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Software ownership issue adds $10M to cost of 'Big Dig'

Software ownership issue adds $10M to cost of 'Big Dig'

Failure to secure access to the source code of a key application added more than US$10 million to the cost of the infamous Big Dig highway construction project in Boston, according to the Massachusetts state auditor.

The application, called the Integrated Project Control System (IPCS), handles traffic, roadway, fire and security systems management for the $14 billion Central Artery/Third Harbor Tunnel Project. The software development project remains unfinished.

The application was created by Transdyn Inc., which was awarded the contract for the initial phase of the project. The problem occurred when Transdyn refused to hand over access codes for the application to Honeywell Technology Solutions Inc., which won a contract to develop the next phase.

Massachusetts State Auditor Joe DeNucci this week said the failure of project managers to secure "timely ownership" of the IPCS software boosted the cost of the project, which was designed to ease highway traffic congestion moving through and around Boston. The matter wound up in court and cost the state millions in overruns and other costs, he said.

"The significance of this audit is that it's a good example of the kinds of things that went wrong in the project," said a spokesman for DeNucci. It indicates a failure to foresee that "a dispute over the access to the software code (could lead to a) problem that would delay the second phase."

The initial phase of the IPCS project started in 1994, when Pleasanton, Calif.-based transportation software maker Transdyn won a $52 million contract to develop the application for the first phase of the Big Dig. The system was based on Transdyn's Dynac transportation management software. In 1999, Honeywell won a $104 million contract to build the next phase of the system to control and monitor the entire Big Dig project.

At that point, Transdyn refused to turn over the Dynac source code to Honeywell, claiming that the technology was "proprietary and forms the cornerstone of a portion of the business." The state argued that Dynac had been modified as part of the project and had thus become a customized piece of software not subject to the legal safeguards for off-the-shelf applications.

Massachusetts paid Transdyn $350,000 in a 1999 out-of-court settlement of lawsuits that each had filed against the other. Under the agreement, Honeywell sublicensed the software from the state "under certain safeguards."

The auditor based the $10 million price tag for the problem on the state's decision to waive $2.72 million in damages it believed it was owed by Transdyn and an estimated $7.2 million cost for the four-month delay in the project caused by the interruption of the software handover - bringing the total cost overrun to $10.3 million.

Meanwhile, Honeywell in December negotiated an end to its contract for the project, for which costs have ballooned from $104 million to $188 million since 1999.

Vic Miller, vice president and general counsel at Columbia, Md.-based Honeywell, said the audit bolsters his company's position that the late delivery of the Dynac software was among the factors that affected its ability to deliver its portion of IPCS for the agreed-upon price.

Currently, Transdyn is negotiating with Big Dig authorities to complete the IPCS system, said a Transdyn spokesman. He said the company "is not in a position to comment" on the auditor's report.

The Massachusetts Turnpike Authority, which manages the Big Dig, declined to comment on the specifics of the audit. In an e-mail statement, the authority said, "We have been very candid about the issues we have encountered with the installation of the IPCS system and have already referred those issues over (to the state attorney general) for potential cost recovery actions."

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