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MBTA could have 1 bidder for $1 billion rail contract

One of the two companies competing to MBTA provide commuter rail service is threatening to drop out of the bidding.Patricia Harris for The Boston Globe/Globe Freelance

One of the two companies competing to provide Greater Boston's commuter rail service is threatening to drop out if the MBTA does not provide key information by Friday, potentially leaving the state with only one bidder for the largest contract in Massachusetts history.

The MBTA had promised to create an even playing field in the competition for the $1 billion-plus commuter rail contract, even though one of the bidders, Massachusetts Bay Commuter Rail, currently runs the system and has close personal ties to state transportation leadership.

But the only other bidder, Keolis America Inc., said that Mass Bay has not turned over to the MBTA crucial information on the railroad's huge labor costs, making it impossible for Keolis to complete its bid and undermining the MBTA's promise of fairness.


More than 70,000 commuters depend on the rail service daily, and MBTA officials had hoped robust competition might force bidders to promise better service and lower costs in order to win the contract.

"We can only conclude that [Mass Bay] is deliberately withholding this information" to hurt Keolis's chances of taking over the rail service next year, according to a March 27 letter to the MBTA from Astrid Stumpf, Keolis's commuter rail project manager.

Keolis, a subsidiary of one of the world's largest transportation companies, set a deadline of Friday to decide whether to drop out of the bidding, despite spending hundreds of thousands of dollars already in preparing to bid.

Officials from Mass Bay sharply disagreed with their competitor's characterization, saying "any suggestion that [Mass Bay] is withholding relevant information is false, inflammatory, and quiet frankly nonsense."

In a statement, released late Wednesday after first receiving a copy of the Keolis letter from the Globe, Mass Bay spokesman Scott Farmelant said the company has provided the MBTA "an unprecedented" amount of information — 10 gigabytes of digital information, or "the equivalent of a bookcase spanning the length of a football field."


Farmelant said the only type of information that Mass Bay has declined to provide concerns the firm's business practices, which the company statement said are "sensitive, proprietary . . . and outside the scope of similar public contract bids" nationwide.

MBTA officials, who are responsible for collecting information from Mass Bay on behalf of Keolis, said in a statement that they have "satisfied more than 90 percent" of Keolis's requests.

"The MBTA . . . continues to work diligently to provide the extraordinary volume of information requested" by Keolis, MBTA spokesman Joseph Pesaturo said in the statement.

Pesaturo also said the MBTA remains "strongly committed to conducting this complex process in a deliberate and determined manner" for the benefit of MBTA customers and Massachusetts taxpayers.

Twenty-five companies from all over the world initially expressed interest in competing for what is believed to be the most lucrative rail contract in North America, and one of the biggest state contracts of any kind in Massachusetts history.

But in the end only two stepped up to bid, which MBTA officials admitted was disappointing.

MBTA officials said they had hoped for at least half a dozen competitors to help sharpen bids for an eight-year contract that currently pays the operator $300 million a year.

Final bids are due July 10.

The dispute centers mainly on labor cost for about 1,800 unionized employees and 200 managers on the rail line. Keolis officials said that labor represents about 70 percent of total costs, but that the firm has received little data on a workforce that will stay on the job no matter who wins the contract. Keolis wants more information on the cost of employee benefits, such as bonuses, health insurance, and pensions, and even the current number of employees.


Keolis officials also said that they have been furnished no detailed information on management costs, and that some of the information they have received is outdated, including documents from 2002.

Alan Eisner, a Keolis spokesman, said the firm has received what it considers unacceptable responses to 104 of its 133 requests for information. He said some of the information provided to date has been of little use because it is in Spanish or in a computer format that makes it nearly impossible to work with.

"What they have given us is either no information, partial information, or grossly out-of-date information," he said. "It's an overall pattern of going out of their way to obstruct our ability to make a rationale bid. We're hoping something can be worked out in short order. We want to stay in, but without the proper information we can't do it."

Eisner said it is up to the MBTA to pressure Mass Bay for the information.

"The T has been trying to get the information, but they need to step it up and lean on the incumbent a little harder," Eisner said.

Keolis originally entered the bidding for commuter rail service, knowing that Mass Bay appeared to be on the inside track if only due to Mass Bay's superior knowledge gained from running the system since 2003.


Mass Bay, which has collected more than $1 billion in fees from running the commuter rail, was founded by James O'Leary, a former MBTA general manager with deep local connections, including mentoring Richard A. Davey, the state's transportation secretary. Davey has abstained from involvement in the selection process.

Still, Keolis chief executive Steve Townsend told the Globe last year that he felt the company had a chance to win the contract.

"We would not be investing money into this without having satisfied itself that there's a level playing field," he said.

Now Keolis officials are not so sure that the playing field is level after all, calling Mass Bay's decision to withhold some information "ludicrous."

"We may be forced to withdraw from the competition," wrote Keolis's Stumpf in the letter to the MBTA.

"This of course will be a result most beneficial to MBCR and a travesty of the public bidding process," the firm said.

Sean P. Murphy can be reached at smurphy@
. Follow him on Twitter @spmurphyboston.