Report 99135 Summary - May 2000

Alameda Corridor-East Construction Authority:

Its Planning and Contracting Is Generally Sound, but Proposed Changes in Rail Traffic May Affect Its Construction Program

RESULTS IN BRIEF

The Alameda Corridor-East Construction Authority (ACE) has generally used a sound process for planning its construction program to mitigate anticipated traffic problems at rail crossings throughout the San Gabriel Valley. However, a proposal to consolidate rail traffic in the area of the program may affect ACE's plans, leading it to delay and possibly eliminate some projects. In addition, it has generally adopted and implemented appropriate contracting policies and procedures.

ACE was created in 1998 to find ways to alleviate anticipated motor vehicle congestion caused by an expected increase in rail freight traffic in eastern Los Angeles County. It has identified construction projects, ranging from low-cost improvements in safety features and signal devices at rail crossings to expensive grade separations, which involve building underpasses or bridges so that rail and motor vehicle traffic no longer intersect. These projects have a total estimated cost of $912 million. ACE has obtained various funding commitments amounting to roughly $370 million from local, state, and federal agencies, as well as from the Union Pacific Railroad (Union Pacific). It is currently seeking additional government funding to finance the remainder of the program's cost. Although its current funding sources do not require a cost-benefit analysis, we believe ACE might improve its chances of receiving future funds by quantifying expected program benefits in dollars and comparing them to estimated costs. This type of analysis could give ACE an advantage when competing with other agencies for limited government funds.

ACE's planning process included building upon a feasibility study, creating a project implementation plan, performing environmental assessments, and using a project scheduling system. These procedures ensured that ACE was addressing key elements of the construction planning and management process. In addition, ACE has included the public and local governments in its planning process. In some cases, ACE has made major design changes based upon input from the cities affected.

Despite the quality of its efforts, ACE may have to substantially alter its plans if Union Pacific agrees to consolidate the majority of its freight traffic to the southern of two lines crossing the San Gabriel Valley. If this happens, many of the grade separations planned for the northern line may no longer be necessary. ACE should therefore delay further work on a portion of the northern line until the disposition of freight consolidation is known.

For the most part, the contracting policies and procedures that ACE has adopted ensure that contracts will be properly awarded and monitored. These policies include awarding contracts through a competitive bidding process and requiring contractors to provide detailed task schedules and monthly progress reports. Nevertheless, one of ACE's contract award policies expands on state and federal regulations, another conflicts with federal regulations, and a third requires clarification. In addition, its conflict-of-interest code may inadequately protect against possible real or perceived conflicts because it does not include nonemployees who sit on its contractor selection committees. ACE rescinded another policy allowing contractors to begin work before contract execution when we pointed out that the policy conflicted with California Department of Transportation guidelines. Finally, ACE violated its procedures for changing a contract's scope of work by failing to commit to writing a change in scope for its program management contract.

RECOMMENDATIONS

To improve its competitive position when seeking future funding, ACE should consider quantifying program benefits in dollars.

To avoid spending money on projects whose benefits may be reduced by possible rail freight consolidation, ACE should delay activities planned for a portion of the northern rail line until Union Pacific makes a decision in July 2000.

To assure competitive contracting, ACE should make the following changes to its policies and procedures:

  • Revise its policies regarding noncompetitive procurement to conform to those established in state and federal regulations.

  • Require construction contractors to provide evidence of appropriate licenses only upon contract award.

  • Clarify its procedure for handling cases in which ACE's board rejects the recommendation of its contractor selection committee.

  • Amend its conflict-of-interest code to include members of contractor selection committees.
To ensure that contractors complete all elements of scopes of work, ACE and its contractors should agree in writing to any changes in scopes of work.

AGENCY COMMENTS

The Alameda Corridor-East Construction Authority agreed with our recommendations for the most part and will seek guidance from its board and funding authorities on how to best implement them.


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