T board criticized for secret talks on $280m deal
When the Massachusetts Bay Transportation Authority’s oversight board this week approved a nearly $280 million no-bid contract to buy new Red Line cars from a Chinese company, it marked the first time the massive deal with the group had been discussed publicly.
The company, China Railway Rolling Stock Corp., had been negotiating with the MBTA for eight months, but wasn’t mentioned by name on the agenda that announced Monday’s meeting. Months before, MBTA officials had publicly discussed the possible purchase of a batch of new Red Line cars, but refused to say whether they would purchase them from the company.
Behind the scenes, board members had been briefed on some aspects of the deal, which was an addition to a $566 million subway car contract from 2014. They met privately last week to discuss the potential legal risks, according to MBTA officials. On Monday, the board approved an agreement for up to 134 cars after half an hour of public discussion.
Critics are raising questions about two aspects of the multimillion-dollar contract, saying that the board sidestepped the customary competitive bidding process and that its private discussions may have violated the state’s open meeting law.
“The presumption of the law is that meetings are open to the public, and I think there are a lot of public bodies that operate on the opposite presumption,” said Robert J. Ambrogi, a lawyer and executive director of the Massachusetts Newspaper Publishers Association. “They want to discuss as much in private as possible, and only want to discuss in public when they’re pushed to the edge to do so.”
MBTA officials said the closed meeting was justified under an exemption in the open meeting law that allows public agencies to discuss litigation strategy, even if a lawsuit has not been filed.
In September, MBTA officials told the fiscal and management control board they were considering the purchase of new Red Line cars, but had not disclosed they would award the contract to the Chinese company, which is already building a separate batch of MBTA subway cars for $566 million. MBTA officials now say they had been in negotiations, which are generally behind closed doors.
MBTA officials also defended the decision to bypass the competitive bidding process, saying the contract takes advantage of a good price and accelerates a process crucial to improving service. Buying all its cars from the same company was the only way to ensure a standardized fleet, they said.
“The MBTA determined that a competitive procurement would be futile and did not contact other potential sources or advertise the procurement of the Red Line No. 3 fleet,” William Wolfgang, the agency’s director of vehicle engineering, and Gerald Polcari, its chief procurement officer, wrote in an internal document.
Stephanie Pollack, the state’s transportation secretary, said the decision to award a contract without a bid justified the closed-door talks.
“The litigation risk is that another manufacturer says, ‘Hey, you should have done a regular procurement,’ ” she said. “We’re not aware of anyone who is saying that they are going to sue,” she added.
But open government advocates said the MBTA’s interpretation of the litigation exemption is too broad, since the possibility of lawsuits nearly always exists.
“Everyone says, ‘I’m going to say sue you,’ ” said Peter Caruso, an attorney who specializes in media law. “If we took that at face value, then everything would be secret in government.” Caruso and others said agencies should have some evidence of impending litigation to claim the exemption.
Critics also said that the MBTA’s reasoning appears to contradict an advisory from the state attorney general’s office, which enforces the open meetings law. The office’s open meetings guide states that “discussions relating to potential litigation are not covered by this exemption unless that litigation is clearly and imminently threatened or otherwise demonstrably likely.”
The attorney general’s office said it doesn’t comment on specific cases without an official complaint. The Globe is filing a complaint to challenge the closed-door session.
But a recent ruling on a complaint between AT&T and two town boards in Hardwick also appears to suggest that litigation must have been threatened to justify closed meetings. Jonathan Sclarsic, an assistant attorney general, wrote that the town boards had the right to meet privately because AT&T had given the town written notice that it intended to take legal action.
John Englander, general counsel for the MBTA and the Massachusetts Department of Transportation, said he stands by the agency’s decision to keep the meeting closed. When the MBTA first selected the company two years ago, a losing bidder sued, claiming the process was unfair.
The case was dismissed, but Englander says it demonstrates the likelihood of similar suits.
Englander also cited a Massachusetts Superior Court case, Collins v. Wayland Board of Selectmen, in defense of the closed session. In that case, Superior Court Judge Kenneth Salinger ruled that the Wayland Board of Selectmen was allowed to meet in executive session “to discuss matters concerning potential litigation strategy . . . whether or not the Board is a party to that litigation or is likely to become a party.”
“For example, a public body that reasonably expects it may be sued on a particular action or issue may discuss that matter in executive session even if anticipated lawsuit has not yet been filed,” Salinger wrote, citing two other cases.
But Ambrogi pointed out that the Wayland case doesn’t set a binding precedent. The Wayland case also involved litigation that had already been filed, though the town hadn’t become involved.
The agency’s move to quietly bypass a bidding process, which typically encourages price competition among companies, has also raised concerns.
“Agencies can always come up with excuses about why they shouldn’t go out to bid, but in the end, the bidding process promotes transparency and gives the public comfort that it got a good deal,” said Mary Connaughton, a director of the Pioneer Institute, a fiscally conservative watchdog group, who served on the former Massachusetts Turnpike Authority’s board of directors.
The MBTA may have strong reasons for choosing the company, she said. But the public wasn’t privy to them until the decision was minutes from being made.
“While they made a strong technical argument about why it makes sense, the real debate where the details were disclosed happened behind closed doors,” she said.