I have reported many times that the cost of the Dulles Rail project appears to be about two times what it should be.
http://www.bruhns.us/civic/DullesRail/Dulles-Rail—Silver-Line-overcost-report—Bruhns.pdf

Now comes this US DOT audit report that shows one big reason for the Dulles Rail double price that I have noted. The audit reports that MWAA has been steering a large percentage of multi-award contracts to a contractor that apparently charges 1.3 to 3.3 times as much as other contractors.

I submit that because of the size of the Dulles Rail project, the magnitude of the cost increase caused by this practice will crush the economy of this region for much of this century. I hope that the people who pushed for this rail project without regard to its cost, and our so-called ‘leaders’ and news media that covered up the double price of Dulles Rail (also known as the Silver Line) all these years, are proud of themselves.

Maybe it is not too late to force Phase II of this project, at least, to be contracted properly and at a reasonable cost. Our government should also vigorously pursue the recovery of excessive payments that were made for Phase I.

(continued)

The Dulles Rail contract is not a multiple award contract (MAC) which was a main focus of the IG's audit. In fact the Phase 1 contract is not a MAC and was not examined, nor is it even mentioned in the report.

If there had been obvious discrepancies in Phase 1 policy and/or procedure it is not unreasonable to assume that the IG would have been more than eager to look at that contract and boldly feature its flaws, and to insist the report findings be especially applied to the high dollar value Phase 2. They did not and therefore to automatically assume based on this report that the Phase 2 estimate is suspect to the tune of being 100 percent overpriced is a complete fantasy.

MWAA awarded more than 80% of multiple award contracts at 130% to 330% of the cost of other bids, and you actually think they are being frugal with Dulles Rail? Wake up and smell the coffee, dude! I based my estimate on several things, stix, and this audit result is more confirmation.

Here's a question, stix. You know that the MWAA estimate for the parking garages, for example, is 48% higher than your very generous estimate. Why aren't you saying anything about that?

Please stop being an apologist for the Dulles Rail ripoff.

Again Phase 1 is NOT a MRC and it was not even reviewed or mentioned in the audit report, even though it is the most prominent MWAA contract today and probably of greatest value.

To leap to the conclusion that the audit report proves your "amateurish" analysis (your words) that the actual incurred cost of Phase 1 and the estimated cost of Phase 2 are each 2X overpriced is an 'ends justify the means' act of a opponent of Dulles Rail that lost his fight to kill Phase 2, imo.

It is noteworthy that no one believes your analysis and off-the-wall 2X allegation but you.

And btw I believe the MWAA estimated garage costs are as accurate as can be reasonably expected of the experienced professional estimators MWAA used. The actual cost of the Rt 28 garage will be known when that portion of the Phase 2 contract is negotiated with the competitively selected Design/Build contractor.

It do appear that the value received for the price paid is way below normal expectations. The IG report states that the MWAA is as corrupt a group as any in the US. No bid contacts, nepotism, travel expenses, dining expenses, hiring practices and no accountability just a few of the less then stellar attributes of the MWAA.

Although the audit report cites many instances of dubious administrative, human resources and contracting actions in SERVICES areas, it does not even mention the Dulles Rail Phase 1 Design/Build contract. Nor does it include in its 13 recommendations any suggestion that any apply to the pending Phase 2 contract, huge in terms of value and public attention.

That is not to say there are not report recommendations that would benefit the Phase 2 competitive bid and ultimate contract. But to conclude based on the audit report (that has been many months in the preparation and that does not even mention Phase 1 or Phase 2) that we the public are "not getting the value for the price paid" is wholly unwarranted. And to jump to the conclusion as MR. Bruhns has that the report somehow justifies his wild assertion that the current Phase 2 estimate is 2X overpriced is simply ludicrous by any standards.

Dulles Rail, although mentioned only in the opening paragraph of the letter as background, it is nowhere mentioned in the main report, nor was it apparently reviewed, nor is it referenced in any of the detailed recommendations. To jump to the conclusion that thie report as written proves a 2X overprice of the Phase 2 estimate is dumb in my view. Five or ten percent overpriced perhaps since it only an estimate, but 100% has no creditability as demonstrated by no one that has come forward in agreement.

