State rail officials acknowledge changing construction bid rules

By Dan Weikel and Ralph Vartabedian

April 18, 2013 12 AM PT

State high-speed rail officials acknowledged Thursday that they changed their rules for selecting a builder for the bullet train’s first phase in the Central Valley, making it possible for a consortium led by Sylmar-based Tutor Perini to be ranked as the top candidate despite receiving the lowest technical rating.

The California High Speed Rail Authority announced last week that the Tutor Perini-Zachary-Parsons joint venture was the top-rated contender among five bidders seeking to build the initial 29 miles of track between Madera and Fresno.

While it offered the lowest price at $985.1 million, the Tutor Perini team’s technical score ranked last. Ferrovial and Acciona, two Spanish firms with significant high-speed rail experience, had the highest technical mark but bid almost $1.4 billion. The rail agency board is expected to select a contractor in coming months after additional negotiations.

The technical score is based on safety measures, engineering, scheduling, quality of design, project approach and solutions to possible construction problems.

In March 2012, the rail authority’s board set up a two-step process for weighing the bids. In the first step, the bidders were supposed to be narrowed to three based only on a technical evaluation. Only the bids submitted by the remaining contenders would be opened. The winner was to be selected on a combination of price and technical scores.

Under that process, the Tutor Perini consortium and another team by Skanska, a Swedish company, would have been eliminated after the first round, leaving groups led by Colorado-based Kiewit and two teams led by Spanish firms, Dragados and Ferrovial.

The board adopted the two-step process, which the agency’s staff said would create competition and obtain quality technical proposals for the first 200-mph rail system to be constructed in the United States

“We think we’re going to get strong technical proposals, and we’re going to get some very well-thought-out plans from these proposal teams,” Thomas Fellenz, the authority’s attorney, told the board last March. “And we’re making it very competitive, because, you know, if you are not in the top three, you’ll be dropped.”

Fellenz said at the time that “non-substantive” changes could be made in consultation with board chairman Dan Richard.

The agency changed the evaluation process in July, according to an agency spokesman. The official did not provide details of the internal process used to alter the criteria. But he said the state potentially will save hundreds of millions of dollars as a result of the decision to change the evaluation criteria.

But Elizabeth Goldstein Alexis of Californians Advocating Responsible Rail Design, a group critical of the bullet train project, disagreed and argued that the change in evaluation criteria has invalidated the bidding process. “This is not a non-substantive change,” she said. “I don’t see any indication that the board approved this.”

In the end, the state placed far more weight on price than the technical evaluation, which is contrary to best practices suggested by some construction industry groups. The Design Build Institute of America advises public agencies to put greater emphasis on technical merit to avoid later problems on a project.

“Smart public owners across the country are moving in that direction,” said Rex Huffington, an official at the institute. “This best practice is even more critical on complex projects.”

The state only completed about 15% of the design of the first segment when it sought bids from the five teams.

The technical proposals could be critical. Building the first section will require a massive engineering feat on a tight schedule that includes cutting a 1.7-mile trench through Fresno, erecting a 1.2-mile viaduct and three major bridges and using giant hydraulic jacks to create a tunnel beneath California 180 in the Fresno area.

Tutor Perini is one of the largest contractors in the country. Critics have complained the firm tends to bid low to win contracts and then seeks change orders and contract amendments that increase costs.

The firm has handled many major construction projects successfully. But it also has been embroiled in controversies involving accusations of overbilling, fraud and shoddy workmanship related to the Los Angeles subway, San Francisco International Airport and public works projects in New York. Those matters have cost the builder tens of millions of dollars in legal judgments, settlements and penalties.

Tutor Perini officials could not be reached for comment Thursday. Representatives of Parsons Corp. in Pasadena and the Zachry Construction Corp. in San Antonio, Texas, referred all comment to Tutor Perini, the lead company in their joint venture.

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Twitter: @DanielJosephWei

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