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IG Report Questions MWAA Policies

In statement, regional panel welcomes report, while letter to LaHood criticizes interference.

A long-awaited report about the Metropolitan Washington Airports Authority by the U.S. Secretary of Transportation’s Inspector General calls for actions beyond what the regional panel has already undertaken.

MWAA, responsible for constructing Metro’ Silver Line project from Falls Church to Ashburn, came under fire for lax oversight of its members. The IG report also raises questions about whether the organization’s policies permit favoritism in awarding contracts and nepotism in awarding jobs.

For the full report, see the PDF attached to this article.

After an interim report from the IG, MWAA approved a new travel policy and code of ethics, revised bylaws for board members and its Freedom of Information Policy and terminated contracts with former board members. But the IG’s final report finds those measures inadequate.

“While these are the types of actions needed to ensure fiduciary and ethical responsibility, further actions remain to fully address the management weaknesses we identified during our audit,” a summary of the report states.

A response to the report from MWAA on Thursday appears to show the organization is prepared to accept the criticism and work with the U.S. Secretary of Transportation Ray LaHood to make improvements.

“While the criticisms and issues raised have been unpleasant to hear – and will require hard work to address – we appreciate their interest and guidance, and we know they share our goal of making the Airports Authority a better organization,” MWAA said in a press release.

But the statement falls in stark contract with a letter sent one month earlier by MWAA board member Robert Clarke Brown to LaHood (see attached PDF), in which he charged the secretary with overstepping his bounds and requests the government shift its focus from investigating MWAA to helping fund the Silver Line, which currently relies primarily on tolls along the Dulles Toll Road. The tolls are expected to rise significantly if an additional infusion of money cannot be found. In fact, Brown praises the work of MWAA, disregarding the issues raised by the IG report.

“The Metropolitan Washing Airports Authority is a triumph of good transportation policy, a vivid demonstration of what a regional approach can accomplish in a large metropolitan area,” Brown wrote. “Not only have your repeated encroachments on MWAA’s independence been of questionable lawfulness, they have also gone far beyond the traditional role of U.S. DOT in local project development and execution.”

Brown went on to add that “most members” of the MWAA board “believed the Inspector General was acting far beyond the scope of his legal authority.”

In Brown’s letter, sent on MWAA letterhead, he acknowledges that the criticisms of the organization “have not been without merit,” but “I urge you now to turn your efforts on behalf of the Silver Line away from local politics and yesterday’s governance problems, and toward the real challenge the project still faces.”

Those problems were identified as securing state and federal funding for the project. The federal government contributed $900 million to the project’s first phase, about one-third of the cost. No federal money has been allocated for phase two, estimated to cost an additional $2.7 billion.

The procurement process for phase two has begun, while passengers are expected to begin board trains from phase one stations next year.