Your analysis is unprofessional and naïve, but I agree with you in your own assessment that it is “amateurish’. Repeating it hundreds of times as you have in this and local forums does not give it any creditability. I would contend that this is conclusively demonstrated by the fact that no one has come forwards in all these months that is in agreement.

Drop it Mr. Bruhns. Your 2X claim no matter how many times you shout it is bogus. You lost your campaign to kill Phase 2!

Well stix, I don't know how many Inspector General reports you need to see, that tell you that MWAA has been happily awarding their contracts at 30% to 230% elevated cost, before you begin to realize that what I'm saying is correct. But ignoring the double cost two thousand times will not make the double price right

The audit only examined 125 contracts awarded between 1989 and 2011. This is but a fraction of the total number of contracts awarded during that period. In fact there were 190 contracts awarded between 2009 and 2011 alone.

To jump to the conclusion as you have that because of a fraction of the 125 contracts examined had costing discrepancies, that Phase 1 (that they chose not to examine) had similar costing discrepancies is as bogus as your amateurish analysis. Your 2X 'sky is falling' claim is nonsense and the audit report findings say nothing to the contrary. If you were honest, you would recant your first post in this thread.

Thats enough contracts of considerable value that shows mass corruption.

Once again stix: as you are well aware, my conclusion of a roughly 2:1 overcost is based on MWAA's estimates of the overall cost of Phase II, the statement of Mark Canale that Phase I prices were similar to the FTA numbers for Phase II, the cost of the Rt 28 station and the cost of the parking garages.
http://www.bruhns.us/civic/DullesRail/Dulles-Rail---Silver-Line-overcost-report---Bruhns.pdf

You say that my analysis is defective, but then you intimate that the Inspector General's analysis is defective as well. From what you are saying, it seems that I'm in good company!

But the point about this audit is that MWAA routinely awards contracts at prices that are sometimes bloated 3.3 to one - and that supports my claims. I suspect that your evident desperation to mischaracterize the basis of my analysis indicates that it is you who are losing this debate.

On P2 of the audit (P3 of the pdf):
"We conducted our audit in accordance with generally accepted Government auditing standards. To conduct our work, we reviewed relevant acts, agreements, policies, and manuals; examined Federal, State, and local best contracting practices; and interviewed MWAA officials. In addition, we reviewed a total of 125 contracts to evaluate MWAA’s contract practices."

Here is what Mark Canale said:

“We have actual cost information related to Phase 1 and the cost of these Phase 2 elements are within the range of what the costs we have seen in Phase 1”.

In other words the Phase 2 cost estimate is consistent with the actual costs being experienced on Phase 1. He did NOT endorse your flawed 2x analysis. In fact after all these months of your writing letters and posting hundreds of times, no one has endorsed your analysis.. again NO ONE!

Maybe phase 1 should be audited for cost overruns. Didn't they just set up a 150 million dollar slush fund for the pilings in August? Alright just so you lose the repeated talking point I fully agree with Bob on the cost of phase 2. If it's not 2 times as much it's probably more. Tell me about the cost of the garages per space and the rail cars that have increased in price from 2.6 million to 4 million per car Stix.

The-stix, as you don't identify your real name or support for your claim to divine the truth, readers should discount your comments just as Bob Bruhn's Dulles Rail cost claims should be viewed with caution where not supported by hard facts.

From OIG report p8/9: "Between January 2009 and June 2011, MWAA awarded 190 contracts that exceeded $200,000—only 68 (36 percent) of which were awarded with full and open competition. Of these 190 contracts, 5 were sole source awards with a combined value of $6 million. However, MWAA awarded these five contracts without Board approval—which the Airports Act, lease agreement, and MWAA’s Contracting Manual require. MWAA awarded the remaining 117, or 62 percent of the 190 contracts over $200,000, using categorical exceptions ... these contracts amounted to $225 million, or 40 percent of the total value of ... contracts over $200,000. MWAA’s policies allow limited competition through the use of six categorical exceptions,...its Contracting Manual states...these exceptions “comprise only a small portion of the Airport Authority’s contracts and their dollar value.”

