Government

Corporate Collision Looms at Tri-Rail

$100 million-plus locomotive purchase runs into charges of bid steering, higher costs
By: Kenric Ward | Posted: February 12, 2011 3:55 AM
Tri-Rail 2

Tri-Rail at West Palm Beach Station | Photo Lane Wright


A South Florida transit agency that oversees Tri-Rail is accused of mishandling the bidding and purchase of 10 new locomotives for the three-county train system.

In a formal written protest, GE Transportation alleges that the South Florida Regional Transportation Authority used bid guidelines to steer a $100 million-plus contract, which the company claims will cost taxpayers an additional $1 million per locomotive.

Even before the SFRTA board officially awards the contract -- it's scheduled to do so at its Feb. 25 meeting -- powerful state politicians, business groups and even environmentalists have blasted the agency in a series of scathing letters.

"Large procurements of these types should be open, transparent and highly competitive," Senate Ways and Means Chairman J.D. Alexander wrote to SFRTA on Jan. 24.

"It concerns me that there are major locomotive manufacturers who expressed interest in the bid, but were excluded from qualifying. ... Such a sweetheart deal would be an outrage to Florida taxpayers," wrote Alexander, R-Lake Wales.

The deficit-ridden Tri-Rail commuter train system relies on millions of dollars in annual government subsidies, despite serving Florida's most densely populated urban corridor running through Miami-Dade, Broward and Palm Beach counties.

GE Transportation, an Erie, Pa.-based division of General Electric, alleges that SFRTA's bid and performance requirements relied on outdated and inefficient technology. GE Transportation executives urged the agency to revamp the bidding and qualification process to achieve long-run savings.

The Florida Chamber of Commerce joined GE Transportation in complaining to SFRTA executive director Joe Giulietti.

In a June 11 letter, Chamber president and CEO Mark Wilson wrote:

"One shortfall in government spending today is the drive to purchase cheaper products that have lower capital cost, yet much higher operating and maintenance costs. ... We believe to the maximum extent possible, Tri-Rail should consider life cycle costs."

Sen. Mike Fasano, R-New Port Richey, said Tri-Rail's "request for proposals" gave "no quantitative value to life cycle costs."

"The life cycle costs of these locomotives account for over 75 percent of the total cost of ownership," Fasano stated in an April 20 letter to Giulietti.

GE Transportation said a rival lower bid would cost Tri-Rail $1 million in additional lifetime operational expenses for each of the competitor's locomotives.

The Southern Alliance for Clean Energy questioned SFRTA on environmental grounds and called for longer-range vision in awarding contracts.

Susan Glickman, head of the alliance, said newer "Tier 3" locomotives, such as the ones produced by GE Transportation, would run far cleaner than competing models.

"Replacing 10 old pre-tier locomotives with Tier 3 compliant engines is equivalent to taking approximately 538 cars off the road per day. Over the life of the Tier 3 locomotive, a reduction of 5,800 tons of nitrous oxides, 289 tons of particulate matter and 75,200 tons of greenhouse gases will be achieved," Glickman stated.

Fasano blistered Tri-Rail, bluntly declaring, "I do not support the purchase of obsolete, high-polluting, gas-guzzling Teir 2 locomotives."

With politicians, business organizations and environmentalists buttressing the challenge by GE Transportation, the Tri-Rail-SFRTA controversy may provide more ammunition to critics of taxpayer-supported train systems.

Citizens groups have sprung up in Central Florida to oppose new commuter-rail ventures, including the proposed SunRail in Orange County. Efforts to raise the sales tax in Hillsborough County to kickstart a light-rail line there failed. A similar tax-boosting campaign is getting under way in Pinellas County.

But beyond alleged operational inefficiencies, outdated technologies, endless government subsidies and copious bureaucratic red tape, the Tri-Rail bidding squabble points to potentially deeper problems.

MotivePower Inc., an apparent unsuccessful bidder, accuses the SFRTA of favoring Brookville Equipment Corp. of Brookville, Pa.

"The fundamental basis of [our] protest is that Brookville's bid failed to comply with non-waivable requirements of SFRTA," the Boise, Idaho-based MotivePower stated in an Oct. 7 letter from its lawyers.

In a 46-page exhibit, MotivePower, a subsidiary of Wabtec Corp. of Wilmerding, Pa., details a host of alleged problems in the bidding process and reputed technical shortcomings in Brookville's products.

"SFRTA's erroneous determination regarding Brookville's service-proven qualification provides Brookville with an unfair competitive advantage enjoyed by no other proposer," MotivePower stated.

"Any reasonably diligent review of Brookville's bid could yield only one conclusion: Brookville has simply failed to demonstrate that at least five of its seven proposed subsystems ... satisfy the requirements."

Yet on Oct. 29, SFRTA posted a notice of intent to award the contract to Brookville, "the apparent low bidder." The contract calls for the purchase of 10 locomotives, with an option for 13 more.

A project manager of ASFRTA pegged the "base order" cost for 10 locomotives at "just under $50 million, including training, manuals, test equipment and spare parts."

Adding the option of 13 more locomotives brings the price tag to nine figures.

In a written appeal to SFRTA board member and Miami-Dade Commissioner Bruno Barreiro on Dec. 2, GE Transportation general manager Brett BeGole said the pending contract with Brookville was for $109,983,000.