Bob Bruhns November 05, 2012 at 09:53 AM
Oh - and as you are well aware, my assertion that MWAA's price for the Dulles Rail project is double-priced, is based on examination of the overall Phase II cost compared to another local rail extension job, the cost of the Rt 28 station and the cost of the parking garages compared to similar jobs, and the fact that a Fairfax County official who has access to the cost figures that are deliberately hidden from lowly citizens and taxpayers like us, says that Phase I was priced about the same as the July 3, 2011 Phase II FTA figures. My cost analysis can be found here: http://www.bruhns.us/civic/DullesRail/Dulles-Rail---Silver-Line-overcost-report---Bruhns.pdf
the-stix November 05, 2012 at 11:58 AM
My estimate was $51 million vs MWAA's $53 million and at that no better than yours, and especially no better than the rail project experienced and professonal bottom-up Phase 2 estimates of AECOM and Parsons Brinkhoff and an independent estimator McDonough, Bolyard and Peck.
the-stix November 05, 2012 at 12:20 PM
Mr. Whitfield, surely you are not saying that the estimates by rail project experienced AECOM and Parsons Brinkhoff and the independent estimator McDonough, Bolyard and Peck (as called for by DOT) are wrong are you? And you are not saying that the MWAA did not review the estimates, or if they did their review was flawed are you? And you are not saying the Commonwealth did not review the estimates are you? Finally, can one not assume DOT reviewed the estimates and found them at least reasonable before La Hood offered his plan to reduce the MWAA part of Phase 2 (passing the cost of garages to the counties), and anounced the exact $ value of his plan? I agree it is 'shameless' if Fairfax County on behalf of the tax payers did nothing with the estimate as I think you are saying. But if NO ONE looked critically at the AECOM and Parsons Brinkhoff and McDonough, Bolyard and Peck estimates then that would be news now would it not?.
Rob Whitfield November 05, 2012 at 12:47 PM
The-stix, MWAA certainly reviewed the estimates but at what level of detail I do not know. I never read the reports and data from AECOM/PB (it's Brinkerhoff!) or the independent estimator but was told to investigate the assumptions made in the estimates. I never have. The Virginia agency responsible for reviewing the estimates is Department of Rail and Public Transportation. DRPT hired a professional engineer at the end of 2011, to work at the Tysons project office, presumably tasked with reviewing the data. I have long had a high regard for Sam Carnaggio, the MWAA Phase 1 project manager. Pat Nowakowski, Executive Director for MWAA for Dulles Rail, has skated around various issues and questions in the past but at a meeting last week he did a good job in answering questions.
Rob Whitfield November 05, 2012 at 01:10 PM
It is hard for non-engineers to assess what risks are involved in a complex project such as Dulles Rail. The saying goes: "the devil is in the details." I am not a licensed PE so do not offer formal opinions in the engineering field. It seems to me that the engineering and other risks associated with Phase 2 are less than they were for Phase 1. Also, a body of knowledge and experience has been built by the MWAA Project team over the last five years. The fundamental problems with Phase 2 continue to be the proposed financing structure and lack of evidence to support demand for heavy rail transit in the lower population and employment density areas westward from Reston into Loudoun County. Add the potential negative real estate market impacts of sequestration and increased federal income taxes - $2,500 for those making $60,000 per year - coming in 2013 and we have a formula for potential financial disaster, not only for the Dulles Toll Road and Dulles Rail but for the Dulles Greenway also. Several times in the past decade at Committee for Dulles and MWAA meetings, representatives of contractors and engineering consultants expressed concerns that the MWAA contract process was not handled fairly or properly. I did not have the ability to judge the reasonableness of these complaints so I took no action. Here's a link to a Bacon's Rebellion article today about the OIG report on MWAA: http://www.baconsrebellion.com/2012/11/the-mwaa-contracting-scandal.html
the-stix November 05, 2012 at 01:14 PM
Mr. Whitfield, you say you were trained as a civil engineer and worked as an engineering consultant. Phase 2 estimates were developed by rail experienced, professional and independent private consultants, each of whom has as a minimum their reputation on the line with this high profile construction program. Question: in light of the actual costs being incurred on Phase 1, can you reasonably conceive that the current Phase 2 estimate is as much as 100% overpriced, even if a few of the assumptions are questionable? I grant that the cost could be lower if program cost items were reduced or eliminated, but for the current work scope, is it even reasonable in your view for the estimate to be even near that far wrong? I am asking for your opinion as having related experience and a long personal involvement in these matters.
