RFP released for 35 Next Gen Locomotives

[Anderson]

Assuming that Siemens has a competent rebuttal to EMD, is there any way that Illinois can turn around and basically say "We find your protest wanting"? Likewise, if EMD's protest were blown off, where could/would the process go from there?

 

[jis]

There is always an appropriate court where EMD could take it next, unfortunately.

 

[Fan Railer]

From what I can see, this does seem like a more viable protest than the hissy fit Alstom threw over Eurostar awarding Siemens the contract for 10 new high speed trains for the Eurotunnel system. That case got thrown out of court multiple times:

https://en.wikipedia.org/wiki/British_Rail_Class_374#Court_Case

It's easy to contest and debate safety regulations; it's hard to argue with physics.

 

[Fan Railer]

Well, would you look at this:

http://www.marketwatch.com/story/caterpillar-loses-locomotive-contract-2014-02-27-184491630

I would really like to see Illinois's response letter, to be honest.

 

[afigg]

Well, would you look at this:

http://www.marketwatch.com/story/caterpillar-loses-locomotive-contract-2014-02-27-184491630

I would really like to see Illinois's response letter, to be honest.

To clarify for those who have not followed the link to the article, the protest from Caterpillar/EMD was rejected and the contract was awarded to Siemens.

"The Illinois Department of Transportation, which handled the bidding process on behalf of California, Washington, Michigan and Missouri, rejected Caterpillar's protest last week, saying Siemens' proposal met the contract's technical and performance requirements. Caterpillar said Wednesday it is considering its options for further appeals."

The article is dated February 27, after the close of business, so I'm a little surprised this was not covered elsewhere in the press today. But it will probably be in the Monday railroad trade press news.

The WSJ article discusses how Caterpillar brought EMD in 2010 and made investments with the goal of establishing a major presence in US passenger locomotive market. They apparently did not count on Siemens making its own big push into the US passenger rail market and undercutting EMD on price by a $1 million a unit. This is a big contract with options for 225 additional locomotives, so Caterpillar may decide to fight, even if it places the contract award at risk of being awarded to anybody.

As for the response from IL and the other state agencies to the protest and on award of the bid, that may be a public document that will get posted.

 

[Ryan]

Excellent news. Let get these babies built and in service.

 

[MattW]

I m surprised, but relieved that that happened so quickly. I expected the lawyers to get involved then drag the process out over the next eleventy dozen years!

 

[afigg]

I m surprised, but relieved that that happened so quickly. I expected the lawyers to get involved then drag the process out over the next eleventy dozen years!

That could still happen. Caterpillar/EMD could go to court claiming that their protest was incorrectly rejected or file an appeal.

 

[rickycourtney]

Right, just because the Illinois Department of Transportation rejected the formal protest... doesn't mean the legal problems are over. Lawyers for Caterpillar/EMD can stretch this process out for months or even years as they exhaust every possible option for appeal (and they can do it even if they have no chance of winning the case!)

I hope they won't... but they probably will.

I guess I didn't realize that Caterpillar made such a huge investment trying to make it into the passenger locomotive... an investment that may all be for not if Siemens gets this contract. This is much more than an order for 32 locomotives to be used on the corridor trains... 225 locomotives for the long-distance routes are also at stake. Remember, Amtrak's orders for the P32-8WH and the Genesis (P40DC, P32AC-DM, and P42DC) locomotives kept GE's production lines humming for a decade.

That being said, we have no idea if Amtrak will actually be able to afford to buy 225 locomotives for the long-distance routes.

 

[Railroad Bill]

Since Caterpillar is an Illinois based company, I am surprised that the state DOT would not favor a contract to them. I would think the state legislators would be under a considerable amount of pressure to help a home grown industry with millions of dollars in business. ?

 

[andersone]

As a former resident of Elmwood, some 30 miles west of Peoria, a town where everyone worked at CAT, I am sorry to see this course of events. I remember what the 78 strike did to the company, and quite honestly I am saddened not to see CAT get the work. They build damn good stuff.

As a federal subcontractor, I am also aware of the protest process. It ain't over til the fat lady sings.

 

[MikefromCrete]

The locomotives would have been built in Munice, IN. at a plant EMD/CAT built in order to fire all their union workers in London, Ont. Apparently Hoosiers don't mind working for lower wages than everybody else. So, Illinois really won't have benefited that much by giving the contract to EMD.

 

[afigg]

Since Caterpillar is an Illinois based company, I am surprised that the state DOT would not favor a contract to them. I would think the state legislators would be under a considerable amount of pressure to help a home grown industry with millions of dollars in business. ?

This is not just an Illinois state procurement, but a multi-state procurement. IL DOT is just acting as the coordinating lead agency. The Evaluation Report that gave higher scores to Siemens for Responsive points, price offer points is for IL DOT, CalTrans, and Washington State DOT (WSDOT). IL is representing the Midwest Coalition of IL, MI, MO. Then the contract is funded by the FRA HSIPR grants and CA state bonds (for a portion of the locomotives allotted to CA).

