State dumps Kiewit as Key Bridge builder, potentially delaying project past 2030

Two years into the costly, high-profile rebuild of the Francis Scott Key Bridge, the state is breaking up with its lead contractor.

Kiewit, one of North America’s largest construction and engineering companies, had been expected to both design and construct the new Key Bridge. Now, citing Kiewit’s high cost estimates, state government will seek a new builder in the open market.

That could delay the bridge’s opening, which, to the dismay of frustrated commuters and residents, is already expected to be more than four years away.

Maryland hired Kiewit to design the bridge in August 2024. As part of what’s called a progressive design-build, Kiewit then had the exclusive right to build the span — provided the parties agreed on costs.

Kiewit and state engineers shared an office space as they jointly designed the structure, regularly collaborating on price expectations.

Officials with the state and with Kiewit said in recent months that they were on the same page. In formal negotiations, though, it became clear that there was a substantial “gulf,” said Maryland Secretary of Transportation Katie Thomson.

Moving on from Kiewit was in the best interest of Maryland and federal taxpayers, she said.

“We were stunned by how significantly large their proposal was, and remain perplexed,” she told The Banner. “It just became evident after several weeks of exchanges that we were not going to get close to agreement.”

Kiewit spokesperson Teresa Shada said in a statement that the company is “disappointed by this decision” but is committed to completing the work it has been contracted to finish.

In November, the state increased the project’s expected cost to between $4.3 and $5.2 billion and its scheduled opening to the end of 2030 — already billions more and years longer than an estimate made in the immediate aftermath of the disaster.

Kiewit’s cost projection was far higher than even that new range, Thomson said. She and Kiewit declined to specify the amount. Thomson said continuing with Kiewit also would have extended the project a “year-ish” past the state’s timeline.

Both Gov. Wes Moore and U.S. Transportation Secretary Sean Duffy said in separate statements that backing away from Kiewit was the prudent move. Moore said the state is seeking a new builder to “ensure greater competition and a better deal for Maryland.”

Said Duffy: “We’re putting taxpayers and their priorities first.”

The 47-year-old span across the Patapsco River collapsed when the container ship Dali struck a support pier in the early hours of March 26, 2024. Six construction workers filling potholes on the bridge were killed.

A chunk of rebuild funds will come from the Singaporean companies that own and operate the Dali. Ultimately, the federal government, not the state, is expected to be on the hook for the remainder of the cost.

The project has become a political battleground between Moore and President Donald Trump. Moore said last month his administration is committed to building the bridge “with intentionality, with speed and with safety.”

Exiting a progressive design-build agreement is always an option, though experts say it does not guarantee savings, since market conditions often determine prices.

The state, which hired an independent cost estimator, is confident it can identify a firm that will construct the bridge at a “much more realistic price,” Thomson said. A new contractor would use Kiewit’s designs, which are nearly 100% complete.

“We hope we will have vigorous competition,” Thomson said.

One of the advantages of progressive design-builds is streamlining the process by keeping the same contractor on board throughout the project. The off-ramp is taken in only about 10 or 15% of rebuilds, Keith Molenaar, dean of the University of Colorado-Boulder’s College of Engineering & Applied Science, previously told The Banner.

Parties generally hope to avoid the off-ramp. In this case, Kiewit will lose a lucrative contract, and the state will take time to procure a new builder, though it’s unclear how much, if at all, the project will be delayed.

Asked if 2030 is still a realistic target for completion, Thomson said Tuesday: “We are committed to moving as aggressively as we can on the schedule.”

Maryland will host an industry forum next month; at that point, it will establish a timeline for when it expects to hire a new builder.

“I think the public is going to be probably frustrated and surprised,” said Bruce Gartner, executive director of the Maryland Transportation Authority. “We are disappointed, but we always had to plan for this type of contingency.”

Kiewit will finish work it has already agreed to perform — such as constructing trestles and demolishing the old span — through at least the end of December.

The company will receive over $700 million from the government for its design and early construction works, according to a legislative report.

Kiewit agreed to design the bridge for $73 million in 2024, but that contract increased to $211 million. The company will also be paid nearly $500 million for construction work.

Banner reporter Daniel Zawodny contributed reporting.