HART blamed state licensing delays, but the Department of Commerce and Consumer Affairs says there is no backlog.

A procurement deadline for the last major Honolulu rail construction contract has been pushed back to allow more time for would-be rail contractors to register to do business in Hawaii, but the cause of the delay is uncertain.

Lori Kahikina, executive director of the Honolulu Authority for Rapid Transportation, told the rail authority board last week there has been a surge in contractors seeking licenses to do business in Hawaii so they will be positioned to help with the Lahaina recovery effort.

This has caused a delay at the Contractors License Board level, Kahikina said, and that delay is now affecting companies who also need to get licensed in Hawaii to be eligible to compete to work on the Honolulu rail project.

“We’re having some requests come in that there’s a delay at the contracting board’s level. So, they will need an extension from October to possibly December, maybe even January,” Kahikina told the board on Sept. 15.

Honolulu Authority for Rapid Transportation Executive Director Lori Kahikina, shown here with Gov. Josh Green during opening ceremonies for the first phase of the Skyline rail system, said award of the last major rail construction contract “might be delayed a few months.” (David Croxford/Civil Beat/2023)

But state Department of Commerce and Consumer Affairs spokesman William Nhieu said in a written statement this week that “at present, there does not exist a backlog or processing delays for licensing applications before the Contractors Licensing Board.”

The issue is important for HART because it involves the last major contract for the Honolulu rail line, which will cover construction of three miles of elevated guideway and six rail stations from Middle Street to the Civic Center station near the intersection of Halekauwila and South Streets.

After years of delays and cost overruns, service began running on just under 11 miles of the roughly 19-mile project, from East Kapolei to Aloha Stadium, in June.

HART had planned to finally award the contract to build the city center guideway and stations next summer, but Kahikina said last week that now that contract award “might be delayed a few months.”

Hill International Inc., a federal consultant overseeing the Honolulu project on behalf of the Federal Transit Administration, reported in June the city center contract represents the most serious risk for the rail project right now because “market conditions” could result in a reduced number of bidders.

The logic there are that too few bidders could limit competition for the job, which could result in a particularly high or unaffordable price.

In fact, a solicitation to select a developer to build the rail line through that same city center area and on to Ala Moana Center had to be scrapped in 2020 because the bids were far too high, with one bidder asking for more than $2 billion for the job.

That means awarding an affordable new procurement to design and build the scaled-down segment of the rail line to the Civic Center station is critically important if HART is to finish the rail project as planned by 2031. But the new procurement has already been delayed.

In Phase 1 of the process, HART plans to select finalists from among the companies that submit their qualifications. In Phase 2, HART will solicit design-build proposals from those finalists.

The most recent rail recovery plan submitted to the FTA in June 2022 predicted that the Part 1 request for qualifications would be issued last fall. But HART did not actually issue Part 1 to potential bidders until April 4.

HART had planned to require contractors to submit their qualifications under Part 1 by June 29, but that deadline was extended to Oct. 26 to allow contractors more time to obtain their state licenses. They must be licensed in Hawaii to be eligible to bid on the city center contract.

HART Project Director Nate Meddings said in a written statement Thursday that companies that want to compete for the city center rail work now have until Dec. 11 to submit their responses to Phase 1 of the procurement.

“We want to ensure that no contractor is excluded from the CCGS procurement because of an inability to secure local licensing prior to the posting of Part 2 of the procurement,” Meddings said in his statement.

Kahikina told the HART board last week that she was hoping some HART board member could “somehow help and expedite because there’s an influx of contractors wanting to help on Maui that are trying to get their license, which I understand is causing the delay.”

When asked about DCCA’s statement that there is no backlog at the Contractors License Board level, Meddings said the procurement “is the critical path forward, so we are very pleased that the DCCA has confirmed that there is no backlog or processing delays for licensing applications” before the board.

“We truly appreciate their partnership and support moving forward,” he wrote.

Kahikina was asked at the board meeting if the delay in the contract might delay completion of the city center portion of the project.

“Not at this point, we still feel we can finish the full project” as planned by 2031, she replied.

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