An ambitious public works project in Maryland is moving one step closer to completion, and one of the largest general contractors in the country is going to see some major benefits — but not everyone agrees with the decision.
Tutor Perini was recently selected for Maryland’s proposed widening of I-270 and parts of I-495, as well as the rebuilding of the American Legion Bridge, in the area to the Northwest of Washington, D.C., a project known as the New American Legion Bridge I-270 Traffic Relief Plan.
The project has been one of outgoing Maryland Governor Larry Hogan’s main priorities for public works improvements, with its planning going back nearly five years. However, the selection of the firm hasn’t been championed by all, as a number of other state leaders are pushing back.
Montgomery County Executive Marc Elrich noted he is “not very happy” with the firm’s selection of Tutor Perini, adding “I’m not sure they’re [the] best partners.”
Ben Ross, head of the Maryland Transit Opportunities Coalition, also voiced concern over the selection, calling the choice of Tutor Perini “a big flashing red light and blaring sirens for taxpayers to watch out.”
Leaders in other states have had issues with Tutor Perini on other projects, with a Pennsylvania State Senator notably accusing the company of alleged “change order scheming” in 2021.
One of the most significant contractors in the country, Tutor Perini is involved in a number of huge projects. The company ranked as Engineering News Report’s 7th-largest contractor in 2021, bringing in revenue near $4.64 billion.
In the past year, the company has had a fairly strong track record with payment across all of its jobs — earning a B payment score from Levelset, with an 80 out of 100 — but it isn’t without its detractors, and a rating of just 1.9 out of 5 stars in ratings provided by subcontractors at the time of reporting
One subcontractor recently said of the company that “Perini Management prey on small minority companies, they always will pay slow if they pay at all. They seek to run small businesses out of business. They are fraudulent and never truthful about anything.”
“They seem to think cost overruns are a perfectly normal part of business,” Elrich added. “One of the things you try to do when you make a contract…is particularly if the other party is going to be doing the design, that the other party eats the cost overruns rather than having the state or county eat the cost overrun. So I’m just concerned that we’re just down the track, and the focus is solely on getting this thing approved.”
Not everyone feels this way over the selection, of course.
“We’re comfortable with Tutor Perini. [They’re a] good union contractor,” said Dennis Martire, vice president and regional manager for the Laborers’ International Union of America (LiUNA).
According to Martire, LiUNA reached a Project Labor Agreement with Tutor Perini for the project, a move that he endorsed.
“It just standardizes everything so everybody knows what the rules are for the project, as far as work rules, overtime, strikes, all that stuff,” he said. “If anyone has a dispute on the job, there’s no walking off the job. If there’s a dispute, you just settle it through a grievance procedure and work keeps proceeding.”
The company similarly disagrees with the characterizations of the project’s opponents. Ronald Tutor, chairman and CEO of Tutor Perini, said of the project: “We bring a strong record of meeting or exceeding project participation goals for disadvantaged businesses and bring to bear the strength of our union and non-union contracting partners to put people to work.”
Tutor Perini spokesman Jorge Casado pushed back on some of the concerns of officials, as well, focusing on the allegations of “change order scheming” that some have brought up in recent years.
“It is widely known in the industry that the growth between a project’s original budget and what the final project costs ultimately end up being is the result of change orders that originate with and are directed by the customer, particularly on large, fixed-price projects,” he said. “Each time a change order is requested by a customer, Tutor Perini determines the cost of the change, as well as the additional execution time the change will require and then communicates the information to the customer.”
Having a stable situation for the project is a priority for all given its huge financial impact. Though it has yet to be revealed how much the firm has bid for the project’s construction, the cost of the project has been estimated to land between $3.75 billion and $4.25 billion. In its release announcing its selection, Tutor Perini did at least point out that Phase 1 South will be a “multi-billion dollar construction project.”
A recent environmental impact finding from the Federal Highway Administration also made the project eligible for federal funding, meaning finances could flow from a number of different government sources, as well — which could also make subcontractors subject to different federal requirements.
For the project to move forward as-is, it needs to gain approval from a number of government agencies — which isn’t a given at the moment.
In fact, Ross expressed doubt that Tutor Perini would be able to gain the necessary permissions for the project before Governor Hogan leaves office in January 2023, and pointed out the potential for conflict. MDOT and AM Partners need to reach a final agreement on the terms of the contract, which then needs approval from the Maryland Transportation Authority’s board of directors.
If the project doesn’t gain the requisite approval before Hogan leaves office, a new governor could block or change the expansion plan — and both the Democratic and Republican nominees for governor have made it clear that they would reconsider the project, making the situation anything but stable.
If the project goes ahead as planned, there could be a lot of economic benefits. According to Tutor Perini, a 2022 assessment report from George Mason University’s Center for Regional Analysis found that Phase 1 South and Phase 1 North of the project could result in $12.6 billion in construction-related economic activity as well as boost labor income in the region by more than $3.3 billion.