The Runaway Bridge Budget

State transportation officials stood by as planning costs for the Interstate 5 Columbia River Crossing ballooned.

The freeway project Oregon and Washington want to build across the Columbia River has already cost taxpayers $136 million.

This cost comes largely from paying consultants to design, plan and push for the project, known as the Columbia River Crossing, or CRC.

The cost of the project has been reported before. But for the first time, it's clear why those costs skyrocketed.

Documents reviewed by WW show that a single contract initially estimated at $20 million has climbed to $105 million. 

The contract grew because Oregon and Washington officials kept rewarding the contractor, Portland-based David Evans and Associates, even though the firm had burned through its money long before finishing the work.

The costs include the price of working for years on a bridge design experts later said was unbuildable. The result: We now have a project that's 18 months behind schedule and costs more than five times the original estimate.

Records show Oregon and Washington officials sent the cost of the original David Evans contract soaring, from $50 million to $95 million, with a single change to the deal. That change was done quietly and with little public scrutiny. 

WashDOT Deputy Secretary David Dye insists both states' transportation agencies monitored costs carefully and only approved expenditures after identifying specific, necessary tasks. "We have very rigorous internal processes," Dye says.

He says the complexity of the planning process made sticking to the $20 million estimate impossible.

"The environmental process up front has so many variables, and there is so much that can happen,” Dye says. “It is very volatile and very difficult to estimate.” 

The hidden story of this deal, called the master contract, doesn't bode well for the $3.5 billion freeway project.

The CRC calls for building a new Interstate 5 bridge, widening the freeway, adding a series of ramps, and extending light rail from Portland to Vancouver. 

The project is aimed at reducing the traffic congestion that now plagues I-5 near the Oregon-Washington border.

But as WW has reported, the CRC's own documents show the project won't solve traffic problems, and that state officials based their cost estimates on inaccurate traffic projections ("A Bridge Too False," WW, June 1, 2011). WW has also reported that state officials continue to mislead the public about the number of jobs the project will create ("Not True, Times Ten," WW, June 15, 2011).

Oregon and Washington officials pledge the project will be completed on time and on budget in 2022.

But if the early stages are any clue, the CRC will take far longer and cost far more than officials are telling the public.

Here's what has driven the costs so high already:

A project of such scale requires years of planning—costs paid for equally by Oregon and Washington taxpayers. The key document that comes out of this work is the Environmental Impact Statement, the size of a couple of Manhattan telephone books, filled with traffic, environmental and financial information. 

In February 2005, planners went looking for a consultant to manage the planning.

"The WSDOT/ODOT Project Team anticipates the total cost of the environmental phase to be in excess of $20 million, with an initial agreement to be in excess of $6 million," the original solicitation read. "The total dollar figure will vary upon project requirements and funding."

Only one company, David Evans and Associates, responded. In May 2005, Evans signed the contract to: "Deliver the EIS [Environmental Impact Statement] and Record of Decision; develop a framework and strategy to deliver the project.” 

But something had changed behind the scenes. The $20 million-plus cost had somehow jumped to $50 million, the amount written into the David Evans contract.

It's unclear how or why the figure grew so much. "I wasn't here then, but as they realized what the scope was, it was more than anticipated," says Lyn Wylder, David Evans' current CRC project manager. "There were more alternatives examined and more work to be done."{::PAGEBREAK::}

Yet David Evans couldn't finish the work even with a contract that paid more than twice what was originally planned.

On May 2008, Evans delivered the hefty Draft Environmental Impact Statement along with some bad news: The firm had used up the $50 million in less than three years.

And the project was far from finished: David Evans still had to produce the Final Environmental Impact Statement, published September 2010.

The cost of the contract exploded with a startling lack of oversight and public review. 

On May 16, 2008, Doug Ficco, a WashDOT engineer then in charge of the project, submitted a terse four-page memo seeking an additional $45 million for the Evans contract. 

Normally, public agencies are required to seek competitive bids when contract amounts exceed a certain threshold. But to get that money for David Evans, Ficco didn't need to get new bids from other contractors or even seek legislative approval. He merely had to answer a few brief questions on a WashDOT form. 

Here's the key question: "Explain why the services were not included in the terms of the original contract?"

“The services were included,” Ficco wrote. “The funding wasn’t.” 

That was his entire answer.

And David Evans got $45 million added to its contract.

Patricia McCaig is both a consultant to David Evans and the adviser to Gov. John Kitzhaber on the CRC project. She isn't paid by Kitzhaber, but she's billed David Evans $227,000 so far. McCaig says although the $45 million increase did not require approval of lawmakers or the states' governors, it wasn't just rubber-stamped. 

She says project officials wrote the contract to be amended without rebidding if Evans performed well. 

"The caliber and quality of work is evaluated all the way up to the [transportation department] directors," McCaig says. "I don't think anybody ever thought you could get to an ROD [Record of Decision] for $50 million. I believe that was just the maximum contract amount WashDOT could sign at the time."

Portland economist Joe Cortright, a critic of the CRC, says the practice of low-balling the cost of the initial contract and then hiking the price through amendments, or “change orders,” allows agencies to skirt oversight. 

"Why wouldn't you rebid the contract when you are almost doubling the initial amount?" Cortright asks. "The argument is always that you've built relationships that would be lost with a rebid, but that's not a good excuse."

Oregon and Washington officials did it again in April 2010, extending the deadline by 18 months. A year after that, they increased David Evans' contract to $105 million and pushed its life out to December 2012.

Of the total contract, David Evans itself has collected $33 million and has paid the remainder to subcontractors to help with planning. (For a list of how much subcontractors got paid, download it here.)

McCaig and Wylder say mega-projects such as the CRC present many variables.

"The range of alternatives and unanticipated specific challenges, you don't know them all," McCaig says. "Being 18 months off on a project like this is actually on time."

McCaig says it's unfair to assume that, simply because the CRC blew its planning deadlines as costs grew, the actual building of the bridge will also go over budget and past its deadlines. "It would be like comparing apples and oranges,” she says. 

Cortright says the project's record makes him skeptical—as does the poor track record of similar mega-projects across the country.

“There aren’t effective mechanisms to hold them accountable when budgets and deadlines are not met,” he adds. 

And the CRC saw its costs explode while doing the easy part: planning. Just wait, he says, until the project actually starts building a massive new bridge, disrupting a freeway that carries 120,000 vehicles per day, and working in the Columbia River under strict rules to protect sensitive salmon habitat.

"Experience should tell us the risk is on the upside in these projects," Cortright says. “It’s going to take longer and cost more than they say.”  

WWeek 2015

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