Phase 1 of the Silver Line Opens Tomorrow: Let’s Recap Phase 2’s Project Labor Agreement Controversy

0 July 25, 2014  Featured, Transportation & Infrastructure

Phase 1 of the Dulles Corridor Metrorail Project, commonly known as the Silver Line, opens tomorrow. This milestone is a great opportunity to revisit the project labor agreement (PLA) controversy surrounding Phase 2 of the project.

Silver Line

While the final numbers aren’t in yet, Phase 1 cost about $2.9 billion, or $150 million more than initially planned.

Phase 2 of the Silver Line, extending 11.4 miles west from Reston to Loudoun County, just beyond Dulles International Airport, is expected to cost $2.7 billion and open in 2018.

That puts the total Silver Line tab at an estimated $5.6 billion, which is funded by toll revenue from the Dulles Toll Road, as well as tax dollars from Loudoun and Fairfax Counties, the Commonwealth of Virginia, and federal money and loan guarantees.

Contracts to design and build both phases of the Silver Line are procured by the Metropolitan Washington Airports Authority (MWAA).

Dulles Transit Partners (DTP), the joint venture between Bechtel Infrastructure Inc. and Washington Group International (now URS), constructed Phase 1 of the Silver Line with a PLA it voluntarily entered into with labor unions, which ensured union labor was used for work self-performed by DTP. The voluntary Phase 1 PLA did not apply to subcontractors. MWAA could not identify any subcontractors that voluntarily signed the PLA or the number of manhours performed by subcontractors and employees subject to union hiring hall rules contained in the voluntary PLA.

In 2011 and 2012, TheTruthAboutPLAs.com exposed MWAA’s controversial PLA requirement (and later PLA preference/de facto PLA mandate) on Phase 2 of the Silver Line that would have steered billions of dollars worth of construction contracts to unionized contractors and created jobs primarily for union construction members, despite the fact that 95.8 percent of Virginia’s construction workforce does not belong to a union.

After months of controversy, media scrutiny and drastic reforms involving MWAA board members and personnel, MWAA issued a solicitation for Phase 2’s construction contract free from anti-competitive and costly PLA requirements or PLA preferences.

On May 14, 2013, a $1.178 billion design/build Package A contract was awarded to Capital Rail Constructors, a joint venture consisting of Clark Construction Group and Kiewit Infrastructure South Co.

“We are very encouraged by the price submitted by Capital Rail Constructors and the potential savings it includes,” said Pat Nowakowski, executive director of the Dulles Corridor Metrorail Project. “This has been a very successful competitive procurement process. The winning proposal is well below our original estimates of $1.4 billion to $1.6 billion for this portion of the project, which hopefully will allow us to pass on additional savings to users of the Dulles Toll Road.”

The bid by Capital Rail Constructors was 16 percent to 27 percent lower than expected and was just $14.2 million less than the second most responsive bid submitted by Bechtel Transit Partners, indicating robust PLA-free competition for Package A of Phase 2 served taxpayers and MWAA well. A $14.2 million difference on a $1.178 billion contract is an incredible feat of estimating.

On July 2, 2014, MWAA announced its intent to award a contract to Hensel Phelps Construction Co. of Chantilly, Va., to design and build the rail yard and maintenance facility for Package B of Phase 2 of the Silver Line. Hensel Phelps’ $253 million price proposal for Package B was better than three other competitors.

The Silver Line’s PLA controversy is best summarized in this May 23, 2014, TheTruthAboutPLAs.com blog post: Phase 2 Silver Line Bids Below Budget Without Project Labor Agreement Scheme.

Silver Line’s Bottom Line

TheTruthAboutPLAs.com’s campaign for fair and open competition on Phase 2 of the Silver Line helped shed light on corruption at MWAA and killed the union-favoring scheme Big Labor boss and MWAA board member Dennis Martire tried to orchestrate behind closed MWAA doors. If successful, this backroom deal for a PLA would have needlessly increased costs and steered billions of dollars worth of construction contracts to unionized firms employing union members to the benefit of Martire’s employer, Laborers International Union of North America (LiUNA), and Martire’s personal financial interest.

Without MWAA’s attempted PLA mandate and preference, taxpayers are sure to benefit from reduced costs as a result of increased competition. In addition, Virginia construction workers and firms will be more likely to win construction jobs and benefit from this massive investment of tax dollars and toll revenue supplied primarily by Virginia stakeholders.

Numerous stakeholders, lawmakers and citizens deserve credit for taking action and ending this crony contracting scheme while protecting taxpayer interests.

TheTruthAboutPLAs.com will continue to monitor this project closely and wishes the Silver Line success for Phase 1’s opening this weekend. Congratulations to the men and women who built Phase 1.

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