High-speed rail contractor gets additional $96M

SACRAMENTO, Calif. (AP) -- The board that oversees California's high-speed rail project voted Thursday to give its largest private contractor another $96 million and two more years to oversee architectural and engineering work, but warned that it will exercise rigorous oversight.

Board members made it clear to contractor Parsons Brinckerhoff that the California High-Speed Rail Authority has beefed up its senior management and added staff, so the firm should not expect its proposals to be rubber-stamped, as many critics have charged.

The authority, which is overseeing efforts to begin building the $68 billion bullet train, has been criticized for relying too heavily on outside contractors, including Parsons Brinckerhoff. The authority's chief executive, Jeff Morales, was hired from the firm last year.

A report by the state auditor last year said the rail authority was "significantly understaffed and has struggled to oversee its contractors and subcontractors," delegating significant control to them. That criticism was valid, but many of those issues have since been resolved, several board members said Thursday.

"We as a board fully expect the staff to ensure that government people are making the government decisions and that the contracting party is being held accountable," board member Jim Hartnett said.

The board also approved carrying over $24 million that remains unspent from the $199 million project management contract with Parsons Brinckerhoff that had been set to expire in July.

Board member Lynn Schenk, who also was on the board when the first contract was approved in 2006, said she often had the feeling over the years that Parsons Brinckerhoff officials "felt that they were the authority."

"And we were routinely ignored and dismissed. The times have changed," she said.

Morales was a senior vice president at Parsons Brinckerhoff, where he helped draft the current high-speed rail business plan, before he became CEO of the rail authority last June. He also headed the California Department of Transportation under former Gov. Gray Davis, a Democrat.

Some of the most contentious decisions the high-speed rail authority has made so far have been shaped by Parsons Brinckerhoff. It helped draft Proposition 1A, the 2008 ballot measure in which voters approved selling $10 billion in bonds for high-speed rail, and developed the current business plan.

The contract extension allows the consulting firm to continue that work and draft a revised business plan due next year. It contains a 30-day termination clause if the board is not satisfied with the company's work.

Board Chairman Dan Richard said in an interview that the board also placed certain restrictions on Morales' dealings with Parsons Brinckerhoff when it approved hiring him last year and maintains "a very sharp look at anything regarding that contract because of his past relationship."

Separately, Morales and board members on Thursday also addressed criticism of the rail authority's choice of a bid from a Sylmar-based consortium to design and build the first 30-mile segment of track from Madera to Fresno.

Under the original selection criteria, bidders were to be narrowed to the final three based only on the technical evaluation, then costs would be considered. That process would have eliminated the $985 million bid from Tutor Perini-Zachry-Parsons because it had the lowest technical score, but the rail authority changed the criteria and decided to consider all bids that met the technical standards.

Morales said that resulted in "five very strong, technically sound bids," greater transparency and a lower price, but critics wondered if the criteria were changed to favor the Tutor group.

"There is a problem here, and this board needs to attend to it, because there is not a public trust," said Frank Oliveira, co-chairman of Citizens for California High-Speed Rail Accountability.

The board is expected to vote on the contract at its June meeting.