From the Aug 12 – Aug 18, 2004 issue

News

Bidder End

Loss of Contracting Team Jolts Monorail

by Erica C. Barnett

Last week, far behind schedule and beset by ongoing legal and financial difficulties, Team Monorail--a consortium headed by Canada's Bombardier Corporation--dropped out of the competition to build Seattle's monorail system, leaving just one bidder, the Hitachi-led Cascadia Monorail Company, in the running.

The decision prompted a dizzying and almost instantaneous round of spin from monorail opponents and supporters, including this Pollyannaish statement from Seattle Monorail Project director Joel Horn: "While we had hoped to receive proposals from two contractor teams, from the outset this process has anticipated that eventually we'd be dealing with only one." Opponents like Monorail Recall leader Liv Finne and City Council member Richard Conlin returned the volley, accusing the SMP of moving forward with an illegitimate bidding process. "A single bidder has an enormous opportunity to manipulate the process and dictate their own terms and conditions," Conlin said in a statement Friday. By Monday, Conlin had tempered his rhetoric (though not his sarcasm), noting slyly, "It's pretty hard to do a competitive process when you only have one competitor."

But while the news for the monorail last week was undeniably bad--the fact that only one bidder remains definitely undermines the process of awarding the $1.6 billion contract--there was a tiny silver lining: The agency's strict requirements, which Bombardier and its partners failed to meet, eliminated a team that was clearly unprepared, and possibly unfit, to bid on the project. "Their team fell apart because of their instability, not ours," says SMP board member Cindi Laws.

It's undeniable that Team Monorail has had its share of difficulties, both logistical and financial. In April, the team lost three major partners--Granite Construction, Kiewit Construction, and Wilder Construction--leaving it scrambling to come up with suitable replacements in time for the SMP's August deadline. One of those partners, Granite, was also part of a Bombardier-led team that just finished building a privately funded four-mile monorail line in Las Vegas. The Vegas line was supposed to open last winter, but Bombardier's faulty equipment delayed that date for more than six months--and, under a provision that makes every partner responsible for the mistakes of any one, left Granite on the hook for thousands of dollars in fines.

The SMP's contract includes a similar "joint and several liability" provision. And it requires bidders to secure $500 million in so-called performance bonds, which guarantee that if the project isn't built the companies will pay the agency $500 million. Both provisions are meant to guarantee that taxpayers won't be responsible if the monorail can't be built.

Team Monorail's failure to qualify as a bidder does highlight the SMP's strict financial safeguards, which knocked a financially troubled consortium out of the running--albeit earlier in the process than expected. In that sense, monorail supporters say, the winnowing process worked. "That requirement is there so that they can demonstrate that they're financially sound," SMP board member Cleve Stockmeyer points out. "[A] $500 million [bond] is a huge requirement." Nick Licata, a monorail backer on the council, says it's "in the monorail's interest to set high standards. There's more hoops to jump through and it becomes a tighter project." The real moment of truth, board member Richard Stevenson adds, will come August 16, when Cascadia unveils its proposal. "If we get a good bid back [then], I think that will put the questions to rest."

Hardly: Over at the anti-monorail camp, the loss of Team Monorail carried a far different moral. As Finne put it, "This helps our campaign tremendously. There is no way they can say this is a successful project" with just one bidder standing, Finne insists. "It's just another blow for this deeply flawed project."

barnett@thestranger.com