Millions Paid to MTA Firms in Safety Bonuses : Metro Rail: Despite high injury rates, subway builders qualify for extra payments. Agency is revamping program.

Although the Los Angeles rail project has been marred by spectacular accidents and high worker injury rates, contractors have earned nearly $3 million in lucrative but little-known “safety bonuses” and stand to make millions more in the years ahead, records and interviews show.

Inspections have produced thousands of citations against the contractors on the multibillion-dollar construction project--including some of the same firms that are collecting safety bonuses for their work.

Now, as federal and state officials have begun to question whether the city’s trouble-plagued new subway should be finished, transit officials are revamping the unusual “bonus” program, which was designed to provide financial incentives to avoid disruptive and costly safety problems.

Officials of the Metropolitan Transportation Authority are moving to close loopholes that have flawed the program, but they still expect to pay out as much as $9.5 million to contractors under the old bonus system--all from the coffers of an agency that has raised bus fares sharply to meet budget shortfalls.

Although no workers have been killed on the Metro Rail’s subway portion, the project during the last 19 months has suffered underground fires, runaway trains, near-escapes from a gaping Hollywood Boulevard sinkhole, the entrapment of a worker in a cement mixer and other accidents that have pointed up systemic safety problems.

Officials say they have worked to shore up safety in recent months, adding new inspectors and assuming direct control over safety operations. They say that, despite higher-than-average injury rates on some contracts, they believe the project’s overall record is no worse than that of many major projects nationwide.

“Safety is priority No. 1 here,” said MTA construction chief Stanley G. Phernambucq, who--in one of his first acts in his new job--fired a main contractor this summer because of safety and other concerns. “There’s no black or white to it. No accident is acceptable.”

Records from the California Division of Occupational Safety and Health (Cal/OSHA) indicate a pattern of lapses that potentially endanger hundreds of workers.

Fire extinguishers have been found out of place or missing. Miners have been caught smoking in tunnels where gas is found. Frayed electrical wiring has been left exposed. Pressure regulators and other instruments have been found damaged. Platforms sometimes have not been equipped with guardrails or ladders. Tunnelers have neglected to wear required eye gear and other protection. Some inspectors and locomotive drivers have not been properly trained.

“Not qualified!!” one Cal/OSHA inspector scrawled last year in a report, describing a worker whose inexperience had contributed to an underground construction train accident.

The bonuses are meant to combat such problems through an unusual strategy used by only a few other public works agencies around the country.

The program promises extra cash to the contractor--generally 1% of the contract value or up to $500,000--if its workers meet certain goals for “lost time” accidents, below national industry standards. It also penalizes the contractors up to $500,000 if their numbers exceed the standards--but no one has ever had to pay the penalty.

Supporters of the bonus system say that by providing contractors with a financial incentive to do better than industry norms, transit officials can expect a safer workplace on one of the nation’s largest public works projects.

But critics attack the idea that contractors should need an incentive to do their jobs safely. And records and interviews raise questions about the effectiveness of the program, showing that bonuses have accelerated even as safety concerns have mounted:

* The hundreds of injuries requiring medical attention on some major parts of the subway represent a rate two to three times the national average for heavy construction.

Yet many of these mishaps are never counted in figuring the bonuses because the formula has relied exclusively on “lost time” accidents, tracking a worker’s time off the job.

* Tunnelers on the Hollywood Boulevard leg worked six-day weeks for months, despite warnings from the main contractor that “dog-tired” workers were getting hurt far more frequently while trying to make up for months-long delays, correspondence shows. Serious tunnel accidents rose 62% in the year after the long weeks started in early 1994, according to records from contractor Shea-Kiewit-Kenny.

After months of debate among project officials, SKK refused in May to continue scheduling six-day weeks. SKK was fired weeks later with more than $1 million in state safety fines pending against it. The firm maintains it still is owed a bonus of up to $500,000 because its work fell within MTA-established standards.

* The ranks of subway officials overseeing safety and related issues have been depleted by prolonged absences, worrying local, state and federal officials who see a lack of stability. At least eight managers and key inspectors who work on safety issues for the MTA or its contractors have been off the job for myriad reasons--including resignations, firings, stress leave, and in one case, the criminal conviction of the MTA’s risk manager.

“The cumulative effect of it is that we’re losing a tremendous amount of experienced people who have knowledge of the system,” said one MTA official who spoke on condition of anonymity. “What we’re gaining are generally inexperienced, non-safety people.”

* The MTA in past months has reviewed wide-ranging claims made by a former safety manager for subway construction manager Parsons-Dillingham, who turned “whistle-blower” because he said he saw no other way of resolving workplace problems.