Overall Dulles Rail capital costs, including garages and other elements within the 2004 Environmental Impact Statement plus other transit station area improvements will cost over twice the original cost estimates from a decade ago. Projected Dulles Toll Road tolls are five times higher than forecasts made before MWAA became involved.

say opps! Stix?

In early March 2012, I was warned by an official with knowledge of both Phase 1 and 2 cost estimates to review the assumptions made in estimating Phase 2 costs. While I was educated as a civil engineer and worked as an engineering consultant forty years ago, I lack the ability, time or funds to review the complex cost estimates.

Fairfax County, for whom Mark Canale works, did not provide to the public any detailed review and technical basis for support of the Phase 2 cost estimates. Canale merely acted as a rubber stamp. On the day prior to Fairfax County Board vote to support Phase 2 participation, I called the Fairfax County auditor who had reviewed Phase 1 numbers and assumptions circa 2010. He was not asked by the Fairfax BOS to review the Phase 2 cost estimate data.

The Dulles Corridor Advisory Committee, which is supposed to represent the public in Dulles Rail matters, did not request an independent review of costs.

In August 2011, I proposed a public oversight committee to include technically and financially qualified professionals to review and make suggestions for the Dulles Rail project and Dulles Airport area transportation improvements. Neither MWAA nor elected politicians have acted on this request.

When are we going to see a report showing both economic and financial feasibility of Phase 2, supported by all assumptions made? TIFIA loan funding of $1 to $2 billion would help reduce the potential DTR cost burden but who knows if that will happen.

The-stix, MWAA certainly reviewed the estimates but at what level of detail I do not know. I never read the reports and data from AECOM/PB (it's Brinkerhoff!) or the independent estimator but was told to investigate the assumptions made in the estimates. I never have.

The Virginia agency responsible for reviewing the estimates is Department of Rail and Public Transportation. DRPT hired a professional engineer at the end of 2011, to work at the Tysons project office, presumably tasked with reviewing the data.

I have long had a high regard for Sam Carnaggio, the MWAA Phase 1 project manager. Pat Nowakowski, Executive Director for MWAA for Dulles Rail, has skated around various issues and questions in the past but at a meeting last week he did a good job in answering questions.

It is hard for non-engineers to assess what risks are involved in a complex project such as Dulles Rail. The saying goes: "the devil is in the details." I am not a licensed PE so do not offer formal opinions in the engineering field.

It seems to me that the engineering and other risks associated with Phase 2 are less than they were for Phase 1. Also, a body of knowledge and experience has been built by the MWAA Project team over the last five years. The fundamental problems with Phase 2 continue to be the proposed financing structure and lack of evidence to support demand for heavy rail transit in the lower population and employment density areas westward from Reston into Loudoun County.

Add the potential negative real estate market impacts of sequestration and increased federal income taxes - $2,500 for those making $60,000 per year - coming in 2013 and we have a formula for potential financial disaster, not only for the Dulles Toll Road and Dulles Rail but for the Dulles Greenway also.

Several times in the past decade at Committee for Dulles and MWAA meetings, representatives of contractors and engineering consultants expressed concerns that the MWAA contract process was not handled fairly or properly. I did not have the ability to judge the reasonableness of these complaints so I took no action.

Here's a link to a Bacon's Rebellion article today about the OIG report on MWAA:

http://www.baconsrebellion.com/2012/11/the-mwaa-contracting-scandal.html

Mr. Whitfield, you say you were trained as a civil engineer and worked as an engineering consultant. Phase 2 estimates were developed by rail experienced, professional and independent private consultants, each of whom has as a minimum their reputation on the line with this high profile construction program.

Question: in light of the actual costs being incurred on Phase 1, can you reasonably conceive that the current Phase 2 estimate is as much as 100% overpriced, even if a few of the assumptions are questionable?

I grant that the cost could be lower if program cost items were reduced or eliminated, but for the current work scope, is it even reasonable in your view for the estimate to be even near that far wrong? I am asking for your opinion as having related experience and a long personal involvement in these matters.

"The Stix" this is my final comment to you unless you divulge your identity.

