Mini-Case Study on Mega-Project Management

When people think about mega-projects in Boston, the Big Dig, along with its enormous cost overruns and construction quality issues, is what comes to mind. But there’s another Boston mega-project that started at about the same time, and didn’t become an archetype for infrastructure incompetence: the Boston Harbor clean up.

In the 1980s, due to decades of pollution from poorly-treated sewage and combined sewer overflows, Boston Harbor was a stinking embarrassment. A lawsuit under the Clean Water Act resulted in the state being forced to improve stormwater and sewage treatment systems so that water quality in the harbor would recover. It’s a little surprising that there doesn’t seem to be a detailed study comparing the two projects; because both projects were constructed at about the same time in the same city, there should be less issue correcting for exogenous factors like legal precedents, quality of local contractors and engineering consultants, and political institutions.

However, a trio of articles from the fall of 2006 offers some insight. A short article in Governing cites three major factors: continuity of oversight leadership, local funding, and in-house talent at the Massachusetts Water Resources Authority (MWRA), the agency created in 1985 to oversee construction and operations of the sewer treatment system. Continuity of leadership came in the form of oversight from the same federal judge and several long-serving MWRA board members, while the use of local funds for construction created an external incentive to control costs. Inside the MWRA, a small team of talented engineers oversaw the contractors and consultants, providing strong owner representation.

In a Commonwealth Magazine expert panel on the Big Dig, Douglas McDonald, who served as Executive Director of the MWRA for nine years, cites the MWRA board of directors as the critical difference between the two projects. According to McDonald, the Executive Director had to report to the board of directors and a community advisory board every month, answering questions in real time. In contrast, leadership at the Massachusetts Turnpike Authority, which managed the Big Dig, saw more frequent turnover and political interference. McDonald says that “it’s not totally clear to whom the Bechtel corporation [which oversaw the Big Dig] ever reported.”

Lastly, in a long-form article looking at the mismanagement of the Big Dig, Boston Magazine cites the high level of in-house talent at the MWRA as the critical factor. The article quotes David Luberoff of Harvard’s JFK School of Government saying “it’s clear the state needed to have someone with Bechtel’s expertise, but the state could have done a better job of managing the managers. You have to have a small, highly skilled, highly respected group of people who could look over Bechtel’s shoulders.” In other words, a project as unique as the Big Dig is always going to be beyond the capabilities of the managing public agency, and there’s nothing inherently wrong about using outside consultants. However, strong advocacy on the owner’s part is still required.

The article goes on to quote Paul Levy, another former MWRA director, saying that “we had a 50-person project management team within the MWRA of highly paid, very experienced people… right after I hired Dick Fox, I remember [Big Dig architect and former Secretary of Transportation] Fred Salvucci calling to congratulate me, saying he wished he could do that but it was not possible under the state personnel system.” Thus, it appears that a political decision – subjecting the DOT to the state’s personnel system but exempting the MWRA – made it more difficult for the Big Dig to hire people with the skills required to oversee the project. The inability to pay wages that are competitive with the private sector is a pervasive problem for public agencies.

Readers with experience in private land development will not be surprised by any of this. As a land developer, you need to hire a team of consultants to successfully complete a large project, including legal professionals, civil engineers, architects, mechanical-electrical-plumbing consultants, structural engineers, construction contractors, and construction managers. While they are all on your payroll, they all have other interests as well, which may conflict with your priorities. Architects will select more elaborate designs and finishes, both out of professional pride and the desire to have future clients see a portfolio of high-quality work. Civil engineers don’t want to aggravate the public agencies they interact with for other projects. Construction managers don’t want the contractor community to see them as too adversarial. Contractors might be losing money on another project and looking to make up that loss on other jobs. As an owner, you must strongly advocate for your interests and priorities. If you’re asleep at the switch, you’ll end up paying too much for the job, even if the entire project team is working ethically and there are no serious issues.

The harbor cleanup project was not without issue. For example, in 1999, two workers died near the end of the project’s nine-mile long tunnel due to a failure of the improvised breathing systems that they were using. However, the project was successful in its water quality goals; today you can swim at Spectacle Island, something that would have been unthinkable in the 1980s. The MWRA seems to be one of the more respected state agencies.

Meanwhile, the problems with the Big Dig have poisoned the public debate on transportation mega-projects. People now expect that the projects will be poorly built and have massive cost overruns, which makes it much more difficult to build political support. Progressives that think cost effectiveness and public trust don’t matter, take note.

Advertisements

2 thoughts on “Mini-Case Study on Mega-Project Management

  1. Alex B.

    Thanks for this post – these key issues of finance, governance and risk are too often lost in the wash in the political advocacy.

    It’s one other hurdle to overcome, in addition to finding clarity and consensus on the goals for a particular project.

    Reply
  2. lj moritz

    While Fred Salvucci was unable to pay the salaries to hire top talent, he did have a robust group of experienced highway engineers and the Mass Turnpike Authority. What happened next was that the new secretary of transportation James Kerisiotes came in and fired hundreds of workers at the highway department believing that the private sector could handle it. It was the era of “privatization. “

    Reply

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s