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Thursday, March 1, 2012

FC Quarterly Audit: Dulles Metrorail Project, February 2012

For access to the online document, click on the post title above.  

DULLES METRORAIL PROJECT

The Audit Committee requested that OFPA monitor the Dulles Corridor Metrorail Project (Project) with a focus on the project costs and project timeframes. OFPA is tracking the following areas: 1) Project Cost, 2) Start of Revenue Service and 3) Funding Obligations. 

Currently, only Phase I is under active construction. Information used in this OFPA report is based on the December 2011, MWAA Monthly Progress Report, dated February 1, 2012 and the Comprehensive Monthly Report issued by the Project Management Oversight Contractor (PMOC) for the FTA dated January 20, 2012.

I. PROJECT COST STRUCTURE

Phase I Budget

Phase I of the project has a total budget of approximately $3.2 billion. As of December 2011approximately $1.77 billion of the Project funds have been expended.1 The Project team assesses Phase I as 61% complete.2 The overall project expenditure and construction completion rates are running roughly in parallel. The Contingency budget of $297.7 million and the Allowance budget of $485.7 million are 9% and 15% of the total Phase I budget respectively. The Project faces challenges in containing the usage rates of the Contingency and Allowance budgets.

[1]Change Orders
The MWAA report divides change orders into two broad categories: Amended and Restated Design Build, and Utility Relocation. Through December 2011, there were $78.3 million in total changes to the Design Build category3 which represent approximately 4.6% of the original total contract amount.

There have been $22.9 million in total changes to the Utility Relocation category, which represent 17.7% of the total original contract amount.4 MWAA assesses this project phase as 99% complete.5 The Utility Relocation category data has been unchanged for approximately one year.

Contingency Utilization
The tracking of contingency fund use is helpful in monitoring the progression of a project and its financial commitments. Contingency funds are classified as federal and non-federal and are tracked separately by MWAA. In the event there are unspent contingency funds in one project phase, those funds are moved to the Project’s contingency reserve account. Any positive amount in that reserve account is used prior to the contingency allocation for the next phase. The federal contingency had a starting balance of $297.7 million. Of this amount, $222.3 million has been utilized through project phases 1- 7, as noted in the following table:


There is an additional $34.1 million of Federal Contingency that has been obligated for Project phases 8 through 12. Since those obligations have not been utilized they are not included in the above MWAA table. To summarize the status of the Federal Contingency, of the original $297.7 million budget, $222.3 million has been utilized and $34.1 million obligated – leaving a balance of $41.3 million as of December 2011, or 14% of the original allocation. This is down from a remaining balance of $70.8 million or 24% from September. The following MWAA table shows the contingency balance after utilized and obligated amounts have been subtracted. These figures do not include contingency amounts which are currently being reviewed or negotiated by MWAA.


There is approximately $28.3 million in additional Contract Change Orders currently under evaluation by MWAA.6 Depending on the outcome of these evaluations all or a portion of these change orders could be applied against the contingency budget.

Allowance Items

There is a $485.7 million budget for allowance items. As the table below shows there are 17 major allowance items, each of which may contain multiple sub-projects.