Phase 1 costs rose signficantly from the 30% PE stage (2005?) to final design completion in 2009. Phase 1 projected capital costs rose from $1.5 billion in 2003 to $2,9 billion current cost estimate. MWAA projected Phase 2 at $2.5 billion in its 2006 submission to Virginia. By 2010, MWAA projected Phase 2 at $3.8 billion. Total new costs are still over $3 billion.

In Phase 1, as in Phase 2, some elements of the orginally approved "record of decision" plan were shed as costs rose, eg the $100 million Wiehle Avenue parking garage. The Wiehle garage project lacks any cost-benefit feasibility. Rather it is a politician's dream, paid for by taxpayers, by one who thinks that we should all ride transit, regardless of where we live or work.

Phase 2 will lack the complexities of utility relocation and right of way acquisition and easement issues in Phase 1. We are in a less competive global demand environment for raw materials today -concrete, steel etc- than in 2008 when the Peking Olympics and other major Chinese public works were a factor. That coupled with diminshed worldwide industrial and commercial development demand resulting from global economic woes indicates that the contractors bidding on Phase 2 will likely be less aggressive on pricing than would have been the case five years ago. As I recall, Bechtel/Dulles Transit Partners locked in Phase 1 contract price circa 2007.

Thank you Mr. Whitfield, I am sorry you have an aversion to posters that do not identify themselves, but I do so for my personal security reasons and not at all because of any connection with you or your interests except in this forum.

I will say that I am disappointed that with your knowledge and experience you danced around my specific question. Phase 1 cost estimate changes during the preliminary engineering process, especially during a transition of project responsibility to MWAA are not surprising. The 100% PE estimate of $2.65 billion in 2006 is the project cost of record that carried forward to the project start and award of the Design/Build contract in 2007. That estimate was thoroughly reviewed and scrubbed by MWAA, DRPT (the Commonwealth), WMTAA and PMOC consisting of a variety of outside consultants and specialty experts (for the Tyson tunnel for example).

Except for project scope changes during the PE process, it is inconceivable that that Phase 1 100% PE estimate could be overpriced by a factor of two. In fact the recent cost estimate increase to $2.9 billion is clearly an indication that it was underpriced. I suggest that Phase 2 is and will be no different regarding costing integrity. Over 5 or 10% perhaps, but 100% over is not even a reasonable expectation except for scope changes. I should think anyone with any knowledge of the engineering estimating and contracting process of major programs would agree.

As those who know me can attest, I don't dance very well -especially around facts.
A minor correction; it's Parsons Brinckerhoff. the firm used to include Quade & Douglas. PB was acquired in 2009 by Balfour Beatty, a British company. In 2007, BB also acquired Centex Construction, Centex Homes commercial building division.

As to Phase 1 project costs, in his March 2, 2012 article, Terry Maynard of Reston 2020 tabulated the changes in cost estimates from the $1.52 billion noted in the Final EIS in 2004. The April 2006 FTA PMOC shows $2.07 billion "true 100% PE costs" with a 2011 completion date. By July 2007, the FTA "updated 100% PE" shows $2.65 billion and 2013 completion date.

http://reston2020.blogspot.com/2012/03/key-dulles-rail-cost-document-held.html

As to the level of Phase 2 review conducted by MWAA and DRPT, MWAA only took one week from receiving the project cost estimate data from the consultants on or about March 1, 2012 before releasing information to its project partners -Fairfax and Loudoun counties. As Terry points out, most Fairfax County Supervisors did not want to wait to review the data before approving its Phase 2 participation.

Taxpayers in Fairfax and Loudoun counties should demand a greater role in the Phase 2 project oversight and decision making process, either adding public representation by professional experts in finance, engineering and other skills to the existing Dulles Corridor Advisory Committee or through a new committee.

I am familiar with Maynard’s post. As I said earlier, the cost growth of Phase 1 should not be surprising as the project requirements and scope are refined from start, through 50% PE completion to 100% PE completion. Also with all the program delays affecting project start and completion dates, one can reasonably expect cost escalation. Finally I have never been convinced that there was not just a bit of politics involved to keep the initial estimates down pre-MWAA, for the public consumption and probably for the project to look more attractive to DOT to maximize their contribution.

