Blasting the Bridge Keepers: a Construction Expert Denounces the Ntsb’s Report on the I-35w Bridge Collapse

 Blasting the Bridge Keepers: A Construction Expert Denounces the NTSBâ??s Report on the I-35W Bridge Collapseâ??and the â??Public Servantsâ? Who Keep Dropping the Ball

An NTSB report over a year in the making cites faulty gusset plates as the cause of the 2007 Minnesota bridge collapse. But the report contains a glaring sin of omission: It ignores key problems inherent in our nationâ??s infrastructure oversight system that continue to put the public in danger every day.

By Barry LePatner

 Itâ??s been more than a year since the collapse of the I-35W bridge in Minneapolis. And now, the final report put forward by the National Transportation Safety Board has concluded from its investigation: (1) the steel gusset plates originally designed in the mid-1960s to reinforce the bridgeâ??s joints were half an inch too thin; (2) the probable causes for the collapse were additional modifications to the original design, which added substantial weight to the bridge, and the weight added by construction materials placed on the bridge by a contractor just prior to the collapse. Thatâ??s it. And if youâ??re thinking Surely, there was more to the collapse than that, you are right. And by ignoring the other (extremely critical) factors, the NTSB is perpetuating a problem that puts millions of Americans in danger every day.

The NTSB is severely neglecting its duty to protect Americans. By placing the sole blame for the bridge collapse on the gusset plates and the added weight factor, the Board has ignored the inefficiency and irresponsibility among the government agencies responsible for the bridge, which also contributed to the disaster.

At the heart of many of these problems is the Minnesota Department of Transportation, which (and hereâ??s a scary thought!) has long been considered one of the better state transportation departments in the country. Basically, MnDOT failed to protect the public from a preventable disaster that was long in the making. And the problems faced by MnDOT are far from isolated. DOTs everywhere are struggling to keep the highways and byways that connect this nation in working order.

We must put these struggles in perspective: There are 12,000 bridges in our country whose designs are similar to the I-35W Bridge. Furthermore, according to statistics from a 2007 U.S. Department of Transportation/Research and Innovative Technology Administration report, there are over 72,000 bridges that are labeled â??structurally deficientâ? and over 81,000 bridges identified as â??functionally obsolete.â? Every one of these bridges needs detailed inspections to ensure their safety.

One important factor contributing to the poor state of Americaâ??s infrastructure is the seeming irresponsibility and inefficiency exhibited by those who have been elected or appointed to government positions that supposedly exist to ensure the safety of the public. To illustrate, here are several red flags that I have identified that should have warned MnDOT and other officials that the I-35W bridge was in trouble, but instead were ignored, misunderstood, or simply not acted upon in time:

*The I-35W bridge was first rated as â??structurally deficientâ? in 1990. Despite annual reports describing a continuing section loss and build up of corrosion at key places, as well as the attention of a number of consultants who recommended substantial remedial action be taken, at no time between 1990 and its collapse in 2007 was the I-35W bridgeâ??s condition ever raised above its â??poorâ? rating.

*Photographs exist of gusset plates â??bowing and arcingâ? as early as 2003, but the photos, taken by MnDOT consultants, were apparently dropped into a file folder and forgotten. MnDOT inspecting engineers did not deem these red flags to be serious enough to command attention.

*In 1996 a bridge on I-90 outside of Cleveland with a structure similar to the I-35W bridge collapsed as a result of improper gusset plate design. But although a) Federal officials investigated this serious failure, b) an official report from outside engineers was filed indicating that the gusset plates did indeed contribute to the bridgeâ??s collapse, and c) Civil Engineering magazine published an article in 1997 detailing the Ohio bridge collapse, officials at MnDOT denied ever having heard of the Ohio bridge failure and said they were unaware of any prior problems with gusset plate design.

*Discussions concerning the need to add redundancy to the I-35W bridge had been underway years earlierâ??but action was never taken. And, in fact, MnDOT instead scheduled redecking work that overloaded sections of the bridge, and, according to the NTSB, contributed to the eventual failure of the gusset plates. 

