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Metro board adopts cost control plan for Measure R bus, road and rail projects

January 27, 2011 |  4:29 pm

Local transit officials on Thursday adopted a cost control plan for dozens of bus, highway and rail projects called for under Los Angeles County’s latest sales tax to fund transportation improvements.

The action approved by the Los Angeles County Metropolitan Transportation Authority board, would establish a process for preventing, assessing and mitigating cost increases or funding shortfalls should they occur on Measure R projects.

Board members said they were concerned that potential declines in tax revenue or large cost overruns in the future could threaten Metro’s ability to deliver projects that would be paid for with the half-cent sales tax passed by voters in November 2008. Measure R is projected to generate an estimated $40 billion for transportation improvements across the county in the decades ahead.

“If we are not on our tippy toes closely watching the spending, it could threaten projects 20 or 30 years out,” said Los Angeles County Supervisor Gloria Molina, one of several Metro board members who proposed the plan. “We don’t want a bait and switch. We need to deliver on promises made to the voters.”

Over the years, some of Metro’s transit and road projects have experienced significant cost increases due to unforeseen construction problems as well as later additions and changes. More recently, there have been concerns about the first phase of the Expo light rail project, the cost of which has increased from $640 million to more than $900 million.

Though he voted for the plan, Los Angeles County Supervisor and Metro board member Zev Yaroslavsky cautioned that it would require a two-thirds vote of the board to shift Measure R funds between projects to cover cost overruns or funding shortfalls.

In other action Thursday, the Metro board declined to approve a five-year $44,377,000 maintenance contract for elevators and escalators after questions were raised about the agency’s procurement process and the lack of competition for the work. Although a variety of companies perform the service, only Mitsubishi Electric and Electronics USA Inc., the holder of the current contract, bid on the job.

“I am concerned that there is just one bidder on this contract,” said Los Angeles County Supervisor Mark Ridley-Thomas, a Metro board member. “How could there be one bid? A dozen firms engage in this form of work. This tells me that the procurement process is flawed.”

Ridley-Thomas, who has been concerned about sole-source contracts and a lack of competition for contracts, cited a recent Metro audit showing that out of 19,152 procurements in 2009, 2,684 were not competitive. The audit made 11 recommendations to improve the contracting process.

Board members decided to extend the current agreement with Mitsubishi for three months and ordered an independent review to determine why there was so little interest in the elevator contract.

An earlier Metro survey of possible bidders indicated that others were not interested in the job because of the amount of work and the financial penalties they would have to pay for the time elevators and escalators were out of service.

-- Dan Weikel
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