By Noel. T Braymer
The reason is simple, they were defective. The first construction contract for the California High Speed Rail Project went to the Tutor Perini Company to mostly build highway bridges to grade separate road traffic above the High Speed Rail right of way in the Fresno area. As part of an effort to speed construction and reduce costs, the contract with Tutor Perini called for what is called design/build. Traditionally the agency in charge of a project would draw all the blueprints for the project and and expect the contractor to build according to these plans. With design/build construction, the engineers for the contractors are allowed to design the majority of the project. When done right this allows changes to be made to the design when unexpected issues crop up in construction and changes are needed. When done right this can result in time and money savings and with fewer layers of bureaucracy to adjust for unexpected conditions which often happen on major construction projects. What happened was Tutor Perini designed and built four road bridges with what is called an earth wall structure. This is the cheapest form of construction for bridges and the one most likely to fail. It also seems that the soil in the Fresno area is not a good candidate for earth wall construction. The High Speed Rail Authority is now ordering the four bridges be built with cast-in-place abutments which are much stronger and more expensive.
The Tutor Perini Company has a reputation for bidding low to win a contract, but often demanding changes to their contract leading to major cost increases and more revenue for Tutor Perini. Tutor Perini is often known for going to court to sue clients when there are construction problems. It is also a company with deep political connections and often gets major government contracts. It also often gets complaints from some of its former customers of shoddy work. This is from a post by the California Policy Center website posted on July 2017 titled: “The horrible history of state contract awards”. “Tutor Perini CEO Ron Tutor is allegedly a master at change order scheming, where companies make artificially low bids on projects and then make up for the low bid by charging the government for “unanticipated costs”.”The company’s change order practices have led to public outcry, with officials in both San Francisco and LA seeking to ban the company from bidding on contracts. Over a period of 12 years Tutor has cost the San Francisco government $765 million more than expected (or 40% above initial bids) for contracted projects. Specifically, San Francisco city attorney Dennis Herrera alleged that the company fraudulently inflated costs from $626 million to $980 million in a 2002 lawsuit. The company paid only $19 million to settle the San Francisco based suit.” “It seems that any project CEO Ron Tutor touches is doomed for legal trouble. The most notable is Tutor Perini’s lawsuit against LA County for $16 million in “unanticipated costs”. “Two decades later the county has spent over $32 million without a resolution to what the county refers to as a false reimbursement claim.”
This is from an article in the Los Angeles Times from January of last year titled “Metro picks controversial contractor to build the next phase of the Westside’s Purple Line”. “Local transportation officials on Thursday hired one of the more controversial names in California construction to build a $2.4-billion section of the Westside subway, which will connect Century City to downtown Los Angeles.
The Metropolitan Transportation Authority’s board of directors voted 8-0 to award a $1.37-billion contract to a joint venture led by Sylmar-based Tutor Perini Corp. and Chief Executive Ronald Tutor.
The board’s vote marks a form of redemption for Tutor, whose work on L.A.’s first subway a generation ago sparked a protracted legal battle that, until now, had left him excluded from Metro’s rail building boom.
Tutor’s bid was hundreds of millions of dollars lower than his competitors, drawing criticism from some skeptics. But during Thursday’s meeting, Tutor told directors that he had “cross-checked until my eyes crossed” to ensure the bid was accurate.”
The following are quotes from the National Black Chamber of Commerce web site on Tutor Perini. “The Construction Industry has a bad reputation. That reputation is well earned as we are constantly being informed of fraud, cost overruns and safety violations related to big and small construction projects at a relentless and never ending rate. So it was apropos when the federal government along with the State of New York decided to come up with a crime busting taskforce aimed at the construction activity within the region. They knew they were going after the five Mafia families but they also ended up with a big catch outside the typical organized crime membership. They took the “scalp” of the gigantic firm known as Tutor Perini.”
“The taskforce was comprised of members from Department of Justice, IRS, US Dept. of Transportation, Office of State Inspector General, and US Dept. of Labor and New York City of Transportation. According to the New York US Attorney’s office: “Following a four-week trial, a federal jury in Brooklyn yesterday (March 9, 2011) found Zohrab B. Marashlian, the former president of Perini Corp.’s Civil Division, an international construction services corporation, guilty of fraud and conspiracy to launder money. The charges arose out of Marashlian’s false representation to New York government agencies that Disadvantaged Business Entities (DBE’s) were performing work in connection with major public works contracts, when, in reality, Marashlian had non-disadvantaged businesses favored by Perini Corp. do the work.” Tutor Perini paid Marashlian $14 million in salary while all this was going on. Two days before Marashlian was to receive a multi-year prison sentence he committed suicide. A fellow employee is currently doing a long prison term for the same case.”
“Any Black owned firm doing any of the above would be permanently banned from doing anymore federal contracting. But Perini? Oh no, it has actually grown exponentially in the government contracting field. How can this be? Well, the principal owner of Tutor Perini is Richard Blum, the husband of US Senator Dianne Feinstein (D – CA.) who serves on the Senate Armed Services Committee which oversees the Dept. of Defense. Since joining the US Senate, Senator Feinstein and her husband have enjoyed billions of dollars in defense contracts.”
The United States has some of the most expensive and least productive construction work in the world. Most developed countries are able to build projects faster with fewer workers for less money and fewer problems than the United States. Yet most of the media reporting on these problems, if reported at all, center on blaming government agencies rather than on the often cut throat business practises of the construction industry. Rarely is the politics of construction work contracts investigated by the media. Greater public oversight is needed to insure low bids can be justified for major construction projects to prevent the abuses often seen by companies like Tutor Perini. More oversight would result in vast savings for the taxpayers and fewer delays getting major infrastructure projects built with greater accountability.