Friday, March 18, 2011

Get in line and don't crowd. There's plenty of cash to go around from the California High-Speed Rail Authority

Let's be honest.  Under that recent economic optimism, business in the US is in terrible shape (except of course for the financial markets).  Therefore, when federal dollars are sniffed in the wind, the race to get some of those is frightening.  Picture those old hunting scenes with dozens of dogs racing after one little fox.  That's what this CHSRA press release and article below it are all about.

Unemployment is rampant, particularly in the lower income sector, especially so in the Central Valley where double digit percentages are felt throughout the region.  Any work is better than none.  And, the CHSRA is dangling its "lucrative" federal and bond dollars to people seeking contracts and work.

The CHSRA appears proud to make an announcement about the huge response they have had to their request for letters of interest for contractors.  Well, they got them; more than 1,100 responses.

Here is the CHSRA Press Release about this. They are treating it like a stunning and delightful surprise.  I say, who could have doubted it? What did they expect when they dangled red meat over a hungry wolf-pack?

Please understand that all this has nothing to do with private investments providing those promised loans to the rail authority, although the rail authority would like to confuse the two; bidding on work contracts, and fund lending to the rail authority. They continuously introduce ambiguities over this distinction.

"companies addressed the design, construction, operation and funding aspects of . . . the initial construction segment . . ."  Well, that phrase "funding aspects" needs to be clarified.

“True high-speed rail systems are profitable, competitive and spur near-term job creation and long-term economic growth.  To the minds of many, including me, none of those things are true.  It won't be profitable; I don't know what they mean by "competitive"; the nearest-term job creation won't be for another year and a half, and long-term economic growth is singularly problematic.

The real question about this letter of intent exercise is, are they ready to go out for bids?  Is their design work that far along? Whenever asked, Roelof Van Ark defers, saying that decisions haven't been made yet and a number of options are being studied.  So, what was the point of alerting all those potential bidders? 

First, public relations.  Many of these bidding companies are also in the public relations game and are willing to endorse the federal support for this project since they are hopeful it will add to their bottom line.  

Second, it creates the illusion of progress.  Look, they are telling us, we are moving forward and already searching for willing "partners" who will contract with us to do the actual construction and related work. 

And third, it covers up the increasingly ambiguous circumstances of the current process for the Central Valley, where matters have become highly contentious and funding more uncertain than ever.

Remember, with the CHSRA, we are not dealing with a professional high-speed rail development organization.  We are dealing with a political public relations organization.

Press Release

March 17, 2011
CONTACT: Rachel Wall
Private Sector Expresses Tremendous Interest in California’s High-Speed Train Project

SACRAMENTO – More than 1,100 expressions of interest flooded into the California High-Speed Rail Authority’s offices in Sacramento prior to a Wednesday deadline – from businesses ranging from self-employed entrepreneurs and small businesses to multinational corporations and large construction firms. The submissions were in response to a “Request for Expressions of Interest” issued by the Authority in February, asking that the private sector put in writing their desire to help develop California’s high-speed rail project. 

In the responses, companies addressed the design, construction, operation and funding aspects of both the initial construction segment in California’s Central Valley and the overall first phase of the statewide project stretching from the Los Angeles basin to the Bay Area. The responses will help guide the next stages of the formal procurement process and the packaging of future bids.

“The size of this response sends a clear signal that the private sector sees great opportunity in California’s high-speed rail project, the first of its kind in the nation,” said Roelof van Ark, CEO of the California High-Speed Rail Authority. “True high-speed rail systems are profitable, competitive and spur near-term job creation and long-term economic growth.”

High-speed rail operators around the globe responded to the Authority’s call, as did dozens of major construction and engineering firms, and hundreds of small businesses. 

The Authority is currently reviewing and compiling responses with the intention of posting a list of respondents on California High-Speed Rail Authority Web site next week and to post the response documents within the coming weeks. From responses reviewed thus far, it is clear that the private sector is eager to participate in developing California’s project: 

“We look forward to being a participant in and working with the California High-Speed Rail Authority in making this project the first very high-speed success story in the US.”  
-Guillaume Mehlman, President, ALSTOM Transportation Inc.

“We are prepared to immediately partner with the Authority in developing an implementation approach that builds on current passenger rail transportation successes such as the Capital Corridor and San Joaquin Services, just to name a few.” 
-Albrecht P. Engel, Amtrak
“This prospect is tremendously exciting in that it links the major cities of California in a visionary and market changing way. This is an opportunity to which VRG is prepared to commit substantial resources to, in order to assist the Authority in achieving its objectives. We believe that California is a market very well suited to High Speed Rail.” 
-Virgin Rail Group
“We are excited for the opportunity to participate on such a monumental project.”  
-Bill Trombley, Director of Preconstruction Services, Skanska USA Civil West California District
 The California High-Speed Rail Authority is developing an 800-mile high-speed train system that will operate at speeds of up to 220 miles per hour, connecting the state’s major urban centers, including the Bay Area, Fresno, Los Angeles and San Diego. The first phase of the project, San Francisco to Los Angeles and Anaheim, is projected to cost $43 billion. [edit. Although their own numbers, they still don't acknowledge that it's $66 billion.] Initial infrastructure construction will begin in the Central Valley, the backbone of the system, in 2012. The project is being funded through a voter-approved state bond, federal funding awards and public-private partnerships. [edit. Which have yet to be seen.]

