State Grants Bullet Train Contract to Low-Cost Bidder

by Juliet Williams, Associated Press

SACRAMENTO, Calif. (AP) — The board that oversees California's High-Speed Rail Authority on Thursday unanimously approved a nearly $1 billion contract to start construction on the first leg of the $68 billion bullet train in the Central Valley, clearing the way for work to start as soon as this summer.

The bid from a California-based joint venture was the cheapest out of five received by the state, but had the lowest technical rating for safety and design, drawing public scrutiny and prompting more than an hour of questions to the high-speed rail authority staff from board members. They ultimately voted 6-0 to approve the $985.1 million bid.

The selection has drawn scrutiny after it was revealed that the authority changed its rules for selecting a company after the process was made public, allowing the cheapest bid to be selected even though it had the lowest technical rating for safety and design quality.

Most of the questions from the board appeared intended to show that members had asked questions of officials before they approved the construction package.

"The questions really boil down to, can the successful bidder do the job, and will they do it within the confines of the contract as contemplated by the authority," said board member Jim Hartnett. "The questions that I had were answered to my satisfaction."

High-speed rail opponents raised questions at the meeting about possible cost overruns and the financial health of the lead company, Sylmar-based Tutor Perini. The company's chief executive officer, Ron Tutor, told reporters the criticisms of his firm are "all nonsense" fanned by the media "to create controversy that doesn't exist."

"Like most of the uneducated opinions you hear where we can't rebut them, they're not based on anything factual or real," he said of the criticisms. "We've built more large civil works programs in this state than anyone else, virtually all of them successfully and without the cost overruns they all allude to."

Board Chairman Dan Richard did not vote or participate in the conversation because he had previously worked with one of the films involved in the bid.

Officials in April announced that the $985.1 million bid from a consortium led by Tutor Perini was the top candidate out of five submitted to build the first 30-mile construction segment from Madera to Fresno. The bid came in below the authority's estimated cost of $1.2 billion to $1.4 billion.

The bid process was changed without approval from the board that oversees the rail authority, which had delegated authority for such changes to high-speed rail Chief Executive Officer Jeff Morales.

Officials with the authority were worried that their previous methodology, which called for considering only the bids with the three highest technical ratings, "could have left hundreds of millions of taxpayer dollars on the table," the agency said at the time.

Under the new criteria, all the bids that met the technical criteria were considered, leaving the door open for the proposal from Tutor Perini-Zachry-Parsons.

High-speed rail officials say the total cost of each bid was kept in sealed envelopes while the other criteria were weighed, including a three-step technical review to ensure the bids met all the qualifications. The technical criteria were based on safety measures, engineering, scheduling, design quality, project approach and solutions to possible construction problems.

The authority's attorney, Tom Fellenz, told board members Thursday that "the integrity of the process was pristine."

The competing firms will also receive a payout and the rail authority will get to keep the engineering and design work in their proposals.