http://www.mbta.com/uploadedfiles/About_the_T/Board_Meetings/3-BRGLookback.pdf
I scanned back a bunch of pages, and I don't think this has been discussed, sorry if it has. Based on the PPT above, here's a summary of how costs actually got inflated.
- MBTA picked a CM/GC contracting structure. Under that system, the project budget was split into 7 incremental guaranteed maximum price (IGMP) segments. What was supposed to happen was that an independent cost estimator (the "ICE") would set an estimate when design was complete on that segment, and WSK would quote any number up to 110% of it. Thus, the total project cost would not exceed 110% of this cumulative ICE-produced total.
- WSK produced a budget when they bid for the work. Extrapolating non-construction costs and contingency (not sure why that was necessary), Slide 11 has that budget at $2.35B.
- The MBTA never bothered to set a budget, nor did the ICE. The budget was seen as a completely moving target. As the design contractor (HDR/Gilbane) completed design work on each segment, they'd offer an estimated cost that was roundly ignored by all parties. Instead, the ICE and MBTA would throw out a number, WSK would refuse to do the work for 110% of it and would suggest a different number, and they'd work to an agreement, essentially throwing out the ICE and bidding each phase like they were buying a car.
- The first time this happened (October 2014), extrapolating WSK's agreed-upon IGMP for IGMP 1-3 (i.e., the first chunk) gave an extrapolated total cost of $2.46B.
- The second time this happened (August 2015), extrapolating WSK's agreed-upon IGMP for IGMP 4A (i.e., the first BIG chunk) gave an extrapolated total cost of $3.09B.
One month later, an unexplained peer review study gives us $2.99B, including the inflated total for IGMP 4A. I can't find any paperwork on how that estimate was done, but Slide 14 insists that no one has ever actually costed out this project. AFAIK, the only independent estimate of what it SHOULD cost to build is from Arup, which I think argued that if you cut all of their proposed stuff, you'd save 40%, to a total of $1.8B.
My point is, we haven no firm reason to believe that $3B is the actual project cost. What if Arup is correct? I'm not sure, because Arup's cost savings slide is trash. It adds up to 109%, so the bottom can't be a total. Does it mean percentages of the 40% maximum, with 9% made up of newly-incurred costs? If so, cutting Union Square and replacing it with buses saves 15% of 40%, or $180M. If that's right, is that really worth cutting Union Square if doing all the other VE gets you to $1.98B?
We have no basis for discussion. We don't know what any of this costs, and we don't even know what it should. It's imaginary numbers.