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In spite of objections, KC Council approves streetcar construction management contract

Updated: 2013-09-13T05:41:57Z

By LYNN HORSLEY

The Kansas City Star

Kansas City’s downtown streetcar reached another milestone Thursday as the City Council gave the go-ahead for an out-of-town team to manage the construction project.

Following heated discussion, the council voted 8 to 5 to award the contract to St. Joseph-based Herzog Contracting Corp. and California-based Stacy and Witbeck.

“It’s time to get on with it,” Mayor Sly James said of the project, which has had its legal and financial ups and downs this year but recently won a $20 million federal grant.

Supporters hope that by summer 2015, the streetcars will be running on a 2-mile route from River Market to near Union Station, primarily on Main Street.

Thursday’s fierce debate focused on the unusual way the winning construction management bidder was selected.

Instead of seeking a “lowest and best bid” with a final cost for streetcar construction, a technical team evaluated the bidders based on experience, project approach and pre-construction management price.

That team chose Herzog-Stacy as the most qualified and experienced to manage a challenging project in a congested urban environment that will surely involve disruptions to businesses.

Herzog has worked on the Tampa, Fla., streetcar and has done lots of light-rail projects. Stacy has worked on the streetcar lines in Seattle, Salt Lake City and Portland, Ore.

Council members supporting the contract, in addition to James, were Russ Johnson, Cindy Circo, Melba Curls, Scott Wagner, Dick Davis, Jan Marcason and Jim Glover. Opponents were John Sharp, Ed Ford, Michael Brooks, Scott Taylor and Jermaine Reed.

Before the vote, the council’s business session discussion was packed with organized labor members, including representatives of the Heavy Constructors Association of Greater Kansas City and the Greater Kansas City Building and Trades Council, who had urged the city to rebid the contract.

They were frustrated by what they believed was a subjective bid process that unfairly favored Herzog-Stacy over Kiewit-Clarkson, which has more local ties and more connections to Kansas City unions.

Critics also complained that Herzog-Stacy won the contract recommendation even though it bid a higher change order fee than Kiewit-Clarkson. They warned that if the project has lots of change orders, that could drive up the cost. They wanted the project rebid, with the more traditional approach of getting the “lowest and best bid.”

“My preference would be to reject these bids,” Sharp said before Thursday’s vote, saying that a more traditional bid process would assure “we get the best value for our taxpayers and the best bang for the buck.”

James angrily chastised critics of the selection process during Thursday’s business session. He argued it was fair and should not be redone.

“There is no legitimate reason to change this process at this point,” James said, adding that no one questioned it until they didn’t like the winner.

He also pointed out that Kansas City was the only city in the country to get a streetcar grant this year, because the federal government thought Kansas City had its act together. He suggested that redoing the bid could delay the project by months, drive the price up and possibly mean the city would have to pay back the federal money.

“To jeopardize that,” James said, “would be the height of foolhardiness and fiscal irresponsibility.”

Thursday’s vote was seen as a test of James’ political leadership and a victory for other streetcar advocates, who worked hard to rally support for the Herzog-Stacy team.

Circo said she had received 114 emails from downtown residents, businesses and others favoring Herzog-Stacy as the team most likely to do the job correctly. She said she received only one letter from the Heavy Constructors opposing the deal.

Herzog President Al Landes, spokesman for the winning team, said after Thursday’s vote that he was pleased and eager to get to work.

“I’m happy and glad it’s over,” he said of the quarrel over the contract.

The contract approved Thursday does not actually set out a final construction price for the streetcar. It simply says the city will pay Herzog-Stacy $50,000 for “pre-construction” management, which involves working with the city and designers to finish the design, which is currently about 60 percent done.

Public Works Director Sherri McIntyre said getting the contractor on board now will help the city anticipate and address problems before they arise and should help the city get the best price.

The city and the contractor are expected to negotiate a final maximum construction price by late this year, which would go to the City Council for approval.

The overall project is expected to run about $100 million. But the actual construction price is expected to be roughly $60 million.

Landes reiterated his expectation that the vast majority of the streetcar construction work will be done by Kansas City-area workers, including many union workers and minorities. At its peak, the project will probably have about 100 workers on site. Herzog-Stacy officials also have said they have a track record of keeping change orders to a minimum.

To reach Lynn Horsley, call 816-226-2058 or send email to lhorsley@kcstar.com.

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