Bidders object to Sound Transit's pick for rail project, threaten suit

Frank Coluccio Construction and Gary Merlino Construction say they have built most of the streets and underground utilities in Seattle over the past half-century. Last year, Merlino completed Sound Transit's new streetcar line in downtown Tacoma.

But their experience didn't persuade the agency to hire the two firms for the Link light-rail project in the Rainier Valley.

Coluccio and Merlino, in a joint venture named Rainier Valley Constructors, have formally protested the agency's choice of a competing team, RCI-Herzog, to build the 4.3-mile project. Sound Transit's finance committee voted to recommend the $128.3 million deal yesterday, subject to final approval from the executive board.

Frank Coluccio, who founded his firm in 1953, called yesterday's meeting "a kangaroo court" after committee Chairman Kevin Phelps, of Tacoma, wouldn't let Coluccio's team testify. The committee policy is to allow public comment only for issues where the finance group has final responsibility.

Rainier Valley Constructors said Sound Transit fumbled its own bid-evaluation process, a "best-value" system that scores and ranks the teams on cost, schedule, diversity and community outreach, rather than simply choosing the cheapest qualified bidder.

"If we're not successful here, we're going to seek an injunction," said the group's attorney, Arnold Hedeen.

The team tentatively chosen is made up of Missouri-based Herzog Contracting and Sumner-based Robison Construction Inc. (RCI). Herzog has built light rail in San Diego, Los Angeles, Long Beach, Baltimore and Tampa, Fla. The founder of RCI is Mark Robison, a native Hawaiian who won an award last year from the University of Washington Business School for having the state's "Largest Asian Pacific Islander Owned Business."

The group ranked high in diversity, proving it will spend at least 15 percent of its money on subcontractors with ethnic-minority, female and disabled owners, with a goal of 20 percent, according to a staff report from Link director Ahmad Fazel. Fazel's report warned that delays in awarding the contract would mean missing the 2004 construction season.

Rainier Valley Constructors' executives said there's no rush, since Sound Transit hasn't bought all its land. They argued in protest letters and interviews that:

• Sound Transit held private negotiations with RCI-Herzog on Dec. 12, after the bids were opened, and therefore the agency is legally obliged to take a "best and final offer" from each of the five bidding teams.

A round of final offers might drive down the cost by $5 million, Hedeen said.

Fazel said the talks were meant only to confirm that the RCI-Herzog price, of $128.3 million, included all required services.

"Before an award of a contract over $100 million is made, it's only reasonable that we have protected the interests of Sound Transit by asking the right questions," he said.

• The RCI-Herzog bid would force taxpayers to spend an additional $1.7 million to $2 million. This is because RCI-Herzog, which is nonunion, will reimburse labor unions' benefit funds for money the unions would receive in a union job. If that happens, the bid of $129.8 million from Rainier would be lower.

Gary Merlino, a former cement mason, sounds puzzled by Sound Transit's preference for a builder with extensive rail credentials, since about 90 percent of the valley tasks involve rebuilding roads, sidewalks and utilities.

"This is a street job, it's not a rail job," Merlino said.

Sound Transit evaluators found the Rainier team's proposal lacked details and added: "knowledge of Rainier Valley and fragility of Valley not reflected in approach."

"It's insulting to make a comment like that," said Joe Coluccio, vice president of the family firm, which sits on the light-rail route at Martin Luther King Jr. Way South. "We know this better than anyone. They're rewarding people who are talking the talk instead of people walking the walk for 50 years."

More than 400 homes and businesses border the line, and dozens are being displaced or relocated.

Coluccio formerly supported an activist group called "Save Our Valley," which unsuccessfully demanded a light-rail tunnel. Save Our Valley went on to lose a federal discrimination suit alleging that Sound Transit was giving lower-income residents surface tracks while proposing tunnels in the city's north end.

Hedeen, the Rainier Valley Constructors lawyer, accused Sound Transit of spinning the numbers so its preferred bid sounds like a great bargain.

Sound Transit announced last week that RCI-Herzog bid $30 million below the budget of $160 million, hailing that as good news for Link and taxpayers.

However, the $160 million refers to an "upset amount" at which all the bids would be tossed out. The bid teams were told the job was worth $110 million to $130 million.

If contingency funds are counted, the proposed contract would max out at $144 million. Sound Transit's monthly progress report from October lists the job at $141 million.

Transit spokesman Geoff Patrick called the lower numbers "a range, put out solely to provide a ballpark sense of the scope of the procurement."

Agency engineers estimated the likely cost at $158 million, he said.Mike Lindblom: 206-515-5631 or mlindblom@seattletimes.com