02 Feb Airo Security Reports: Clues hint at direction of federal probe into Seattle trans
When Seattle hired a consultant to design a downtown streetcar line, the initial contract totaled $1.85 million. Four years and 11 amendments later, the cost had grown to $14.3 million. Today, the line has yet to be built and the contract is among several now under scrutiny by federal investigators.
Not all Seattle transportation projects incur such cost increases. Plagued by debates and delays, the First Avenue streetcar is unusually troubled.
Still, the project’s design deal is an extreme example of how no-bid amendments — planned or unplanned — can grow consultant contracts over time. All the Seattle Department of Transportation contracts listed in a federal subpoena issued in December are structured the same way, augmented by numerous amendments, and come amid a new push by the agency in recent years.
Determined to address Seattle’s rapid growth and traffic congestion, the city has taken the lead on ambitious projects like the streetcar and a Madison Street bus rapid-transit line, seeking federal money to help pay for the work and leaning on consultants for expertise.
Authorities haven’t revealed much about an ongoing U.S. Department of Transportation (USDOT) audit announced in November — except that it deals with Seattle projects that have requested or received federal money — nor about an investigator’s use of the phrase “criminal inquiry” in an email, which has stirred confusion about how serious the probe may be.
Some clues emerged, however, after the federal investigator subpoenaed records related to several Seattle Department of Transportation (SDOT) design and management contracts.
Using amendments to advance complex transportation projects is an established practice. But the subpoena indicated authorities may be trying to determine whether SDOT has been advertising and supervising its consultant contracts properly.
In emails that date to last May, obtained by The Seattle Times under condition of anonymity, a complainant shared concerns with investigators about contract solicitations and amendments, among other issues.
In some cases, SDOT appears to have agreed to pay its consultants more than the agency initially estimated, with projects severely delayed. SDOT declined to answer detailed questions about the contracts and amendments.
The federal review has come as SDOT is trying to recover from years of tumult. After cycling through directors and struggling to deliver promises to voters, the agency is counting on federal dollars to help complete its high-profile projects.
“We are working with US DOT to ensure we comply with their requests,” Seattle transportation director Sam Zimbabwe wrote in an email to employees in December.
“Since 2017, we have undergone a series of changes to ensure more accountability for all of our major capital projects, and since my start at SDOT I have said that I believe in full transparency both inside and outside of the agency,” added Zimbabwe, who took over the agency about a year ago.
Seattle City Councilmember Alex Pedersen, the new chair of the council’s transportation committee, said he plans to monitor the federal review “very closely.”
Pedersen met with Zimbabwe last month, but SDOT seemed to know few details, he said. Pedersen also contacted USDOT but was told it couldn’t comment on an ongoing investigation, he said.
The federal agency’s Office of Inspector General didn’t name any particular projects in November, when the agency announced it would audit oversight of Seattle’s federal transportation funds, citing “several complaints” on the subject. The review could take up to a year, the agency said.
Then a criminal investigator, an Inspector General special agent, in December subpoenaed documents related to consultant contracts on six projects, including the design contracts for the streetcar line and the Madison bus line.
The inspector general later narrowed its interest to four projects because the other two hadn’t received any federal money, SDOT said.
No cap on payments
The four projects — also including a citywide bus rapid-transit expansion and the completed western part of Mercer Street’s redesign — are mostly unalike. They involve different modes of transportation, span several mayoral administrations and are in various stages of completion. The subpoenaed contracts were awarded to three firms.
The contracts do, however, share a structure characterized by small initial agreements followed by cost adjustments over time rather than hard payment caps.
Rick Gustafson, a consultant whose firm has advised Seattle on streetcar projects, said the structure is not unusual. While expanding contracts through amendments is less transparent than repeatedly seeking bids, the structure can save time and money, he said.
Not all agencies use small base agreements with amendments. Joseph Casey, who served as general manager of the Southeastern Pennsylvania Transportation Authority from 2008 to 2016, said he didn’t structure contracts that…