As to Phase 2, I am certainly in favor of more transparency and of some public explanation of the project cost estimates. I do not favor the public having a significant role in the “decision making process”. I have run a few major programs in my time and can attest that “too many cooks spoil the broth”. And I expect this would be especially true of “public” cooks who are often excessively vocal but woefully ignorant. One needs only look at some of the posters in the Patch forums to see what I mean.

Bottom line, based on the actual costs being incurred on Phase 1, I am relatively confident that The Phase 2 100% PE estimate is not all that far off from today’s reality for heavy rail construction. Just an opinion to be verified.

Once Mr. Brown gets through wiping it off his face he can then spend his time looking for other gainful employment.

I have so many questions I don't know where to start. Who benefited from these contracts? What department (s) gave out these contracts? What role does the CEO have in approving contracts ? Does the staff have authority to just give out contracts without CEO or Board approval? Why did they not report who was awarded all these contracts? Why is Wolf, McDonnell and LaHood not asking for any resignations? Im sick of this I'm sorry crap we will fix it going forward. I will be paying huge tolls and these jerks just keep saying I'm sorry we will adopt a new policy. People in leadership need to be fired. Where are our elected leaders? I have not heard one of them Republican or Democrat ask for any resignations. WHY???

Also I would assume MWAA does an audit every year. Why was this never discoved before this report? Please fire someone just to show that you cut the head of this snake. If our elected leaders do not get involved and ask for resignations then they are part of the problem.

I do believe they do a internal audit. This quagmire dates back to the 90's. The whole concept of a Authority is a failed system, they are from the school of blame he did it, or she did it and they didn't have the authority yet they awarded contracts under the current group of leaders. The buck stops with them no if's and's or but's about it. Let me reconsider I do believe there are some butts involved.

Frank Wolf was very vocal about Martire's plane ticket but has been silent on the 180k job for a no show job for a former Board member. He also held that lame press conference with Senator Allen and Barbara Comstock complaining about MWAA hiring Mame Reiley while wearing George Allen for Senate stickers. Was this a press inference about MWAA or a political event for Allen? Either way it looked like they made the deal political. Now that the elections are over Wolf and McDonnell have been silent. It just shows most of this has been political theatre. These politicians have no interest in cleaning up MWAA? They just want to use them to beat up on. Fire the three clowns and I will think MWAA has a hance to survive. Potter, Davis and Curto need to resign.

At the November 16 hearing by the House Transportation and Infrastructure Committee on the USDOT Inspector General's audit of MWAA. nobody involved escaped without blame for shortcomings and misconduct. The USDOT IG Calvin Scovel was very professional in his presentation. He did not comment on the FBI's investigation of MWAA.

At the Governor's Transportation Conference in Tysons last week, nobody offered substantive comment on the as yet unresolved feasibility and financial problems for Dulles Rail Phase 2. My view is that it is time for the USDOT IG Scovel to tackle the many as yet unreported problems at the Washington Metro Area Transit Authority.

WMATA has yet to admit publicly that upgrading traction power stations in Arlington and DC plus other improvements needed to downtown elevators and escalators to allow more eight car trains to operate there will cost well over $1 billion.

The Dulles Airport maintenance yard has been sized and designed for all Series 7000 rail cars - not just those to be used by Dulles Rail. WMATA is trying to force Virginia taxpayers to pay all of its costs instead of most being paid by Metrorail riders. A total absence of leadership exists by both Republicans and Democrats.

Why has no elected official or transportation agency leader demanded independent forecasts of Metrorail ridership, revenues and cost projections for the Silver Line? The project is the biggest financial boondoggle in Virginia history.

It's just a bunch of crooks fighting over stolen money. Reports that expose their lies are not going to help them grab the money and run, so they don't demand them.

The Dulles Rail project, also known as the Silver Line, costs two times what it should - we're talking about an unnecessary extra $2.5 to $3 Billion dollars of economic drain that is causing a major financial crisis for this entire region. And then there are the finance charges for the money that we need to borrow, to pay the bloated costs of this project. And let's not forget the real and needed projects that must make do on less money, because so much is being devoured by this ripoff.

When are people going to wake up?