(The following article by Jim Smith was posted on the Philadelphia Daily News website on October 7.)
PHILADELPHIA — A federal judge yesterday began taking testimony on why SEPTA didn’t award the multi-million-dollar Market Street Elevated reconstruction project to the low bidder.
The El project, the largest in the transit agency’s history, was given to Market-Street Constructors, which bid $139.7 million, about $1 million higher than the lowest bidder, Conti Enterprises Inc.
Conti sued SEPTA to win the work demolishing the old elevated train tracks and erecting four stations on Market Street in West Philadelphia.
The heart of the court dispute centers on so-called “Buy America” laws. The job requires the contractor to use about 320 feet of “new” contact rail – the rail that supplies electrical power to the trains. The steel rails cost less than $10,000.
In bidding, Conti and two other companies said they could not get domestically produced rail and would have to buy the rail overseas.
MSC, however, claims it found 22-year-old, but-never-used USA- made rail rusting away in a rail contractor’s yard in North Jersey.
SEPTA investigated and found the rail to meet all contract specifications. SEPTA decided that both federal and Pennsylvania law required that the contract had to be awarded to MSC, lawyers for SEPTA and MSC argued in court yesterday.
SEPTA lawyer Nicholas J. Staffieri said that although the rail that MSC intends to use for the job was made in 1981, “it’s new-contact rail; it’s never been used.”
The rail was made in Steelton, Pa., the lawyer noted. SEPTA sent pieces to a metallurgist for testing, and it was found to meet all contract specifications, Staffieri said.
MSC met the “Buy America” requirements and SEPTA was “bound to accept” MSC’s bid, “even though SEPTA must pay an extra million dollars,” Staffieri asserted.
Lawyers for Conti claim that SEPTA should have sought a waiver of the Buy America legal requirements, since the cost of the rail was such a minor element of the $138.7 million that Conti bid.
In the “public interest,” SEPTA, which is in the midst of a budget crisis, would have saved more than $1 million by using Conti.
And no American jobs would have been lost by procuring the rail oversees, since such rail is no longer made in America, said Conti’s lawyer, Howard M. Cyr.