Case Study: Seattle Alaskan Way Viaduct Replacement – Design-Build Delivery Challenges (2014)

Project Overview
• Name: Alaskan Way Viaduct Replacement Tunnel
• Location: Seattle, Washington
• Year: 2014
• Project Size: $3.3 billion
• Scope: Construction of a deep bored tunnel replacing an aging highway viaduct using a Design-Build delivery method
• Lead Agencies/Contractors: Washington State DOT, Seattle Tunnel Partners (Design-Build JV)

Category of the Issue, Problem, or Challenge
• Project Delivery Method
• Design-Build

Summary of the Issue, Problem, or Challenge
During construction, a major tunneling machine failure and subsequent repair delays were compounded by contractual disputes over risk responsibilities under the Design-Build contract. Ambiguities in the contract and risk allocation led to claims and slowed decision-making.

Root Cause Analysis

• Ambiguous risk allocation clauses for unforeseen subsurface conditions and equipment failure.
• Insufficient early collaboration on risk mitigation strategies.
• Contractual rigidity limiting flexibility in managing unexpected events.
• Delayed owner-contractor communication in crisis response.

Impacts Due to the Issue, Problem, or Challenge
• Project delay of over 1 year.
• Cost overruns exceeding $200 million.
• Negative public perception and media scrutiny.

Corrective Actions Taken

1. Amended contract to clarify risk sharing for unforeseen events.
2. Established joint risk management task forces for real-time problem solving.
3. Improved communication protocols between owner and contractor.
4. Increased contingency planning and scenario analysis in project controls.

Lessons Learned

• Clear, detailed risk allocation in Design-Build contracts prevents disputes.
• Early collaboration and joint risk management improve resilience.
• Flexibility in contracts supports effective crisis management.
• Timely communication is critical during unexpected events.

Audit & Prevention: Project Control Questions to Ask on Future Projects to Help Control the Situation

• Are risk allocation clauses unambiguous and comprehensive?
• Are joint risk management mechanisms established early?
• Does the contract allow for flexibility in unforeseen circumstances?
• Are communication channels open and efficient for crisis response?