Of course, none of this is meant to imply that Minnesota is the only state experiencing serious problems with its infrastructure. The Colorado Department of Transportation has acknowledged that the cost to replace or rehabilitate 125 state bridges rated in poor condition in the state is $1.4 billion. Yet, bridge repair funding, a critical element in reducing the number of bridges that are considered structurally deficient, has been reduced from $32 million in 2007 to $18 million for 2009.

Or consider a story out of Georgia in which reports identifying several bridges as hazardous were thrown away. Why? Because the official in charge said handling the problem would have required too much paperwork and involved too many people. Stories like this one are clear indications that Minnesota isnâ??t the only state that has had its political head in the sand regarding its infrastructure problems.

Clearly, solving our infrastructure crisis will require more than a few patches here and there. In 2005 the American Society of Civil Engineers (ASCE) estimated that the cost of making the upgrades, repairs, and expansions needed on the U.S. bridge system will be $9.4 billion/year for twenty years. The report also said the U.S. road system required $92 billion/year for maintenance and $125.6 billion/year for improvementsâ??an updated report from the ASCE next year will likely reflect an even larger cost for these repairs.

And even if our cash-strapped government could come up with the money and ensure that itâ??s properly applied, thereâ??s little indication that builders could get it done at that price. The construction industry itself has been rife with problems for quite some time now, wasting an estimated $120 billion each year. Those problems have easily flooded over into public projects, the prime example being the Big Dig and its billions of dollars in cost overruns.

We must begin taking steps, right now, to shore up Americaâ??s infrastructure. Not to do so is to invite more death and destruction. Every engineer in the field of bridge design can testify that the corrosive effects of inadequate maintenance of our bridges and tunnels will only get worseâ??they are not self-healing. And while the problem is far too massive and widespread to repair overnight, we can take steps now to start chipping away at it.

We must do everything in our power to end the downward spiral of our nationâ??s infrastructure. As the incoming Obama Administration prepares to tackle Americaâ??s ailing economy, it should make repairing the nationâ??s infrastructure an important part of those plans. Doing so will not only help prevent future catastrophes; it will actually contribute to our nationâ??s prosperity.

Every $1 billion in infrastructure spending is estimated to create 47,000 new jobs, a critical factor at a time when our unemployment rate is at a 14-year high. By taking the steps necessary to tackle our infrastructure problem now, we have an opportunity to improve our economy with the great ROI of a better, safer infrastructure system that will lead to a stronger nation.

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About the Author:

Barry B. LePatner is the founder of the New York City-based law firm LePatner & Associates LLP. For three decades, he has been prominent as an advisor on business and legal issues affecting the real estate, design, and construction industries. He is head of the law firm that has grown to become widely recognized as one of the nationâ??s leading advisors to corporate and institutional clients, real estate owners, and design professionals.

Mr. LePatner is widely recognized as a thought leader in the construction industry. His new book, Broken Buildings, Busted Budgets: How to Fix Americaâ??s Trillion-Dollar Construction Industry (The University of Chicago Press), which was reviewed in the Wall Street Journal, has created a national debate among owners, designers, and other key stakeholders. Mr. LePatner has been featured in BusinessWeek, the Boston Globe, the New York Times, Crainâ??s New York Business, the Chicago Tribune, and other prestigious publications. His articles and speeches on the perilous state of our nationâ??s infrastructure have garnered him widespread attention. He has appeared on many television and radio broadcasts, including a CNBC appearance and several National Public Radio segments. A November 2007 Governing Magazine article stated, â??If thereâ??s a guru of construction industry reform, itâ??s LePatner.â?

A nationally recognized speaker, Mr. LePatner has addressed audiences on topics central to trends affecting the real estate and construction industries at recent events sponsored by: The International Economic Forum of the Americas, the Real Estate Board of New York; FIATECH, the National Realty Club, the Construction Owners Association of America, the Construction Management Association of America, the Construction Financial Management Association, and MC Consultants Inc.â??s Construction Defect and Construction Law Conference. He also routinely presents CLE-accredited courses to other law firms and organizations on how the construction industry actually works and how they can best protect their clients from the vagaries of the construction process.

