About a year after awarding a $63 million contract to engineering firm URS Corp. — and some $6 million spent so far under the deal — rail officials have canceled the agreement due to a relatively new, unforeseen conflict involving the work that URS was hired to oversee.
Despite the cancellation, rail officials this week said that the taxpayer dollars used for URS’ services, abbreviated though they were, ultimately went to good use for Oahu’s transit project.
Putting the oversight contract back "on the street" for other companies to bid could save several million dollars on that remaining work, rail’s top executive asserted, although he couldn’t say exactly how much.
Even with potential savings there, the overall rail project still faces a daunting budget gap of up to $910 million. Those overseeing it still don’t know exactly how they’ll close that gap or ultimately how much the project will cost to complete.
In January 2014 the Honolulu Authority for Rapid Transportation hired San Francisco-based URS to serve as what’s described as a "construction, engineering and inspection consultant" for the final 10 miles of the rail project heading into town.
On Friday, HART Executive Director Dan Grabauskas described URS’ role as "boots-on-the-ground consultants" who would assure the quality of other companies hired to do design and engineering work, including AECOM Technical Services.
Los Angeles-based AECOM has received five Honolulu rail-related contracts totaling some $105 million, according to an official city tally. That includes nearly $93 million in design and engineering work along rail’s final 10-mile stretch into town.
However, in October AECOM purchased its global rival, URS. The move set up a potential conflict for Oahu’s rail project. Under the merger, workers from the same company would now be monitoring their own colleagues to ensure quality on the city’s behalf.
Grabauskas said Friday that HART didn’t know the merger would happen when it awarded the contract 10 months prior.
Officials at URS’ Honolulu offices could not be reached for comment late Friday.
According to Grabauskas, after the merger the firm suggested setting up a "firewall" in which company employees working on design and engineering and those handling the oversight would be isolated from each other.
Grabauskas said such an idea wouldn’t work. Then, in a letter sent to URS Vice President Brian Norris earlier this week, Grabauskas formally ended the contract.
"Firewalls can work for a limited time and for a limited-scope-type of activities. This is a huge scope, big contract, that’s going to go over multiple years," and it’s unlikely that such a barrier would hold over the long term, Grabauskas said Friday. "I shot that down."
URS will continue to provide oversight in the short term using that firewall approach until HART can find a replacement, according to Grabauskas’ Tuesday letter.
Grabauskas added that HART was able to end the contract based on its terms without the city being vulnerable to any claims or legal challenges. Despite the conflict created by the merger, URS did "excellent" work, he said.
The company will not be allowed to bid when the request for a replacement goes out sometime in the next couple of weeks, Grabauskas added.
Briefing members of the City Council on Friday, Grabauskas said URS’ eventual replacement would likely have less oversight to do, and so the project would save money on that work. There would be less oversight because HART is repackaging rail’s remaining construction contracts in hopes of making them less costly to complete, Grabauskas explained.
Despite his optimism there, some on the Council continued to express deep concerns about how the ballooning costs of the project and the best way to confront them have been portrayed to the public.
Ann Kobayashi, the Council’s budget chairwoman and a frequent critic of how rail has progressed, said that transit leaders have been lobbying to extend the rail tax for varying reasons at different times. Sometimes it’s to close the budget gap, other times it’s to fund future operations and route extensions, she said.
"I think we have to get our stories straight, and you have to go back to what was voted on," Kobayashi told Grabauskas, referring to the original intent for rail to end at the University of Hawaii at Manoa campus. "Because that’s what counts in the public’s eye."
