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LRT Planning: Cutting Corners
by Amy Radil
March 29, 2000
Part of MPR's Session 2000 coverage
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Light Rail's Road

April 13, 1998: The Minnesota Legislature passed a bonding bill with $40 million for LRT along the Hiawatha Corridor.
April 22, 1998: Governor Arne Carlson signed the capital improvements bonding bill with $40 million for construction of the Hiawatha Corridor LRT line, from the Mall of America, to MSP International Airport, through the West Bank of the U of MN, into downtown Minneapolis.
May 1999: State legislators pass a bonding bill that includes $60 million for construction of the Hiawatha Corridor LRT line. State funding makes it possible for Minnesota to receive Federal matching funds for the project.
May 28, 1999 : U.S. House Transportation Appropriations panel approved a bill including $46 million in funding for light rail and $26 million for improvements for Metro Transit.
25 July 1997: House Passes Transportation Bill With $52 million for rapid transit in Twin Cities.
September 1999: Minnesota transportation officials, including Governor Jesse Ventura, Transportation Commissioner Elwin Tinklenberg, and Met Council Chair Ted Mondale send the formal request for $274 million in federal matching funds for the Hiawatha Corridor LRT Line to Washington.
October 1999: U.S. Representative Martin Sabo announced that $43 million had been secured as part of the federal transportation funding package for the Hiawatha LRT line. November 1999: Several legislators detail plans to rescind $60 million in funding already allocated to the Hiawatha Corridor LRT line.
February 7 2000: President Clinton's 2000 budget includes $20 million for the Hiawatha LRT line, virtually assuring Federal matching funds for the project.
March 2000: Federal officials raise concerns about conflicts of interest in naming of project manager without a bidding process.
March 13 2000: House leaders introduce legislation to kill light-rail funding. March 22 2000: House passes transit bill and kills LRT funding.
A House panel examined the allegations of a conflict of interest surrounding the Minneapolis light-rail project Tuesday, and added what critics say are more troubling details to the picture. The Minnesota Department of Transportation and the Metropolitan Council are trying to address Federal Transportation Administration concerns about such a conflict. At the hearing, MnDOT officials admitted they tried to skirt open-bidding rules in order to meet the project's strict deadlines, but they say no infractions occurred.

THE FTA'S CONCERNS about conflicts of interest revolve around the role of two employees of Parsons Brinckerhoff, the firm currently managing the light-rail project for MnDOT and the Metropolitan Council. Both of those employees have since been reassigned to other projects to allay agency concerns. One of them, former interim project director William Stead, told the committee that last year, MnDOT attempted to award a $35 million management contract to his firm without competitive bidding. He says the move was unusual for such a large contract, but he scurried to prepare his firm's proposal. Stead said he knew such a move would also need clearance from the FTA in order for it to help fund the light-rail line.

"You would need to certainly consult with FTA in advance of doing something like this, and that was the responsibility of our grantee Metro Council, Met Transit, and I'm not sure what happened there, I wasn't involved," Steed told the lawmakers.

Stead says his proposal was returned to him unopened and, instead, Parsons Brinckerhoff was asked to serve as interim project manager while MnDOT took competitive bids for permanent management. Stead says MnDOT raised no concerns about his multiple roles in the project.

Ultimately, Parsons Brinckerhoff won the permanent management contract, over the objections of its competitor, Booze-Allen Hamilton. Booze-Allen claimed Parsons had the upper hand because it was already involved with the light-rail line. Kent Allin, assistant commissioner with the state administration department, examined and ultimately rejected the firm's charges.

"One of the things that we were most interested in assessing was whether the Parsons responders had essentially insider information or had any relevant information that wasn't available to the interested parties," said Allin.

But Allin says his department didn't know until Stead's admission before the committee Tuesday that Parsons Brinckerhoff actually prepared the sole-source proposal. He thought his agency dissuaded MnDOT before it made any requests to outside firms. Allin says knowing Stead's full role in light-rail planning would have made his agency more thorough in analyzing Booze-Allen's claims of discrimination in the bidding. "Had we known about the request to prepare the earlier proposal, I'm confident we would have at least asked some additional questions regarding that," he said.

Parsons Brinckerhoff's William Stead says he he was reassured by MnDOT that his role posed no conflict-of-interest problems. He says the light-rail project is progressing well, and he accepted reassignment because the FTA allows no appeals of its decisions.

At the hearing, MnDOT's Richard Stehr said the agency's attempt to work with a single firm was forced by the project's tight deadlines to secure federal funds. "The exercise of going through and exploring whether or not a sole-source contract could be done was driven upon us by, it was June, we needed to finish and submit the preliminary engineering by October," Stehr noted. "A six-month process to get a consultant on board was going to kill the project."

Steps in the process to secure federal funds ultimately raised questions from the very agency MnDOT was trying to impress. Committee chairman Phil Krinkie, a Republican and longtime critic of light rail, says the hearing vindicated his concern that MnDOT cut too many corners in the planning process.

"They knew they were under a time frame to get this project done, they had to meet certain deadlines of time to submit this information to the FTA in order to get a full funding grant agreement, and they went outside the bounds of full and open competition in order to get there," said Krinkie.

To address the FTA's concerns, the Metropolitan Council plans to review all contracts awarded for the $548 million project so far, and to establish more in-house expertise to oversee the project. In addition, the agency may have to re-bid the management contract that led to Stead's reassignment and Booze Allen's protest.