CAHSR Awards Contractor Bid

[Blackwolf]

The California High-Speed Rail Authority made a decision Friday to select a joint-venture group for the first design-build contract of the state's high-speed rail system.
Tutor Perini/Zachry/Parsons, a California-based joint venture, scored the highest of the five contractors who bid on the first portion of the project.

The article goes on further to say:

Tutor Perini/Zachry/Parsons bid $985,142,530 for the design-build contract, which combines project design and construction into a single contract.

That is over $214 million under budget for their quote. The allocated budget for this portion of the design and construction was between $1.2 and $1.8 Billion.

The official press release is here: California High-Speed Rail Authority Announces Bid Results on Central Valley Construction Project (PDF)

 

[Paulus]

Unfortunately said company has a well known history of underbidding with cost overruns.

But history suggests that the transportation agency should proceed with caution: Collectively, 11 major Bay Area projects completed by the construction company since 2000 have cost local government $765 million more than expected, 40 percent above the initial bids, according to a review by The Bay Citizen.
"Tutor is doing the same thing that he has always done: He bids super low, but the project ends up costing a lot more in the end," said Kevin Williams, a former city contract compliance officer who raised concerns about the company's work at San Francisco International Airport. "The reason that he is repeating this on the taxpayers' dime is because he gets away with it."

Run by politically connected CEO Ron Tutor, Tutor-Saliba has continued to win new projects despite attracting both criticism and lawsuits that allege the company drives up the price of projects. At one point, agencies in Los Angeles and San Francisco sought to bar the company from bidding.

The failure to blacklist this company is going to lead to nothing but trouble and bad PR for the high speed rail authority.

Edit: Winning bid had the lowest technical score of all contenders while runner up was only $100M more and had second highest technical score. They're going to get hammered and screwed on this.

 

[Devil's Advocate]

They're going to get hammered and screwed on this.

It might be a little early to predict a complete failure just yet. I read your link with interest but didn't find it as persuasive as it first sounded. You would think that the builder would want the first few phases to go as smoothly as possible in order to keep winning more of the project down the road. Maybe things will be different toward the later phases but hopefully by then California will have adjusted the bidding process to give more weight to the technical side of the equation.

 

[Anderson]

You'd think there would be language in the bid limiting how far over a contractor would be allowed to go before being forced to swallow losses...

 

[Devil's Advocate]

You'd think there would be language in the bid limiting how far over a contractor would be allowed to go before being forced to swallow losses...

Thus you have the change order.