SEPTA’s recent announcement that it would be purchasing new cars for its Regional Rail system from a Korean firm with no experience in the U.S. transportation market has raised questions, and not without reason.
A policy of accepting the lowest bidder with few questions asked has led to a $236 million contract being granted to United Transit Systems Inc., a consortium of the Korean Rotem Company and Nissho Iwai American Corporation that previously operated only in Asia.
Accusations have been raised by both industry experts and local politicians that the selection of UTS may have had something to do with more than just its low bid. UTS has the support of Gov. Ed Rendell and Mayor John Street, as well as a crack lobbying team in Harrisburg comprised of state Republican chairman Alan Novak, former Mayoral Chief of Staff Stephanie Franklin-Suber and former SEPTA general manager Jack Leary.
UTS’ poor technical rating on the scale SEPTA uses to rate the qualifications of its bidders just adds more fuel to the fire. UTS rated 125.2 points out of 175 for technical merit while competitors Kawasaki, Sumitomo and Bombardier, scored 162.8, 157 and 132 points respectively.
The only upside offered by UTS would be that their railcars would be constructed in Philadelphia. UTS has proposed a facility in the Navy Yard, paying workers the prevailing wage and creating 140 new jobs. Bombardier is a Canadian firm with factories in New York and New England, while the Japanese Sumitomo company has multiple American factories outside of the Philadelphia area. But even SEPTA has admitted the new jobs created in Philadelphia by UTS are only, as one board member put it, “icing on the cake.”
Although bad decisions are hardly an exception for SEPTA, creating a situation where Philadelphia’s commuter rail fleet will be overhauled by an untested company with low-performing previous work will both endanger SEPTA customers and give this city one more black eye. Low bids cannot be the only factor in granting SEPTA contracts – the safety of commuters and the performance of the trains being purchased matter too.
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