Two Contractors Drop Out of Fresno-Bakersfield Bidding
And then there were three:
Two would-be contenders for a contract to design and build the second stretch of a high-speed train line through the San Joaquin Valley have dropped out of the competition, leaving the California High-Speed Rail Authority with three contractors chasing the job.
The withdrawal of the two contracting teams potentially reduces the competitive pressure on the remaining firms bidding for the 65-mile job from Fresno to the Tulare-Kern county line. The state estimates the project’s value at between $1.5 billion and $2 billion.
Rail authority CEO Jeff Morales confirmed last week that two teams sent withdrawal letters to the agency in May. They are:
• California Rail Builders, a joint venture composed of Ferrovial Agroman U.S. Corp. and Granite Construction. Ferrovial is an American subsidiary of Ferrovial S.A., a Spanish company, while Granite Construction is a California company headquartered in Watsonville.
• Skanska-Ames Joint Venture, a team that includes Skanska USA Civil West California District Inc., a subsidiary of Sweden’s Skanska, and Minnesota-based Ames Construction Inc.
The two teams said in their letters that this wasn’t intended as a lack of confidence in the project or the process:
Jose Baraja, a Los Angeles-based representative of Ferrovial Agroman, said in his notice to the rail authority only that “the number of bidders shortlisted resulted in problems moving forward on the project.” Skanska USA Civil’s vice president of operations in Riverside, Jeff Langevin, wrote that his team’s decision was “based on internal business decisions and strategy and not a reflection on the authority or the project.” Both letters indicated that the companies hope to compete for future contracts on the high-speed train system.
So who’s left? There’s three teams still bidding:
• Tutor Perini/Zachry/Parsons, which won the $1 billion contract for the first segment in and to the north of Fresno
• Dragados/Flatiron/Shimmick, with Spain’s Dragados being the centerpiece of that bidding team
• Golden State Rail Partnership, which includes OHL USA and a US-based subsidiary of Samsung.
Tim Sheehan’s article also notes that in a conference call with investors, Tutor Perini CEO Ron Tutor indicated that the fewer bids meant a possibility of greater profit on this second segment. CHSRA CEO Jeff Morales disputed that, of course.
Bids are due in October and the board will make its choice in December. We will see who wins. There was no small amount of controversy last year when Tutor Perini won the first contract, something I’m sure the CHSRA board is keen to avoid this time around.