Building a Good HSR System Requires Looking Beyond Costs Alone
Governor Jerry Brown traveled to San Jose State University today to announce a controversial partnership with Udacity, a private company that would offer remedial education to new college students via massive open online courses. While I profoundly disagree with the proposal, I do agree with Governor Brown chiding reporters for focusing only on the program’s costs in their initial questions of him at the event. And I can find humor in the governor’s comment that this program “costs less than high speed rail.”
What matters most about this online education proposal isn’t its cost, it’s whether or not it will do a good job providing education to California students. And a similar principle holds with the HSR project. What matters most isn’t its cost. What matters is how many people it serves, how much carbon emissions it reduces, and whether it’s built safely, properly, and effectively.
Those factors are also the ones that matter most when it comes to assessing the bids to build the initial construction segment of the HSR project in the Central Valley. But as with the governor’s online course proposal, it is costs that the media has zeroed in on in assessing the first HSR bids:
According to a 161-page instruction book given to the contractors, the detailed price estimates must be “submitted in a sealed container” separate from the rest of the proposal. Next to it must be another sealed envelope with just one page displaying the price tag.
The supporting documents that back up the price figures then must be submitted “in a locked fireproof cabinet” and stored somewhere secure, “with the key held only by the contractor.” If any of the firms’ proposals don’t meet the rail authority’s quality standards, their envelopes with the actual bids won’t ever be opened.
The firms offering the best price stand the best chance. To determine which of the five final firms are awarded the five-year contract in June, the companies will receive a score based 70 percent on cost and 30 percent on quality….
But some outsiders are questioning why the state is taking so long to look at the price, particularly with so many taxpayer dollars on the line and a groundbreaking just months away.
“The process is supposed to be transparent,” said state Sen. Mark DeSaulnier, D-Concord, chairman of the Senate’s transportation committee. “Once the bid is in, it’s in the public domain, and the public needs to (be able to see) what the bids look like, especially on a project like this.”
This is a flawed line of attack on the project from DeSaulnier, the last man standing of the anti-HSR triumvirate now that Joe Simitian and Alan Lowenthal have been termed out of office. As Mike Rosenberg’s article points out, the bids will largely be decided based on price. But to get the best project, it makes sense to have a detailed technical analysis of the proposals, rather than let price obscure those other factors.
Construction experts agree that separating costs and technical matters is a smart way to assess a bid:
“It’s totally appropriate not to look at the price (first) and totally appropriate to look at the technical aspect of it first,” said Ken Gibbs, a Los Angeles-based mediator on construction disputes and co-author of a book on California construction law. “You may wind up comparing apples to oranges if you’re only looking at price.”
But that offends those who believe that the only thing that matters, to the exclusion of all other factors, is sticker price. One has to wonder if these HSR critics are the ones who would buy a car solely based on price and not look at reliability ratings, mileage estimates, cost of ownership, and whether or not it actually meets their needs. A building contractor could save a lot of money by buying a SmartCar rather than an F-350 pickup truck, but they would probably have a hard time hauling materials to a building site.
The California High Speed Rail Authority is handling this the right way. I’m looking forward to seeing how the bids turn out, and of course, looking forward to construction beginning later this year.