MoPac toll contractor in default, mobility authority charges

Frustrated with slow progress on the North MoPac Boulevard expansion project, the Central Texas Regional Mobility Authority on Thursday notified its contractor, CH2M, that it considers the company in default of the $136 million contract to add a toll lane to each side of the 11.2-mile stretch of the highway.

The notice, and what happens in the next couple of months, could mean further delay on the project, which began construction in January 2014 and is already three months past its original completion date.

Mike Heiligenstein, the mobility authority’s executive director, said that unless CH2M “cures” the default in the next 15 to 60 days by submitting a detailed project completion schedule and putting more workers on the job, the company could be forced off the job. A period of idleness lasting a few months could be the result, Heiligenstein said.

“That could happen; that could happen,” Heiligenstein said.

Or, as an alternative, CH2M and a surety bonding company it was required to engage before the job began could work together to keep the company and its subcontractors on the job.

Another possibility, Heiligenstein said, is that the surety company could pay the mobility authority an amount of money needed to complete the project, beyond the remaining contractual amount, which would leave the authority looking to hire another contractor.

That likely would result in a stretch of time with no active work on North MoPac.

Craig Martell, a Denver-based CH2M executive in charge of the Austin project, said the company was still digesting the notice, which arrived late Thursday morning.

“At this juncture, we have no comment,” Martell said.

In letters to the mobility authority and previous interviews with the American-Statesman, CH2M officials have blamed the slow progress on a number of factors: harder than expected limestone encountered during the boring of drainage facilities south of Enfield Road; labor shortages; an unexpectedly high number of abandoned utility lines and pipes found beneath the surface; and trouble working with the city of Austin on relocating a 42-inch water main near West 35th Street.

Heiligenstein discounted at least some of that rationale Thursday in a letter to CH2M official Frank Gross.

“The authority’s investigation determined that the type of rock CH2M encountered is commonly found in Central Texas and that use of proper methods and equipment could have prevented the delay,” Heiligenstein wrote. “Regardless of our findings, this and other claims raised by CH2M fail to explain your firm’s failure to prosecute the overall project in a timely manner.”

Work has slowed appreciably on the project, after seeing a steady increase through the first part of the year. Heiligenstein said there are about 200 construction workers on the project this week, down from 384 in July.

Drivers have seen little or no activity lately on the project’s northern several miles. On Wednesday morning, crews were working near Camp Mabry, Westover Road and on sound walls along MoPac’s east side near Windsor Road, but the key section south of Enfield where tunnels are under construction showed little activity.

In addition, the monthly billings from CH2M to the mobility authority, an objective measure of progress, have been in the $2 million to $3 million range this fall, Heiligenstein said, when they should have been closer to $7 million.

Heiligenstein said his agency has brought in several consultants in recent months and estimates that the project, if the proper oversight and manpower were brought to bear, could be open as soon as next Labor Day. But he wasn’t predicting that will occur at this point, and a September opening would be several months sooner than CH2M and agency officials were predicting just a few months ago.

The mobility authority has $70 million banked and dedicated to further payments for the project. Heiligenstein said his staff and consultants estimate it will take $35 million to $40 million beyond that amount to complete the work. That money would come out of CH2M’s pocket or, if final default occurs, from the surety company, Zurich North America Insurance, he said.

Heiligenstein said the agency decided to issue the default notice now because, at this point, MoPac in the project area — from Lady Bird Lake to Parmer Lane — has the same number of lanes open as it did before the work began. That typically is three lanes in each direction, with a fourth entrance and exit lane in some sections. A plan to reduce the northbound lanes from three to two south of Enfield hasn’t yet been executed, he said.

“We want to make sure we get on top of this before that happens,” Heiligenstein said. “If it goes to two (lanes), and they leave the job, then they’ve really screwed the region.”

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