Construction Update on Interstate-287: the Issues and Problems Surrounding the Roadwork on I-287

There’s bad news  and worse news about the construction on I-287. Which do you want first? The bad news? Okay.
The project is $200 million over the original estimated cost—so far—and won’t be completed for another two years—at least.
That’s the bad news. And yes, there’s worse to come. But how could it possibly be worse?

The reconstruction was conceived in 1994 with high hopes. It was going to correct some huge mistakes that were made in the original design, straightening out the traffic flow coming off the Tappan Zee Bridge, removing some of the deadly vehicle weaving created by on-and off-ramps located too close together, installing better noise and traffic-control systems, and a whole host of other improvements. As originally conceived, the work would start in 2000, be finished by 2010, and cost about $350 million. And the Easter Bunny would be waiting with a big basket of goodies for everyone at the ribbon-cutting ceremony.

The first of five contracts covering the project was awarded by the New York State Department of Transportation (NYSDOT) in 1999. By the time the fifth and final one was let, the contracted cost had risen to $477 million. And 2010 had arrived with at least two more years of work to be done. What’s more, cost overruns on the initial contracts had ballooned the total cost to $550 million and counting—almost 60 percent above the original estimate!

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The Journal News went ballistic, estimating that the cost of the project has been $63 million per mile, or twice the average of similar road projects in the region. New York Assemblyman George Latimer jumped on the issue, authoring a letter co-signed by all Westchester Assmebly members asking Governor Andrew Cuomo to launch an investigation. Cuomo appointed a national construction expert to look into it. US Senator Chuck Schumer got the Federal Highway Administration to conduct a probe. Meanwhile, the 150,000 or so drivers that lurch along through the construction zones every day kept on lurching, creeping, and learning new traffic patterns as they dodged orange cones. The taxpayers—that would be you and me—just kept writing checks.

“In theory, the project was wonderful,” says Harrison Mayor Joan Walsh. “It’s a pain in the neck to have to go around
the construction.”

White Plains businessman Jeff Chung, owner of Fashion Cleaners on Lake Street, just a block from the highway, says the construction put a major crimp in his profits, especially while the Lake Street Bridge was being replaced. “The construction added as much as fifteen minutes to every delivery trip,” he reports. “Sometimes, we had to go all the way to I-684 and come around.” Chung’s drivers make 10 to 12 delivery trips on an average day, so adding 15 minutes to every one incurs significant expense.

How did the project get so out of hand?

To start with, the original estimate of $350 million was based on 1994 costs—without adding a factor for inflation. This was common practice at the time, according to NYSDOT spokesperson Jennifer Post. But that was a long time ago. Monica Lewinsky hadn’t yet wriggled her thong in the Clinton White House. And the Chinese hadn’t started buying all the oil, steel, and concrete they could get their hands on.

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“From 1994 to 2000,” Post explains, “the industry experienced a seventeen-percent increase in costs for highway projects. From 2000 to 2010, there was a fifty-eight-percent increase.” Just as the cost of home heating oil went up during that time, the price of asphalt skyrocketed. The federal investigators cited the miscalculations in their report.

The biggest single factor, though, was the number of changes and additions to the project once the contracts were let. We taxpayers like to think that awarding contracts to the lowest bidder ensures that we get the biggest bang for our buck. That’s true, but only sometimes. Once a project begins, the state and the contractor enter a daily tug of war over what’s included and what’s not. Guess who ends up winning most of the time?

Cost overruns ballooned the total cost to $550 million and counting—almost 60 percent above the original estimate!

As George Latimer points out, “Those kinds of things may be defensible, but we can’t ultimately run infrastructure improvement on the basis of initial contracts where the price may turn out to be double or triple. To avoid change orders, we need more thorough evaluation of what will be required of the contractor. In the world of the lowest bidder, how do I know that the second lowest bidder wouldn’t bid on the change orders in a more financially efficient way, making them the low bidder? We don’t know that.” Latimer serves on the State Assembly Committee on Transportation.

I-287 from Start to Finish (Maybe)

Original construction
Duration: 1956-1960, 4 years
Scope: 11.3 miles from Tappan Zee to I-95 in Rye
Cost: $50 million

Current project
Duration: 1999-2013(?), 14 years and hoping
Scope: 7.7 miles from Tappan Zee to Exit 8 in Harrison
Cost: $550 million and counting

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The Stage III contract, which was awarded to YonkersContracting/Dragados USA in 2006 for $142 million, currently stands at $193 million—a whopping 35-percent increase. The contractor negotiated more than 70 additions to the original agreement. Speaking for the NYSDOT, Post says, “If you don’t understand how construction works, that may seem excessive. The number of change orders for projects of that nature is not uncommon.”

