award of utility relocation work under separate contract and without a fixed-price
– Loose provisions to control “differing site condition” costs
– “Concurrent Non-Project Activities” which are expected to be designed and built as part of the Project but have an unclear relationship to the proposed contract
– – Provisions allowing the contractor to cause the conditions for its own Change Orders and Delay Claims that would increase cost to the taxpayer
Coleman did not offer any recommendations. His stated purpose was simply to bring the flaws in the contract to Connolly’s attention so he “can make informed decisions and take appropriate actions as the project advances through the federal system.”
Update: Reader Becky Dale notes that a Washington Examiner editorial referred to the letter on Wednesday. No mention how the Examiner acquired the letter.