[Klorissana]

Problems not new for the project's largest contractor
By Christopher Rowland, Globe Staff | July 14, 2006

Modern Continental Construction Co. has performed work that resulted in some of the Big Dig's highest-profile problems: chronic tunnel leaks, defective walls, and now a flawed ceiling that fell and killed an automobile passenger Monday, rocking public confidence in the safety of the $14.6 billion tunnel complex.

It has been a long road for a company that got its start building sidewalks in Peabody in the 1960s, then grew into the biggest contractor on the Big Dig and one of the largest construction companies in the country. But its rapid growth faltered; the company was close to a bankruptcy filing; and it lost its independence. Now its road and heavy construction business has been tarnished by the very project that fueled its success.

Authorities have not established whether design or construction or both are to blame for the ceiling collapse. But Jordan Levy , a former board member of the Massachusetts Turnpike Authority who was highly critical of the project during his tenure, said Modern Continental's deep financial problems, cost overruns, and poor workmanship have left a lasting legacy.

``The general public will see them as responsible for doing shoddy workmanship on this project that caused the death of a person and destroyed the credibility of this project," he said.

Since Monday's accident that killed Milena Del Valle, 38, of Jamaica Plain, Modern Continental has declined to make executives available for interviews. In a prepared statement, the company said it performed its job correctly and followed design specifications.

State Senator Marc R. Pacheco -- chairman of the Senate Post Audit and Oversight Committee, which authored a blistering critique of Big Dig supervisors in 2004 -- said Modern Continental's performance is part of a broader pattern of oversight problems on the project that resulted in substandard work.

While Pacheco's 2004 committee report focused much of its ire on the project manager and designer, Bechtel/Parsons Brinckerhoff , the contractors performing the work also share the blame, Pacheco said. He cited a cozy atmosphere between state supervisors and the designers and contractors hired by the state.

``There was less-than-arms-length relationships between the hierarchy that was overseeing the Big Dig and the contractors that were doing work on the job," including Modern Continental, he said.

Andrew Paven , spokesman for Bechtel/Parsons Brinckerhoff, declined to comment.

Modern Continental has collected an estimated $4 billion in Big Dig contracts since the early 1990s. Nonetheless, the company teetered at the edge of bankruptcy in 2004, the same year that the Big Dig sprang its biggest leaks and the public learned that some tunnel walls were poorly constructed.

The company had invested in a wide variety of businesses, from restaurants to healthcare, and has ventured into heavy construction projects as far away as California and Brazil, leading the Conservation Law Foundation and other groups monitoring the Big Dig to speculate that the company had become overextended.

To avoid a default and the resulting chaos it would inflict on the Central Artery project, the state helped arrange a merger with another large Big Dig contractor, Jay Cashman Inc. Cashman now controls Modern Continental, which still maintains its own corporate headquarters on Memorial Drive in Cambridge.

Strong support for the merger with Cashman came from Modern Continental's insurance carriers, which would have been left with the responsibility of hiring another contractor to finish the work.

The company was founded by Lelio ``Les" Marino with a $4,000 sidewalk contract in Peabody in 1967. But it was not until he won huge Big Dig contracts in the early 1990s by submitting exceptionally low bids that the company really grew. Just two months after state officials disclosed the merger in late 2004, Marino died after suffering from stomach cancer and heart problems.

Also in 2004, the state barred the company from bidding on major highway contracts because of delays in another state project, the $400 million job to widen Route 3 from Route 128 to the New Hampshire border.

Under Marino's leadership, Modern Continental ran into a variety of other problems. In 1998, it agreed to pay $500,000 in penalties to state and federal authorities after a former MBTA resident engineer was indicted on charges of accepting free construction work and building materials from a vice president of Modern Continental who was Marino's nephew. As part of the settlement, Modern Continental agreed to set up a training program to teach business ethics to its employees.

On the Big Dig project, Modern Continental won state work with low bids but then returned to the state with demands for more money because costs were higher than expected.

In other cases, the state officials negotiated a series of global settlements of tens of millions of dollars with Modern Continental to handle the company's demands for additional funds. In 2002, the Globe reported that the company had received approximately $500 million in such contract changes, called change orders.

``It was like open feeding season for change orders," said Levy.