High-Speed Rail

High-speed rail board OKs first construction contract for Fresno-Madera link

The California High-Speed Rail Authority on Thursday agreed to the $985 million contract for the first stage of construction for a statewide bullet-train system in the Fresno-Madera area.

By a 6-0 vote Thursday in Sacramento, the agency's board authorized CEO Jeffrey Morales to finalize the deal with a consortium made up of Tutor Perini Corp. of Sylmar, Zachry Construction of Texas and Parsons Corp. of Pasadena.

The Tutor Perini/Zachry/Parsons team was the lowest of five bidders for the contract to design and build the 30-mile segment.

The project runs from Avenue 17 northeast of Madera to American Avenue at the south end of Fresno. It will include a bridge over the San Joaquin River; elevated tracks at the north and south ends of Fresno; a tunnel under Belmont Avenue and Highway 180; and a dozen street or road overpasses.

Thomas Fellenz, the rail authority's chief counsel, said the agency and representatives of the construction consortium will likely take several weeks to a month to hammer out details of the agreement. He said he expects the contract to be signed in July.

Authority officials have said they hope some of the first construction work -- including clearing ground, relocating utilities and building demolition -- could start this summer.

Thursday's approval came despite concerns from some audience members that Tutor Perini Corp. represented a flawed choice for a contractor. They cited concerns over the company's work on a disputed MGM high-rise hotel project in Las Vegas and worries about the firm's financial stability.

Kings County farmers Karen Stout and Frank Oliveira, members of the grassroots Citizens for California High-Speed Rail Accountability, said a downgrade of Tutor Perini's bond rating last fall represented a "material change" in the company's fiscal health that they believed made the firm ineligible for the contract.

Oliveira likened the contract to the famous ship Titanic, which sank in 1912 after its captain failed to heed warnings of icebergs in the ship's path. "Have you really done due diligence on this contractor?" he asked. "Your bid process and the selection process was full of icebergs."

The Tutor Perini/Zachry/Parsons consortium was ranked by the authority as its "best value" bidder, earning the highest total score in a bid-screening process that considered price and technical merit. The team offered the lowest price, but also had the lowest score for technical merit.

Board members said they're comfortable the low bidder was qualified to design and build the project.

Member Mike Rossi said the rules do not require a construction team to have an investment-grade bond rating to be eligible to bid on the project, and noted that none of the comments had mentioned Tutor Perini's partners in the consortium. Fellenz added that the Tutor Perini/Zachry/Parsons team has already submitted performance and payment bonds required by the authority.

Fellenz and chief engineer Frank Vacca told the board that while technical scores varied among the bidding contractors, all were deemed technically capable of performing the work.

"Some of the teams carried their designs further or designed more elements like bridges to another level," Fellenz said of the range of technical scores. "That didn't mean that any of the teams were not qualified."

Tutor Perini CEO Ronald Tutor defended his company after the vote. "After hearing all the commentary about our MGM issues and our financial issues, I'm happy to share information so there are no questions that any of them are germane at all," Tutor told the board. "We're a publicly traded company, our net worth still exceeds $1 billion, and we continue to make money. That's a matter of public record."

"I'm personally committed to the success of this very important project," he added. "That's not rhetoric, that's me saying the truth."

Also Thursday, the rail board approved an allowance of up to $53 million to cover costs that the authority did not believe any of the bidding contractors could predict for utility relocation, removal of asbestos or other hazardous materials from buildings to be demolished, and related construction on affected properties along the route.

Coming this weekend: More on the rail authority's plans for starting consturction.