LePatner co-sponsored â??Real Estate Outlook,â? an annual executive seminar series for corporate and real estate leaders; â??Protection, Survival, Readiness: Project Strategy in the Post-9/11 World,â? a seminar presented to institutional, developer, and corporate real estate executives; and â??Secure Space,â? a building security seminar for corporate owners and developers. He has also presented â??Construction Cost Integrity: Equitable Risk Allocation Agreementsâ? and â??Protecting the Owner from Pitfalls in Todayâ??s Construction Projects,â? a series of Continuing Legal Education lectures to law firms and their in-house real estate departments; and the highly successful â??Marketing for Design Professionalsâ? course at the Harvard Graduate School of Designâ??s Summer Program, from 1990-2004 with A. Eugene Kohn, founder of KPF Associates.

Mr. LePatner has written extensively and is widely quoted in the media on the subject of construction law. He previously co-authored the legal sections of the Interior Design Handbook, McGraw-Hill 2001, and Structural & Foundation Failures: A Casebook for Architects, Engineers & Lawyers, McGraw-Hill 1982, with Sidney Johnson, P.E.

Recently published articles include: â??Sarbanes-Oxleyâ??s Wake-Up Call to the Construction Industry,â? The CPA Journal, December 2007, co-authored with Henry Korn, Esq., and Anthony Chan, CPA; â??Todayâ??s Construction Contracts: Drafter Beware,â? Legal Times, September 2007; â??The Industry That Time Forgot,â? Boston Globe, August 2007; â??Construction Cost Increases: Owners Should Know the Difference Between the Myths and Realities,â? New York Real Estate Journal, October 2006; and â??Are You Preparedâ??Disaster Management Plans Help Owners Protect Their Investmentsâ? in the March/April 2006 issue of Commercial Investment Real Estate magazine. Articles published in the New York Law Journal include: â??Caveat Advocatusâ??Drafting Construction Agreements for Your Clientâ??s New Construction Project Ainâ??t What It Used to Be,â? March 27, 2006; â??Insuring a Construction Project Against Water and Mold,â? October 25, 2004; â??Building Security Measures and Owner Liability After Sept. 11,â? May 1, 2003, co-authored with Henry Korn, Esq.

In May 2002, LePatner was elected by the American Institute of Architects to receive an Honorary AIA Membership, one of the highest honors the organization can bestow upon an individual who is not an architect and which is granted to those who have devoted their careers in service to the architectural profession.

In July 2001, LePatner was elected to the Board of Trustees of DIFFA, the Design Industries Foundation Fighting AIDS. He has also served on numerous advisory committees, including: the Advisory Board, Society for Marketing Professional Services, 1990-93; the board of the New York Building Congress; Board of Advisors, Legal Briefs for the Construction Industry, 1981-89; American Institute of Architects Advisory Committee, 1984; and the National Academy of Sciences, 1984-85. He is a member of the Association of the Bar of the City of New York, the New York State Bar Association, and the American Bar Association.

About the Book:

Broken Buildings, Busted Budgets: How to Fix Americaâ??s Trillion-Dollar Construction Industry (The University of Chicago Press, October 2007, ISBN-13: 978-0-226-47267-6, ISBN-10: 0-226-47267-1, $25.00) is available at bookstores nationwide, from major online booksellers, and direct from the publisher at www.press.uchicago.edu.

For more information, please visit www.brokenbuildings.com.

Litigation Services Handbook, 2008 Supplement: The Role of the Financial Expert

Product Description
The 2008 Supplement contains the following updates:

• Chapter 15. The authors of our chapter on Punitive Damages review the Supreme Court’s decision in Philip Morris USA v. Williams and the implications of that decision for punitive damage claims going forward.
• Chapter 18A. In securities class actions, a lot rides on class certification. Many defense counsel appear to believe that to defeat the certification of the class is to win the big battle, maybe even the war. One impediment to class certification is non-alignment of the interests of the members of the class. Our authors discuss how the proposed class members’ interests can easily be adverse and how one might show that.
• Chapter 22. The authors of our chapter on Patent Infringements have revised their chapter to discuss whether a current patent owner has entitlement to the former owner’s damages.
• Chapter 25A. Merger transactions often have a so-called MAC or MAE clause—Material Adverse Change or Material Adverse Event. The idea is that some company specific events might occur (think private jet crash killing the top echelon of the target company’s management), which would give the buyer reason to want to change its mind about the acquisition itself, or the purchase price. In any particular deal, the parties can negotiate whatever terms of MAC or MAE they choose, but still may find themselves in sufficient disagreement that the buyer, typically, tries to invoke the MAC clause to get out of the deal. (In our experience, there has been some economy wide bad economic event—think the market crash of March 2000—that causes the buyer to wish he hadn’t offered such a high price. The buyer seeks to find some aspect of the target’s operations or financial statements on which to build a case that bad things happened to the target company beyond economy-wide effects. The lead case discussed here, IBP v. Tyson, arose from a deal negotiated in December 1999, but not completed before the March 2000 crash.) The authors discuss the proto-typical MAC clause and how an expert can help in supporting or defeating the claim that a company-specific MAC has occurred.

