Contract conflict creates new concerns for rail project

Contract conflict creates new concerns for rail project
Published: Nov. 19, 2014 at 8:38 PM HST|Updated: Nov. 19, 2014 at 10:43 PM HST
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HONOLULU (HawaiiNewsNow) - There are new concerns with the Honolulu rail project.  The company hired to oversee the work has been bought out by the same business it is supposed to watch over.

Mergers happen.  When it's part of a $5.3 billion public project it raises concerns.

A company called AECOM Technical Corporation was hired to design the second ten miles of the rail track.  Another company, URS Corporation, is supposed to make sure it does the job correctly.  But now AECOM owns URS.

"You don't want to have the fox watching the hen house so to speak. We need to sit down with them to ensure their independence," said Dan Grabauskas, Honolulu Authority for Rapid Transportation (HART) CEO and Executive Director.

AECOM was awarded three design contracts with the City of Honolulu (airport rail station group, airport guideway and city center guideway) totaling $99.2 million.

The URS contract is valued at $63.1 million, according to Hart.

Hart may need to rebind the entire URS contract, which Grabauskas hopes won't add more costs. The company could reorganize. Either way a conflict of interest is a concern.

"We have recognized it as a conflict and we are working to resolve it," said Grabauskas.

"It's sort of part of doing business."

"It's very incestuous. It's one big company and all the sub contractors are part of that one big company,"

said Ann Kobayashi, Honolulu City Councilmember who questioned the rail CEO at a Budget Committee hearing today.

Kobayashi is also concerned about the lack of local companies picked to work on the rail saying the train hasn't delivered what was promised in terms of jobs.

"First it was 17,000 jobs, then 10,000 and here we are at 1,300," said Councilmember Kobayashi.

1,300 is the number of people working on rail right now. Hart says 70 percent of them are local.

They can't give companies contracts just because they're from Hawaii.  That would be against the law.  Also Hart says local companies don't always have the expertise or size to win the larger contracts.

"Maybe a couple of companies that are medium sized could pull together a hui and bid as a team. We're kind of hoping by putting this out in smaller chunks we might actually see more local competition," said Grabauskas. 

"It's very frustrating that this project was touted as a great thing for our economy and it probably will be but not for our local companies," said Kobayashi.

"Our architectural firms, engineering firms, realtors, I mean we have so many good people here."

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