Lack of leadership, communication breakdowns and complexity of design are among the problems dogging Victoria’s $92.8-million Johnson Street Bridge project, says engineering consultant Jonathan Huggett, who raises doubts the project can be completed on budget.
“During my review, I asked everyone involved a simple question: ‘Who is in charge of the project?’ Nobody could provide me with an answer,” Huggett says in his project review.
Huggett, who has been appointed interim project director, was originally contracted to review the bridge project after the prime contractor, PCL Constructors Westcoast Inc., submitted a change order to the city for an additional $7.9 million and 5 1/2 months to complete the project.
PCL’s change order, submitted in March, focused on two issues: lateness of design delivery and project scope growth related to material increases.
MMM Group, overseeing the project on the city’s behalf, has recommended rejecting PCL’s request. Huggett says MMM is in conflict assessing PCL’s claim because if it were found valid, it might imply fault with MMM.
Victoria Mayor Dean Fortin says the city has a fixed-price contract with PCL to build the bridge for $63.2 million and he expects the project to come in on time and on budget. Additional costs include project management and engineering design, insurance, communications and administrative support.
Huggett’s report says that while “fixed-price” is often used on construction projects, there is no such thing. “The project budget is extremely tight, and there is a very real prospect that it will not be achieved.”
He recommends the city conduct “a thorough and realistic assessment of potential costs” and develop strategies to contain them.
“I am certainly not suggesting that the city tear up contracts, but complex issues are involved. The project has turned out to be far more complex than originally anticipated, and this has resulted in changes to schedule, scope and risk,” his report says.
Huggett also raises concerns about engineering services being provided to the city. “The city is relying on MMM as an experienced adviser, and we note the following ongoing unresolved issues: after one year, there is still no detailed [project] schedule; disputes between PCL and MMM are common, involving such issues as design reviews and the like; the development of the detailed design of the bridge has taken considerably longer than projected.”
Trying to get the best bridge for the best price, the city used a procurement process that allows the contractor, working with consulting engineers, to suggest design changes to bring the project in under a set financial ceiling.
“It is clear to me that the intended collaborative nature of this project has not materialized,” Huggett says. “Problems are not being dealt with on an expeditious basis, communications are poor, risks are not being identified and proactively dealt with, and there needs to be a fundamental change in the attitude of the project team.”
Coun. Ben Isitt, one of two councillors to vote against the contract, said he is happy Huggett’s report is being made public.
“I think the public has a right to know there have been serious problems with the bridge project,” Isitt said, adding they may have been avoided with a more conventional approach.
Isitt believes it’s “very unlikely” the bridge can be completed without additional funds.
“Whether or not we can recover those funds from MMM is an open question. How big the potential payment to PCL is also an open question.”
Eight recommendations made by consultant
Engineering consultant Jonathan Huggett makes eight recommendations in his report, which can be downloaded from the City of Victoria here [PDF].
Recommendation One
That the City appoints and delegates authority to one individual (the Project Director) to manage the project, who shall report through the City Manager to Council. In addition the City Manager should determine whether any of its current project participants are suited to this role.
Action Taken: The City Manager has retained the Consultant (Jonathan R. Huggett P.Eng) on an interim basis (until September 2014), and reporting to the City’s Director of Engineering and Public Works to provide leadership on behalf of the City in resolving the issues identified in this report. The City Manager has indicated he will be reviewing longer-term issues around leadership once the Project has stabilized.
Recommendation Two
That issues arising on the project are dealt with in a timely manner through constructive dialogue and teamwork. The City should also consider, in consultation with the other contracting entities, appointing an independent Project Referee to deal with the most difficult issues.
Action Taken: The Interim Project Director has asked both MMM and PCL prepare a detailed scope of work for MMM and its subconsultants from now until the end of the Project and then MMM will be invited to submit a proposal as to how these services can be provided.
Recommendation Three
1. The roles and responsibilities of MMM and their performance todate needs to be reviewed with MMM. This should take a thorough review of their contract and discussing whether all of the services required are being adequately provided.
2. MMM are in a conflict of interest regarding the assessment of the PCL claim and the City should recognize that.
Action Taken: The following action has already been taken:
1. MMM have assigned an additional office engineer to review contractor submittals
2. MMM have been asked to review all of the engineering services required to complete the Project and to submit a proposal regarding that as soon as possible. We expect that proposal by the end of July.
Recommendation Four
Revise the risk monitoring process to identify and focus on a smaller number of risks that are specific to the project (not generic risks) and develop proper mitigation strategies to deal with them.
Action Taken: Through regular weekly meetings the Project Team are now coming to grips with all of the key project risks and these are being tracked on a weekly basis. We will reflect these better in the upcoming reports to Council so they may be properly managed.
Recommendation Five
That the City in consultation with MMM and PCL devise an appropriate Owner’s quality assurance plan that provides further comfort that the portions of the bridge manufactured in China are of appropriate quality and meet all North American standards of workmanship and material quality.
Action Taken: The City has now issued a fully detailed quality assurance change order to MMM and principally it’s sub consultant H&H to ensure third party checks on the steel fabrication in China are being undertaken. I am satisfied that this issue has now been dealt with, but ongoing monitoring will be required.
Recommendation Six
That the City should make it a priority to formalize a project schedule for the Project in an agreement involving PCL, MMM and the City and include it in both contracts.
Action Taken City staff and MMM are reviewing all responses made by City /MMM staff to PCL regarding the April 6, 2013 schedule and are endeavouring to ensure formal adoption of the project schedule by the end of July 2014.
Recommendation Seven
The City should do a thorough and realistic assessment of potential costs on this project and work with its partners to develop strategies to contain costs.
Action Taken: The City is in the process of reviewing PCL’s request for a change order for schedule delays. The City has also asked MMM (and its sub-consultant H&H) to review the scope of work required to complete the engineering services for the project.
Recommendation Eight
The City should put in place the recommended Project Governance strategy outlined in this review. That process needs to recognize not only the roles and responsibilities but also the ability of key individuals to fulfill those roles.
Action Taken: The City Manager has appointed the consultant Jonathan Huggett P.Eng as an Interim Project Director with instructions to implement the recommendations in this report as quickly as possible. The Interim Project Director will report to the City’s Director of Engineering and Public Works and both will report to the City Manager on a regular basis.