Order from Amazon TODAY —> Litigation Services Handbook, 2008 Supplement: The Role of the Financial Expert

Litigation Services Handbook, 2009 Cumulative Supplement: The Role of the Financial Expert

Product Description
In the last 20 years, the need for a financial expert to act as a witness and consultant to litigating attorneys has grown even more than litigation itself. This handbook includes all aspects of litigation services, including current environments, the process itself, a wealth of cases, how to prove damages, and practical considerations of court appearances. It thoroughly covers the fine points of trial preparation and testimony presentation. Also, clear discussion is offered for understanding Sarbanes-Oxley rulings and fraud investigations. Accountants and attorneys working in litigation will benefit from this book.

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SAS 70 Audit | An I.T. Auditor’s Expert View on Pricing for Type I and Type II Reports

SAS 70 Type I and Type II audits have become common for many organizations providing critical outsourcing services to companies. Known as service organizations, they have all landed on the regulatory radar of having to be SAS 70 compliant, due in large part because of Sarbanes Oxley (SOX) or any other large number of federal regulatory compliance mandates.. I’m often asked how much does a SAS 70 Type I or Type II audit cost. Well, that depends on a number of factors and circumstances that will be discussed today.

Choosing a Firm for the SAS 70 Audit

There are a number of providers available for SAS 70 audits, ranging from regional CPA firms to the nationally recognized big four firms. And as with anything in life, most organizations try to find the most value for their money, but remember, you get what you pay for. Small firms may be cost-effective, but they may lack the expertise and name recognition of other firms. The big four accounting firms will charge you a heavy premium audit fee, yet you get their name on the report, ultimately giving it a high level of recognition, simply based on who they are.

Remember, SAS 70 Type I and Type II audit prices have a wide range, so it’s probably a wise choice to pick in between, that is, a firm who is specialized, nationally known, not too large and bureaucratic, and provides you with a cost-effective, “fixed fee” that is fair, equitable, and you can live with.

Scoping the SAS 70 Audit

Numerous factors ultimately come into play for pricing considerations, but scoping is extremely important. It tells you and the CPA firm what will be tested, where it will be tested, and how long the test period will be, if a SAS 70 Type II audit is being performed. Thus, listed below are important points for discussion and consideration with any firm you enter into with regarding a SAS 70 Type I or Type II audit pricing. In short, this should be used as a baseline for discussing the scope of the audit, ultimately ensuring a fair and just fee proposal for SAS 70 Type I or Type II audits.

Be sure to discuss if the audit will be only a general controls audit-one that covers the essential, core components of any SAS 70 audit-or will there be specific business processes or activities included in the scope. For example, if you are a third party administrator (TPA); would the scope include testing for plan administration, billing & eligibility activities, or would it just be a general controls audit? Thus, converse and come to an agreement on what additional business lines outside the scope of a general controls SAS 70 Type I or SAS 70 Type II will the audit fee ultimately include. Discuss where your primary facilities are located and what testing has to be done at these physical locations, if any. Why is this important? Because the CPA firm needs to know what is being conducted there from a business perspective and if it will be included in the scope. SAS 70 audit testing periods-If you have to have a SAS 70 Type II audit, then determine what will the test period be. Test periods generally range from six (6) to twelve (12) months. However, the longer the test period, then generally, the more the CPA firm will charge. Get a fixed fee-Travel, lodging, and any other out of pocket fees can add up, so it’s important to get a fixed fee; one that includes all of these expenses into the proposal. If not, then expect to pay anywhere from substantially more than the fee proposal itself because out of pocket costs can be very high.

 

Learn more about SAS 70 audits at the official SAS 70 Resource Guide.

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