High-Speed Rail

High-speed rail board will hear construction bids

SACRAMENTO -- For the first time since contractors' bids were announced for the initial stage of high-speed rail construction in Fresno and Madera, the public and members of the California High-Speed Rail Authority board will have their opportunity to weigh in on the bids and the bidding process.

At their meeting Thursday in Sacramento (click here for the agenda), board members will receive an update on the bids submitted by five contractor teams this year. The prices of each bid were announced last month, following a three-month analysis of the bids' technical merits during which the prices remained sealed, according to the rail authority.

A consortium of Sylmar-based Tutor Perini, Zachry Construction of Texas and Pasadena's Parsons Corp. was deemed to be the "apparent best value" with a low bid of about $985 million -- the only one of the five bids to come in at less than $1 billion.

But the bidding process has come under scrutiny because, months before the contractors submitted their bids in January, the agency's executive leadership altered the threshold for evaluating the proposals without approval from the authority board.

What was initially adopted in March 2012 as a rigorous and competitive way to ensure that only the three most technically sound bids would be considered for the contract morphed into a "pass/fail" analysis requiring contractors to only meet "the minimum elements required" to advance in the competition.

The Tutor Perini consortium had the lowest technical score among the five bidding teams. The second-lowest-cost bid -- less than $1.1 billion from a joint venture of Dragados SA of Spain; Samsung C&T America, a subsidiary of South Korean multinational Samsung Group; and Pulice Construction Inc. of Arizona -- received the second-highest technical score.

Officials with the rail authority said Wednesday that the changes to the bid-evaluation process were made with the goal of ensuring the lowest possible price for technically sound bids, and done in consultation with board member Michael Rossi, who heads he authority's finance committee. The consultation chores were delegated to Rossi by board chairman Dan Richard, who stepped away from all of the discussions involving bidders or changes to the request for bids because he had once worked as a consultant for Parsons Corp.

"The more we looked at it, we believed that the state would get better value by having as much competition as possible among the bidders," authority CEO Jeffrey Morales said in an interview Wednesday. "Think of the alternative scenario: we get five bids, all technically sound, and depending on the scoring they could all have been within two points of each other. Yet under the original process, the bottom two would have been dropped for what would be a virtual non-difference. And we wouldn't have the benefit of getting their prices."

Added Morales: "Imagine the criticism we would be under had we left $300 million or $500 million sitting on the table from technically sound bids."

All five bidders, Morales said, are fully capable of building what he described as "rather basic civil infrastructure" for the Madera-Fresno section, compared to future sections that will pose significant engineering and technical challenges, such as tunneling through mountain ranges toward the Bay Area or Southern California. "We might look at things a little differently in those sections," Morales said.

Deep agenda

Also on the board's agenda Thursday are extensions of consultant contracts for the Sacramento-Merced, Los Angeles-San Diego and Palmdale-Los Angeles segments of the statewide train system. Each of the contracts expires at the end of June, but the authority wants to extend each to allow time to seek new bids for completing public outreach, environmental and planning work for those regional sections. Collectively, the consultant contracts were originally valued at about $252.5 million, but as of February the rail authority reported it had spent about $118 million with the companies -- less than half of the contracted amounts.

The authority's closed-session agenda includes discussion of what is emerging as a secondary battleground for high-speed rail opponents: the authority's March 27 petition to the federal Surface Transportation Board for an exemption from federal permit approval.

Over the past few months, project opponents have deluged the Surface Transportation Board with letters expressing concern over the authority's failure to secure federal approval. They include people in Kings County, where the county and two of its residents are suing the rail authority, and two organizations in Madera and Merced counties -- the Chowchilla Water District and Preserve Our Heritage -- that have since settled their lawsuits against the authority.

On April 18, the same day that the lawsuit by the Merced and Madera county farming interests was settled, the Surface Transportation Board dealt the rail authority a setback by rejecting a motion to dismiss the petition for an exemption. The authority argued unsuccessfully that the Surface Transportation Board had no jurisdiction over the state project, and thus there was no need for an exemption from the federal permit requirements.

If you go

What: California High-Speed Rail Authority board meeting

When: 10 a.m. Thursday, May 2

Where: Sacramento City Hall, 915 I Street, Sacramento

Webcast: The meeting will be webcast live. Go to the rail authority's web page for a link.