After decades of planning, the Metropolitan Transportation Authority is finally set to award a $1.6 billion contract for the first phase of the Westside subway extension. But it appears that nothing on this project can happen without controversy.
One of the losing bidders, Dragados USA, is crying foul over the contracting process. In a letter to MTA board member Don Knabe, Dragados pointed out that its $1.4 billion bid is $192 million lower than the winning proposal, submitted by Skanska. Dragados also leveled accusations at MTA staffer Dennis Mori, accusing him of being "openly hostile, aggressive and even verbally abusive" to the Dragados team.
The MTA is investigating Dragados' allegations, said spokesman Marc Littman. However, he added that the MTA staff "stands behind its recommendation." An MTA committee is expected to consider the recommendation to award the contract to Skanska on Thursday.
The first phase of the Wilshire subway extension will run from the current terminus at Western Avenue to La Cienega Boulevard, a distance of 3.9 miles. The project is scheduled for completion in October 2024.
Skanska ranked higher than Dragados and a third bidder, Westside Transit Partners, even though Skanska offered the highest price. The MTA staff scored Skanska's bid highly for its technical expertise and its project management team.
The staff ranked Dragados last, alleged that Dragados' team lacked rail transit experience, and seemed unfamiliar with the specifications of the project. That prompted a strong response from Dragados, which considers itself the "global leader" in infrastructure tunneling.
"Our brand has been questioned," said Chris Ward, Dragados' executive vice president of major projects, in an interview. "This is a company that’s built 858 miles of subway tunnels around the world, and you’re gonna say we don’t know how to do it? That’s a tough one."
Dragados has suffered a blow to its reputation recently due to a troubled underground highway project in Seattle. Last December, the firm's tunnel boring machine broke down. The machine has been stuck underground since then, and officials estimate it will not get moving again until sometime next year.
The Seattle project was not mentioned in MTA's report, and it was unclear whether it factored into officials' decision to recommend Skanska. Ward defended the company's handling of the issues there.
"Dragados' business model is that even in the face of enormous challenges, like Seattle, we stick with the owner and deliver the project and don’t go to litigation," he said.
It remains unclear whether Dragados intends to file a formal protest, or go to court, on the Westside subway project. However, Dragados' letter is unusually personal, faulting MTA staffer Mori for his "belligerence and aggressiveness" in directing the contracting process. Among other accusations, the letter alleges that Mori unfairly barred Dragados from submitting innovative design proposals.
Skanska is currently working on two other MTA projects — the Expo Line Phase 2 extension to Santa Monica and the downtown subway project, which is known as the Regional Connector. Dragados noted that its own bid for the Regional Connector contract was $80 million cheaper than Skanska's winning bid.
Dragados also warned that MTA was "putting all [its] eggs in one basket" by picking Skanska for all three projects. The firm noted that the same Skanska project manager, Mike Aparicio, will oversee both the Regional Connector and the Westside subway simultaneously.
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"It is impossible for even the best project manager to dedicate 100% of his or her focus on a project when his or her time is split between multiple projects of this magnitude," wrote Alejandro Canga Botteghelz, president of the West Coast division of Dragados USA.
Noting that the contract has not yet been awarded, Skanska declined to respond in detail to Dragados' claims.
"We respect the owner’s process for awarding contracts of this size and await approval and notice to proceed," Skanska spokesman Jay Weisberger said in an email. "Skanska carefully evaluates any project pursuit and often teams with joint venture partners to ensure any project we propose on can be properly managed and staffed from start to completion."
A representative of Westside Transit Partners, which ranked second, said the firm is "evaluating" the process and had not decided whether to raise objections.