An artist's rendering depicts the California High Speed Rail train leaving the station envisioned for downtown San Jose. (California High Speed Rail Authority)
More than four years after California voters approved a bullet train, the biggest project in state history, sealed envelopes containing the actual cost for the first leg of the high-speed rail line will finally be hand-delivered to state offices this week.
But you won't see the bid prices yet -- and neither will the officials planning the project. They'll be filed away in sealed containers, with the supporting documents locked up in fireproof cabinets.
Five major firms Friday will submit their final bids to build the first 29 miles of train track in the Central Valley, an eagerly anticipated milestone as it will provide the first gauge on whether the project is on pace to meet its $69 billion budget and actually be completed.
But bullet train officials say they will keep the price portion of the bids sealed in separate envelopes, like at the Oscars, while they analyze the quality of the proposals. That process, already delayed from November, could take another two months and is meant to keep state officials from being biased toward the firms with the cheapest bids.
Supporters point out that the practice is common for big projects around the nation.
"This is a major milestone in moving high-speed rail forward and getting underway this summer," Jeff Morales, CEO of the California High-Speed Rail Authority, said in an emailed statement. "It is the industry standard in design-build projects to open bid prices following initial evaluations
as not to skew the process. We are working hard to secure the best possible value for taxpayers."But some outsiders are questioning why the state is taking so long to look at the price, particularly with so many taxpayer dollars on the line and a groundbreaking just months away.
"The process is supposed to be transparent," said state Sen. Mark DeSaulnier, D-Concord, chairman of the Senate's transportation committee. "Once the bid is in, it's in the public domain, and the public needs to (be able to see) what the bids look like, especially on a project like this."
The rail authority has budgeted $1.2 billion to $1.8 billion for the project's initial leg between Madera and Fresno. But the actual prices submitted by firms will prove whether that estimate is accurate -- and could set a precedent for whether the $69 billion estimate is off the mark, as skeptics claim.
The state does not have room to spare, possessing less than a fifth of the money needed to build the full San Francisco-to-Los Angeles rail line.
Rail authority officials are going to great lengths to prevent prematurely revealing the bids.
According to a 161-page instruction book given to the contractors, the detailed price estimates must be "submitted in a sealed container" separate from the rest of the proposal. Next to it must be another sealed envelope with just one page displaying the price tag.
The supporting documents that back up the price figures then must be submitted "in a locked fireproof cabinet" and stored somewhere secure, "with the key held only by the contractor." If any of the firms' proposals don't meet the rail authority's quality standards, their envelopes with the actual bids won't ever be opened.
The firms offering the best price stand the best chance. To determine which of the five final firms are awarded the five-year contract in June, the companies will receive a score based 70 percent on cost and 30 percent on quality.
Each of the finalists, announced last year, are joint ventures, with several of the construction companies and design firms based as far away as Spain and Sweden and as close as California, Nebraska and Texas.
Construction experts say the strategy to look at cost last is common for so-called "design-build" projects that require firms to come up with many of their own building plans. The federal transit and highway administrations use this tactic.
"It's totally appropriate not to look at the price (first) and totally appropriate to look at the technical aspect of it first," said Ken Gibbs, a Los Angeles-based mediator on construction disputes and co-author of a book on California construction law. "You may wind up comparing apples to oranges if you're only looking at price."
Still, bullet train opponents and open government advocates wonder what the harm would be in simply releasing just the cost figures without linking the numbers to the companies.
Terry Francke, general counsel for the open government group Californians Aware, likened it to a house hunter looking for quality and location first and worrying about the price later.
"I don't think they're going to gain anything from not opening the bids," agreed civil engineer Aaron Fukuda, who leads a Central Valley group aimed at keeping the rail authority accountable. It's another indication, he said, that the project "hasn't been very well planned out."
Contact Mike Rosenberg at 408-920-5705. Follow him at twitter.com/RosenbergMerc.
joint ventures vying for high-speed rail contract
California Backbone Builders: Ferrovial Agroman and Acciona (both based in Spain), design firms LAN and Euroestudios, subcontractor Top Grade Construction
California High-Speed Rail Partners: Fluor (Texas), Skanska (Sweden), PCL (Canada), HDR Engineering (Nebraska)
California High-Speed Ventures: Kiewit (Nebraska), Granite Construction (Watsonville) and COMSA EMTE (Spain); design firms HNTB, Gannett Fleming, PROINTEC, ENGEO, Terracon
Dragados/Samsung/Pulice: Joint venture includes Dragados S.A., Samsung, Pulice, C.C. Myers, Jacobs, Stantec, Sener
Tutor Perini/Zachry/Parsons: Tutor Perini (Sylmar), Zachry (Texas) and Parsons (Pasadena)
Source: California High-Speed Rail Authority, company websites
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