(The following article by Jere Downs was posted on the Philadelphia Inquirer website on October 15.)
PHILADELPHIA — A federal judge yesterday affirmed SEPTA’s decision last month to choose the second-highest bidder on a $140 million project to rebuild four stations on the Market-Frankford El in West Philadelphia.
Taxpayers will feel the difference because the financially troubled transit agency will spend $1 million more than the lowest bid on the reconstruction between 46th and 60th Streets, U.S. District Judge Thomas N. O’Neill wrote. However, the “public will benefit if the Stations Project is not delayed by further litigation.”
O’Neill noted in his ruling that the injunction sought by the low bidder, Conti Enterprises of New Jersey, would have delayed the completion of the overall reconstruction of the El – a $567 million project stretching from 46th to 69th Streets – by six months or more, until mid-2008.
On Sept. 25, Conti filed a lawsuit seeking to block SEPTA’s $140 million contract award to Market Street Constructors, a partnership of Feasterville’s Neshaminy Constructors and Granite Construction of Watsonville, Calif.
Last May, Conti had bid $139 million on the project, proposing the use of foreign-manufactured steel for about 400 feet of new “third rail” required to power El trains. In contrast, the bid from Market Street Constructors proposed using a stash of U.S.-made steel rail, albeit decades old and found rusting in a New Jersey rail yard.
Conti, a South Plainfield firm, does not have sufficient “taxpayer standing” in Pennsylvania, O’Neill wrote, to pursue the claim in U.S. District Court.
Having presided over a four-day hearing last week on the case, however, O’Neill also addressed the merits of Conti’s claim in his ruling.
Even as SEPTA struggled with its then $41 million budget deficit during the summer, the judge wrote, the agency “reasonably concluded” that federal and state regulators would not grant a waiver to bypass “Buy America” regulations and allow SEPTA to go with the low bid.
Conti also had alleged that SEPTA improperly coached Market Street Constructors, extensively communicating with the firm about its cache of steel after the bids were opened.
O’Neill wrote that such talks “were a part of SEPTA’s due diligence in making its bid selection.” Finally, he concluded that the rusty steel was sound, as two of three experts had testified.
Chris Murphy, a lawyer for Conti, declined comment.
Officials at Market Street Constructors celebrated yesterday.
“We are very pleased and vindicated that the level-playing-field principle, which is the cornerstone of the competitive bidding process, was preserved today,” said Joseph Canuso, chief executive officer of Neshaminy Constructors. “We are very happy.”
SEPTA spokesman Richard Maloney said the agency had gone to “extraordinary lengths to make sure that we did both the legal right thing and the right thing in terms of business. We are very happy that the judge concurred.”