Rob Whitfield November 05, 2012 at 01:50 PM
"The Stix" this is my final comment to you unless you divulge your identity. Phase 1 costs rose signficantly from the 30% PE stage (2005?) to final design completion in 2009. Phase 1 projected capital costs rose from $1.5 billion in 2003 to $2,9 billion current cost estimate. MWAA projected Phase 2 at $2.5 billion in its 2006 submission to Virginia. By 2010, MWAA projected Phase 2 at $3.8 billion. Total new costs are still over $3 billion. In Phase 1, as in Phase 2, some elements of the orginally approved "record of decision" plan were shed as costs rose, eg the $100 million Wiehle Avenue parking garage. The Wiehle garage project lacks any cost-benefit feasibility. Rather it is a politician's dream, paid for by taxpayers, by one who thinks that we should all ride transit, regardless of where we live or work. Phase 2 will lack the complexities of utility relocation and right of way acquisition and easement issues in Phase 1. We are in a less competive global demand environment for raw materials today -concrete, steel etc- than in 2008 when the Peking Olympics and other major Chinese public works were a factor. That coupled with diminshed worldwide industrial and commercial development demand resulting from global economic woes indicates that the contractors bidding on Phase 2 will likely be less aggressive on pricing than would have been the case five years ago. As I recall, Bechtel/Dulles Transit Partners locked in Phase 1 contract price circa 2007.
the-stix November 05, 2012 at 04:43 PM
Thank you Mr. Whitfield, I am sorry you have an aversion to posters that do not identify themselves, but I do so for my personal security reasons and not at all because of any connection with you or your interests except in this forum. I will say that I am disappointed that with your knowledge and experience you danced around my specific question. Phase 1 cost estimate changes during the preliminary engineering process, especially during a transition of project responsibility to MWAA are not surprising. The 100% PE estimate of $2.65 billion in 2006 is the project cost of record that carried forward to the project start and award of the Design/Build contract in 2007. That estimate was thoroughly reviewed and scrubbed by MWAA, DRPT (the Commonwealth), WMTAA and PMOC consisting of a variety of outside consultants and specialty experts (for the Tyson tunnel for example). Except for project scope changes during the PE process, it is inconceivable that that Phase 1 100% PE estimate could be overpriced by a factor of two. In fact the recent cost estimate increase to $2.9 billion is clearly an indication that it was underpriced. I suggest that Phase 2 is and will be no different regarding costing integrity. Over 5 or 10% perhaps, but 100% over is not even a reasonable expectation except for scope changes. I should think anyone with any knowledge of the engineering estimating and contracting process of major programs would agree.
Bob Bruhns November 05, 2012 at 04:58 PM
I've been through this with stix on Restonweb for a long time. See the eighth post on this page, the documentation is there. http://restonweb.com/forum/viewtopic.php?t=5977&start=45 Stix himself estimated a price for the Rt 28 parking garage that is about 2/3 of the one that comes from MWAA's estimators. He then bungled the percentage difference between his own May 24, 2012 estimate and the earlier July 3, 2011 FTA estimate, and now he will not admit that his own estimate is about 2/3 of the present MWAA estimate (from March 6, 2012), that I have to assume comes from the same estimating companes that he is extolling. He stands by his estimate, but their estimate is 48% higher than his, and yet he uses their numbers whenever it is convenient to him. I am certainly not perfect or omniscient - but should people make a serious decision on the price of Dulles Rail, that will affect this region for generations, based on flip-flop stories from a pen-name poster? Nobody is perfect. Why have our so-called 'leaders' not called on the cost estimators to justify their apparently excessive price estimates? Regarding the cost estimating companies, see page 4 of my report. http://www.bruhns.us/civic/DullesRail/Dulles-Rail---Silver-Line-overcost-report---Bruhns.pdf
Bob Bruhns November 05, 2012 at 05:30 PM
