Metro Rail Station 64% Over Budget, Builder Says : Transit: Contractor is seeking $27 million more to recover costs. County and firm blame each other and are negotiating to avoid an expensive court battle.

Claiming poor planning and inadequate research by county transportation officials, the builders of the major downtown Metro Rail station are demanding $27 million in cost overruns on the underground structure at 7th and Flower streets.

Even in an industry where overruns are commonplace, the bill from Granite Construction Co. stands out--it exceeds the original $42-million contract by 64%.

If true, Granite’s allegations raise questions about the ability of transportation officials to accurately predict the price tag for construction of the region’s fledgling rapid transit system. According to current calculations, Los Angeles County transportation officials will spend $45.9 billion on the system by 2010.

But a transit official said last week that the huge claim may be, at least in part, an attempt by Granite to make up for an unrealistically low bid it made in 1987 in order to win the contract. “It’s not our problem to make the contractor whole,” said Ed McSpedon, assistant general manager of the Los Angeles County Transportation Commission.

McSpedon said the problems encountered by Granite are vastly overstated, but added: “When you dig underground, you’re always going to find surprises.”

Transportation officials have made a counterclaim against Granite to cover costs of correcting alleged errors made by the firm while building the station. Settlement negotiations aimed at avoiding an expensive lawsuit are under way.

Officials of Granite, a heavy-construction concern based in Watsonville, declined to comment.

But documents filed with the transportation commission show that the project was plagued by 173 change orders that began even before workers dug the first spadeful of dirt in 1988. Granite called the change orders “excessive and abnormal.”

During their three-year odyssey under the streets of downtown Los Angeles, Granite workers encountered a murky world of uncharted utility lines, unstable soil and unanticipated obstructions, all of which should have been noted in the bid specifications supplied by the LACTC, the firm claimed.

Despite the unforeseen problems, transportation officials refused to relax the construction schedule, forcing Granite to incur substantial overtime costs, according to documents filed with the commission.

The station, which opened on Feb. 14, 1991, runs under 7th Street between Hope and Figueroa streets and under Flower Street between 6th and 8th streets. At present, it serves passengers on the Long Beach-to-downtown Blue Line. Its passageways and platforms extend deep into the ground under several huge downtown office structures, including the Roosevelt Building and the former Barker Brothers Building on 7th Street.

The station is to be the transfer point between the Blue Line, a light-rail train the runs largely above ground, and the Red Line, the region’s first subway line, which will run from downtown to the Mid-Wilshire area and is scheduled to open in 1993.

Before beginning construction of the station, Granite had to install a support system to shore up the soil and the buildings. The work required partial demolition and modification of several buildings. Underground construction work included installation of a high-density polyethylene barrier and supporting and structural steel.

But the Southern California Rapid Transit District, the agency that originally handled the project, failed to identify and relocate a range of underground utilities and other obstructions, making Granite’s planned work schedule virtually useless, the firm claimed, and the result was “disastrous.”

“So different was the timing, sequencing and nature of the performance thrust upon Granite, that the whole character of the work was changed. . . . Effectively, the original concept was thereby abandoned,” the Granite documents claim.

On 668 occasions, Granite alleged, errors and omissions in official documents made it necessary for Granite to ask for clarifications and solutions. The RTD, and later the LACTC, were slow to respond and in some cases did not respond, causing costly delays, the firm claimed.

The first indication of trouble came in late December, 1987, a few days after Granite was awarded the contract, according to the allegations. At a pre-construction meeting, RTD officials informed Granite that a four-foot zone that had been labeled “utility free” contained utilities, including water mains and lines, telephone, telegraph and electrical ducts and fiber-optic lines. All had to be located and rerouted.

The news meant that Granite was unable to proceed with any aspect of its tightly drawn schedule, the firm claimed. This early development “set in motion” delays compounded throughout the project, the documents allege.

More than 50 times during excavation for the station, workers encountered subsurface soil that differed substantially from the descriptions in contract documents, the firm claimed.

In one case, soil near the Barker Brothers Building had been described as stable, silty sand. In reality, workers found “caving sand and gravel,” which would not withstand the drilling to install piles.

Granite’s list of similar complaints and background documentation runs to thousands of pages.

McSpedon, the construction manager, said that a substantial effort was made to locate and identify underground obstacles before Granite began work, but that some discrepancies should be anticipated by an experienced contractor. Those encountered by Granite were “more normal than not,” he said.

“With utility drawings,” Mc Spedon said, “you always have to take them with a grain of salt. The real issue is whether the contractor did everything possible to minimize the problem.”

McSpedon suggested that it is “very much a possibility” that Granite deliberately underbid the contract in order to win it. Some contractors calculate that they can name a low price, then “figure they’ll finagle it later” to make up losses.

The agency’s Disputes Review Board is to meet again in March to try to resolve the matter.