Transit
Agency, Auditors Debate Way Forward for Delayed Minnesota Light Rail Extension
Work on the Minneapolis-area Metro Green Line Extension project is continuing following a settlement between the Metropolitan Council and the contractors.
Photo courtesy of Metropolitan Council
Minnesota officials are continuing their review of the late and over-budget Metro Green Line Extension project in the Minneapolis area. But some of the auditors’ latest recommendations for contractor oversight do not align with federal requirements and could have even added to the delay, according to the agency behind the project.
The Green Line Extension plan, previously known as the Southwest Light Rail Transit project, calls for construction of 14.5 miles of track, 16 stations and associated infrastructure to connect Minneapolis to suburbs Eden Prairie, Hopkins, Minnetonka and St. Louis Park. The Metropolitan Council, a Twin Cities-area agency behind the Green Line project, had originally estimated in 2011 that the project would cost $1.25 billion and open in 2018. Construction did not begin until 2019, and officials then estimated it would complete in 2023 at a cost of $2 billion. As of last year, the expected cost is $2.77 billion and officials anticipate the line will open in 2027.
Last year, Minnesota lawmakers directed the state’s Office of the Legislative Auditor to review the project. The latest evaluation, released June 28, focuses on the Metropolitan Council’s oversight of its design and engineering contractor and original cost estimating consultant, AECOM Technical Services Inc., and of civil construction contractor Lunda/C.S. McCrossan Joint Venture. Representatives from AECOM did not immediately respond to inquiries.
The project has faced a variety of hurdles. A spokesperson for Lunda/McCrossan said in a statement that the joint venture "was provided a poorly prepared and incomplete set of design plans and specifications" for the project, which was "subjected to an unprecedented level of continual change." The council issued 658 change orders between March 2019 and October 2022, together adding about $220 million to the cost, according to the report. The council also resolved 700 nonconformance reports related to the construction contract as of November 2022. Officials signed a settlement agreement with Lunda/McCrossan in March 2022 to increase the cost and set a new construction schedule.
The Metropolitan Council “has not adequately enforced several aspects” of its construction contracts and lacks “adequate documentation to support some project decisions,” the auditors wrote.
Auditors recommended that the council take action such as changing the way it addresses change orders, including resolving any schedule delays before approving them. However, Charles Zelle, chair of the Metropolitan Commission, wrote in a response to the legislative auditor’s office that resolving each schedule delay separately would be “far more difficult, if not impossible.” A consultant estimated that the adjusted schedule reached as part of the settlement mitigated the overall delay by at least two years, he added.
The council should also use strategies like withholding payment to “fully enforce its contracts,” the auditors wrote. But Zelle contends that it “is not an industry standard on complex construction projects” because it would risk prompting the contractor to stop work and litigate. Instead, the settlement agreement includes best practices for resolving disputes while construction is ongoing, he added. A spokesperson for the JV said they worked with the council to minimize delays, re-establish a target schedule considering the impact of changes and agree to a process to resolve cost impacts from the changes.
Zelle wrote that while they “appreciate the [auditors’] attention to this matter, several of the report’s recommendations do not align with the U.S. Dept. of Transportation’s Federal Transit Administration guidance or construction law, are not appropriate for a project of this size and complexity, and in some instances could have contributed to additional delay.”
There is at least one point the auditors and council seem to agree on. The report recommends that the council consider changing its cost estimation policies and contracts. In April, the council awarded a $12.7-million contract to HNTB for further construction cost estimating services on the project.
The legislative auditor’s office previously released a special review highlighting issues with the project budget and timeline, and one earlier program evaluation focused on Metropolitan Council decision making. The office plans to also produce a financial audit of the project, which it says is currently a work in progress.
