METRO moves to second choice contractor; Solutions cost is a moving target

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METRO is no longer negotiating with Washington Group International to build the revised Solutions plan (via the Chron’s Rad Sallee):

Metropolitan Transit Authority officials announced Tuesday they have ended talks with Washington Group International to be prime contractor on four planned light rail lines, saying the two sides were “hundreds of millions” of dollars apart.

Metro now will try to reach an agreement with Parsons Transportation Group, which ranked second among three candidates for the job when WGI was chosen in January 2007, Metro President and CEO Frank Wilson said.

Wilson said WGI will be compensated $77 million for design and engineering work to date, most of which has been paid. He said Parsons will build on that head start, allowing the projects to move forward on schedule.

The Metro board last week approved paying Parsons up to $12 million for work it will perform through December.

Metro announced the change at a hastily called news conference.

Tom Barron, the company’s executive vice president, said, “Our primary objective is to make sure the program doesn’t miss a beat.”

If talks with Parsons break down also, Metro could turn to Fluor Corp., whose proposal had been rated third. Wilson said all three companies are competent to do the job. Meanwhile, he said, WGI’s subcontractors will remain on the job.

Wilson said Metro and WGI were “hundreds of millions” apart on the cost of the project and on how to share various risks that could affect costs — such as delays, inflation, governmental action and unforeseen environmental impacts. The two sides had been in negotiations for a year.

Then there’s this:

Because of the negotiations, Wilson would not reveal what he described as the “constantly moving number” that Metro thinks is fair payment for a contractor to design, build, operate and maintain the North, Southeast, East End and Uptown lines. He also declined to reveal WGI’s cost estimate for the four lines and another estimate prepared for Metro by a consultant, although he said both figures were made known to Parsons.

A financial capacity analysis prepared for Metro this month put the cost of the entire Metro Solutions Phase 2 plan at $2.6 billion. However, that includes a fifth light rail project, the University line, which is longer and likely to be more costly than the others.

It’s like METRO’s pulling numbers out of a hat. For the longest time we heard that METRO solutions would cost $1.2 billion; then it was $2 billion; then recently we learned that the FTA wants METRO to get real, so the number is probably closer to $4 billion (thanks to Neal Meyer’s work on the calculator), and now a METRO report says $2.6 billion.

They have no idea what it’s going to cost.


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Anne Linehan is a co-founder of blogHOUSTON.