If were just a state of Illinois contract with the state putting up some or most of the money, then Caterpillar would be able to play the political card by going to state legislators and the Governor and try to undercut the state agency decision process. This is Illinois, after all, which is not exactly a state with a reputation for totally clean government. But as a multi-state procurement with the FRA and Amtrak deeply involved, their political power play options are limited. They can't go to WA and complain about not getting jobs in IL and IN. With the Siemens locomotives to be built in Sacramento, Caterpillar/EMD is not going to get a responsive reception in CA. Caterpillar might try a political play in Congress, but that is a much more complex political terrain.

If Caterpillar/EMD decides to continue to protest the contract award, it will have to be through the accepted legal channels. The problem Caterpillar faces is that Siemens won the evaluation with the most points in each category: contract responsive points, price, and lower life cycle cost. Unless they can show that the points were incorrectly assigned, a judge is not likely to overrule the contract award decision.

 

[Green Maned Lion]

As a former resident of Elmwood, some 30 miles west of Peoria, a town where everyone worked at CAT, I am sorry to see this course of events. I remember what the 78 strike did to the company, and quite honestly I am saddened not to see CAT get the work. They build damn good stuff.

As a federal subcontractor, I am also aware of the protest process. It ain't over til the fat lady sings.

As the (happily former) owner of an otherwise Isuzu truck with a CAT 3126 diesel, I strongly disagree with you. Everything on that truck worked right except the engine and the Allison tranny it drove through. The tranny is out of the preview of this post, but that engine, in no particular order, leaked fuel like nuts, hemoraged (expensive Cat brand only) oil primarily through crankcase blow-by, jettisoned its oil pump once (thank god for self protection!), and shot two HEUI (I called them hooey) pumps in 18 months and 32,000 miles. It was a nice truck with a crappy engine. Oh, and the cool part? The cool part was when the turbo compressor blades shredded, got into the engine, and managed to turn my $28,000 truck engine into something only suitable for maritime applications- generally as a 3/4 ton boat anchor.

 

[gaspeamtrak]

The locomotives would have been built in Munice, IN. at a plant EMD/CAT built in order to fire all their union workers in London, Ont. Apparently Hoosiers don't mind working for lower wages than everybody else. So, Illinois really won't have benefited that much by giving the contract to EMD.

You are so right!

 

[neroden]

That being said, we have no idea if Amtrak will actually be able to afford to buy 225 locomotives for the long-distance routes.

The base order plus the option is sufficient to replace all regularly used road power except the dual-modes at Albany (which would need a different contract anyway). The remaining fleet would be "road switchers" and backups. I seriously doubt that Amtrak is going to exercise the entire option, certainly not all at once. By the time Amtrak has funded part of the option, technology may have changed and it may be desirable to put out a new bid. It would also, frankly, make more sense to order new dual-modes (not just to replace the fleet at Albany, but to get rid of those engine changes at DC, Harrisburg, and New Haven).

If Caterpillar/EMD decides to continue to protest the contract award, it will have to be through the accepted legal channels. The problem Caterpillar faces is that Siemens won the evaluation with the most points in each category: contract responsive points, price, and lower life cycle cost. Unless they can show that the points were incorrectly assigned, a judge is not likely to overrule the contract award decision.

Worse for Caterpillar and EMD, if they cause too much delay by protesting, they will generate ill-will at Illinois DOT. Which I wouldn't do if I were them.

 

[PRR 60]

...

If Caterpillar/EMD decides to continue to protest the contract award, it will have to be through the accepted legal channels. The problem Caterpillar faces is that Siemens won the evaluation with the most points in each category: contract responsive points, price, and lower life cycle cost. Unless they can show that the points were incorrectly assigned, a judge is not likely to overrule the contract award decision.

That is not the situation. The 125mph capability was a firm yes/no requirement of the bid. A product that does not meet the 125mph requirement is disqualified from further consideration. If EMD can show that the product specified by Siemens does not meet the 125mph requirement gatekeeper, then a judge can void the award.

 

[afigg]

...

If Caterpillar/EMD decides to continue to protest the contract award, it will have to be through the accepted legal channels. The problem Caterpillar faces is that Siemens won the evaluation with the most points in each category: contract responsive points, price, and lower life cycle cost. Unless they can show that the points were incorrectly assigned, a judge is not likely to overrule the contract award decision.

That is not the situation. The 125mph capability was a firm yes/no requirement of the bid. A product that does not meet the 125mph requirement is disqualified from further consideration. If EMD can show that the product specified by Siemens does not meet the 125mph requirement gatekeeper, then a judge can void the award.

Which is essentially what I wrote. If the Siemens proposal is not compliant with the performance specifications, then the contract responsive points were not correctly applied and Siemens would lose the contract. The technical reviewers of the three bids determined that the Siemens proposal met the speed requirements, so EMD has an uphill fight here.