Maybe so, but the change orders on this segment alone cost the taxpayers more than it did to construct the entire 11.3 miles of I-287 in 1960!

“I believe more than half of the so-called overruns could be attributed to the DOT and the designer,” says a civil engineer who demanded anonymity since his firm does extensive work with the state, including some on I-287. He adds, “Change orders are not always due to a mistake by the designer. Sometimes, in the middle of a job they decide to add something to it.”

Post says, “We did, in fact, change our approach on the project as it went along. That resulted in it costing more than originally projected and taking more time. In many cases, we were doing more and better work than we had originally anticipated. Just like if you are installing kitchen cabinets and decide to fix your plumbing in the process, the plumbing costs extra and it would be silly to hang the cabinets and then rip them out later.”

Some of the improvements made on the fly at the behest of the state designers were the replacement rather than the rehabilitation of some bridges.

But then there were a few things that probably should have been anticipated when the contract bid specs were prepared, like three-quarters of a million bucks for equipment for the field engineer’s office and six trainees hired to meet various labor requirements. And there were a few mistakes, too, like the purchase of 44,000 metric tons of asphalt that had to be tacked on to the contract because the project engineers “incorrectly added up” the amount needed. The cost? Another $830,000.

But those kinds of cost overruns are almost incidental compared to the unexpected items they found once ground was broken. When the road was built in the late 1950s as the Cross Westchester Expressway, it was a reconstruction of the old Westchester Avenue. “The plans didn’t show that a lot of the original pavement and concrete basins were buried and used as fill or just left in place in some cases,” Post says. “Some of this stuff was ten or fifteen feet down.” The contractors frequently ran into big, expensive surprises. Several change orders for more than a million dollars each are for removal of buried asphalt and other items.

But these things weren’t built under cover of night. Weren’t there plans? Didn’t somebody look before they leaped into this multi-million-dollar project? “There were borings and test pits dug, but you can’t dig up the whole road,” Post says. “You do one every hundred or fifty feet and you can miss some of this stuff.”

There were a variety of causes for other extra costs and delays. Relocation of underground communications conduits and cables, as well as business and residential gas and power lines, means the contractor has to wait for Con Ed, Verizon, Cablevision, or whomever to get their act together. As the anonymous engineer pointed out, “The utilities operate on a sort of ‘mañana’ time schedule.”

The relocation of a 24-inch, high-pressure gas line owned by Tennessee Gas was particularly troublesome. “You only have a certain window of opportunity,” Post says. “It can’t be taken out of service between November 1 and April 1 for the heating season so you have a window when you have to get the work done. If you miss it because of another delay, you’ve gone a whole other season before you can do that work.” In each of the five contracts, there was some delay related to the gas line. In Stage III, the contract with the biggest overruns, the line had to be temporarily moved, then relocated again to its permanent location. One of those moves missed the window, so—bingo!—another six months was added to the project.

Other things happened, too. The contract for the final stage, the one under way now in Harrison, was supposed to be awarded in 2009. As you may recall, however, the state budget wasn’t approved on time that year (shocking, isn’t it?), which meant the appropriation of the state’s 25-percent share of the cost didn’t come along until later. The current projected (hoped-for) completion date? Summer 2013.

Delays not only add time to the project, they add costs, too. One of the change orders on Stage III was for $4 million in overhead costs related to delays. Another from the same cause was for $7 million.

The cost overruns on the first four contracts are history now. The federal review said the change orders were “justified based on changed conditions.” The governor’s review has yet to be delivered, although it’s rumored to be coming later this year. Will there be recommendations that can affect the final contract? Maybe. Will the state DOT enact them? Jennifer Posts says, “We’re always considering ways to improve the project development and delivery process.” Will the state legislature take action? “If there are any recommendations that require legislative action, we’ll draft legislation, debate and discuss it,” Latimer says. “That stuff doesn’t get done in a day—or even in a month.”  Neither does highway construction.

Wait—what about the worst news?!

Improvements to the rest of I-287 are on the state drawing boards. It should be fascinating—and probably infuriating—to watch DOT tackle the spaghetti bowl between I-684 and the Hutch. Currently in development are bridge replacements, repaving, traffic-control improvements, and other work slated to start in 2013 and end in 2020. The estimated costs? $50 million. Wanna bet?

Dave Donelson’s latest book, The Dynamic Manager’s Guide To Practical Management, is based in part on his experiences running a construction company that handled many public works projects.

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