Investigate High Speed Rail

Morris Brown
Founder of DERAIL, a grassroots effort against the California high-speed rail Project

First exposed by the LA Times, the recent revelation, that the rules for awarding the first construction bid contract for the California High Speed Rail project were changed in the middle of the process, needs a full blown investigation.

The Authority CEO, Jeff Morales seems to be immersed in a world of his own imagination. His numerous in print statements that the rule changes were “thoughtful and transparent” is completely unbelievable.  How can he make these statements when the rules which were changed by him, were unannounced to the public or the media?  The rule changes are embedded in an Addendum of 150 pages, and involved deleting a couple of sentences. 

At the Authority Board meeting on Thursday, May 2, 2013, CEO Morales said:

“there is no requirement for the board to approve specific provisions of this RFP, or of any construction RFPs”

There is no truth in this statement. The whole bid contract evaluation process was governed by the formal Board approved resolution CHSR# 12-04, which was passed in the Board meeting on March 1 2012.

The first paragraph of resolution 12-04 reads:

Whereas, the California High-Speed Rail Authority (Authority) may enter into design build contracts with private and public entities pursuant to the Public Utilities Code §185036;

Code 185036, vests the Public trust to deliver the project onto the Authority board, which in turn must clearly designate how these powers are to be executed.

The resolution further reads:

The Executive Director/Chief Executive Officer is hereby authorized and directed to make appropriate non-substantive changes to the Construction Package #1 RFP terms contained on the term sheet in consultation with the Board Chair as part of the RFP evaluation and contract negotiation process. 

The rule change is certainly not non-substantive (after all it results in a bidding group which would have been disqualified on technical merit, now being the apparent winner of the contract).  Also, any changes could only be applied to “terms contained on the term sheet”.  The change in the bidding evaluation rules are not on the term sheet.

Clearly CEO Morales did not have the power, without full Board approval, to change the rules regarding the evaluation criteria for who will win a $1 billion construction award, regardless of what ever statements he makes to the contrary.

There is clearly the need for a full blown investigation of what has happened here. Why were the rules changed?  Authority Staff in March 2012 made such a strong presentation that the two phase evaluation plan, was in keeping with best practices and would produce a competitive environment and result in an excellent result for the project. These are the rules which were approved by the Authority Board.

For whatever reason(s), CEO Morales in August 2012 decided to change the rules and did so without getting approval from the Board, which was clearly needed. The press and the public were not alerted to this change either. He should be fired.

The bidding process has been corrupted. It needs to be re-done.

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