Stix, do you stand by your May 24, 2012 $46.6 million estimate for the price of the Rt 28 station? Because as of March 6, 2012, MWAA and (I have to assume) their cost estimators are saying something more like $68.9 million - which is 48% higher than your number. You were just saying 5% or 10% error might be realistic - but your own estimate says something else, doesn't it?
Rob Whitfield November 05, 2012 at 06:09 PM
As those who know me can attest, I don't dance very well -especially around facts. A minor correction; it's Parsons Brinckerhoff. the firm used to include Quade & Douglas. PB was acquired in 2009 by Balfour Beatty, a British company. In 2007, BB also acquired Centex Construction, Centex Homes commercial building division. As to Phase 1 project costs, in his March 2, 2012 article, Terry Maynard of Reston 2020 tabulated the changes in cost estimates from the $1.52 billion noted in the Final EIS in 2004. The April 2006 FTA PMOC shows $2.07 billion "true 100% PE costs" with a 2011 completion date. By July 2007, the FTA "updated 100% PE" shows $2.65 billion and 2013 completion date. http://reston2020.blogspot.com/2012/03/key-dulles-rail-cost-document-held.html As to the level of Phase 2 review conducted by MWAA and DRPT, MWAA only took one week from receiving the project cost estimate data from the consultants on or about March 1, 2012 before releasing information to its project partners -Fairfax and Loudoun counties. As Terry points out, most Fairfax County Supervisors did not want to wait to review the data before approving its Phase 2 participation. Taxpayers in Fairfax and Loudoun counties should demand a greater role in the Phase 2 project oversight and decision making process, either adding public representation by professional experts in finance, engineering and other skills to the existing Dulles Corridor Advisory Committee or through a new committee.
the-stix November 05, 2012 at 07:26 PM
I am familiar with Maynard’s post. As I said earlier, the cost growth of Phase 1 should not be surprising as the project requirements and scope are refined from start, through 50% PE completion to 100% PE completion. Also with all the program delays affecting project start and completion dates, one can reasonably expect cost escalation. Finally I have never been convinced that there was not just a bit of politics involved to keep the initial estimates down pre-MWAA, for the public consumption and probably for the project to look more attractive to DOT to maximize their contribution. As to Phase 2, I am certainly in favor of more transparency and of some public explanation of the project cost estimates. I do not favor the public having a significant role in the “decision making process”. I have run a few major programs in my time and can attest that “too many cooks spoil the broth”. And I expect this would be especially true of “public” cooks who are often excessively vocal but woefully ignorant. One needs only look at some of the posters in the Patch forums to see what I mean. Bottom line, based on the actual costs being incurred on Phase 1, I am relatively confident that The Phase 2 100% PE estimate is not all that far off from today’s reality for heavy rail construction. Just an opinion to be verified.
Bob Bruhns November 05, 2012 at 07:44 PM
Your estimate was $46.6 million stix. Sorry. But even if your estimate had been $51.1 million, MWAA (and presumably their estimators) still have you beat, with a $68.9 estimate that is about 35% higher than your $51.1 million figure. Weren't you saying that the error could not be more than 5% to 10%? So, are you going to ratchet up your estimate again? Why not? Heck, MWAA ratcheted their estimate up 29% between July 3, 2011 and March 6, 2012.
the-stix November 05, 2012 at 08:07 PM
Yes $46.6 million PLUS cost escalation out to the anticipated mid-point of the construction project, if they followed standard costing practice. At the indices MWAA had been using, that would be an additional $4.4 million. For even the simple minded, $46.6 million plus $4.4 million equals $51 million (my estimate) which is about 4% lower than the MWAA estimate at the time of $53 million. Get it Mr. Bruhns, or shoud I write it all in capital letters next time?
Bob Bruhns November 05, 2012 at 09:39 PM
Ha ha, OK, but even if you say $51.1. million, MWAA's estimate is 35% higher than yours. And you think 5% to 10% should be the limit of error. Now, unless MWAA isn't conforming to your midpoint cost estimate, that's about all there is to it, stix. You are saying that the MWAA estimates are high! Then you are saying that you must be wrong. And you are throwing every insult at me, for failing to agree with you. What can I say.
Bob Bruhns November 06, 2012 at 02:26 PM
Congratulations, stix. Given that the official parking garage cost estimate is 35% higher than you were able to balloon your own parking garage cost estimate, it is refreshing to see that you support a public explanation of the project cost estimates for Phase II, at least. I thought you would simply continue to negate your own analysis by using the estimators as a reference for the estimators, much as one of Fairfax County's Dulles Rail Project Managers previously used Metro prices to justify Metro prices.
