San Francisco International Airpork

Change orders show that some piles for the new international terminal were driven too far into the ground; other piles were too short to go the needed distance. Bob Opie, a Dillingham engineer, says these problems stemmed from difficulties with determining precisely where bedrock lay under the terminal. Geotechnical studies done by the airport proved to be insufficient guides, he says, and it became necessary to drive many piles on a hit-or-miss basis. Change orders added about $10 million to Dillingham's price. Because of problems with driving the piles accurately, airport staffers say, the foundations had to be redesigned as they were being constructed.

Taken together, these foundation problems caused a five-month delay, right off the starting block.

John Martin's written replies to a series of questions submitted by SF Weekly and an interview with Bruce Swanson, project manager for SFO Associates, the lead construction management firm, make it clear that changes related to airline requests and to concession areas have been the main factors in driving up the cost of the international terminal. In fact, said Swanson, much of the steel structure was already in place when the airport decided to expand the concessions to generate more revenue. Due to pile-driving and foundation problems and adding lounges and concession areas, just about every bit of the terminal has had to be redesigned or rebuilt, Swanson said.

The international terminal and the two long boarding concourses that flank it comprise the largest projects in the master plan. When the first big construction contracts in the master plan were let in 1996, the terminal/boarding area complex was scheduled for operation in early summer 1999. Martin claims the terminal building will be ready to open in late September 2000, but SFO's internal reports indicate that full service -- including a light rail system that would connect the new terminal with others -- will have to wait up to two more years. And the delay in completing the new terminal has been accompanied by staggering cost increases.

The biggest construction contracts for the master plan -- including those for the international terminal building, a boarding area, parking garages, the light rail tracks and stations, and the airport's BART station -- are held by a joint venture called the Tutor-Saliba Corp., Perini Corp., and Buckley & Company Inc. (Richard Blum, husband of U.S. Sen. Dianne Feinstein, is a major stockholder in the Perini Corp. Blum and the Perini Corp. also are partners with the Tutor-Saliba Corp. on the construction of the Los Angeles subway, which is also over budget and late.) Overall, Tutor-Saliba holds some $880 million in SFO construction contracts.

And overall, Tutor-Saliba has gained approval of $250 million in change orders for its airport contracts.

Controversy over change orders is nothing new for the Tutor-Saliba Corp. During construction of the chronically delayed Los Angeles subway system, the company racked up more than $130 million in change orders. The late mayor of Los Angeles, Tom Bradley, publicly labeled Ron Tutor, the owner of the Tutor-Saliba Corp., a "change order artist," suggesting he submitted an artificially low bid to get the job and then made up the difference with change orders.

The Tutor-Saliba/Perini/Buckley venture started to build the SFO international terminal in October 1996. The original $248 million contract for the building shell now is forecast to have grown by $240 million, or nearly 100 percent, by completion. Some of this growth was anticipated, but about $175 million of these change orders relates to costs incurred for delays, redesigns, "shortcomings in construction documents," and changes requested by the airlines that will use the new terminal.

An $8 million contract modification submitted in January 1998 by Tutor-Saliba includes the following unusual or unexplained change orders:

" In mid-1999, Tutor-Saliba charged nearly $5 million for fixing two concrete floors that were not poured level. In a change order, SFO Associates said the mistake may have happened because measurements were "inexact." They also expressed concern about the design of the structural steel beams below the slabs. The airport says that it is investigating who is at fault for the floor problem.

" Tutor-Saliba charged $647,000 to fill a series of roof-support column frames with concrete. According to an airport spokesperson, "Either the architects or engineers forgot to indicate that the [wood] column frames needed to be filled with concrete." Apparently, the original plans called for constructing empty frames. It is odd that such a large oversight could make it past teams of architects, engineers, construction managers, and the contractors who methodically scrutinize plans to calculate their bids. In an interview last week, Ron Tutor said that it is not the contractor's responsibility to identify errors in the bid specifications. No one has been penalized for the oversight.

" Tens of thousands of dollars were spent to rebuild steel and concrete openings for escalators. The slots for the escalators were built before the airport decided what size moving stairs would be bought. A similar situation occurred when the airport spent $1 million to retrofit steel beams that support the terminal floor: The beams were set in place before the size of pipes fitting under the floor were known.

And that's just a few of the more than 400 change orders Tutor-Saliba has submitted for its airport work. Tracking those change orders, however, is no easy task. In response to an SF Weekly public records request, an airport lawyer said that many change orders could not be found -- even though the airport has paid construction managers several million dollars for "document control" related to the master plan.

The change orders the airport did make public, however, raise numerous questions about oversight of costs at the airport. In August 1997, Tutor-Saliba charged the airport $240,000 for a furnished triple-wide office trailer for use by SFO Associates, the construction management firm that oversees Tutor-Saliba's work. A representative of GE Capital Modular Space, which manufactures construction office trailers in the Bay Area, says his firm charges $97,200 for a similar brand-new trailer, and rents such models for $1,731 a month.

As part of its contract to build the terminal, Tutor-Saliba also billed the airport $330,000 to build indoor office space for the construction management consultants. It even billed the airport $1,000 a month for cleaning these offices.

In October 1998, a joint venture known as Myers/Condon Johnson, which is building new freeway ramps to serve the airport, received a change order listing more than $2 million for "additional unidentified work." When asked about this change order, airport staffers said that use of the word "'unidentified' may be misleading. It is used in the context of scope that could not be fully defined during design and is therefore 'unidentified' on the contract documents." In other words, the airport acknowledged, it signed a contract that included provisions requiring the airport to pay for undefined amounts and types of work.

Perhaps the most troubling change orders are those relating to many millions of dollars spent to revise the positions of structural, mechanical, electrical, and plumbing systems that were already in place at the new terminal. As structural steel beams were cut and rewelded to fix mistakes, or to expand concession space, or to accommodate special changes requested by the airlines, the placement of environmental support sys-tems behind ceilings and walls was shifted, adding tremendous cost to the project. In effect, significant portions of the terminal were built twice.

And then there is the mother of all change orders: the change order to write change orders. Tutor-Saliba billed $428,000 to pay for staff to write and process the blizzard of change orders Tutor-Saliba eventually submitted. Tutor says that he "does not get rich off of change orders," which, he contends, include only a 5 percent profit margin for his firm. But he declined to reveal the amount his company will profit from its SFO contracts.

One of the bigger wellsprings of SFO change orders is requests from the airlines that use the airport's terminals, led by United Airlines, which has one of its hubs at SFO. The airlines have a contract with the airport that limits the amount of construction costs that can be passed through to them. Through its position on the airport advisory committee, the Airline Liaison Office, which represents the airlines' interests, has considerable influence over the master plan. During the international terminal project, this combination of contractual limits and administrative influence has led to a situation in which millions of dollars of design and construction work was apparently done more than once.

Long after the construction contracts for the international terminal complex were let, the airlines, led by United, decided they wanted several exclusive lounges for use by first-class passengers. The Airport Commission approved these dramatic, costly changes, which include a $2.2 million lounge added to one boarding wing of the terminal. A similar lounge is in the works for the terminal's other boarding wing. All in all, there will be 14 lounges and clubhouses scattered about the new terminal.