The MTA awarded a big contract Monday to build rail cars, such as these on… (Damian Dovarganes / AP Photo )
It is in the nature of politicians to keep making the same mistakes over and over again, especially if they're the kind of mistakes favored by a lawmaker's key financial backers. Yet the award of an important rail-car contract Monday by the Metropolitan Transportation Authority board to a company that submitted the best bid for the job -- but isn't the most politically connected -- is a rare and wonderful demonstration that L.A. leaders have the capacity to learn.
Rail cars are a touchy subject in L.A., at least to anyone who remembers what happened in 2009. Back then, the MTA board awarded a $300-million contract for 100 cars to AnsaldoBreda, an Italian company with a terrible track record (sorry). On a previous 50-car contract, AlsaldoBreda had delivered cars years late and up to 6,000 pounds overweight -- a nightmare for transit operators because overweight rail cars damage rails, bridges and other infrastructure. But that didn't bother labor leaders, whose amore for AnsaldoBreda stemmed from the company's too-good-to-be-true promises to build a solar-powered factory near the Los Angeles River that would provide high-wage jobs to hundreds of local union workers. And where his coalition of labor and environmentalist contributors leads, Mayor Antonio Villaraigosa tends to follow (as does the MTA board, since Villaraigosa appoints three of its 13 members in addition to being a member himself). The MTA ignored warnings about AnsaldoBreda's competence and approved the deal, with Villaraigosa crowing afterward, "This means that L.A. is going to be the center of green jobs in the nation."
Those green jobs, needless to say, did not sprout. Apparently realizing it couldn't deliver on its promises, AnsaldoBreda essentially surrendered the contract, and the MTA was left starting over again with the bidding.
Comes now a new contract for 235 rail cars, on which labor leaders made no secret of their preference. Siemens Industry Inc. promised to open an L.A. factory and invest $5 million into local job-training programs for rail workers. Yet it also submitted a dramatically higher bid than the other two players -- Siemens wanted $940.6 million, compared to low bidder CAF USA Inc.'s $785.6 million and Japanese company Kinkisharyo International's $890 million. After considering Kinkisharyo's superior performance record and its ability to meet the MTA's requirements, the MTA board gave the Japanese company the nod (with Villaraigosa abstaining because of a potential conflict of interest). Power player Maria Elena Durazo, executive secretary-treasurer of the L.A. County Federation of Labor, AFL-CIO, was not happy, nor were other labor leaders, contending that the contract will ship jobs overseas to Japan rather than growing them here.
Governments have a duty to taxpayers to award contracts to the lowest responsible bidder, yet local hiring has economic benefits that accrue to taxpayers and sometimes the low bidder isn't locally based. So it makes sense to give preference to contractors that plan to open L.A. factories. When it comes to Kinkisharyo, though, there doesn't appear to be much difference between its hiring plans and Siemens'. An MTA analysis concluded that Kinkisharyo would create 348 U.S. jobs if awarded the rail car contract, compared to 391 by Siemens. The difference in economic benefit is vanishingly small: $138.8 million for Kinkisharyo and $140.6 million for Siemens. It doesn't seem like a very hard call, unless you're a politician who's obliged to pick up the phone when the likes of Durazo dials your number.
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