One contractor calls it a “beauty contest.” After years of delay, community protests, and changes of plan, Sound Transit is finally starting to award contracts to build its 14-mile light-rail line from downtown Seattle to Tukwila. The agency is near approval of a bid on the Rainier Valley portion of the lineat 4.8 miles, a huge chunk and the most controversial. Wouldn’t you know, the bidding process has been anything but simple.
Even though the estimated cost of the line is three-quarters of a billion dollars more than what was originally planned for the longer, 21-mile line first envisioned, Sound Transit opted against the conventional bid process, whereby the contractor with the lowest price wins. Instead, Sound Transit asked the five general contractors vying for the Rainier Valley work to submit bids that meet social goals as well as financial ones. Consequently, the contractors have spent many months and hundreds of thousands of dollars trying to show that they can “be a good neighbor” and “promote community confidence.” That’s how the tentative winner, a joint venture known as RCI-Herzog, puts it in its proposal to Sound Transit. Now that Sound Transit’s search committee has recommended RCI-Herzog for the job, with the agency’s board expected to vote on the matter Jan. 15, other contractors, labor groups, and community leaders have begun to scrutinize the choice.
THE RAINIER VALLEY has long been a problem for Sound Transit. In the early 1990s, Seattle politicians insisted on routing the train through the Rainier Valley as a way to spur economic development. But the rail line wasn’t necessarily good news for a number of small, predominantly immigrant- and minority-owned businesses that were already springing up in the areamany of which would be displaced by construction. Those businesses and residents who were unhappy that the train would be running at street level, rather than underground or overhead, banded together to protest.
Sound Transit has been keenly aware that it has a “huge community relations problem,” says King County Council member and Sound Transit skeptic Rob McKenna, who nevertheless served on the agency’s board for six years. The agency has, he says, “had staff who did almost nothing but work with businesses and citizens of the Rainier Valley to win them over.”
Now Sound Transit appears to be enlisting the help of the actual contractors. Agency spokesperson Geoff Patrick says “sensitivity around community impacts is the No. 1 reason we chose ‘best value procurement,'” the formal name for its multifaceted bidding process. Using a point system, Sound Transit graded bids half on cost and half on an array of eight other criteria. Some relate to nuts-and-bolts issues, like the ability of contractors to coordinate among various partners in relocating utility lines while widening Martin Luther King Jr. Way South, the designated route. Other criteria, namely community-outreach and workforce-diversity programs, seem designed to create goodwill in the Rainier Valley.
Accordingly, after the request for proposals went out last spring, the contractors fanned out, holding meetings about job opportunities, contacting locals about potential concerns, and generally building up their street credibility in a way that they could document in their 200-page proposals. California-based Stacy and Witbeck, one contractor vying for the job, had up to 10 staffers working full time on its bid over a five-month period, according to project manager Bill Bruce. Among its outreach efforts: mentoring a dozen minority-owned subcontractors.
ANOTHER CONTENDER, a joint venture of two Seattle companies going by the name Rainier Valley Constructors, hired two public- relations firms, according to Liz Rhea, a project manager for the venture. It also sought out every community business it could possibly involve in the project, from auto body garages that could change tires to noodle shops that could supply workers with lunch. And it discussed ways of recruiting employees from the community who weren’t trained in construction. The joint venture proposed to send them to Seattle Vocational Institute for training. “We even talked about having a liaison who spoke a lot of different languages, who would be at street corners to help people understand construction signs,” Rhea says. She estimates the months-long effort of putting the bid together cost upward of half a million dollars.
Seemingly frustrated by losing the bid after all that work, Rainier Valley Constructors last week submitted a letter of protest to Sound Transit over its recommendation of RCI-Herzog. Rainier Valley Constructors contends, among other gripes, that Sound Transit improperly negotiated with RCI-Herzog after the bids were in, without giving other firms the same opportunity. Sound Transit declines to comment at this stage.
MEANWHILE, African-American leaders are agitating for information on RCI- Herzog’s plans for using African-American subcontractors. The use of such subcontractors was a bone of contention in Sound Transit’s first two contract awards, to Kiewit Pacific Company, which had planned on giving up to 14 percent of its work to minority subcontractors but only eight-tenths of 1 percent to specifically African-American subcontractors. (It has since promised to give 3.5 percent of the work to African-American subcontractors.) Eddie Rye of the Black Contractors Coalition complains about a “gag order” on RCI-Herzog’s bid before the board vote. “We want to find out what we’re going to be voting on,” he says.
At the same time, it has raised eyebrows in some circles that Sumner-based RCI Construction is an “open shop” that only occasionally uses union labor, while its partner, Herzog Contracting Corp., is based not locally but in Missouri. Unions, among others, want the work to go to local union labor, with extensive opportunities for apprenticeship and training. Such factors were spelled out in a “project labor agreement” negotiated years ago by Sound Transit and labor groups, but a subsequent executive order by President Bush prevents the agency from mandating such an agreement, although Sound Transit has applied for a waiver. So now unions such as the International Union of Operating Engineers Local 302 are requesting that RCI-Herzog voluntarily sign the project labor agreement. (Regardless, contractors on the project are obliged to pay “prevailing wages.”)
RCI Herzog declines to say whether it intends to sign the project labor agreement, or to discuss any details of its bid before formal approval by Sound Transit’s board, citing a confidentiality agreement. But a portion of its proposal that was disseminated by Sound Transit to interested parties, and which Seattle Weekly reviewed, discusses the project labor agreement as a given. It also promises a goal of allocating 20 percent of its work to minority-owned, women-owned, and disadvantaged subcontractors8 percent higher than the goal expressed by Sound Transit. In fact, as the proposal takes pains to stress, RCI is minority-owned: Mark Robison is a native Hawaiian. Kevin Walker, vice president of RCI-Herzog, calls RCI the “largest minority-owned business in the Northwest.”
LIKE ITS PEERS, RCI-Herzog tried to beef up its PR with a “community outreach team” based in the Rainier Valley, called Doris Lock and Associates, according to its proposal. One team member walked door to door along Martin Luther King Jr. Way. The proposal speaks of the need to “display compassion and sensitivity” to Rainier Valley constituents and to “understand the level of frustration and anger at being negatively impacted.”
Was RCI-Herzog’s ability to feel the Rainier Valley’s pain the deciding factor? Sound Transit isn’t saying. But guess what? In spite of all the cost-adding social values stressed by the agency, the putative winner had the lowest bid. RCI-Herzog is offering to do the job for $128 million$30 million under budget.