First Stretch of MoPac Toll Lane to Open More Than a Year Late

Oct 14, 2016

The first stretch of a toll lane project on MoPac opens Saturday more than a year behind schedule. The northbound, north end segment of the MoPac Express Lane will open from about 2222 to a mile before Parmer Lane. Tolls start at 25 cents and as traffic volume goes up, so will the tolls, with the goal of keeping that one lane flowing at a minimum speed of 45 miles per hour.

The MoPac Improvement Project was supposed to open in late 2015. Both sides have blamed each other for delays – the Central Texas Regional Mobility Authority (CTRMA) and the contractor, CH2M Hill. But both sides agree on one thing: CH2M Hill underestimated how much it would cost to complete.

“We’ve gotten a $100 million gift in a sense from the contractor given what they should have bid on this, so there may not have been a project [without their bid],” CTRMA executive director Mike Heiligenstein said.

The CTRMA chose CH2M Hill’s $137 million bid in 2013 over two other bids that were just above and just below $200 million.

Government procurement specialist Dan Contreras with TX One Source, who was not involved with the project, said when one contract bid is significantly lower than the others, it should be seriously questioned.

“If I have three top proposals and two of them are within $5 or $10 million dollars and the other [differs by] $100 million dollars, I’m going to enter into negotiations with all three, and I’m going to come up with a list of questions to make sure each one of the vendors make sure what our requirements were,” Contreras said. “Are they really that more cost effective than the other two parties?”  

CH2M Hill ran into unexpected problems, including harder rock than expected, underground utilities it didn’t know were there and a water main that needed to be relocated. Record rainfall and a worker shortage also slowed construction. 

A simplified vision of the entrance and exit opportunities on the MoPac tolled lanes
Credit Central Texas Regional Mobility Authority

CH2M Hill blamed CTRMA for many of the problems in reporting an “unexpectedly disappointing” second quarter net loss of $62 million, compared with $16 million profit in the same time frame last year.

During a conference call with investors, CH2M Hill CEO Jacqueline Hinman said the company is requesting an additional $80 million from CTRMA. CTRMA said it will consider each expense on a case-by-case basis and will make its decisions in the best interest of the public.

“We know that we can and we will meet these challenges,” Hinman said.  

Many of these challenges were brought to a disputes review board made up of three construction industry professionals. In some cases the board ruled in favor of CTRMA, but in the case of the water main it ruled in favor of CH2M Hill and urged both sides to negotiate a solution.

The CTRMA’s Heiligenstein disagreed with CH2M Hill placing blame on the agency. In a blistering letter Heiligenstein sent to Hinman this summer, obtained through a public information request, Heiligenstein said the cost overruns occurred because CH2M Hill “grossly underbid the project.”

Heiligenstein wrote that he was “incredulous” with CH2M Hill’s demands for more money. He said CH2M Hill demonstrated “inept management that has plagued the project since its inception.” Heiligenstein described a “disconnect between corporate management’s understanding of the Project and the reality we face every day.”

“I felt like it was time to take the gloves off a little bit,” Heiligenstein told KUT. “So it is what it is. I sent back a fairly no holds barred letter and meant every word of it.”

Government procurement consultant Dustin Lanier, founder of Civic Initiatives, said the contract should resolve disputes in such situations but a deteriorated relationship makes it difficult. 

“By the time we reach for [the contract], we’re probably so angry with each other that now the ability to do productive work gets lost because we’re now maneuvering for position,” he said.

State representative Donna Howard (D-Austin) said it’s difficult for government agencies to predict problems in advance, but said “the buck does stop with the CTRMA.”

“There should perhaps be some checks and balances earlier in the process so that you do not get so far down the road that the responsible choice is one of going with someone who’s not giving you what you need, who’s delayed the project, who’s costing you a lot more, but who ultimately will cost you less than if you started all over again,” Howard said.

But now that the project is nearing completion and the public will get its first taste of dynamic tolling Saturday, Heiligenstain said they’ll see how well it works.

“When you see that open, people will understand what the benefits of this project will be,” he said. “The long term 30-year benefits will be evident.”

The remaining sections of the project are still under construction and are not expected to be fully completed until 2017.