A $299-million contract to purchase 78 new light rail vehicles from Kinkisharyo International LLC, was approved Monday afternoon by the Metro Board of Directors on a 8-to-1 vote.
The approval is pending resolution of two protests filed with Metro by firms that did not win the bid as well as no negative responses from the Federal Transit Administration before the protests are resolved.
The contract also includes four options to buy another 157 light rail vehicles for $591 million for a total contract value of $890 million for 235 new rail cars. Metro staff had recommended Kinkisharyo after spending the past year evaluating bids.
Board member Jose Huizar, a member of the City Council, voted against the contract and board member Richard Katz abstained. Members Gloria Molina and Mark Ridley-Thomas, both county supervisors, were absent and the board chair, Mayor Antonio Villaraigosa, could not participate in the discussion due to a conflict of interest.
Metro CEO Art Leahy opened the special board meeting by saying that agency has fallen several years behind its procurement of new rail light rail vehicles and that the agency does not have enough vehicles at this time to operate the second phase of the Expo Line and the Gold Line Foothill Extension. Both projects are under construction and could be complete by 2015.
An effort to buy 100 new rail cars ended in late 2009 when a potential deal with another manufacturer fell apart.
Under the new contract with Kin-kisharyo, 28 of the new rail cars are scheduled to be delivered by 2015 and a total of 62 by May 2016. If the four options are fulfilled, the delivery of the 235 total rail cars would be complete by February 2020.
The new rail cars will also replace 69 aging vehicles currently in use on the Blue Line.
Kinkisharyo International LLC is based in Massachusetts and is a subsidiary of Kinki Sharyo Company of Osaka. The firm, according to Metro staff, has been awarded 15 contracts in the U.S. to build 684 light rail vehicles, including recent contracts to supply rail lines in Phoenix, Dallas and Seattle.
The other two firms — Siemens Industry Inc., and CAF USA Inc. — bid on the contract, and both filed protests with Metro after agency staff recommended Kinkisharyo. Siemens officials and many members of the public who testified to the board said that the Siemens bid would create more U.S. jobs.
Using federal guidelines to evaluate the bids, Metro staff concluded that the Kinkisharyo bid would create about $138.8 million in U.S. job value and the Siemens bid would create about $140.6 million. Current federal rules prohibit local transit agencies from considering local job creation in rail car contracts — the rules are intended to prevent local transit agencies from potentially using federal funds to take jobs from other cities in the U.S.
Metro is planning to secure $240 million in federal funds to help pay for the new rail cars.
Metro staff also concluded that Kinkisharyo:
• Presents the lowest risk to the delivery schedule of the new light rail cars.
• Offers the best technical proposal for all rail car systems, overall car design and integration.
• Has the best program management team by experience and resource capability in the U.S.
• Will create a high value of new U.S. jobs, and will move manufacturing of option vehicle car shells to the U.S.
AFL-CIO Position
In a full-page ad in the April 30 issue of Downtown News, the Los Angeles County Federation of Labor, AFL-CIO, quoted a Reuters article about the 20th anniversary of the L.A. Riots: “A visit to Florence and Normandy today … suggests that while some things have changed, a lot more has remained the same … Unemployment remains rampant.”
The ad reads, “Los Angeles. 2012. You have one billion dollars in public money to buy railcars for our public transportation system. Do you use it to create jobs here in America … or in Japan?
“MTA staff are saying ‘no’ to American jbs. They want to build our railcars chiefly in Osaka, Japan.
“It’s not too late to stop them. A proposal from Siemens Inc. will create 1,122 American jobs and open a factory in our communities.
“MTA Board, override the staff recommendation. Let’s create jobs in our communities with our tax dollars.”