The Johnson Street Bridge replacement project is the talk of the town these days. This past weekend at the Phillips Backyard Weekender people were sipping great local beer and fretting over the potential cost increase of the project. Others said that at a weekend cocktail party, guests had grave concerns about who will pay if the price goes up – and that they’re watching my leadership on the issue closely.
What went wrong
In late March 2014, the City received a change order from PCL (the contractor building the bridge) for $7.9 million and a request to extend the project schedule by five and a half months. In response, Jason Johnson, the newly hired City Manager, engaged engineer Jonathan Huggett to review the project. Huggett’s report was made public last week. The report revealed three key problems with management of the project to date.
1. No one had been put in charge of the project. As Huggett notes, “During my review I asked everyone involved a simple question: ‘Who is in charge of the project?’ Nobody could provide me with an answer.”
2. There is no official project schedule. A schedule had been submitted by PCL to the City on April 6 2013. But it is still unclear to Huggett whether all parties (MMM the City’s engineer, PCL and the City) agreed to this schedule.
3. The collaborative process that had been established in the contract to review issues as they arose had broken down.
Confronting Reality
These three facts leave Council and the public in a difficult situation. A recent Times Colonist editorial noted, “Fortin’s fixed-price fixation notwithstanding, Huggett has doubts that the project can be completed at the contract price.” At Council last week (watch here) Council and the public learned more about why it is unlikely that the project can be completed on budget.
Director of Engineering and Public Works told Council that, “We do still have a large part [of the contingency] which is unallocated; I think it is going quite well.”
Immediately after he spoke, Huggett stepped in. “It’s worth talking about the contingency,” he said. “It’s a concern to me. The problem that occurred [when the contract was awarded] is that some of the very key components were no more than a concept in somebody’s eye. There were elements of the project that were reduced to a 10% design. The problem comes that you have a bunch of components at 10% design with a contingency [budget] of less than 5% [of the total project budget.]”
Huggett’s conclusion? “Frankly, from what I know, the contingency is very small and is likely already used up. I promised you I wouldn’t come in here and try and sugar coat it.”
Moving Forward
I voted against awarding the contract to PCL in late 2012. My reason was simple. The design wasn’t far enough along to award the contract with only a 4% contingency budget. Now, it’s time to move beyond looking backwards and to do the best we can to get the project under control. Here’s how:
- Get a revised project budget as soon as possible. After learning last Thursday that the contingency is likely used up, I said that if that’s the case, Council needs to know what the potential cost increases are, as unpopular as that may be, so we can start planning. Huggett committed to getting Council a revised project budget by early September.
- Finalize and confirm a project schedule that all parties agree to. Huggett promised this within the coming weeks.
- Create a risk registry specific to the project (not a generic risk registry that has been used to date) and ensure that risk mitigation strategies are in place.
- Have someone in charge of the project and fix relationships among PCL, MMM and the City. With Huggett at the helm and the collaborative spirit of our City Manager guiding the process, this is well in hand.
Council’s job is to go forward with eyes wide open. We need to hold Huggett to the commitments he made last Thursday. We need to be realistic about the cost of the project. And, most importantly, we need to keep the public – those paying for this new bridge – informed.
