Case Study: Cost Overrun from Change Orders on Seattle Alaskan Way Viaduct Replacement Tunnel (Seattle, WA, 2013)

Project Overview
• Name: Alaskan Way Viaduct Replacement Tunnel
• Location: Seattle, Washington
• Year: 2013
• Project Size: $3.3 billion
• Scope: Construction of a deep-bore tunnel to replace an aging elevated highway viaduct
• Lead Agencies/Contractors: Washington State Department of Transportation (WSDOT) /

Category of the Issue, Problem, or Challenge
• Change Orders
• Cost Management

Summary of the Issue, Problem, or Challenge
Numerous change orders due to unforeseen underground conditions and design modifications led to significant cost escalations.

Root Cause Analysis

• Unforeseen Subsurface Conditions: Variable soil and groundwater conditions necessitated design and method changes.
• Design Modifications: Changes requested by stakeholders and regulatory agencies during construction.
• Contractor Claims: Additional costs claimed for extra work and delays.
• Scope Creep: Expansion of project scope beyond initial design without early cost reconciliation.

Impacts Due to the Issue, Problem, or Challenge

• Cost overruns estimated at 15-20% beyond original contract value.
• Construction delays impacting overall transportation network.
• Heightened scrutiny by public and governmental oversight bodies.

Corrective Actions Taken

1. Strengthened change order management processes with clear approval workflows.
2. Improved subsurface investigation methods for future projects.
3. Enhanced stakeholder communication to manage scope changes proactively.
4. Increased contingency budgets for change orders.

Lessons Learned

• Effective change order management is critical to controlling costs.
• Early and thorough subsurface investigations reduce unexpected changes.
• Clear communication with stakeholders helps manage scope and cost expectations.

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

• Are change orders tracked and approved with rigorous cost and schedule impact analysis?
• Have subsurface investigations been detailed enough to minimize surprises?
• Is there transparent stakeholder communication regarding scope changes?