A record $537.3 million change order has raised questions on the transparency of the California high-speed rail project in Sacramento. The California High-Speed Rail Authority is moving to settle litigation on what has been deemed the project’s single most expensive change order. The more than a half-a-billion-dollar settlement has led some state lawmakers to doubt the circumstances of the project. They believe that the change order is the driving force behind a proposal that would allow the project’s inspector general to keep some project records secret.

Moreover, they note that these secrets could be concealed if they reveal weaknesses that could harm the state. However, the California High-Speed Rail Authority has denied such claims. The proposal was filed the day before the High-Speed Rail Authority’s Board unanimously approved a settlement change order with Dragados Flatiron Joint Venture. The company is responsible for the design-build for the project’s 65-mile route located within Fresno. It also covers Tulare and Kings Counties. The rail project is one of the major ongoing rail projects in the United States. 

The Scope of the Change Order on the California High-Speed Rail Project in Sacramento

The latest change order on the California high-speed rail project in Sacramento ramps up the number to 597 since the project commenced. In construction, a change order is an official change to the project’s original contract. It can mean more work, different work, or unexpected issues and usually involves more time or more money. Consequently, the latest settlement would bring the total dollar amount of the company’s change orders to well over $1 billion. A spokesman for the California High-Speed Rail Authority denied that there is any connection between the litigation settlement and the bill that could shield some project records from the public.

“This action reflects the Authority’s renewed commitment to delivering with urgency and accountability,” said Micah Flores, the rail authority’s spokesman. He also noted that the new developments resolve outstanding claims and critically ties payment to achieving defined performance milestones. Moreover, it advances the authority’s ambition to complete the work necessary to accelerate track-laying this year. “We remain focused on converting construction progress into a track-ready corridor as quickly as possible,” he concluded. Flores said the details of the change order would be posted on the rail authority’s website soon.

Despite his confirmations on the agenda of the change order, some are still in doubt. Republican Assemblywoman Alexandra Macedo, who represents Tulare, Kings and Fresno counties, remains skeptical on the matter. She noted that she thinks the latest litigation settlement prompted the proposal to keep some project information secret.

Project Factsheet

• Project name: California High-Speed Rail Project.
• Location: Sacramento
• Project authority (CHSRA): the California High-Speed Rail Authority.
• Delivery model: Design-build
• Contractor: Flatiron-Dragados Joint Venture.
• Project overview: High-speed rail 65-mile long section in the Central Valley in California.

Issue at hand:

• Record $537.3 million change order
• Biggest sole change order in the history of the project.
• Associated with resolution of lawsuits between CHSRA and the contractor.

Change order context:

• Number of change orders so far: 597.
• Change orders are now in total over 1 billion dollars.
• CHSRA Board vote to approve settlement.

Political and regulatory audit:

• State lawmakers doubting transparency and governance.
• Concerns raised over a proposal allowing the inspector general to withhold certain project records
• Critics fear records could be concealed if they expose project weaknesses

Authority response:

• CHSRA has refuted the connection between the records-shielding proposal and the settlement.
• States base their payments on specified performance milestones.
• Lays strong emphasis on urgency, accountability and faster track-laying.

Change Order objective:

• Resolve outstanding claims
• Turn construction work into a race-track.
• Speed Central Valley rail delivery amid rising costs