METRO Names New Contractor for METRO Solutions
Tuesday, April 29, 2008 7:12 PM
Calling it a planned detour on an off-ramp, METRO released Washington Group International (WGI) as its lead facility provider and today named Parsons Transportation Group as its new lead contractor, tasked to do $12 million of work on three light-rail lines by December.
Frank J. Wilson, METRO's president and CEO, said at a news conference that there were a number of reasons for this difficult decision, including WGI's failure to deliver an acceptable and reasonable price for the next phase of construction and its failure to deliver on promises made in its original proposal. WGI also showed a lack of sensitivity to the local small business community, which Wilson said he intends to make right.
"This is neither a setback nor a surprise," said Wilson. "We expect a seamless transition between WGI and Parsons Group with no loss of time and effort. This change does not impact our program schedules, does not impact the program quality."
Wilson said all the development work has been completed by WGI. The work - $77 million in contracts - is now product and property of METRO. WGI has been directed to keep all the subcontractors - about 150 - intact and working.
Wilson said that a contingency had been built into the contract with WGI so that both parties would have go-forward options at the end of a major phase. "We've not been offered a price that we believe is reasonable and justifiable. After a year...it was time to move on," said Wilson.
Asked if Parsons were second choice for METRO, Wilson replied that the three engineering and construction firms that had bid for METRO Solutions work were all world-class firms, and it was like having three first-round draft choices.
WGI was dropped because "they did not come around on the key principles. They lost the lottery ticket," said Wilson. "We are not going to buckle under a price we don't think is right. Fortunately, we anticipated it. Fortunately, we did our homework."
WGI's relationship with the small and disadvantaged business community and its lack of communication required damage control by METRO, said Wilson. For example, some contractors were told to go home because there was no more work, when in fact, that wasn't true.
"It took weeks for the message to get communicated properly," said Wilson. "We're going to have to do a much better job of communicating and of relating (to small businesses)."
In contrast, Wilson said Parsons understands how to manage a small business program, pointing to the company's experience in Houston of both its airports in which Parsons doubled the required small business participation goal.
Wilson said this change in contractors would not derail METRO's schedule of completing five light-rail lines by 2012, and pointed out the following achievements that indicate METRO is on schedule:
- The Federal Transit Administration (FTA) has authorized METRO to go ahead with the engineering of the North and Southeast light-rail lines.
- The FTA has approved public hearings on the updated environmental impact statement.
- The FTA has committed to reissue its Record of Decision - final approval for North and Southeast lines by July 3.
"We'll have hearings in May. If we're done in July, and we believe we will be, then in September, we'll start up with the North and Southeast lines. It's very doable," said Wilson. "We're on track, including the cooperation of the FTA."
Although Parsons Group has not signed a deal with METRO yet, Wilson said that's expected. "We have good indication that we're in hot pursuit of that," he said.
Parsons will be giving METRO milestones, pricing out different pieces until it arrives at the total cost. "We expect them to take appropriate risk," said Wilson, adding that METRO does not make a practice of negotiating terms, contracts and prices in public.
A price can change within hours during negotiations, said Wilson, and much of it depends on which party is willing to assume more risk.
"We're tracking exactly what we want. We built a decision point, and we've made one. We're just not sticking to the same contractor, but we are where we want to be," said Wilson.
In fact, tomorrow, METRO will be reviewing five bids on new rail cars.