Case Study: Cost Overrun Due to Unanticipated Rock Excavation at Alaskan Highway Expansion (Alaska, 2015)

Project Overview
• Name: Alaskan Highway Widening and Upgrade
• Location: Alaska
• Year: 2015
• Project Size: $220 million
• Scope: Widening and upgrading a remote highway section involving extensive rock excavation
• Lead Agencies/Contractors: Alaska Department of Transportation /

Category of the Issue, Problem, or Challenge
• Geotechnical
• Cost Management

Summary of the Issue, Problem, or Challenge
Significantly harder rock formations than anticipated were encountered, requiring specialized blasting and excavation techniques, which substantially increased costs and delayed schedules.

Root Cause Analysis

• Insufficient Geological Survey: Initial investigations underestimated rock hardness and variability.
• Equipment Mismatch: Standard excavation equipment proved ineffective, requiring mobilization of specialty machinery.
• Schedule Impact: Additional time required for blasting and rock removal led to increased labor and equipment costs.
• Contract Scope Adjustments: Change orders to accommodate unforeseen rock conditions increased contract costs.

Impacts Due to the Issue, Problem, or Challenge

• Cost overruns of approximately 30% above original estimates.
• Project completion delayed by nearly six months.
• Increased stakeholder concerns over budget management.

Corrective Actions Taken

1. Enhanced geological investigations for ongoing and future segments.
2. Procurement of specialized rock excavation equipment earlier in project timeline.
3. Improved risk allocation in contracts for unforeseen subsurface conditions.
4. Revised project schedule with realistic contingencies for geotechnical risks.

Lessons Learned

• Detailed geological surveys are essential for accurate cost and schedule planning.
• Flexibility in equipment procurement can reduce delays and costs.
• Contracts should clearly define risk responsibilities for unforeseen ground conditions.

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

• Are geological conditions thoroughly characterized before construction?
• Is there flexibility in equipment and methodology to handle unexpected conditions?
• Do contracts include clear risk-sharing mechanisms for subsurface surprises?