Gary Buffington alleged “waste, fraud and gross mismanagement” in the construction program. “If the present safety attitude continues,” he concluded in a May letter to transit officials, “then workers will continue to lose their legs, receive burns [over] 30% to 95% of their bodies, and most likely someone will lose their life.”

Buffington said the potential award of a half-million-dollar bonus to a problem-riddled firm such as SKK only pointed up the lack of accountability.

Officials at Shea-Kiewit-Kenny, the contractor recently fired from the now-stalled Hollywood leg, say they have always made safety the highest priority, giving out jackets and gift certificates to reward good work habits. “We proceeded at a rapid pace, but there was always the feeling that we don’t want to get people hurt,” said Marvin Underwood, safety director for the J.F. Shea Co. in Walnut.

Records show that the 290 “recordable” injuries since 1992 on the Hollywood contract--those considered serious enough under federal OSHA guidelines to require medical treatment--represent a rate three times the national average for heavy construction.

“Sure [the rate] bothers me, it bothers everyone,” SKK’s Underwood said.

“I can’t explain it, really,” he said. “But in my eyes, [the accident figures] are skewed somewhat. We’ve had difficulty with physicians [at local hospitals] who like to over-treat. Instead of saying to the guy, ‘All you need is an aspirin,’ they’re quick to write the guy a prescription or even give him some time off.”

Other contractors sustained similar recordable injury rates. Tutor-Saliba/Perini reported injuries two to three times the national average for heavy construction on its various subway contracts, while major contractors Obayashi Corp. and Morrison Knudsen were also well above the national norm, according to MTA records. All received bonuses because many of these incidents were not factored into the bonus formula specified in their contracts.

Obayashi project manager Carl Linden said he does not believe the recordable-injury reports are the best indicator of job safety because they include many “scuffs and bruises” that may not be serious, even though a worker seeks medical attention. “The lost-time cases [currently used in the bonus formula] are what really count,” he said.

The more quickly that injured workers return to the job, the greater the contractor’s chances of reaping a bonus.

This is one reason, Underwood said, that contractors pursue “an aggressive back-to-work program” and put injured workers on light duty as quickly as possible--waving traffic flags, monitoring supplies or working a desk, even if it means doing it in a cast or on crutches.

“The safety bonus is not the top priority, but it is a priority,” he said. “We want the bonus like everybody else, but we don’t want him back at work if he’s not ready.”

Jose Aguilar, a miner for SKK in the Hollywood tunnels, returned to work three days after an injury. The 24-year-old Sepulveda man recalls that he was doing some grouting one Friday last year when another worker hit the wrong switch on a pressurized pipe--and the rush of air hit Aguilar on the head, knocking him to the ground.

He said he was hospitalized for one night, and his eyes hurt so much that he could not open them. “I thought I was going to be blind,” he recalled.

By the following Monday, he was back to work, getting paid $1,000 a week for two weeks to use his thumb to direct a crane operator. He called it “baby-sitting”; company officials called it “light duty.”

Although the company’s accident rate has climbed far above the national norm, SKK’s handling of injuries such as Aguilar’s has helped limit the number of “lost-time” cases to 38 during the past three years. And that allowed the company to claim a $500,000 bonus.

The MTA is contesting the bonus. Officials also plan to toughen the eligibility requirements for bonuses on the new North Hollywood subway contracts. To win bonuses, contractors will need to maintain a low rate for all accidents, not only ones that caused workers to lose time on the job.

But that still leaves nearly $10 million that the MTA expects to pay contractors such as SKK and Tutor-Saliba under the old formula once those contracts are completed. “It’s an evolutionary process,” said Phernambucq. “We’re making a mid-course correction.”

Tunneling is an inherently treacherous task--and poor lighting, extreme noise and the potential presence of explosive gases can make the work even more dangerous. Limited access means it can take 20 minutes or more to haul an injured worker to medical attention.

State and federal inspectors--who regularly target the Metro Rail sites for spot reviews--have found thousands of violations that compromise worker safety, records and interviews show.

More than 660 construction injuries have been reported on the subway’s ongoing phases, and $6.4 million in accident claims has been paid out for the Hollywood phase alone. MTA officials have ordered a staff review to identify contractors that have suffered excessive claims, and they say many injuries could be avoided if rules were followed more diligently.

Some contractors dismiss the violations as largely “technical,” no more significant perhaps than a missing elevator certificate. But Phernambucq said small problems can often lead to more serious trouble.

Indeed, it was a small but common problem that officials believe sparked one of the project’s worst accidents--an explosion last year that rocked a tunnel between Vermont Avenue and 6th Street, seriously injuring three welders. The blast was apparently set off when a falling chunk of metal pierced an unsecured acetylene welding tank.

