Analysis: Did Design-Build Fail on Route 20 in Oregon?
Did design-build have anything to do with the long delays in completing the tricky Route 20 road and bridge reconstruction project in Oregon? The original design-build joint venture team for the 6.5-mile project, which broke ground in 2005, is now off the job.
The project principal for that joint venture suggests that in light of what happened, design-build isn’t suitable for difficult sites.
“Design-build is more of a risk on sites with extreme and challenging geotechnical issues,” says Bill McGowan, who works for Watsonville, Calif.-based Granite Construction Co., the leader of the design-build joint venture called Yaquina River Constructors. “It may not be the best type of project for design-build.”
But that contention doesn’t sit well with those who promote design-build as a project delivery method especially suited to difficult sites where coordination between design and construction is vital. One attorney suggested that it may not have been design-build that failed when work bogged down on Route 20 due to complex differing site conditions on mountainous terrain.
Instead, Robynne Parkinson says, the trouble may have been the contract language, the inability of the design-builder and owner to work together without shifting blame—or both.
Although she is not familiar with the details of the Route 20 project, Parkinson says it is unreasonable to expect either the design-builder or owner to shoulder the entire cost of differing site conditions on such a project.
Yaquina River Constructors reached a termination agreement on May 3 with the Oregon Dept. of Transportation, under which Granite Construction Co. and its partners will pay the agency a net total of about $9 million. ODOT has since turned over the remainder of the job, substantially redesigned, to another contractor.
Oregon had been planning the project since the early 2000s. It billed reconstruction of Route 20, through the rugged terrain from Pioneer Mountain to Eddyville, as the largest combined road and bridge construction project in the state at the time and emphasized that the project would be done using design-build as the delivery method.
On its website, ODOT says that design-build is a method “heralded by the construction industry as a modern approach that encourages innovation, allows shorter construction time and promotes environmental stewardship.”
Under the termination agreement, both sides agreed to refrain from disparaging one another. But it’s clear the relationship over the years was strained. Yaquina River Constructors had won at least a partial victory in a mediation that the joint venture claims ODOT refused to abide by.
Two prominent facts stand out following a review of the contract between ODOT and Yaquina River Constructors.
First, prior to awarding the job and the design work to Yaquina River Constructors, ODOT completed in April 2003 an extensive risk review of the contracting method that concluded it was less risky to use design-build rather than in-house design work in order to be sure to start work in 2005.
But that same review specifically mentioned the significant cost risk possible when using design-build, including the risks of the steep terrain and difficult soil and rock driving the price of the work much higher.
“Quantifying this risk is speculative,” the author says. “My best judgment is the likely potential is to pay a 'premium' on the order of five to ten percent if all goes reasonably well. If there is a significant ‘bust’ in site characterization or design-build contract conditions, it is not unreasonable to anticipate up to twenty five percent additional cost as was experienced on the adjacent Eddyville-Cline Hill project.”
Second, the author of ODOT’s risk review also wrote that high variability in earthwork quantities, which originally comprised more than half the construction cost, was a major risk consideration.
Risk Becomes Reality
And that is similar to what happened in the early project phases from 2005 to 2007, when ODOT and Yaquina River Constructors agreed to suspend work on the project for awhile after the design-builder discovered unanticipated landslides, according to ODOT’s account.
Yaquina River Constructor’s team included T.Y. Lin for design management and bridge design and URS for geotechnical design. The design-build joint venture proposed adding large buttresses and shear keys at the bottom of slopes, more than 700,000 cu yds of earthwork and $46 million in new costs.
Construction resumed in 2008, but lasting solutions proved elusive.
The project came to a halt when Yaquina River Constructor’s newly constructed bridge bents shifted due to construction in the landslide-prone area. In February 2010, work stopped at four bridge locations—at lengths of 600, 600, 750 and 1,100 ft—all within a 2.3-mile portion, even while work on the rest of the project reached completion (ENR 7/30/07 p. 11).
As concerns mounted that the bridge abutments were still shifting. ODOT last March issued a notice of default to Yaquina River Constructors. The default notice was rescinded under the termination agreement.
The second prominent fact shown in a review of the contract document is that it appears, despite saying that extra work by the design-builder will be compensated, to place responsibility for all design and information needed for design on Yaquina River Constructors.
“The Design-Builder shall obtain and utilize all information concerning each Work Location, including but not limited to geotechnical and survey data, necessary to develop accurate structural calculations and Design Review Documents consistent with Minimum Contract Requirements,” the document states.
It is not clear how closely ODOT’s staff engineers, who may have also had knowledge of the terrain, worked with Yaquina River Constructors.
McGowan, the project principal for Granite, says he is chalking the project up to wisdom-building.
“Design-build is more of a risk on sites with extreme and challenging geotechnical issues,” he says. “It may not be the best type of project for design-build."
McGowman adds that “It’s difficult in the RFP phase to get your arms completely around subsurface conditions and hazards.”
Attorney Parkinson, who is a member of the executive committee of the Design-Build Institute of America, wondered if the terrain risks discussed at length in ODOT’s pre-project assessment were properly priced by Yaquina River Constructors. Parkinson guesses that the risk of trouble with the terrain “was set at a price where it wasn’t a commercially reasonable risk and maybe Granite signed up for that and that’s where the disconnect came, and then they had a failure of communication.”
“Any time you have that, the project will tank.”