Contingency fund to cover contamination, Honolulu rail authority says

The board of the Honolulu Authority for Rapid Transportation on Thursday approved paying a contractor up to $10 million to deal with contaminated groundwater found in December in an aquifer about 30 feet below a rail work site at Daniel K. Inouye International Airport.

But HART staff told the board that the change order requested by Shimmick/Traylor/Granite Joint Venture, the airport guideway contractor, won’t cost taxpayers any more money because it will be covered by a contingency account built into the project’s $9.2 billion overall cost.

The change order was one of several dealing with a variety of issues approved by the board Thursday.

HART Executive Director Andrew Robbins told reporters after the meeting that while the contractor has yet to submit a time impact analysis, the segment of work halted does not appear to be critical to meeting the December 2020 timeline for the project to begin service from East Kapolei to Aloha Stadium. “It’s sort of like a parallel activity, and it won’t affect the schedule.”

Shimmick notified HART officials Dec. 10 that a lab analysis showed elevated concentrations of trichloroethylene, or TCE, and TCE byproducts in groundwater under a construction site between the lei stands and parking garages at the Honolulu airport, said John Moore, HART east area construction manager.

Studies were done to locate possible contamination sites to avoid, Moore said. “What happened at the airport was an anomaly in the fact that we happened to have a monitor go off that hit TCE,” a contaminant found in cleaning solvents, he said. An unforeseen finding of contaminants nonetheless is “an element that is contracted for and is in our allocated contingency.”

The state Department of Health issued a directive Dec. 15 for work on Lot J and the adjacent Lot A to be suspended, and on Dec. 19 the contractor informed HART it was complying with the order.

“It should be understood that they were shut down anyway for the two weeks in December because of the holidays, but at the same time there may have been something that could be done if they had knowledge they were being shut down,” Moore said.

After discussions with Health Department officials, HART installed 14 additional groundwater monitoring wells to determine the scope of the contamination and helped the agency develop a site-specific environmental hazard evaluation and management plan, Moore said.

Meanwhile, Shimmick took measures to cut costs including laying off 32 people at the end of January, he said. And after consulting with the state Health and Transportation departments, the contractor went back to work doing utility relocation and the preparation of drilling additional shafts.

The contractor received the OK from the Health Department to resume work in April on the two lots incrementally in areas where monitoring wells did not show TCE contamination.

“The contractor, at their own risk, at their own cost, went out and procured a system … to process this (contaminated) water,” Moore said. Potable water is typically used to fill newly drilled shafts in order to stabilize the walls of the holes until they are ready to take in concrete, he said. Here the water is being pushed out into a system that filters the water several times before it’s allowed to be disposed of in the sewer system as allowed, he said.

“Right now we believe that we’ve mitigated any overall impact to the construction time for being able to complete the airport guideway station contract by May of 2021,” he said. “The $10 million that we’re looking for is as a not-to- exceed, not what we’re going to pay them. It will be based on actual costs that we have to review.”

He noted that the overall airport guideway station contract was valued at $13 million less than the $874.75 million original contract value, so the $10 million — if all is used — would still leave the contract with about $4 million in credit.

“After 51% (project completion) I’ve got 13 change orders; we’re basically back to even,” Moore said. “Anything we’re paying is coming out of allocated contingency, and we’ve got a huge allocated contingency for the contract.”

Shimmick had the right to stop until the city decided what to do about the contamination problem, “and that would have been a huge impact to our schedule,” Moore said.

Airport officials believe the contamination was created in the late 1940s when the area was used as an equipment maintenance area, Moore said.

The discovery was not entirely a surprise, Moore said. The project’s 2007-2008 environmental impact statement listed a number of possible contamination sites along the 21-mile, East Kapolei- to-Ala Moana line. A 2014 environmental hazard management plan developed with the state Department of Health also came up with a list of areas to avoid.

The HART board also approved a second change order for up to $3.5 million to pay for “short supply materials” including asphalt, cement, concrete, crushed stone, steel and reinforcing bars. The $3.5 million figure was used based on current market conditions and the fact that HART has a $13.2 million “credit” for Shimmick’s $865 million contract due to other changes.

“We’ve received letters showing they have experienced a price adjustment in some of these materials, mainly concrete and rebar,” Moore said.

Price adjustments are allowed when the established price of the materials exceeds by 10% the amount when the contract was first bid. The latest trend analysis indicates costs will rise 5%-7% annually in each of the next two years, Moore said.

The time frame of the project prohibits the contractor from purchasing all of the materials it needs for the length of its contract in one increment, he said.

Also approved were two change orders tied to Hawaiian Electric Co.’s costs to relocate utilities along the Kamehameha Highway Guideway section through Pearl City and Aiea. The contract amount for engineering services was upped by a maximum of $1.9 million to a not-to-exceed amount of $5.9 million. The contract total for construction increased a maximum of $22.6 million to a not-to-exceed amount of $48.8 million.