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Losing bidder for commuter rail contract to appeal

The loser in the battle for a $2.68 billion contract to run Massachusetts commuter rail trains is not going away quietly, vowing that it will appeal to state officials Friday to change their minds.

Executives from the Massachusetts Bay Commuter Railroad Co. said they intend to argue that the newcomer chosen to run the trains, Keolis Commuter Services, failed to provide crucial information to the state during the selection process. Massachusetts Bay, known widely by the acronym MBCR, said it will assert that state transportation officials turned a blind eye to those omissions.

The expected protest sets the stage for possible legal proceedings that could drain millions of dollars from the state’s transportation agency. In a statement Thursday, an MBCR official said that if the state rejects the appeal, the company intends to seek a restraining order to block Keolis from taking over, a move that could derail the tight schedule for the July 1 takeover.

Keolis was chosen last month to operate the state’s commuter rail system, winning a contract primed to put the company, owned by the French government, on the map in North America. The loser, MBCR, has operated the Massachusetts commuter rail system since 2003.


Chances are remote that MBCR will prevail, said commuter rail specialists, who declined to speak for attribution because of the sensitivity of the contract. But by so publicly making its case through an appeal and possibly legal action, the company may be looking for a face-saving measure, the specialists said.

If the expected appeal happens, the state transit authority’s chief procurement officer has five days to respond. If MBCR disagrees with that decision, the company can appeal further to the general counsel of the Massachusetts Bay Transportation Authority, the state’s transit agency.

Since losing the contract battle, MBCR officials have sought to portray Keolis as rife with shortcomings. MBCR has alleged that the company is financially unsound and argued that it won the contract by submitting a bid that was dangerously low, meaning that if service suffers and fines result, the company might simply walk away.


MBCR executives said their appeal will also focus on ways in which they believe Keolis failed to adhere to instructions set out by the state, from failing to provide an emergency response plan to submitting glowing recommendations from company insiders instead of from outside customers.

MBCR representatives said they will argue that the state ignored instances in which Keolis failed to properly answer questions during the selection process.

“Our team took the procurement process and the rules governing it very seriously,” MBCR spokesman Scott Farmelant said in a statement. “Unfortunately, after careful review of the documents provided by the MBTA, it has become clear that the bidding process did not comply with basic procurement standards.”

A Keolis spokesman declined to comment on the MBCR assertions.

Joe Pesaturo, a spokesman for the state transit agency, said the accusations of unfair proceedings were untrue.

“The careful and deliberate process was designed to ensure the best value for the public, customers, and the MBTA,” Pesaturo said. “The evaluation process involved a thorough assessment of operations and management, as well as costs and other financial components.”

MBCR is expected to point to instances in which Keolis ignored instructions from the state. Those omissions, MBCR officials argue, should have led to disqualification of Keolis.


In one instance, Keolis was asked to provide references. “References must have been directly involved as a client representative for the work performed by the proposer under the contract,” the state’s instructions said.

Two of Keolis’s 10 references outlined innovative services provided by Keolis’s majority shareholder, the French national rail company, SNCF. But those recommendations came from individuals in management at SNCF.

MBCR executives also argue that Keolis failed to provide an emergency response plan, one of the demands laid out in the bidding instructions, but promised to create a plan within 90 days of being awarded the contract. In contrast, MBCR offered a comprehensive plan that outlined strategies to respond to fires, bomb threats, terrorist attacks, and medical emergencies, and described approaches to evacuating customers from tunnels within the commuter rail system.

Keolis also failed to provide a list of its intended engineering subcontractors. Reviewers from the state noted this absence, saying the information provided was inadequate. But those in charge of awarding the contract labeled Keolis’s engineering rating as good.

In other instances, the chief procurement officer for the state transit authority wrote to Keolis management to request further documents, only to be told that the documents could not be produced.

An August 2012 letter from the state expressed concerns about the failure of Keolis to include references from three businesses owned by minorities and women. Keolis’s response acknowledged that would not be possible.

“We apologize that we are unable to provide a third . . . reference as requested at this time, due to the fact that we only have the one commuter rail services contract in the US,” wrote Steve H. Townsend, president of Keolis Rail Services America.


About the same time, a state official sent multiple letters seeking a list of Keolis and SNCF commuter rail legal proceedings, disciplinary actions, and safety issues and accidents, warning that if the company failed to do so, it could be disqualified.

“The combination of the magnitude of SNCF’s operations . . . and the very short time frame . . . required by the MBTA for this response,” Townsend responded, “makes a comprehensive review, evaluation, and reporting of all events . . . impossible to compile for inclusion in this response.”

Martine Powers can be reached at martine.powers@globe.com.