Tutor Perini Corporation (Tutor Perini) wishes to respond to the March 24, 2019 article titled “Independent monitor warns Central Subway project in danger of further delays.”
The San Francisco Municipal Transportation Agency (SFMTA) is responsible for the delays and cost overruns on the Central Subway Project (Project), not Tutor Perini.
It appears that SFMTA has been dishonest with the public and the oversight contractor regarding the project delays. Construction delays arise for a myriad of reasons, many of which are the owner’s fault.
Contractors typically do not design the projects they build; owners or their consultants do. If the project’s original design is flawed and the contractor cannot build what is required as a result, the owner will have to issue a change order providing the contractor with new design plans or requirements to correct the problem. Here, SFMTA has delayed the project opening by issuing hundreds of change orders to the contractor to correct numerous flaws in SFMTA’s original design for the Project. SFMTA has known since at least 2016 that the project was not going to be open to the public on time because of the delays that SFMTA, not Tutor Perini, has caused.
A good example of this occurred on the Chinatown portion of the project. The original project opening date of December 2018 slipped because of SFMTA’s design errors. SFMTA also misled the oversight contractor when it gave them a tour of the Chinatown Station this past February. What SFMTA failed to tell the oversight contractor was that from the summer of 2018 until February 2019 Tutor Perini’s progress on the project was effectively stopped due to SFMTA’s defective reinforced concrete structural floor slabs, beam, and Station Agent Booth designs.
In addition, SFMTA failed to inform the public that it was SFMTA that oversaw and approved the contractor’s installation of the steel track referenced in the article that SFMTA later insisted needed to be replaced. Only after the track work was partially installed did SFMTA change its mind on requirements for the work and then tried to blame the contractor. SFMTA admitted some responsibility for the track issue by directly purchasing the new higher strength replacement rail for reinstallation by the contractor.
SFMTA also fails to acknowledge that the reason it partially terminated the Automated Train Control System contract was because SFMTA’s sole source supplier, Thales, who SFMTA previously assigned to Tutor Perini, had failed to date to produce a final design for train control. SFMTA only terminated this assignment so that SFMTA would not be held liable by Tutor Perini for the delay caused by Thales’ failure to perform.
In fact, virtually all of Tutor Perini’s disputes with SFMTA center around SFMTA’s flawed designs for the project and all the re-work and delays necessitated by these design errors and SFMTA’s untimely and inept attempts to correct them. Tutor Perini notified SFMTA in 2015 of the defective radio system prescribed for the project. Yet four years later, SFMTA has still failed to produce an acceptable final design for extension of the radio system necessary to finish the project.
For the past several years, SFMTA also has failed to completely pay Tutor Perini and its subcontractors for the extra work made necessary by SFMTA’s changes to the original project requirements. Many of the subcontractors who have gone unpaid are small disadvantaged contractors. In fact, SFMTA is partly responsible for at least one small disadvantaged business becoming insolvent, and the agency is causing undue financial hardship to many other small companies that have registered formal complaints. SFMTA has also failed to resolve various Dispute Review Board (“DRB”) recommendations that have been made in favor of Tutor Perini, including that Tutor Perini and its subcontractors should be granted extensions to the contract completion date due to design problems caused by SFMTA.
The Article’s suggestion that Tutor Perini’s legitimate disputes with SFMTA may cause delays to project completion is also false. To date, Tutor Perini has continued to perform its obligations under the contract despite the various disputes over time and money, in effect financing extra work made necessary by design flaws that are not Tutor Perini’s responsibility. Moreover, Tutor Perini’s management has made several efforts to reasonably resolve the disputes with SFMTA. Tutor Perini has proposed methods that will allow for SFMTA to make payments for changed and extra work done within a reasonable time frame instead of years later. To date, however, SFMTA has ignored these reasonable proposals.
In summary, it is easy and convenient to blame the contractor for construction delays. It takes more time to understand the complicated project histories that underlie disputes and delays on major construction projects. In the case of this project, however, it does not take long to uncover the real facts. Upon some basic investigation and fact-gathering, it becomes clearly evident that SFMTA itself is responsible for the project delays. We do not address the comment of the self-proclaimed “Ron-Tutor-ologist” other than to note such a claim and the statements made by this purported “expert” are inconsistent with any serious inquiry into the true causes of delay affecting the completion of the Central Subway Project.
The truth is that Tutor Perini and its team have worked diligently to work around SFMTA’s design errors to complete the project on time. We also have continued working on the project notwithstanding legitimate payment disputes that SFMTA has essentially ignored for years. Underlying these disputes is the fact that Tutor Perini and its subcontractors have performed significant extra work to complete a major public project and are now unpaid and out of pocket millions, all as a result of SFMTA’s faulty design and project mismanagement.
Tutor Perini is the lead contract on San Francisco’s Central Subway project.