Photo courtesy of Kiewit

By Paul Rosta
The author is a correspondent for the McGraw-Hill
Cos. He lives in Los Angeles, where he regularly
reports on industry issues.

Over the past two decades, the new light-rail line linking Los Angeles and Pasadena seems to have endured a start and stop for every one of its nearly 14 miles. But in a remarkable conclusion to its long odyssey, the $725-million Gold Line will carry its first customers this July, on time and under budget, just three and a half years after its rebirth as a design-build project.
Conceived to ease freeway congestion, the Gold Line started out as a conventional design-bid-build project under the auspices of the Los Angeles County Metropolitan Transportation Authority. Construction was about 12% complete by early 1998 when a financial crisis prompted MTA to suspend work after spending about $274 million. But strong support in the communities to be served by the rail line—Los Angeles, South Pasadena and Pasadena—pushed it forward. “They wanted to get it done,” says Rick Thorpe, chief executive officer of the Los Angeles to Pasadena Metro Construction Authority.

In response, the California legislature in 1998 created a joint-powers authority (JPA) to finish the project, then known as the Blue Line. (The name was changed in 2001 to avoid confusion with the light-rail line linking Los Angeles and Long Beach.) The JPA’s success shows that “a single-purpose agency responsible for developing the project, combined with design-build, really accelerates the process,” says Nancy C. Smith, attorney for the authority’s legal adviser, Nossaman Gunther Knox & Elliott, Los Angeles.

Money Matters

Thorpe’s predecessors already had recommended using design-build to finish the Gold Line. “One of the benefits of design-build is that you don’t need as much oversight” as conventional delivery, says Thorpe. Only about 10% of the budget is going to soft costs, he says. “We probably knocked off 15% of the total cost of the project just in engineering and administrative costs.”

Because the legislation establishing the JPA provided only the money left when the project was suspended, the JPA had to secure an additional $40 million in state funds and $35 million from development rights along the alignment. In all, finishing the Gold Line will cost about $451 million above the $274 million spent previously.

The project was divided into two main design-build contracts worth about $300 million. The larger segment, dubbed the Arroyo Seco, includes 13 stations, 72 grade crossings, track work and two tunnel sections. To build credibility with the public, the JPA jump started construction on a highly visible segment, separately awarding a $21-million design-build contract on a low-bid basis for a 2,800-ft-long elevated section in Los Angeles’ Chinatown. Cambridge, Mass.-based Modern Continental Construction Co. Inc. and HNTB Design/Build, Kansas City, Mo., is completing that segment as a team.

Dual Drawings

Procurement for the Arroyo Seco contract was fast-tracked and consultants raced to develop the proposal in only nine months, half as long as a conventional process. Thorpe acknowledges that the mission would have been easier if the project had been design-build from the start, but he counts as “one of our successes...that we were able to take what we got from the MTA and convert it into a design-build program.”

Before MTA suspended construction, a cost-reduction exercise had significantly modified some design elements. The JPA asked two firms, Santa Monica-based Gensler and Gruen Associates, Los Angeles, to provide conceptual design. The 10% to 15% design was intended to provide a comfort level without being “so far along that it would tie the contractor’s hands,” says J.F. Finn III, Gensler senior associate.

Dual drawings integrated old and new designs. (Photo courtesy of Kiewit)

Since thousands of pages of design documents at various levels of completion already were in hand, developing criteria for the proposals required special care. “We had to make it clear to the proposers that they were indeed the designer of record,” says Tom Stone, JPA’s former chief project officer who oversaw design and construction from 2000 to 2002 and who now is a consultant on rail projects. The solution was to distinguish between two categories of design documents: those representing “baseline,” or mandatory components and “reference drawings” representing parts of the project open to design-build innovations. “I personally know of no other design-build project that had this...dual set of drawings,” says Dan Duplisea, Kiewit Pacific Co.’s Phoenix-based district manager.

For the Arroyo Seco contract, the JPA received proposals from teams led by Granite Construction Co., Watsonville, Calif., and Herzog Contracting Corp., St. Joseph, Mo.; Kiewit Pacific, Santa Fe Springs, Calif., and Washington Constructors Inc., Boise; Modern Continental/HNTB; and Tutor-Saliba Corp., Sylmar, Calif. The Kiewit/Washington team came out on top in both technical categories and price, with a $260-million bid. Duplisea believes that Kiewit’s earlier work on the rail line, including two bridge contracts and a track removal contract, gave the team a leg up. “We knew about every linear foot of the line before we bid it,” Duplisea says. Once in the field, the Kiewit/Washington team worked so quickly that “a lot of times we joked that this was really a build-design project,” Thorpe says.

An important contract provision requires the JPA to accept liability for changed geotechnical conditions in underground sections and the design-build team to assume the same risk for at-grade sections. “It ended up being a really good decision,” Stone says. “The only way design-builders could have accepted the risks of changed conditions was to put additional money in their bid to cover it.” Potentially challenging sections, such as a 3,000-ft-long tunnel under some century-old buildings in Pasadena, came off without a hitch. A far more serious test arose in early 2002 when the California Public Utilities Commission withheld construction permits for 21 intersections. “Design-build turned out to be a big challenge for the PUC,” Stone says. “They’d never had to move so fast.” Before the commission relented, the design-build team was forced “to hopscotch around and build in a much less efficient way than [it] had contemplated when [it] bid on the project,” says Habib Balian, JPA chief administrative officer.

The delay cost three months and $6 million, yet Duplisea says that the flexibility of design-build enabled the contractors to mobilize additional crews and equipment and “move to other locations that were not in contention.” With conventional procurement, “this could have potentially stopped the whole job,” he says. The PUC episode is an example of what Thorpe calls “the most difficult aspect of design-build—coordination with third parties, whether public agencies or private utilities.” If he had it to do over again, Thorpe says he might hire a staff member dedicated to defusing potential tensions. Concerned about changes, Thorpe also urges prospective owners “to take your time and...think through what is important to the community, what is important to the operator, what is important to the structure.” He suggests a budget line item in case “you’ll want something different from what the contractor wants to provide you.”

With the Gold Line under its belt, the JPA now is looking at a proposed $1.6-billion, 24-mile extension to the city of Claremont. Funding, schedule, and other key issues are still to be determined. But whatever the future of the line, Thorpe predicts design-build will be a part of it.

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