new MTA chief is recommending the agency dispense with the company’s contract options for 100 additional cars and seek competitive bids for the $300-million job.

Chief urges MTA to decline Italian firm's $300 million contract options | L.A. Now | Los Angeles Times

Chief urges MTA to decline Italian firm's $300 million contract options
9:55 AM | May 27, 2009

In a blow to an Italian rail-car manufacturer that had tantalized Los Angeles city officials with a proposal to build a plant in downtown Los Angeles, the new MTA chief is recommending the agency dispense with the company’s contract options for 100 additional cars and seek competitive bids for the $300-million job.

The 13-member board may still approve AnsaldoBreda contract options at its meeting Thursday, but the recommendation sets up a potential confrontation between incoming Metropolitan Transportation Authority Chief Executive Officer Arthur T. Leahy and the Los Angeles County Federation of Labor.

The federation became one of the strongest backers of AnsaldoBreda after the rail company pledged to build a manufacturing plant and hire union laborers — a proposal intended to give the company leverage in persuading the MTA board to approve the potential 100-car contract.

Dozens of union workers attended the March MTA board meeting urging members to approve AnsaldoBreda’s contract options, despite concerns of MTA staff -- and the former CEO — about problems with the 50 cars the Italian company is building under its current contract.

Those cars, which cost the agency $2.9 million each, failed to meet a number of requirements specified in the MTA contract: They are incompatible with other passenger cars in the MTA fleet, 5,000 to 6,000 pounds heavier than ordered and the 50th car would arrive three years late, according to MTA officials.

AnsaldoBreda officials have blamed the delays on changes ordered by MTA and dispute the agency’s weight calculations. At the last meeting, Mayor Antonio Villaraigosa, who is chairman of the MTA board, and one of his MTA appointees, Richard Katz, brokered a two-month delay on the decision, giving the new CEO and board members more time to vet complaints about AnsaldoBreda's performance.

Over the course of the two-month extension, MTA staff was to ensure that AnsaldoBreda met its contractual obligations on weight, compatibility and delivery schedule under the current contract. In a brief memo to board members, Leahy said that although AnsaldoBreda had made a “concerted effort” to respond to concerns, their actions “fall short of meeting the requirements.”

After reviewing the company’s plans and an MTA staff study of them, Leahy added he could “find little reason for recommending exercise of the options.”

The board will debate at its Thursday meeting whether to exercise AnsaldoBreda’s options.

-- Maeve Reston