BECHTEL INFRASTRUCTURE CORP., PB AMERICAS INC., AND CONSULTANTS
AGREE TO PAY $458 MILLION TO SETTLE FEDERAL & STATE CLAIMS

WASHINGTON - A joint venture between Bechtel Infrastructure Corp. and PB Americas Inc., known as B/PB, and certain design consultants have agreed to pay the United States and the Commonwealth of Massachusetts a total of $458 million to settle allegations that B/PB violated federal and state criminal and civil laws by failing to provide adequate construction management and quality assurance services to the Central Artery Tunnel, known as the Big Dig, in Boston and that the design consultants caused excess costs to be incurred on the project.

According to the terms of the global resolution reached today, Bechtel and PB Americas will pay over $23 million to the United States to settle federal False Claims Act allegations, over $40 million to the Commonwealth of Massachusetts to settle state False Claims Act allegations, and over $335 million to a state warranty fund for future repairs to the Central Artery Tunnel. Bechtel and PB Americas will also enter into corporate integrity agreements with the Massachusetts Executive Office of Transportation. In addition, if there is a catastrophic event in the future that requires more than $50 million in repairs to the Big Dig involving B/PB's conduct, the United States and the Commonwealth have retained the right to pursue such claims against Bechtel and PB Americas.

In a related settlement, Massachusetts agreed with a group of design consultants to an additional $51 million settlement arising from their acts, errors and omissions in performing design contracts that resulted in excess costs to the project.

The Big Dig is a major public transportation infrastructure project built through the heart of downtown Boston. The project was planned, designed, and constructed over a period of 20 years from 1985 to the present. Bechtel and PB Americas served as Management Consultants on the project and were responsible for managing the design and construction of the Big Dig.

"We expect, and our citizens depend, on our nation's contractors to be truthful and perform the work they promise," said Acting Assistant Attorney General Jeffrey S. Bucholtz. "Today's settlement requires Bechtel and PB Americas to be responsible for their conduct, and helps insure the future longevity of the Central Artery for the citizens of Boston and the greater Northeast."

According to the United States and the Commonwealth of Massachusetts, Bechtel and PB Americas failed to provide adequate services on four aspects of the Big Dig: 1) the construction of slurry wall panels in the I-93 tunnel; 2) the installation and monitoring of the epoxy ceiling bolts in the suspended ceiling of the I-90 Connector tunnel; 3) claims for payment by contractors on time and material contract modifications, and 4) oversight of the concrete delivered to the slurry wall construction by a large concrete supplier.

The agreement also resolves claims made in a qui tam action filed against Bechtel Corp. and PB Americas in the United States District Court for the District of Massachusetts. Under the agreement, the whistleblower will receive a share of the federal and state recoveries in the amount of $150,000.

The resolution of this matter was achieved by the U.S. Attorney's Office for the District of Massachusetts, the Attorney General's Office of the Commonwealth of Massachusetts, the Federal Highway Administration of the U.S. Department of Transportation, the New England Regional Office of the U.S. Department of Transportation, Office of Inspector General, the Federal Bureau of Investigation, New England Field Office, and the Commercial Litigation Branch of the Justice Department's Civil Division.