Harborview Costs Overruns
“Previous Councils fought to protect taxpayers by insisting on a guaranteed contract on the cost of the Harborview construction project,” said Councilmember Bob Ferguson, chair of the Council’s Capital Budget Committee. “Taxpayers trusted the project partners to keep an eye on the bottom line. The vote we were forced to take today jeopardizes that trust.”
“The Council approved entering into a general contractor/construction management (GC/CM) agreement on Harborview with a contractor based on that company’s expertise and reputation,” said Councilmember Dow Constantine, chair of the Council’s Operating Budget Committee. “I am disappointed that, far from providing the value we were promised, the contract led to a $15 million increase in costs on a project critical to our region’s trauma care center.”
In 2000, County voters approved $191 million in bond funding to support facility improvements at Harborview, which is owned by King County and operated by the University of Washington. The project includes expansion of the hospital’s critical care capacity the construction of new facilities, and a seismic upgrade. Turner Construction was selected to be the General Contractor/Construction Manager, meaning that Turner is acting as both the General Contractor and the Construction Manager for the project. The bids received by Turner for the Inpatient Expansion Facility as well as the Ninth and Jefferson building adjacent to the Medical Center were higher than anticipated.
Normally, under the GC/CM method, the GC/CM would be held to the cost as proposed by the maximum allowable construction cost that they developed as part of their contract bid. In this case, however, Turner claimed that there were extenuating circumstances and design changes that could not have been foreseen at the time the company developed the maximum allowable construction cost. Turner argued that justified the additional cost. A cost evaluation done by the University of Washington, which is managing the Bond Program, concluded that the project budget for the Inpatient Expansion Building should be adjusted by $15 million—a decision endorsed by the bond oversight committee.This ordinance approved by the Council shifts $15 million from the Ninth and Jefferson Building project to the Inpatient Expansion Building and will allow Turner to award contracts to the sub-contractors prior to April 7, 2006 date when bid guarantees will expire. The University of Washington believes this budget adjustment will be enough to complete the IEB project, but shifting the $15 million means there will not be sufficient remaining funding to complete construction on the Ninth and Jefferson Building.
“The Council is between a rock and a hard place with this vote and I want to be sure the public and the Harborview Board of Trustees understand that I do not approve of this cost overrun or of the council being put in this position,” said Council Chair Larry Phillips. “It’s not acceptable to come to the council at the last minute to gain our approval of these types of changes, and I—along with the taxpayers of King County—expect the board to use a far more rigorous process for vetting bond measures before bringing them to the council so that every possibility is accounted and planned for beforehand.”
“As the voice of the voters, the Council is in a precarious position,” said Councilmember Jane Hague, a member of the Capital Budget Committee. “The choice we had to make today doesn't address the big picture plan presented to the taxpayers. We must ensure that all projects voted for under the Harborview bond project are completed on time and within budget.”
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