Big Dig Contractor Reaches $458M Settlement

The main management consultant and contractor on Boston’s $15 billion Central Artery/Tunnel Project (Big Dig) and their insurers have agreed to pay more than $407 million to resolve civil and criminal liabilities in connection with the partial ceiling collapse and other defects in the project.

While erasing all criminal charges, the agreement with state and federal authorities does not release the joint management firm, Bechtel/Parsons Brinckerhoff, from liability for future catastrophic events, if any occur within the next 10 years.

In the agreement, the joint firm acknowledges serious failures in its management of the complex construction project.

The agreement also calls for an additional $51 million to cover costs of other construction flaws. This sum will be paid to the state by 24 other design contractors ($11.1 million) who worked on the project and their insurers ($40 million from owner-controlled program), bringing the total recovery to $458.2 million.

Massachusetts Attorney General Martha Coakley called the agreement the “best possible but not perfect resolution.”

Coakley said most of the funds are coming from the companies themselves and their directors, and only some is coming from insurers, which the government officials considered important. An estimated $30 million is coming from insurers.

The deal does not necessarily end the government’s recovery efforts. If a future catastrophic event relating to the Big Dig causes more than $50 million in damages, the federal and state governments retain the right to sue Bechtel and Parsons Brinckerhoff. Damages are capped at $100 million per event. For the next 10 years (through October 2017), Bechtel and Parsons Brinckerhoff waive their right to statute of limitations and other time-based procedural defenses to a catastrophic event claim.

The actual breakdown of the $458.2 million monies being paid shows Bechtel will pay $357.1 million; Parsons Brinckerhoff, $$50 million; the Owner-Controlled Insurance Program, $40 million; and section design consultants, $11.1 million.

A Big Dig repair fund will get $414.9 million of the funds, with the rest going to various federal, state and local entities and $150,000 to a secret whistleblower.

The settlement means Bechtel/Parsons Brinckerhoff will not face criminal charges in the deadly ceiling collapse in July 2006 that cost Milena Del Valle of Boston her life.