Railcar bidder assails MTA contract award process.

Morrison Knudsen chairman says his team bid best

The chairman of Morrison Knudsen Corp. said last week his team should be awarded a $200 million contract to build cars for L.A.'s light-rail system because of miscalculations and errors in a proposal recommended to the Los Angeles County Metropolitan Transportation Authority.

Morrison Knudsen Chairman William Agee told the MTA board that not only is his team's proposal the lowest of four bids but there are mistakes and "miscalculations" in a competing bid and in the staff recommendation that another contracting team be awarded the project.

Morrison Knudsen's team includes Calabasas-based Lockheed Corp. and Hughes Aircraft Co., a General Motors Corp. subsidiary which is headquartered in Los Angeles.

At the meeting, the board delayed final approval of the high-profile contract to a partnership of Siemens Duewag Corp., TRW Inc. and AAI Corp., not because of Agee's remarks, but because of a procedural problem.

A vote on the project to design and manufacture at least 74 light-rail cars for the MTA Green Line is now scheduled for June 30 following a workshop on the project on June 28.

According to MTA Chairman Richard Alatorre, the board could not vote on the project because 15 days had not passed since the staff recommendation that the Siemens-led team be awarded the contract.

At least 20 representatives of the competing teams, as well as lobbyists, had turned out for the board meeting to argue their points.

Only representatives from the Morrison Knudsen-led team decided to speak.

Agee, who traveled from the company's Idaho headquarters, pointed out that his bid is $18 million under the $215.4 million bid by the Siemens Duewag team.

"Why in this time of economic difficulty ... would this board accept a bid that is $18 million higher?" said Agee.

He said in the past the MTA's predecessor agencies -- the Los Angeles County Transportation Commission and the Rapid Transit District -- always awarded contracts to the lowest bidder, and that across the country most major transportation projects have gone to companies that submitted the lowest bids.

Under a ratings system established specifically for the light-rail project, the MTA staff awarded points to each of the competing teams based on such factors as cost, technical ability, the use of minority- and women-owned subcontractors, and "domestic content" of the rail cars.

Out of a possible 100 points, Siemens scored 88, the Morrison Knudsen team had 87, a partnership of Bombardier Corp. and Northrop Corp. had 86 points and a Sumitomo Corp./Rockwell International Corp. team scored 76.

Outside the meeting room, Agee said the system of awarding points to the Siemens team was flawed and contained mistakes that, if corrected, should move Morrison Knudsen into the lead.

Agee said the MTA staff has refused requests to meet with Morrison Knudsen about discrepancies in the points awarded to Siemens.

He said one mistake was giving the Siemens team a $7-million credit for creating jobs through a temporary employment agency. Agee said the credit should only be $700,000.

Another mistake he cited was listing a possible subcontracting firm that Agee said doesn't exist. A third mistake was asserting the contract would help AAI get into the transportation business, Agee said.

"AAI is already in the business," said Agee.

MTA spokesman Mike Bustamante said the reason there is a 15-day waiting period between staff recommendations and board votes is to allow time for competing bidders to file a protest, which Agee had failed to do by June 23.

"The bottom line is there is a procedure for filing a protest," said Bustamante. He asserted that the formal protest was the proper way to debate the issue and refused to do so in the press.