Cal/OSHA officials, who fined SKK $391,000 over the explosion, said the incident might have been prevented if the contractor had properly secured the tank. Such welding-related problems, MTA records show, were the second-most frequently cited risk on the Hollywood job, responsible for more than 850 citations out of about 6,500 against SKK and other contractors.

“Invariably,” said one former SKK miner, “the guys would just leave [the tanks] laying around the tunnel.”

Threatened with the loss of substantial federal and state subway funding, the MTA is now completing a restructuring of its safety program by assuming oversight duties that used to be carried out by a private construction manager. But Federal Transit Administrator Gordon J. Linton complained in a letter to the MTA last month about the “inadequate effort” to fill safety jobs. The MTA is pledging to fill them by October.

The government’s concerns echo broader criticism from state regulators and private auditors who have repeatedly questioned the MTA’s attention to safety. An independent audit for the MTA earlier this year by Arthur Andersen concluded that while the safety program appears generally successful, “top management has not demonstrated strong support for safety.”

Cal/OSHA inspector Joe Doyle suggested during a state hearing last month that project officials have actively resisted safety measures. He said project inspectors were “flat told . . . do not cooperate with Cal/OSHA and don’t call Cal/OSHA” when problems arise.

MTA officials said they are unaware of any such directive.

To support their contention, Cal/OSHA officials pointed to the sinkhole on Hollywood Boulevard in June, saying project officials failed to notify them for hours that torrents of water were filling the tunnel. Then an SKK supervisor allegedly misled OSHA officials about whether workers were left in the hole, forcing an emergency evacuation as the street collapsed. Cal/OSHA later issued more than $70,000 in fines.

The same SKK supervisor, Norm Hutchins, drove a subway locomotive that careened out of control in March, 1994, injuring three workers and leading to more than $250,000 in Cal/OSHA fines against SKK for “willful/serious” violations. Hutchins was originally removed as the superintendent, but after lobbying by SKK, the MTA allowed him to stay on the job.

Hutchins refused to discuss the accidents, issuing a statement through his lawyer. “We were working under a tight schedule and under very difficult conditions. I and everyone else . . . did our best to build a good tunnel in a safe manner,” he said.

Dan Jackson, the MTA’s new safety director, said the superintendent’s reinstatement was a mistake. “My personal opinion, I wouldn’t have allowed Norm Hutchins back on this job . . . [because of] his repeated failure to comply with safety standards,” Jackson said.

SKK and other major contractors, however, are quick to defend their records.

“I think that the safety program at the MTA speaks for itself,” said contractor Ronald Tutor. “As much as it seems a lot of people would like to tear it down, the record is exemplary.”

The joint venture of Tutor-Saliba/Perini had its own share of trouble on the now-completed Downtown subway, including a devastating 1990 fire that collapsed part of an uncompleted tunnel near the Hollywood Freeway. But within the past three years, the firm has been awarded more than $1.3 million in bonuses and, as recent criticism has shifted to SKK, Tutor-Saliba now stands to gain much of the work that SKK lost.

“The irony is we’d had many of the same [safety] problems with Tutor-Saliba,” said Cal/OSHA deputy chief Mark Carleson. “But now they seem to know what they’re doing.”

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The Bonus Track

The Metropolitan Transportation Authority has paid out nearly $3 million in “safety bonuses” for rail construction and stands to pay millions more for pending work by contractors who meet safety targets. Here are the firms with the biggest total bonuses and how their safety performances compare with national injury rates:

Already Paid:

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Comparison to Contractor/type of work Safety Bonus U.S. Injury Rate* Tutor-Saliba/Perini $1.33 million +138% Subway tunneling, station work Steve P. Rados Inc. $500,000 +37% Light-rail station work Mass Electric $302,341 +113% Light-rail power supply Robert E. McKee Inc. $193,200 -48% Light-rail yard and shop work Morrison Knudsen $155,140 +33% Light-rail track work Still Pending: Tutor-Saliba/Perini $2.16 million +111% Subway tunneling, station work Shea partnerships** $1.49 million +174% Subway tunneling, station work Kajima-Ray Wilson $992,870 +61% Subway station work Obayashi Corp. $500,000 +73% Subway tunneling Traylor/Frontier-Kemper $500,000 -46% Subway tunneling

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* Compares contractors’ recordable accidents on bonus contracts to national rate for heavy construction. These statistics are not used to determine safety bonuses, which have relied exclusively on time lost from the job because of injury.

** Includes both Shea-Kiewit-Kenny and Kiewit-Shea partnerships.

Source: Metropolitan Transportation Authority and Los Angeles Times research.