New York Bridge Project Mystery: Cost and Schedule
The Fluor-led consortium faces a politically sensitive contract closeout on new Hudson crossing
The bridge has a new name, new schedule and possibly a new price-tag.
However, there’s no way to precisely discover the price-tag or even the target opening day for the second span of the new Hudson River crossing north of New York City. The bridge replaces the 63-year-old and often traffic-choked Tappan Zee Bridge that carries the New York State Thruway. A spokesman for the thruway authority declines to say in what month or season of the year the second span will open. He is equally tight-lipped about close-out negotiations and possible late completion damages against the prime contractor.
Both the schedule and cost issues are political dynamite whose potential explosive force was increased by New York Gov. Andrew Cuomo proclaiming last August that the project was currently on-time and on-budget as work progressed.
|Gov. Andrew Cuomo of New York at the site of the new bridge named for his father, Mario M. Cuomo, observing removal of the center span of the old Tappan Zee Bridge, over the Hudson River north of New York City. Photo: Courtesy New York State.|
With the work entering its final phases, the bridge contract's closeout with the Fluor-led consortium, Tappan Zee Constructors, will be negotiated under unique financial and political pressures. Cost overruns could drive up toll costs for the bridge. And Cuomo is in the midst of a re-election campaign where he is likely to prevail but which also may set the stage for future political campaigns.
Since it was renamed for the current governor’s late father, former governor Mario M. Cuomo, the issues surrounding the bridge have even more personal overtones.
The cable-stayed main span and causeway at the western end total about three miles in length. The thruway authority issued a request-for-proposal in 2012 and awarded the best-value contract about a year later.
Started in 2013 as the country’s biggest public works project, the replacement for the half-century-old Tappan Zee Bridge linking Tarrytown and South Nyack, N.Y., had a design and construction cost of $3.14 billion. Several options were priced and made available under the contract.
The design-build contract, originally negotiated to end in July 2018, has substantial liquidated damages for failure to meet key completion milestones—a formidable lever in the hands of the thruway authority.
Last August, Cuomo and the thruway authority set the stage for the current drama at the opening of the bridge’s northern span.
In a public statement, the governor's office said that the thruway authority has managed the bridge replacement project since 2013 with a goal “to fully open the bridge to traffic in 2018, and second, to finish the bridge at or below the budgeted cost of $3.98 billion. Currently, the project remains on budget and on schedule, as construction of its second span continues to progress.”
|New girders placed in May, 2018 frame the west end approach road to the Mario M. Cuomo Bridge's second span. Photo: Courtesy New York Thruway Authority.|
In March, Politico New York, citing two anonymous sources, wrote that Tappan Zee Constructors is preparing a request for payment of $900 million over the amount in the design-build contract. Neither the thruway authority nor the design-build consortium would confirm that report.
A local newspaper noted that the completion schedule had previously, and publicly, been adjusted, adding several months to the schedule.
Closeout Payments and Delays
What remains unclear is whether the triggers for delay damages in the design-build contract will be applied to the close-out payments.
Under the contract's limitation of liability clause, Article 9, the consortium's overall liability, including all liquidated damages, is capped at $1.57 billion for costs associated with fixing faulty work or negligence and another $350 million for all other causes.
Another section of the contract, 13, defines the different categories of delay damages and the per-day amounts associated with each. Failing to remove traffic from the old bridge by the Initial Traffic Relocation Deadline: $15,000. Failure to complete final toll plaza reconfiguation: $35,000. Failure to finish by the crossing substantial completions: $100,000. If the deadlines are missed for a long time, at two years the damage amount per day is cut in half.
Substantial damages kick in for lane closures and toll lane closures, too.
Liquidated damages can and have been successfully challenged in court by contractors, notes Fredric L. Plotnick, a construction scheduling expert and attorney who has consulted on many delay claims. A successful challenge, he says, can sometimes be mounted if the contractor is able to convince the court that the owner “helped the other party fail.”
So far, no one is sure what is taking place between contractor and owner. The thruway authority spokesman declined to comment on whether different completion deadlines had been met or reset. A spokeswoman for Fluor Corp., the biggest entity in the design-build consortium, deferred any comment to the thruway authority.
This story was updated June 1 to correct the age of the existing Tappan Zee Bridge and the year construction of the replacement bridge began.