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FTA gives Metro a second chance

That sound you hear is a bullet whizzing past Metro’s ear

Metro violated federal laws in making a deal with a Spanish company to purchase 103 rail cars, and must re-bid the purchase in order to qualify for a $900 million grant, the nation’s top transit official said today.

Peter Rogoff, the administrator of the Federal Transit Administration, delivered the news in a meeting with Mayor Annise Parker and top Metro officials.

The FTA’s letter to the Metropolitan Transit Authority called the procurement process “alarming and disturbing,” saying it violated both federal procurement laws and “Buy America” provisions intended to protect the national economy.

Metro began soliciting proposals for the rail cars several years ago, and starting the process from scratch would be time-consuming and costly.

The FTA’s letter said the federal agency wanted to work with Metro to continue construction during this process, but didn’t specify how.

You can find all of the documents related to this case here or here. Specifically, here’s the FTA press release, the report of the investigation, the letter from the FTA chief counsel, and the letter from FTA Administrator Peter Rogoff. For the most part, what you need to know is in that last letter. Basically, for all the bad things the FTA determined Metro did, they still believe that that the North and Southeast Corridor projects have merit, and that they are prepared to work with Metro to keep these projects moving forward if Metro cancels the contract with CAF and re-bids it according to Buy America rules. To say this could have been a hell of a lot worse for Metro is to understate. The FTA must have a lot of faith in George Greanias and his ability to not be Frank Wilson for them to have declined to cut Metro off at the knees. I think we can finally close that chapter and say that the New Metro is fully up and running.

UPDATE: Here’s Metro’s statement:

Today at a press conference hosted by Houston Mayor Annise Parker, METRO’s leaders commented on the findings of the Federal Transit Administration’s (FTA) “Buy America” investigation and review of plans to purchase 103 new light rail vehicles.

Mayor Parker first acknowledged Houston’s need for a first class transit system and expressed confidence that the FTA supports METRO’s rail-expansion program. “There is a path forward. It is steep and rocky, but we can do it,” Mayor Parker said.

METRO Chairman Gilbert Garcia echoed comments by Mayor Parker that the NEW METRO was committed to resolving issues left over from the previous administration, including the FTA investigation. “We knew there would be challenges and we are attacking them one at a time,” Garcia said. “We are changing the culture at METRO to rebuild trust.”

Acting President & CEO George Greanias said that today’s FTA findings provide several positive outcomes, while acknowledging the challenges ahead. “First, the FTA made clear that they support METRO’s rail expansion program. Also, they laid out a plan to make funds available to keep the program moving forward. And, they provided a roadmap for how to move forward, including a re-procurement of the rail car contract. It will be a steep climb but we can accomplish it,” Greanias said.

Congress Member Sheila Jackson Lee, who also attended today’s press conference, expressed strong support among Houston’s Congressional delegation to see that METRO ultimately receives the $150 million in the President’s FY 2011 proposed budget for rail expansion.

Greanias underscored that construction currently underway on three light-rail lines will continue – the North, Southeast and East End lines. He acknowledged previously that METRO has slowed some work activity on the North and Southeast lines while awaiting funding commitments from the FTA. He also said future construction slowdowns are possible in light of cash constraints. He said a new procurement to purchase rail cars was not directly linked to construction and that it could take up to 20 months to complete and have initial vehicles begin arriving for testing.

“We treat what the FTA says very seriously,” Greanias added. “The NEW METRO is committed to building a strong working relationship with the FTA and to build trust.”

Finally, Chairman Garcia thanked members of Houston’s Congressional delegation who attended a meeting this morning with the FTA, including Congress Members Sheila Jackson Lee, Al Green, Gene Green and John Culberson. Senator Kay Bailey Hutchison also sent a representative. “We are truly appreciative of all their hard work on our behalf,” Garcia said.

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