 

[Trogdor]

It would also, frankly, make more sense to order new dual-modes (not just to replace the fleet at Albany, but to get rid of those engine changes at DC, Harrisburg, and New Haven).

No it wouldn't.

The equipment rotation would be an absolute mess to try and keep all the locomotives separate based on whether they operate on trains that run through into non-electric territory vs. those that just stay on the NEC spine. Plus, you already have all the ACS-64s coming anyway.

 

[PRR 60]

My comment was directed at this statement:

...The problem Caterpillar faces is that Siemens won the evaluation with the most points in each category: contract responsive points, price, and lower life cycle cost. Unless they can show that the points were incorrectly assigned, a judge is not likely to overrule the contract award decision.

EMD's ability to prevail in an appeal does not depend on how scoring points were assigned for the items you mentioned and will not be impacted by the relative scores of the Siemens and EMD bids. The EMD complaint is focused on one issue and one issue only: the pass/fail requirement that the locomotive be a capable of 125mph. A pass/fail requirement is a gatekeeper. It is not scored for review. You either meet it or you don't. If you meet it, then the scoring in other areas becomes relevant. A bid that fails a pass/fail requirement is rejected without further review.

IDOT has found the Siemans product meets the 125mph capability and therefore is compliant. Scoring was then applied for bid comparison. EMD is claiming that the Siemens bid was not compliant and should have been rejected outright. If EMD appeals in the legal system, the burden of proof will be on EMD to show that the IDOT assessment of 125mph compliance was wrong. If EMD's arguments are not persuasive, then it's game over. However, if EMD shows to the court's satisfaction that the Siemens product does not meet the 125mph requirement, then it's a new ballgame. The court will find that the Siemens bid should not have proceeded to scoring at all. No matter how well the Siemens bid scored in other areas, the Siemens bid will be tossed.

 

[rickycourtney]

That being said, we have no idea if Amtrak will actually be able to afford to buy 225 locomotives for the long-distance routes.

The base order plus the option is sufficient to replace all regularly used road power except the dual-modes at Albany (which would need a different contract anyway). The remaining fleet would be "road switchers" and backups. I seriously doubt that Amtrak is going to exercise the entire option, certainly not all at once. By the time Amtrak has funded part of the option, technology may have changed and it may be desirable to put out a new bid. It would also, frankly, make more sense to order new dual-modes (not just to replace the fleet at Albany, but to get rid of those engine changes at DC, Harrisburg, and New Haven).

I don't see why Amtrak wouldn't want to replace their entire fleet of Diesels with just one model. Having a high parts commonality saves money during maintenance.

Consider, that the bulk of Amtrak's road power is just one model... the P42DC (205 active), along with it's older sister the P40DC (25 active, all rebuilt to be like the P42DC) and the prototype P32-8WH (18 active).

 

[cirdan]

Perhaps I should have said "Retro" styling… A modern engine, but with a updated Retro look. Not a replica of an old engine, but more of a throwback design.

Was it Ford that went with a classic retro style on the Thunderbird, yet it was quite stylish and modern looking. Just a reminder of the classic 1960s models...

I was thinking a modern railroad engine, with a classic streamlined front hood and windshield.

With a bit of imagination you could say the Genesis locomotive already does that.

 

[cirdan]

Worse for Caterpillar and EMD, if they cause too much delay by protesting, they will generate ill-will at Illinois DOT. Which I wouldn't do if I were them.

The stuff that gets into the news in this type of situation is usually only a very small part of the whole story.

Corporations like CAT and Siemens know very well where they can win and where they can't and don't throw good money after bad opening lawsuits out of spite.

But they may sometimes have to go through the motions because that is something shareholders expect they will do, and no senior managers want to be accused of neglecting their duty.

 

[cirdan]

...

If Caterpillar/EMD decides to continue to protest the contract award, it will have to be through the accepted legal channels. The problem Caterpillar faces is that Siemens won the evaluation with the most points in each category: contract responsive points, price, and lower life cycle cost. Unless they can show that the points were incorrectly assigned, a judge is not likely to overrule the contract award decision.

That is not the situation. The 125mph capability was a firm yes/no requirement of the bid. A product that does not meet the 125mph requirement is disqualified from further consideration. If EMD can show that the product specified by Siemens does not meet the 125mph requirement gatekeeper, then a judge can void the award.

Even after a contract is awarded, there is room for further negotiation. They could thus simply ask Siemens to make some modifications to the design to make it fulfill those requirements

 

[engr08]

If Siemens can produce the motor that can go 125mph they should really look into building a dual mode motor for New York State. With the money being poured into high speed rail up there it would be foolish not to. It would be in Amtrak best interest to try to move away from the third rail system coming into Penn Station and use the overhead system. It reduce the gapping situation where you lose third and youre just gliding until you pick it back up, with a stead flow of power going with the overhead system.