The South Florida Regional Transit Authority voted Friday afternoon to award a long-term management contract worth up to a half-billion dollars amidst concerns that it did so after tossing five of six bids, and powerful state Sen. Jeff Brandes reacted with “deep concern.”
The SFRTA Board of Directors voted 6-2 Friday to award an operations and maintenance contract that could be worth $511 million over ten years to Herzog Transit Services after the authorities’ staff disqualified five other proposals, some for far less money, on technical reasons. Board chairman Tim Ryan, a Broward County Commissioner, and Florida Department of Transportation District IV Secretary Gerry O’Reilly cast the no votes.
The prospect had drawn challenges from the other bidders and cautions from Brandes, who chairs a key committee and issued a warning Thursday that the board would be best holding off for some scrutiny first.
On Friday Brandes, a St. Petersburg Republican, said he would look into it. He called it “deeply concerning” and said that Florida taxpayers deserve to know with confidence that the transit authority “is acting in good faith.” He said he had spoken to Ryan and the Florida Department of Transportation before the meeting.
“Right now we’re going to explore all our options,” Brandes said. “Our focus now is to understand, talk to the various parties, including the governor’s office, the Department of Transportation, and office, and understand what our options are for a more in-depth review of the procurement procedures.”
Brandes chairs the Senate Appropriations Subcommittee on Transportation, Tourism, and Economic Development, through which the transit authority’s annual state subsidies flow. SFRTA gets about $50 million a year in state tax dollars, Brandes said earlier.
He said the fact that the FDOT representative and board chairman voted against the proposal were indications of the need for a review.
Officials of the transit authority and Herzog were not immediately available for comment Friday.
Brandes’ office also issued a written statement that read: “It is deeply concerning that the South Florida Regional Transportation Authority would proceed with, and approve, a contract for over $500 million given the controversy that has surrounded the bid process, especially considering the disqualification by the SFRTA of 5 of the 6 bids. My office will review all options available to further scrutinize the procurement process of the SFRTA and the decisions that were made to award this contract.
“Florida taxpayers invest significantly in the SFRTA and the taxpayers deserve to know, with confidence, that the SFRTA is acting in good faith,” the statement continued.
The “good faith” concern is a step further than Brandes was willing to go Thursday when he was cautioning that the contract-award process “just didn’t look right,” after learning that bids seeking as much as $115 million less money were thrown out by the SFRTA staff before the Herzog contract was brought as the loan option to the board on Friday.
Tri-Rail is the oldest and largest state-funded rail in the state, operating up to 50 trains a day on a 72-mile track through Palm Beach, Broward and Miami-Dade counties.
The contract allows Herzog to take over over four different long-term contracts merged into one, to operate the system, maintain the trains and equipment, maintain the stations, and provide dispatching. It’s a seven-year deal with three one-year extension options. Herzog’s bid sought $511 million for the full ten years. Other bidders were lower, as low as $396 million.
The contract takes effect July 1.
Some rejected bidders, including Tri-Rail’s current operator, Maryland’s Transdev Services, challenged in court, but lost a key ruling Monday before Circuit Judge Barbara McCarthy of Broward County, who allowed the contract award to go forward.
The issues the challengers have raised question how much latitude the agency’s staff has in deciding whether a proposal meets requirements, how staff members can make judgment calls and assumptions that go beyond stated prices, and how they do so without contacting the bidders for clarification.