joe brewer November 06, 2012 at 02:40 PM
Once Mr. Brown gets through wiping it off his face he can then spend his time looking for other gainful employment.
Just the Facts November 06, 2012 at 02:48 PM
Who was the contractor who benefited? Why was this not disclosed? What favors did this contractor give the employees of MWAA? Why is Wolf, LaHood and McDonnell not asking these questions? This smells and we are all going to pay for this in higher tolls.
Just the Facts November 06, 2012 at 03:10 PM
I have so many questions I don't know where to start. Who benefited from these contracts? What department (s) gave out these contracts? What role does the CEO have in approving contracts ? Does the staff have authority to just give out contracts without CEO or Board approval? Why did they not report who was awarded all these contracts? Why is Wolf, McDonnell and LaHood not asking for any resignations? Im sick of this I'm sorry crap we will fix it going forward. I will be paying huge tolls and these jerks just keep saying I'm sorry we will adopt a new policy. People in leadership need to be fired. Where are our elected leaders? I have not heard one of them Republican or Democrat ask for any resignations. WHY???
Just the Facts November 06, 2012 at 03:16 PM
Also I would assume MWAA does an audit every year. Why was this never discoved before this report? Please fire someone just to show that you cut the head of this snake. If our elected leaders do not get involved and ask for resignations then they are part of the problem.
Bob Bruhns November 06, 2012 at 03:53 PM
Well, Governor McDonnell asked for Dennis Martire's resignation (and got it). And a former MWAA Vice President, Arl Williams, very recently resigned just before this audit report was released. Transportation Department Audit On MWAA Finds Violations WAMU, November 1, 2012 http://wamu.org/news/12/11/01/transportation_department_to_release_audit_on_silver_line_project I'd say the title of that article puts it ... a bit mildly. :) What we are seeing, I think, is a fight between high level crooks for control of the Billion and a half dollars of overcharge in the Phase II contracts. We get stunning report after stunning report, including this audit that shows MWAA routinely paying 1.3 to 3.3 times as much as they should pay for some big priced contracts - and yet there is NO discussion of the apparent double price of the Dulles Rail job. I assert that the intention is simply to grab that extra Billion and a half dollars, in order to give it to different chosen beneficiaries, rather than back to the public that must pay for it all. And I am glad that more and more people are starting to see that.
Bob Bruhns November 06, 2012 at 08:48 PM
Also, I found this. It is a later edition of the November 1, 2012 Martin Di Caro article. Apparently MWAA's Vice President for information and telecommunications was fired this past spring for receiving two tickets to the 2009 Super Bowl (and other expensive gifts) from a contractor. Audit Exposes Litany of Shady Dealings by Agency Running D.C. Area Airports Transportation Nation, November 2, 2012 http://transportationnation.org/2012/11/02/litany-of-shady-dealings-exposed-in-agency-running-d-c-airports/
Bob Bruhns November 06, 2012 at 08:51 PM
Agreed. The interference that Mr. Brown disliked, was very well justified.
joe brewer November 06, 2012 at 09:34 PM
I do believe they do a internal audit. This quagmire dates back to the 90's. The whole concept of a Authority is a failed system, they are from the school of blame he did it, or she did it and they didn't have the authority yet they awarded contracts under the current group of leaders. The buck stops with them no if's and's or but's about it. Let me reconsider I do believe there are some butts involved.
Bob Bruhns November 07, 2012 at 02:39 PM
MWAA has an Audit Committee that was co-chaired by two former Board members, but its meetings were held in secret during the entire period of this recently completed US DOT Audit. The Inspector General commented that this was ironic, given its function. The MWAA Board and Officers were a happy bunch of dubious political appointees playing all kinds of hidden games, until Frank Wolf and Tom Latham requested this US DOT audit last year. From comments I have read, MWAA and its Board and Directors complained, resisted and balked, but the truth is finally coming out. Potter remains, even though he disgraced himself in the Reiley hiring, and Curto remains, even though he has been a front for the nonsense that went on. Tom Davis had the right enemies on the MWAA Board - witness they grabbed his papers and misused the information in them. But he should have been blowing a great big whistle, and I never heard it. The Dulles Toll Road should be taken back by Virginia DOT, and Dulles Rail Phase II should be supervised by a much better group.
