MTA STAFF PROPOSES SUPERVISING EAST SIDE LINE CONSTRUCTION IN-HOUSE.

Byline: David Bloom Daily News Staff Writer

The MTA spent $165,000 on an expert panel, endured controversies, investigations, a firing and the resignation of its chief executive, all to try to pick a contractor to oversee subway construction on the east side.

After all that, and a week before the Metropolitan Transportation Authority board is supposed to finally pick one of two surviving groups of companies for the $63 million contract, agency staff members said they'd rather do the job themselves.

MTA Construction Executive Officer Stanley Phernambucq told the board's Legal Committee on Wednesday that he would have preferred all along to manage in-house the construction of the east side Metro Red Line extension.

``If I were king, I would do it this way,'' Phernambucq said, arguing that the staff could handle the job if it was augmented by contract engineers, safety specialists and other managers from an outside firm.

The approach could cut 25 percent off the cost of the contract, saving the agency $18 million to $20 million by eliminating duplicated positions, corporate overhead and excessive change orders, Phernambucq said.

Such an approach comes with some risks - one less check in the oversight of construction, an additional four to six months of delays and a lower level of accountability, Phernambucq said.

And while the Federal Transit Administration's consultants have recommended such an approach, the auditors who authored a key management study of the MTA recommended against it, Phernambucq said.

Phernambucq was asked to report on the possibility by Robert Abernethy, county Supervisor Zev Yaroslavsky's alternate on the board and himself an engineering company executive.

``It's a big choice,'' said Abernethy, who declined to say whether he supported such a move. ``I wanted to look at it. It was better now than never.''

Phernambucq's report was greeted coolly by members of the Legal Committee, who raised concerns about the troubled agency's ability to do the job given all the other problems the agency has had with construction in recent years.

``I would be skeptical about putting our staff in the driver's (seat) on what is admittedly, given the soils out there, our most difficult project,'' said Vivien Bonzo, Supervisor Gloria Molina's alternate and an Olvera Street restaurateur.

Phernambucq said he disagreed with Bonzo and other board members who doubted the agency's ability to oversee its own projects.

``We can handle it,'' he said. ``I've done this kind of work for 20 years and I have people in my office who have been doing it for 40 or 50 years.''

Phernambucq's report, which will also be presented today to the board's Construction Committee, comes at a difficult time in the contract's tortured history.

It already is more than a year late, so much so that the board is also scheduled to raise to more than $6 million the amount of money it has spent on interim construction management services from engineering giant Fluor Corp.The contract first stalled when an initial bid award went awry last spring and was thrown out.

The second round has been mired in controversy this fall that became so intense that MTA Chief Executive Officer Joseph Drew cited it last week as the main reason for his sudden resignation.

Drew came under fire from some MTA directors after he overrode the expert panel's choice for the contract in October, instead recommending the panel's last place choice, Metro East Consultants.

The MTA contract manager who oversaw the panel, Lee Graw, was fired in September.

Both the agency's inspector general and the U.S. Attorney's Office are investigating aspects of the bidding process.

After the investigation was announced, the bid award was put on hold. Two weeks ago, Drew announced that Metro East was no longer eligible for the contract because two companies in the joint venture failed to disclose key information in their applications.

That left two partnerships, one headed by Jacobs Engineering Group of Pasadena and one headed by Bechtel Infrastructure Group of Los Angeles.