Where It’s Always Freeway Rush Hour : Firms Race to Meet Quake Repair Deadlines, With Little Room Between Disaster and Profit

While rebuilding the earthquake-torn eastbound lanes of the Simi Valley Freeway in Granada Hills, Brutoco Engineering & Construction Inc. ran into a snag.

After reinforcing steel and concrete was set in a hole, an error in how it was placed was discovered. The steel had to be pulled out, adjusted, then put back in. These things happen at construction sites. Normally, the situation would be reviewed, reports would be filed and arguments would break out.

But this was no normal job.

Brutoco, a Fontana-based contractor, is under a frantic, 100-day deadline to fulfill its $9.7-million contract as the main contractor on the Simi Valley Freeway--and faces a $50,000 penalty for each day late, or a $50,000 bonus for each day it finishes the job ahead of schedule. So, there were no disagreements, no lengthy discussions over who was to blame. The mistake was fixed immediately.

“If you stand around arguing about reinforcing steel,” said Brutoco executive vice president, Tom Salata, “that’s a $50,000 conversation.”

Construction companies such as Brutoco that are working on earthquake-damaged freeways, bridges and ramps are in a pull-out-all-stops race against the clock. Under an unusual process of awarding contracts that the state Department of Transportation adopted to speed earthquake repairs, these contractors have promised to finish their projects in a fraction of the time that they’d take under other circumstances, and without the usual allowance for rain delays.

For the companies that are rebuilding what the Jan. 17 Northridge earthquake destroyed, it’s a big gamble: Finishing by the deadline could mean profits and prestige. Failing to make it almost certainly would mean losing money and face.

“There’s not much room,” Salata said, “between disaster and profit.”

In April, after much fanfare, the Santa Monica Freeway reopened 69 days ahead of schedule--which earned the chief contractor, C. C. Myers Inc., a bonus of $14.8 million, in addition to its $14.9-million contract. Now eyes are now turned to other major earthquake projects on the Simi Valley, Antelope Valley and Golden State freeways.

For the contractors, it’s a gamble made all the more intense because the dearth of private building in the past few years in California has forced them to rely on public works projects. These companies range from small, family-owned subcontractors that depend on one or two projects a year to large corporations trying to juggle several jobs at once. While the earthquake-repair work is risky, many of these firms didn’t want to miss the opportunity presented by such high-profile and possibly lucrative contracts.

Both Brutoco and another primary freeway contractor, E. L. Yeager Construction Co., will win their bet against time. Even so, big profits on the freeway quake repairs are by no means assured.

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Yeager, a Riverside company with about $125 million in annual revenue, is finishing one month early the rebuilding of two Golden State Freeway bridges at Gavin Canyon, a tight, narrow valley fit between steep, rocky cliffs 23 miles north of downtown Los Angeles. On Wednesday, the southbound lanes of the Golden State will open, and the northbound lanes will open Thursday. The fast work will earn Yeager a $4.5-million bonus on top of its $14.8-million contract. An additional bonus is being negotiated for other work Yeager completed to make the bridges more resistant to earthquake damage.

This week, Brutoco is expected to wind up its repairs of the eastbound Simi Valley Freeway, a few days ahead of its May 22 deadline. Brutoco’s bonus is still being negotiated, but it could be more than $1 million because Caltrans added work after the original contract, said Jerry Baxter, Caltrans district director. That’s good news for Brutoco, which takes in about $40 million in revenue annually, and for Salata and other co-owners of the company, because they pledged their houses and cars as collateral for the surety bond required to ensure completion of building contracts.

Another big project still under way is at the interchange of the Golden State and Antelope Valley freeways. Highland-based Kasler Corp. is working feverishly to meet its July 28 deadline to rebuild two bridges connecting the freeways. It was here that an off-duty Los Angeles police officer was killed when his motorcycle shot off the edge of a collapsed bridge after the earthquake. Kasler’s $19.6-million contract includes a $100,000-a-day bonus or penalty.

Even though Yeager and Brutoco will finish early, Baxter expects the companies’ profits to be significantly less than their bonuses because they had to pay for enormous amounts of overtime. To get the earthquake repair jobs done, their crews worked round-the-clock, seven days a week. At any hour of the day or night on the Simi Valley Freeway, Salata said, Brutoco has had 150 employees working “butt to butt.” Supervisors have pulled down 14- to 18-hour days.

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Contractors routinely tally their expenses weekly, but on the Simi Valley Freeway, Brutoco worked so fast that a final verdict on its financial performance won’t be known for some time. Although Salata expects that his company won’t lose money, its profit might not be large because of its big overtime bill.

