L.A.'s Light-Rail Fiasco

One of the bidders was Brutoco Engineering & Construction, a Fontana-based firm with a lot of experience on MTA projects. Mike Murphy, the company president, described the proposed Expo Line contract as "an awkward thing to work through."

"I have never seen one with that exact delivery method," he says. "It took us months to understand exactly what they were trying to get to. ... We weren't real comfortable with it."

ILLUSTRATION BY CURT MERLO

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More About

• Rick Thorpe
• Metropolitan Transportation Authority
• Expo Authority
• Transportation
• Public Transportation

Brutoco bid high, and didn't get the contract.

"When it got down to negotiations, we felt it was more risk than the other team did," Murphy explains.

The other team was Flatiron/Fluor/Parsons (FFP), a joint venture that won the contract in the spring of 2006. It bid $420 million, which represented about two-thirds of the project's total budget of $640 million.

The bid amount was called an allowance — essentially, it was an estimate — with the actual price to be determined through later negotiations.

The design work began that spring, with construction to start the following year. The line was scheduled to open in the summer of 2010.

That date has come and gone, and the project is still far from completion. Most of the things that could go wrong did, and most of that led back to that negotiated design-build contract.

For one thing, just as the outside experts had warned, Thorpe never got a guaranteed maximum price from FFP.

Thorpe said that was because FFP demanded too much of a cost cushion, or contingency, for accepting the full risk of the project.

The Expo Authority broke the contract into 20 "packages" and negotiated a price for each one as the need arose. Soon it became clear that the piecemeal negotiations would result in a much higher total price than the $420 million bid. So in late 2007, Thorpe prevailed on the MTA to boost the project's total budget from $640 million to $808 million. Part of that was due to the rising cost of materials, but it also was attributable to refinements in the design — the rail equivalent of beveled mirrors and Craftsman-style light fixtures.

Today, the FFP contract is worth about $585 million and it's projected to rise to $596 million by the time the project is complete.

How could that happen? Weren't the contractor and the designer working together to create a cost-effective design?

As it turns out, they were not. The tight link between designer and builder — the key to design-build — was broken.

FFP's first project manager was Ray Hughes, a Flatiron executive with extensive experience building bridges and highways. Several officials on both sides of the dispute described him as gruff and confrontational. When he saw something he didn't like, he wrote a letter. It was a way of documenting the issue for a future claim rather than resolving it.

Hughes is a construction guy, and his skill set didn't match the needs of the early phase of the project, which required someone to oversee the design work.

"The designer and the design group was basically doing design with limited supervision from the project manager," says Eric Olson, Expo's chief project officer. "The designers were given free rein to go and design whatever they saw fit."

On a more traditional project, that would have been FFP's problem. A standard design-build contract would have had a fixed construction price, giving Hughes a powerful incentive to whip the designers into shape to hit that price.

But here, the construction price hadn't been negotiated yet, so there was no incentive. It was still Expo's problem. Hughes seemed to have figured that out. In the words of a colleague, Hughes "was playing the contract well. He was saying, 'We're going to bury the [Expo Authority] on this. They don't know what they're doing.' "

Asked to comment, Hughes responds with a statement from FFP that called him a "very capable project manager."

The Expo Authority maintains that FFP's lack of design oversight is the primary reason for the delays.

Thorpe and his colleagues at Expo saw the issue as a personnel problem, and not as a flaw in the contract. Either way, they were powerless to solve it.

"We don't have the ability to fire him because he doesn't work for us," Thorpe says in an extensive interview with L.A. Weekly. "We can express our opinions."

By 2008, Thorpe had expressed his opinion enough that Tom Rade-macher, the president of Flatiron, flew out from the company headquarters in Colorado to replace Hughes and the chief designer from Parsons, Tom Wilson.

By then, other factors were contributing to the delays, and personality conflicts had taken their toll.

The Expo Authority had leased space on the 34th floor of the AON tower downtown, sharing the floor with FFP, an arrangement that was intended to facilitate communication.

From the early going, that didn't seem to work. Whenever either side had something important to say, they put it in a letter.

"I never witnessed any screaming," Olson says. "There were times when it was tense."

Both sides agree that the first two years were critical, and that once deadlines started to slip it was almost impossible to recover. FFP declined to make officials available for on-the-record interviews, but in a statement, the company says the project was "challenging from the very beginning."