With little wiggle room, Muni trusting controversial contractor for Central Subway work 

click to enlarge MIKE KOOZMIN/THE S.F. EXAMINER
  • Mike Koozmin/The S.F. Examiner

Operating under a tight schedule and even tighter budget, Muni is about to hand over its $1.6 billion Central Subway plan to a man who has a contentious history with The City and a reputation for exceeding project costs.

On Tuesday, the San Francisco Municipal Transportation Agency’s board of directors, which governs Muni, unanimously awarded an $840 million construction contract to Tutor Perini, a national firm led by Ron Tutor. As a result of the contract, the transit agency’s contingency budget for the Central Subway project dipped to $65 million, well below the $160 million minimum federal standard. And the plan has just a 4.7-month scheduling buffer zone, also below the 10-month federal standard.

Tutor, a billionaire construction magnate, has successfully overseen an array of multimillion-dollar undertakings across the country. He’s also been sued a number of times, including once by San Francisco City Attorney Dennis Herrera.

In 2002, Herrera accused Tutor of defrauding city taxpayers by increasing the cost of a rehabilitation project at San Francisco International Airport from $620 million to $980 million. The two sides eventually settled, with Tutor paying The City $19 million.

Aaron Peskin, former president of the Board of Supervisors, said Tutor has managed to maintain his portfolio of work because of his phalanx of lawyers and his powerful friends, which include ex-Mayor Willie Brown. Tutor even personally donated $500 to Herrera’s unsuccessful mayoral campaign in 2011.

“Tutor’s very litigious,” Peskin said. “And he’s incredibly politically connected.”

Peskin, an opponent of the Central Subway, said Tutor’s involvement will ensure that the project goes down as a “huge civic embarrassment.”

Tutor has been demonized by his critics for initially bidding low for projects and then adjusting the cost upward, a practice called change-order contracting. In 1992, then-Los Angeles Mayor Tom Bradley said Tutor was “the greatest change-order artist I’ve ever seen.”

A report last year by The Bay Citizen found that 11 projects overseen by Tutor in the Bay Area exceeded their costs by a collective $765 million.

Quentin Kopp, a retired Superior Court judge and former president of the Board of Supervisors, said Tutor has made a career of change-ordering contracts to greatly increase their original costs.

“Awarding him the contract is just the latest mistake made by the SFMTA,” Kopp said.

Tutor’s bid for the Central Subway contract — which includes the construction of three train stations — was $27 million lower than the next-closest firm. By law, the transit agency is obligated to accept the “lowest and most responsible bidder.”
Director Tom Nolan, president of the transit agency’s board, said he was aware of Tutor’s reputation for change orders but did not know about Herrera’s lawsuit.

“This is far from perfect,” Nolan said. “But putting this out to bid again would have put us way behind schedule.”

Paul Rose, a spokesman for the transit agency, said Tutor Perini has an impeccable record for completing large-scale projects, including Muni’s Metro extension undertaking that was completed in 1997.

Tutor was unable to respond to requests for comment Thursday. But in August 2012, when asked similar questions about his involvement with San Francisco and his history of change orders, Tutor said, “I have a great working relationship with Muni and my track record on change orders is no different than any other large contractor.”

wreisman@sfexaminer.com

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Will Reisman

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