The city has identified Ansaldo Honolulu as the rail manufacturer it wants to award a $1.1 billion rail construction and operations contract, but the company is stuck waiting for a decision about protests from two competitors whose bids were not picked.

While he waits for the deal to be made official, it’s clear Ansaldo Honolulu General Manager Enrico Fontana is fed up with the claims his rivals have made.

Both Sumitomo Corp. of America and Bombardier filed protests last month, and both lodged complaints about the city’s procurement process. But the companies also pointed out a series of what they characterized as flaws with Ansaldo’s proposal.

Asked how Ansaldo Honolulu was able to submit a relatively inexpensive — $100 million cheaper than its competitors — estimate for the design/build phase of the project, Fontana appeared frustrated.

“OK, yeah, I can try but I don’t know because this is probably what Sumitomo said,” he said.

One of the competitors’ main gripes has been that Ansaldo shifted $100 million from the design/build portion to the operate/maintain portion between its initial bid last summer and the final and best offer it put forward early this year.

Fontana explained that his company’s design/build proposal changed because the city changed the scope of its project.

“The city didn’t simply ask us to provide a better price, they changed the scope of the project” Fontana said. “The construction schedule was reduced 20 percent. The city revised this schedule … and the number of months for construction was reduced by 20 percent. Now it’s much more optimized, and we can save a lot of costs because the construction was compressed.”

Still, Ansaldo’s operate/maintain bid is some $100 million higher than the bid submitted by Bombardier, while its design/build bid was some $100 million lower. Fontana said he can’t figure out how Bombardier was able to keep operations and maintenance costs that low.

“We don’t know how they were able to be so competitive,” Fontana said. “Basically, labor rates are known. … Number of trains are the same, number of stations are the same. We really don’t know.”

Fontana rejected the idea that his company backloaded cost estimates as a way to appear more appealing to the city, and said it wouldn’t matter anyway if the cost is the same.

“Your whole system is costing you $10,” Fontana said. “You prefer to pay $5 in advance and the other $5 later? Or $8 in advance and the other $2 later?”

Sumitomo Vice President Gino Antoniello told Civil Beat Monday evening that he wants an explanation of how Ansaldo’s bid — which he claims will cost the city a billion dollars more over the 30-year life cycle of the project — is the best value.

“Once they achieve that miracle, we will cease and desist,” he said. “I will pull the plug.”

Since Sumitomo first indicated it would file a protest, city officials have repeated that “best value” does not necessarily mean the lowest bid. Honolulu Mayor Peter Carlisle in April told Civil Beat the city had to strike a balance between buying a Ferrari and an Edsel. Sumitomo’s Antoniello is not deterred.

“There’s a good chance that our protest will be denied, that’s typical, but I can guarantee you that there is a better chance that we will go to the next step,” Antoniello said.

Ansaldo’s Fontana said he doesn’t know how long it will be before the appeals process is wrapped up — that, he said, is ultimately up to how far his competitors want to push their fight.

“The point is, basically, it’s based on what our competitors will do. Now they’ve filed the protests. The city will answer them. If they are not satisfied, they can ask for a hearing and go to appeals court. I would say our proposal is very solid from a technical point of view. Our price proposal, it’s OK,” he said.

He also dismissed claims about problems reported in other cities — late train delivery, technical glitches, for example — as “typical” and “minor” (read more on that in our coverage later this week). Fontana acknowledged that if the tables were turned, his company would likely be putting up a fight.

“This is a very exciting project,” Fontana said. “Everybody would like to show the star on Honolulu in their corporate PowerPoint presentation. Probably if we were not selected, we would have filed a protest against the others, too.”

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