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Attempt to avoid Dulles cost escalation retracted
In an attempt to avoid contractual cost escalations of up to $6 million a month on the Dulles rail extension, the project's manager asked recently for permission to spend reimbursable money to continue work on the project.But the Metropolitan Washington Airports Authority (MWAA) retracted the request just days later, on Aug. 1.
The project contract between the state and Bechtel, the private engineering company working with Virginia and MWAA on the project, stipulated that the project must have final federal approval by Aug. 1, or suffer a 4-percent annual price increase for delays.
By MWAA's own reckoning, that could add up to as much as $6 million a month.
To try and keep work going, Jim Bennett, president and CEO of the Washington Metropolitan Airports Authority, sent a letter on July 27 to the Federal Transit Administration, asking for a "letter of no prejudice."
Letters of no prejudice are standard fare for projects in good standing – that is, with little delay or risk of cost overruns.
If granted, such a letter would allow locally generated money to be spent on the project, but reimbursed back to the local agencies with federal dollars after the project gets the official green light from the feds.
Bennett's letter indicated that the work would amount to around $24 million. And because the private contractor would be doing work on "engineering and design activities that are included under the design-build contract scope of work," the project would technically not be delayed.
FTA has confirmed it has received the retraction from MWAA, but FTA officials would not comment further.
MWAA now intends to focus on getting the project through the FTA's rigorous risk assessment.
"In the grand scheme of things, the bigger issue is the FTA approval process," said Pierce Homer, Virginia's director of transportation. "It's more important to focus on those issues."
Said MWAA spokeswoman Tara Hamilton: "We want to work on providing information for the risk assessment process. We understand that this is the critical priority."
In the meantime, MWAA is back to talking with the private contractors to see what could be done about mitigating the cost escalations that are outlined in the contract.
"It's our responsibility to have that discussion with them," Hamilton added.
Contact the reporter at mzimmermann@timespapers.com
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