Bob Bruhns November 07, 2012 at 08:28 PM
Wolf Statement On DOT IG Report On MWAA Congressman Wolf's Website, November 01, 2012 http://wolf.house.gov/press-releases/wolf-statement-on-dot-ig-report-on-mwaa/
Bob Bruhns November 08, 2012 at 02:59 PM
Stix, the 3.1 billion dollar cost of the Design-Build contract, plus financing, was mentioned in the second sentence of the report. And the Phase II estimate is mentioned too. Perhaps you are not aware of MWAA's track record with regard to costs. MWAA will probably not let Phase II go too far above the incredibly bloated cost estimate numbers that they have handed us - but that's not saying much, because they handed us cost figures that are two times what they should be. In case you haven't noticed, MWAA isn't particularly good at lowering costs. That's why the US DOT stepped in, back in 2011. MWAA, the organization that seems to like paying 130% to 330% of what they should spend, happily accepted cost estimates that are simply unjustified, and passed them along to us. Well, except that they seemed to be looking for any way they could think of, to make the numbers even higher. In fact, between July 2011 and March 2012, they managed to hyperinflate the price of the Rt 28 rail station by 22%, and the cost of the parking garages by 29%. That's a big jump, for less than a year of hyperinflation. Why is it that the items that the Counties have to pay skyrocketed on March 6, 2012, while the rest of the project held about steady? And why didn't the so-called news media happen to mention that?
Just the Facts December 10, 2012 at 04:40 AM
Frank Wolf was very vocal about Martire's plane ticket but has been silent on the 180k job for a no show job for a former Board member. He also held that lame press conference with Senator Allen and Barbara Comstock complaining about MWAA hiring Mame Reiley while wearing George Allen for Senate stickers. Was this a press inference about MWAA or a political event for Allen? Either way it looked like they made the deal political. Now that the elections are over Wolf and McDonnell have been silent. It just shows most of this has been political theatre. These politicians have no interest in cleaning up MWAA? They just want to use them to beat up on. Fire the three clowns and I will think MWAA has a hance to survive. Potter, Davis and Curto need to resign.
Rob Whitfield December 10, 2012 at 10:56 AM
At the November 16 hearing by the House Transportation and Infrastructure Committee on the USDOT Inspector General's audit of MWAA. nobody involved escaped without blame for shortcomings and misconduct. The USDOT IG Calvin Scovel was very professional in his presentation. He did not comment on the FBI's investigation of MWAA. At the Governor's Transportation Conference in Tysons last week, nobody offered substantive comment on the as yet unresolved feasibility and financial problems for Dulles Rail Phase 2. My view is that it is time for the USDOT IG Scovel to tackle the many as yet unreported problems at the Washington Metro Area Transit Authority. WMATA has yet to admit publicly that upgrading traction power stations in Arlington and DC plus other improvements needed to downtown elevators and escalators to allow more eight car trains to operate there will cost well over $1 billion. The Dulles Airport maintenance yard has been sized and designed for all Series 7000 rail cars - not just those to be used by Dulles Rail. WMATA is trying to force Virginia taxpayers to pay all of its costs instead of most being paid by Metrorail riders. A total absence of leadership exists by both Republicans and Democrats. Why has no elected official or transportation agency leader demanded independent forecasts of Metrorail ridership, revenues and cost projections for the Silver Line? The project is the biggest financial boondoggle in Virginia history.
Bob Bruhns December 11, 2012 at 05:30 PM
It's just a bunch of crooks fighting over stolen money. Reports that expose their lies are not going to help them grab the money and run, so they don't demand them. The Dulles Rail project, also known as the Silver Line, costs two times what it should - we're talking about an unnecessary extra $2.5 to $3 Billion dollars of economic drain that is causing a major financial crisis for this entire region. And then there are the finance charges for the money that we need to borrow, to pay the bloated costs of this project. And let's not forget the real and needed projects that must make do on less money, because so much is being devoured by this ripoff. When are people going to wake up?

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