Facts

On March 21, 2002, the State of California Department of Transportation (Caltrans) awarded Skanska USA Civil (formerly Yeager-Skanska), an international construction company, a $100 million construction contract whereby Skanska would widen Interstate 15 between Victorville and Barstow. The project was part of Caltrans' new "design sequencing" pilot program, and was plagued by late and changed designs. Although the project was scheduled for completion on Aug. 3, 2004, it was not completed until almost year later on June 30, 2005.

CLAIMANT'S CONTENTIONS:
Skanska claimed that Caltrans repeatedly failed to issue plans in time for construction to proceed, causing massive delays and productivity impacts to Skanska's work. Although "design sequencing" allows Caltrans to let projects out for bid prior to completing designs for the entire project, the design for each phase of construction must be done prior to scheduled commencement of construction. (Cal. Streets & Highways Code section 217(b),(c).) Despite this legislative mandate, design was nowhere completed prior to construction. To the contrary, over 510 plans were either added, revised, or replaced throughout the course of construction - approximately 50 percent of the total number of original plans. As it turned out, Skanska was an unwitting guinea pig for Caltrans' new design sequencing program, which at least one publication dubbed , "Highway to Hell: How Caltrans Took a Simple Freeway Interchange Project and Turned It into a $368 Million Dollar Mess," available online at: www.ieweekly.com/cms/story/detail/highway_to_hell/1197.

Skanska further contended that despite the numerous late and defective plans and admitted flaws of the design sequencing pilot program, Caltrans refused to pay for Skanska's delays, productivity impacts, and extra costs. After completion of the project, Skanska was forced to file a complaint in arbitration with the Office of Administrative Hearings. Skanska filed in September 2005 seeking approximately $15 million for itself and $6 million on behalf of its subcontractors.

During mediation, plaintiff showcased damaging internal correspondence within Caltrans pertaining to the design sequencing program and its impact on the project.

RESPONDENT'S CONTENTIONS:
Caltrans denied liability claiming that its plans were timely issued and the alleged late/defective plans had no impact on the progress of construction.

Result

After two days of mediation presentations and counter-presentations, Caltrans agreed to pay the claim in the amount of $11.9 million.

Other Information

The parties conducted a mediation in October 2008 with Randy Wulff in Oakland.