Citing safety issues and prevailing industry practices, SFRTA defended its vetting process and its decision not to factor in life cycle costs.

Agency officials say the new engines will meet Tier 3 standards, and will provide the most reliable, cost-effective performance.

SFRTA denies any allegations of favoritism, saying it gave interested parties "almost four months to raise any questions or concerns regarding procurement."

But with the awarding of the contract just two weeks away, a head-on collision may lie ahead.

--

Contact Kenric Ward at kward@sunshinestatenews.com or at (772) 801-5341.



Comments (9)

heidelja
4:12PM APR 2ND 2011
This story is somewhat disjointed. On the one hand it appears that it is one of life-cycle costs not being considered in the bidder's selection of these locomotives and on the other hand it appears to be one of accepting "polluting" Tier 2 locos vs lesser polluting Tier 3 locos. Actually, it is more so one fueled by monopoltistic GE Transportation being excluded because its specilized locos for freight train operations do not meet the requirements specified as needed for TriRail passenger train operations!

Per a related article I wrote:

"GE, which no longer offers DC locomotives" and which is the only American locomotive provider for freight trains which DO NOT require continuous DC power to power passenger cars, goes on to whine that "the specifications [required for passenger train operation] put vendors of the more-expensive AC equipment [used for freigt trains] at a competitive disadvantage." Further the article correctly states "The main debate hinges on two types of train-engine technology – the older [diesel-electric] DC motors" first developed for streamlined passenger train operations in the 1930s "and newer AC engines [primarily developed during the 1990s to be used to haul heavy coal trains] which experts say are less prone to breakdowns" which could significantly impact long haul freight train operations, especially along single-tracked mainlines!

This dichotomous thinking should only be seen as flack spewed by multi-billion corpoarate GE Marketing and its lobbyists to further monopolize the train locomotive industry in America!

Simply put, criterion one, would be, do the locomotives meet the specifications for their intended purpose to push/pull/operate passenger trains dependably? And if they do, what significance really are their long term operating/maintenance costs versus locomotoves that DO NOT meet the specifications for the purpose they are acquired?

This articleshould be seen as a 101 primer for "The Making of a Government Boondoggle" for the benefit of a monopoltistic corporate entity.
heidelja
4:03PM APR 2ND 2011
This story is somewhat disjointed. On the one hand it appears that it is one of life-cycle costs not being considered in the bidders selection of these locomotives and on the other hand it appears to be one of polluting Tier 2 locos vs lesser polluting Tier 3 locos. Actually, it is more so one fueled by monopoltistic GE Transportation being excluded because its specilized locos for freight train operations do not meet the requirements needed for passenger train operations!

Per a related article I wrote:

"GE, which no longer offers DC locomotives" and which is the only American locomotive provider for freight trains which DO NOT require continuous DC power to power passenger cars, goes on to whine that "the specifications [required for passenger train operation] put vendors of the more-expensive AC equipment [used for freigt trains] at a competitive disadvantage." Further the article correctly states "The main debate hinges on two types of train-engine technology – the older [diesel-electric] DC motors" first developed for streamlined passenger train operations in the 1930s "and newer AC engines [primarily developed during the 1990s to be used to haul heavy coal trains] which experts say are less prone to breakdowns" which could significantly impact long haul freight train operations, especially along single-tracked mainlines!

This dichotomous thinking should only be seen as flack spewed by multi-billion corpoarate GE Marketing and its lobbyists to further monopolize the train locomotive industry in America!

Simply put, criterion one, would be, do the locomotives meet the specifications for their intended purpose to push/pull/operate passenger trains dependably? And if they do, what significance really are their long term operating/maintenance costs versus locomotoves that DO NOT meet the specifications for the purpose they are acquired? This argument should be seen as a 101 primer for "The Making of a Government Boondoggle" for the benefit of a monopoltistic corporate entity.
Concerned brookville citizen
11:02AM FEB 15TH 2011
G.E. and MPI are just jealous because a smaller company like Brookville beat the big dogs this time. Waaww go cry now G.E. and MPI.
Concerned brookville citizen
10:56AM FEB 15TH 2011
G.E. and MPI are just jealous because a smaller company like Brookville beat the big dogs. Waawww go cry now G.E. and MPI. We will wave to you when we drive past in the Brookville Equipment Built South Florida locomotive.
Ironman
11:41PM FEB 12TH 2011
I cant stand this kind of crap. Just put all bidders in a room and pick the best proposal. The crap based on who is closest to the project manager gets in, others are out is whats wrong with government today. I've seen it with my own eyes when the government buys fleets of cars. Its all about what dealership has the best connections, even if someoe else offers the same car for $3k less.

Governmnet is made up of a bunch of morons I have concldued
BM
6:28AM FEB 12TH 2011
Hey what do you expect? It is government after all. I think I would watch who takes trips in the future and watches Dolphin games from luxury suites. Maybe even drive around a new car. I mean we live in the "you scratch my back I scratch yours" world of government?
Chris T
9:24AM FEB 12TH 2011
Why are we spending $100 million on trains that nobody rides in South Florida?
Concerned brookville citizen
11:04AM FEB 15TH 2011
Because BEC makes one damn fine locomotive. haha
Ty
8:13AM FEB 12TH 2011
Typical in South Florida. Why am I not shocked.

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