Rail Project Cases Argued in Federal, State Court

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BY JIM DOOLEY – A motion to dismiss portions of a federal lawsuit challenging Honolulu’s $5.3 billion rail project was argued in court this morning, with U.S. Senior Circuit Judge A. Wallace Tashima to issue a ruling later.

In state court, a judge this week struck down procurement policies followed by the City to award nearly $250 million in rail consulting contracts since 2005.


In the federal proceedings, Tashima also delayed a decision on whether to allow the National Trust for Historic Preservation to file a court brief that supports the plaintiffs’ claim of deficiencies in the rail project’s environmental impact statement.

The federal lawsuit was filed last year by longtime opponents of the 20-mile elevated railway project planned to run from the center of Honolulu to the Kapolei “second city” area of Oahu.

Among the plaintiffs is former Hawaii Gov. Ben Cayetano, now running for Honolulu mayor against incumbent Peter Carlisle and former City Managing Director Kirk Caldwell. Carlisle and Caldwell are pro-rail.

Today’s court session centered on a City motion that the plaintiffs had no standing to argue that specific historic sites along the planned rail route were inadequately analyzed during preparation of the EIS.

Tashima told lawyers in the case at the start of the hearing that his “inclination would be to grant” the City’s requests “with some minor exceptions.”

Nicholas Yost, lawyer for the plaintiffs, called the issues in the motion “a very tiny sliver of the entire case” but still argued that his clients did have grounds to raise questions about how the project would affect historic sites like Makalapa Naval Housing at Pearl Harbor.

The request from the Historic Preservation Trust to file an “amicus brief” in the case involves the treatment of Makalapa Housing and other sites in the EIS.

Tashima asked city lawyers for a legal memo on whether the amicus brief can be filed in the case.

In a related rail legal case across the street in state Circuit Court, Judge Karl Sakamoto this week ruled that the City followed invalid procedures in awarding multi-million-dollar rail consulting contracts.

The contracts went to principal rail system engineer PB Americas and its corporate predecessor, Parsons Brinckerhoff Quade & Douglas, and to a second, related firm, Infraconsult, which provides overall rail project management.

A series of consulting awards went to the companies when fewer than two other firms offered competing bids for the contracts.

State procurement law requires consideration of at least three competitors for such contracts, but a rule followed by the state and the city waives that requirement.

Cayetano, working with engineer Dennis Mitsunaga, a longtime friend and political backer, challenged the validity of that rule in complaints to the city and the state in 2010.

The complaints were rebuffed, so attorneys John McLaren and Arthur Park filed a lawsuit against the state Procurement Policy Board on behalf of a single plaintiff, Lloyd Asato, last year.

Tuesday Sakamoto ruled in their favor, finding that the waiver rule conflicted with the specific three-bids requirement of state law.

McLaren said today he doesn’t know how Sakamoto’s decision will affect past or future consulting contract awards involving fewer than three bidders.

McLaren said state lawyers predicted the ruling would cause “chaos and ruination” but he said he must wait to review a written transcript of Sakamoto’s decision before discussing its possible ramifications.

The rail contracts awarded without three bidders include $10.2 million to Parsons Brinckerhoff in 2005 and $86 million to PB Americas in 2007. The value of the latter contract was increased through change orders last year to $156 million.

The same company received a new rail engineering contract worth $300 million last year, but two other companies submitted bids for that job, according to the city’s procurement website.

One of those firms, AECOM Pacific, is a large, Los Angeles-based engineering firm that regularly receives consulting work from the city and state. The other competitor for that $300 million contract, WPS Transit Consultants, is not incorporated or licensed to do business in Hawaii, according to state records.

Infraconsult, which was formed in 2006 in Arizona by former executives of Parsons Brinckerhoff, received its first Honolulu rail management contract, worth $11.9 million, in 2007.

It was the only company that offered to perform the work in 2010 and was awarded a $36.7 million contract by the City.

This year, the company was awarded a new $33.7 million rail construction management contract by the city after it again submitted the only bid for the work, according to city procurement records.



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Jim Dooley joined the Hawaii Reporter staff as an investigative reporter in October 2010. Before that, he has worked as a print and television reporter in Hawaii since 1973, beginning as a wire service reporter with United Press International. He joined Honolulu Advertiser in 1974, working as general assignment and City Hall reporter until 1978. In 1978, he moved to full-time investigative reporting in for The Advertiser; he joined KITV news in 1996 as investigative reporter. Jim returned to Advertiser 2001, working as investigative reporter and court reporter until 2010. Reach him at Jim@hawaiireporter.com