Losing bidder accuses CTA of rigging rail car deal

SHARE Losing bidder accuses CTA of rigging rail car deal

A train pulls into the Garfield Station in 2012. File Photo. | Brian Jackson~Chicago Sun-Times

The CTA “rigged” a contract for its next generation of rail cars in favor of a Chinese manufacturer who won the deal after “interference” from Mayor Rahm Emanuel, the losing bidder charged Tuesday.

Bombardier Transit Corporation filed a protest with the CTA demanding that the March 9 award to CSR Sifang America Joint Venture be cancelled, that Bombardier be declared the winner, and that Bombardier be given an additional $2 million in expenses.

At issue is a $1.31 billion contract for CSR Sifang America JV to provide up to 847 train cars to the CTA.

CSR Sifang America JV is a joint venture of CRRC Qingdao Sifang Co., which is owned by the Chinese state, and CSR America, which has offices in Chicago.

Its bid was more than $226 million less than that of Bombardier, which has headquarters in Canada and production facilities in New York and Pennsylvania.

In an emailed statement, CTA spokesman Brian Steele said the rail car deal was “was handled the same way every CTA competitive procurement is handled. CTA is confident that all of the procurement processes and applicable laws were followed properly, ensuring a fair and equitable contract award.”

However, in a 51-page protest brief Tuesday, Bombadier charged that CTA structured the deal to give CSR “arbitrary and undisclosed advantages.”

The CSR joint venture had promised to open a plant in Hegewisch and provide local jobs as part of its offer — something Emanuel hailed in a news conference at CTA headquarters about an hour after the CTA board vote on the contract.

Bombardier contended that the CTA “took direction from” Emanuel on the rail car deal and shared “confidential” bid information with the mayor and labor leaders before the contract was approved.

On a Sunday, March 6, three days before the CTA board vote, Emanuel “effectively ‘awarded’ the contract to CSR” by announcing through the mayor’s media office that “The CTA board on Wednesday will award a contract for more than 800 new rail cars” that includes “new jobs, as well as a multi-million-dollar investment in an assembly facility in Chicago,’’ according to the Bombardier protest brief.

The next day, the CTA “rushed” to complete its evaluation of the CSR proposal in time for the Wednesday CTA board meeting, when it presented “incorrect” and “fraudulent” information to the board about CSR, Bombardier charged.

Bombardier contended that CSR’s bid was so “unreasonably low” that it should have been investigated by the CTA, which is required to disqualify any bid whose price is too low.

Emanuel made clear that he wanted the CTA rail car deal to “encourage local job opportunities whenever possible,” Bombardier charged. However, because the contract involved federal funds, only U.S. jobs had to be created as part of the proposal —- not necessarily Chicago ones, Bombardier said.

“Federal law and CTA rules prohibit exactly what happened here; a trade of federal money for local preferences,” wrote Bombardier attorney Theodore Chung of Jones Day.

After the CTA board vote, the CTA dragged its feet in providing Bombardier records it needed to file a protest, the rail car manufacturer charged. It contended it is entitled to $2 million in costs incurred in preparing its original bid and its protest.

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