Typically, building contractors estimate a gross profit of about 10% in a bid. After subtracting taxes and other costs, such as administrative expenses, a company would do well to net a 3% or 4% profit. That leaves little room for mistakes or delays--and even less with a late penalty looming.

Yeager President Carl Boyer said he won’t know how well his company did financially until it finishes other work, including drains on the Golden State Freeway project. “We’ve done fairly well. But I don’t think anybody realizes the risk when you bid a job like that. You’ve got to make every day and every hour count.”

Yeager also kept crews working nonstop, rain or shine, aftershocks and all. On the day the company won the contract, plans for the Golden State Freeway bridges weren’t even completed, but Yeager was on the phone ordering all the materials it guessed would be needed, instead of spacing out orders over time.

“We spent a lot of money to accomplish this,” said Yeager’s project manager, Jim Crews. “Two or three stumbles, two or three weeks of bad weather, and we would have been paying out of our pocket” to cover losses.

Kasler is hoping that it won’t encounter such problems as it rebuilds the two bridges connecting the Golden State and Antelope Valley freeways in four months--a job that normally would take 18 months--even though it’s abandoned some of its usual procedures. “Normally, we go back to the office and regroup at the end of the day,” project manager Gene Boisvert said. “Here, we don’t have an end of the day.”

Kasler faces enormous obstacles. Unlike the flat Santa Monica Freeway, the exchange roads Kasler is rebuilding are situated in a canyon in a mountainous area. Workers toil on bridges reaching 126 feet high and precariously near freeways still open to traffic. Some columns are being raised just feet away from railroad tracks, with huge steel caissons to support the concrete columns plunging 70 feet into the ground. A main gas line to Los Angeles is in an underground vault running through the building site.

On a typical job, Kasler, a $200-million-a-year company, would have a month after winning a bid to plan, mobilize and get quotes from suppliers, Boisvert said. This time, the contract for the interchange was awarded March 18, and Kasler began work the following day. Boisvert immediately lined up a dozen subcontractors, ordered the lumber and got phone numbers where he could reach suppliers 24 hours a day.

Kasler’s crews are working 11-hour shifts, with one crew falling in behind another “like a baton marathon race,” Boisvert said.

Caltrans’ Baxter said Kasler lost 10 days work when it had to remove a previously unknown hunk of buried concrete left from an earlier bridge that collapsed in the 1971 Sylmar earthquake. Kasler won’t be penalized for that, Baxter said, although the company is making up time so fast that it could still meet its original deadline.

In their rush to finish, contractors also depend on the dozens of subcontractors they’ve hired for such tasks as drilling, welding, steel and electrical work. For these subcontractors, many of which have no bonus promised for completing their work early, controlling costs is critical.

One subcontractor, Tri-City Reinforcing Corp., which installed reinforcing steel on the Santa Monica Freeway, is now working on the Golden State-Antelope Valley freeway interchange project under a $3.5-million subcontract with Kasler. Of that, 55% pays for steel “rebar,” Tri-City owner Dean Bubion said. That leaves labor, the big intangible cost on any job. One steelworker costs $40 an hour in salary and benefits, more if there’s overtime. Even though Tri-City gets paid every two weeks--as opposed to each month on normal jobs--for the small firm to come up with the cash to meet its payroll isn’t easy, Bubion said.

Tri-City made a profit on its $4.5-million subcontract on the Santa Monica Freeway, Bubion said. But the Golden State-Antelope Valley freeway job is tougher, he said, and “we’re hoping not to lose money.”

It didn’t help when Tri-City workers mistakenly installed single hoops of reinforcing steel for three columns instead of the required double hoops. Fixing the error cost Tri-City time and money, but Bubion said he took it in stride. “You don’t want to beat up on a guy who’s been working 70 hours a week,” he said.

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Bubion looks forward to completing the column work and going full speed on the bridges. That’s when Tri-City’s ironworkers--whose jobs are considered the most grueling of the construction trade--can show their metal by trying to catch up with the carpenters working just ahead of them.

Beyond the money, Bubion said the earthquake jobs have given his 5-year-old firm valuable exposure at a time when construction work is scarce. Previously, Tri-City was known as a Metro Rail specialist, but its next Metro Rail contract doesn’t start until December.

There will be plenty more work for qualified firms, said Baxter at Caltrans. After the earthquake repairs wind up by the end of the year, 800 bridges in Los Angeles and Ventura counties will still need retrofitting, and that work will continue for several years, he said.

But Bubion isn’t worrying about that now. “Doing this job in three months,” he said, “doesn’t give you a lot of time to get more work.”