This document discusses two major challenges faced in the construction of the new Bay Bridge: 1) A seismic issue following the 1989 Loma Prieta earthquake, and 2) significant cost overruns. For the seismic issue, Caltrans investigated and recommended either retrofitting the existing bridge or rebuilding it entirely for improved seismic safety. For the cost overruns, initial budget estimates were exceeded due to factors like raw material price increases and labor disputes, halting construction. Project managers then implemented measures like dividing the project into smaller bids and allowing foreign materials to control costs and complete construction by 2013.

1. Group #9
Bay
Bridge
Eric Chan
Jolene Kuo
Huiting Tang
Lele Zheng

2. Contents
Introduction
Modeling, Data gathering and Analysis
Conclusions and Recommendations4
Executive Summary1
2
3

3. Executive Summary
In the following paper
we focus on two of
the challenges that
arose at different
times in the project’s
life cycle. Our focus:
1
2
3
4
The importance and
the uniqueness of
these two problems
The conflicts that
were caused by the
limited resources
Their scopes and
interdependence
The project management
processes that were
used to manage them

4. What comes to mind?

5. The “Other” Bridge

6. The “Other” Bridge

7. What’s the difference?

8. The “Other” Bridge

9. Loma Prieta Earthquake of 1989

10. Loma Prieta Earthquake of 1989

11. Problems
Initial Problem Further problems
Overrun Costs
• Address the
significant overrun
costs that occurred,
causing a complete
halt to the
construction.
 Retrofitting the existing
east span to be more
seismically safe
 Construct a new
seismically safe
structure all together

12. Problem 1
Seismic Issue

13. Seismic Issue
• Portion of Bay Bridge collapsed in 1989 due to earthquake
• Bay Bridge lies within 10 miles of 2 earthquake fault lines
• Caltrans investigated and suggested either retrofit or rebuild of
the bridge
• Rebuilding the bridge would last up to 100 years rather than 30
• Started building in 2002. Built to withstand 8.5 magnitude
earthquake and set to SEE (This is defined as an earthquake
that generates the largest motions expected to occur at the
bridge site once every 1,500 years )
• As of now, major components in place. Should open by
September 2013

14. Timeline- Main Points
• 1989 Loma Prieta earthquake
• Dec. 1996 Caltrans recommends rebuilding
• 1997 budget estimated at $1.5 billion
• 2001 Caltrans releases new budget of $2.1 billion
• 2002 construction begins
• 2003 Caltrans revises cost at $2.95 billion
• 2004 Caltrans reveals cost of $5.1 billion
• 2008 foundation laid, however labor disputes arise and costs rise to
$5.7 billion
• 2013 bridge expected to be completed

15. East Span construction

16. The NEW East Span

18. Problem 2
Cost Issue

19. Overrun Costs
California ran
out of money
Raw Material
Cost Increase
9/ 11 increased
the cost of
bonds for
construction
Overrun
costs =
???
Top down budgeting was not working
Resource usage changed
Contingency fund was not enough

20. Budgeting Management
Involved engineers and outside
resources
Governor Office had the right to
audit Bridge finances
Bottom up
Fiscal
Responsibility
Change
Resources
Lower raw materials cost
Solutions

21. Budgeting Management
Involved engineers and outside
resourcesBottom up
Divide the project into 13 smaller
projects to obtain competitive bids
“Buy America” Clause

22. Budgeting Management
Governor Office had the right to
audit Bridge finances
Fiscal
Responsibility
California Legislation eased bond requirements so
Caltrans could obtain bonds for the overrun cost.
California would cover 43% of the overrun
cost.
Caltrans traded federal funding with state
funding

23. Budgeting Management
Change
Resources
Lower raw materials cost
“Buy America” Clause
Caltrans traded federal funding with state
funding
Able to use foreign steels and other raw materials
Outsource the building to China, Japan, Korea, and
England

24. Conclusion

25. Conclusions & Recommendations
Recommendations
Recourse Leveling
Planning-monitoring-
controlling
process
May help avoid lagging the
project and finish it before
the deadline of 2q013.
May help foresee any
causes that could either
delay the project or produce
extra overrun costs
Conclusions
 The first issue
 Reflects the application of risk
planning and budgeting in
project management.
 However, the construction is
still underway.
 The second issue
 Relates to cost estimating in
project management.
 The cost estimating process
may be the main factor of the
overrun costs.

26. The Bay Lights