Respondents will be invited to an industry forum the Authority is hosting in Los Angeles on April 12, 2011, to learn more about the next steps in the procurement process and the results of the request for expressions of interest. Credentialed press will also be invited. 

# # #

More information about the California High-Speed Rail Authority's RFEI is available at 

Local businesses seek high-speed rail contracts

FRIDAY, 18 MARCH 2011 08:54

Officials behind the state’s ambitious high-speed rail project estimate the endeavor could create more than 100,000 jobs — 24,000 alone in the San Joaquin Valley.

But very few, if any, of those jobs could materialize without the help of small businesses and private contractors to furnish everything from engineering, asphalt and lighting to maintenance and landscaping.

Securing help for the 800-mile network is getting more urgent as federal mandates compel the California High-Speed Rail Authority to get shovels in the ground by mid-2012 on the first $5.5 billion segment of the project, stretching from Bakersfield to just north of Fresno.

Attempting to gauge the level of interest and formalize the contracting process, the agency last month called on businesses both large and small looking to work on some aspect of the rail to send in expressions. By the March 16 deadline, more than 1,100 sent in their forms.

The respondents will be listed on the California High-Speed Rail Authority’s website at next week and will be invited to an industry forum on April 12 in Los Angeles to learn more about the next steps in the procurement process.

Later in the year, the rail authority will issue a request for proposals to select a workforce from among all industries in which high-speed rail might have an impact.

Recently, the Central California Hispanic Chamber of Commerce hosted a workshop for small businesses on how to get certified with the state and apply for contracts when the time comes.
Considering everything from construction to hospitality, Executive Director John Hernandez said as much as $6 billion could pour into the local economy from high-speed rail if outside interests hailing from the Bay Area, Los Angeles or Nevada don’t take the work away.

“If we play our cards right as a region, and some of our local builders or business people get chosen to work on the project, there’s a good chance they’ll get other work up and down the project,” said Hernandez, who is also reaching out to unions and other groups to give Valley workers the kind of training that is lacking in most Valley cities when it comes to rail construction.

A minimum of 25% of the project’s more than $40 billion in contracts will be awarded to small businesses, according to policy goals of the rail authority, while at least 3% will be disabled veteran-owned. According to the rail authority, small business participation was 27.72% for the $18.5 million in contracts during fiscal year 2009-10, while 7.07% went to disabled veteran-owned businesses.

Although a small business of only 35 full-time staffers, Precision Civil Engineering of Fresno markets itself as an expert in high-speed rail. In the early ‘90s, Vice President Kekoa Anderson, then working for engineering firm Parson Brinckerhoff, participated in a feasibility study by the California Department of Transportation (Caltrans) for a theoretical high-speed rail segment between Los Angeles and Bakersfield.

“There’s not oodles of resumes with people that have this type of experience, so there’s going to be a lot of training required, “ Anderson said. “The strength that we have on our team is that we have a group of high speed experts that are not matched by other firms.”

Even large businesses are exploring the opportunities high-speed rail can bring. While it wouldn’t be its biggest contract, Fresno-based Ameriguard Security is eyeing the project with bundles of video surveillance equipment, utility vehicles and 120 local security officers to offer, with more hiring to come.

“The construction site would probably need 24-hour security,” said President and CEO Lawrence Garcia. “There will be a lot of materials that need to be protected . . . we’ve demonstrated that we can manage contracts all the way on the East Coast, and we can surely manage them in our backyard.”

Not everyone buys the feasibility of the much-advertised prospects of high-speed rail. Legislation introduced last month by Reps. Kevin McCarthy, Devin Nunes and Jeff Denham aims to redirect federal rail funding to finance overdue and urgently needed roadway improvements along the Highway 99 corridor.

“The ever-escalating costs of California’s high-speed rail project need to be controlled,” Denham said in a statement. “We are in no place to spend recklessly. Until the rail project is better managed, local leaders should support this bill that uses the funds they already have to fix SR 99, and put people back to work immediately.”

But even if it’s not for high-speed rail, small businesses can easily situate themselves for lucrative government contracts through certification. Small business certification, which can be completed at, gives firms advertising by listing them on a database that agencies all over the nation can access to find specific services for government projects. In addition, small businesses may qualify for a 5% bid preference on applicable state contracts, and are guaranteed prompt payment.

“I think we have a really large untapped resource here in the Valley,” said Morris Caudle, small business liaison for Caltrans, who provides guidance to companies all over the Valley on applying for government contracts. “One of the biggest speed bumps for small businesses is they are intimidated by the process.”
This article ran in the March 11th print edition of The Business Journal. To receive more of this premium content, visit our subscription page at