Sour Grapes- Napa Valley Wine Train No-Bid Stimulus Project Facing Massive Cost Overruns

Photo- Steven M Welch

Readers of this blog in its earlier days might remember the sweetheart no-bid contract Alaska Native Corporation Suulutaaq was awarded with stimulus money to do some work on a new bridge for the Napa Valley Wine Train- a project that Suulutaaq turned right around and subcontracted to Kiewit and Sons while pocketing nearly $20 million for doing next to nothing in the process.

Well, in perhaps the most surprising news since the tide coming in or sun rising in the east, the Napa Valley project that Suulutaaq subcontracted is looking at cost overruns of at least $6.2 million.

The U.S. Army Corps of Engineers may need as much as $6.2 million to keep work on the relocation of railroad facilities and Napa Creek flood defenses on track, Julie Lucido, local project manager, told the Napa Flood Control District's board of directors Tuesday.

"If we don't get those dollars for those two projects, we could be stopped," Lucido said.

Any disruption would undoubtedly end up increasing construction costs when work was resumed, Lucido said. Taxpayers would end up paying more, she said.

Dave Cook, one of the Army Corps' Napa managers, said he expects to know within 30 days if the companies working under federal contracts in Napa can keep working.

The corps is dealing with two issues, Cook said. The company with the $65 million railroad contract racked up substantial unanticipated costs last fall, he said. Also, the corps' overall budget has been reduced by Congress, he said.

In March alone, Cook said he approved more than $3 million in additional costs for Suulutaaq Inc., the general contractor for the new railroad bridges and related street work.

Suulutaaq and its partner, Kiewit Corp, ran into major complications last year in building a new rail bridge over the Napa River. It took working seven days a week to finish the bridge's foundation prior to the winter flood season, which allowed construction to occur throughout the winter, Cook said.

Although these construction problems ran up the price, the alternative was to delay the rail project a year, Cook said. "It saved the federal government millions and millions by having those guys work seven days," he said.

The Army Corps negotiated with Suulutaaq over the bills for unanticipated work, then reached a settlement, Cook said.

To keep work going, the corps shifted money from its construction management account, leaving a construction management deficit that must be filled if work is to continue this summer, Lucido said.

With money tight for many flood projects across the U.S., Cook said the corps was developing contingency plans on how to proceed. Some projects will need to be scaled back, he said.

Don Ridenhour, the county's public works director, suggested that Napa may ultimately end up paid for. "We seem to be a very popular project in the eye of the corps," he said.

Lucido agreed, noting that Napa has been the corps' "poster child" for flood control. The Napa project was one of the first federal efforts that provided major environmental benefits as well as flood control, she said.

Until this latest bad news, local officials thought that both the rail relocation and a two-year, $15 million contract with Proven Management for Napa Creek were fully funded.

The Napa Creek project and most of the rail contract are paid for by a $99.5 million grant from the American Recovery and Reinvestment Act, the federal government's effort to jump-start the economy and end the recession.

Because Proven's winning bid was $14 million less than estimates, the corps ended up returning $14 million to Washington last September.

Keeping the $14 million in a contingency fund would have defeated the goal of the economic stimulus grant to "put people to work" right away, Cook said.

Even if this fiscal year's budget shortfall can be solved, the Napa flood project still faces an uncertain future in the new federal fiscal year that starts in October, Lucido said.

Until now, the Napa project was mostly paid for by federal "earmarks," or specific appropriations that elected officials such as Rep. Mike Thompson, D-St. Helena, put into the federal budget, she said.

But Congress and President Obama have since banned earmarks, meaning there will have to be "some other process" for keeping the Napa project going, [emphasis mine- NANESB!] Lucido told the flood board.

This is where Napa's "poster child" reputation may save the day, she said.

"Some other process"? I'm dying to know what that will be. Since California is serving as an object lesson in out-of-control government spending by being about $43 billion in the hole, I doubt the state will be riding to the rescue. The municipalities in the Golden State are hardly better off, either.

So that would most likely mean Lucido and Congressman Thompson would somehow find another way to continue federal funding in some way, shape or form. Which means we will ALL get to foot the bill for this ill-concieved, wasteful fiasco in some way shape or form.

Iron Horse Roundup For August 2010

CHINA: Passengers stranded on a train that was stuck on a partially collapsed bridge Guanghan, Sechuan were successfully evacuated shortly before at least two of the cars plunged into the river below this week. Amateur video shot inside one of the cars shows passengers making frantic calls to loved ones as the bridge starts to buckle, and later on shows another train passing in the background on a separate bridge immediately in the background as the passenger cars are plunging into the river. Rescuers and railway officials were able to get the passengers out of the cars minutes before the first passenger car toppled into the floodwater-swollen river and came to rest at the abutments of nearby bridge that was still under construction.

Severe flooding and landslides triggered by heavy rainfall have battered southern China leaving hundreds dead and hundreds missing this month alone.

HOLLAND: An out of control maintenance-of-way train crashed through a barrier and tore its way through 300 feet of parking lot and slicing a watersports shop in two before coming to a stop in the town square in Stavoren, Holland on July 26.

Dutch Daily De Telegraaf reported that the official in charge of safety on the maintenance of way train was a temporary worker that spoke no Dutch. Investigators said that the firm- Spoorflex Safety First- had a history of safety infractions over the last two years and suspended the contract.

IOWA: The volunteer fire departments in Atlantic and Anita, Iowa held a fundraiser that featured Iowa Interstate's Chinese made QJ 2-10-2 #7081 powering an excursion between the two southwestern Iowa towns. The excursion ran on the western portion of Iowa Interstate's former Chicago, Rock Island & Pacific between Blue Island, IL (Chicagoland) and Omaha, NE (across the river from Omaha, NE) line.

Two trips were initially planned, but a third was added due to increased demand.

ALASKA: The Alaska Railroad announced that Kiewit Pacific Co. has been awarded the contract to provide general contracting and construction management services for the first phase of their planned 80-mile extension from the current end of the line between Fairbanks, AK and Delta Jct.

Kiewit is the same company that Alaska Native Coropration Suulutaq Inc subcontracted their $54 Million no-bid Napa Valley Wine Train Project to for less than $30 million earlier this year.

ELSEWHERE: The trailer for Unstoppable is now available online. The movie was flimed along portions of the Wheeling & Lake Erie in Pennsylvania and Western New York & Pennsylvania in western New York State using locomotives from Canadian Pacific and Wheeling & Lake Erie (modified to portray the fictitious Allegheny & West Virginia)



OK....not to get all Jay Sherman here, but it looks like Tony Scott took some of the Cop Show/movie tropes and applied them to a fictional railroad and its workers....["turn in your gun and badge fluorescent safety vest and walkie talkie!!"- NANESB!] Ah well....as I mentioned earlier, the movie is very loosely based on a real life runaway train incident in Ohio back in May 2001.

Former Alaska Senator Ted Stevens Killed in Wilderness Plane Crash

86 year old Ted Stevens was among 5 people killed in a single-engine plane crash in a remote area east of Dillingham, AK late Monday.

Stevens was the longest-serving Republican in the Senate, taking office in December 1968 and leaving office in January 2009 after losing his re-election bid. Steven's seniority earned him enough clout where he was able to steer government and military spending towards his home state. Stevens was also responsible for lifting the cap on contract size for the Alaska Native Corporations established under the 1971 Alaska Native Claims Settlement Act

The WWII Flying Tigers veteran left office under a cloud when he was found guilty of giving false statements in a Washington D.C federal court just days before the 2008 election. However, that conviction was later voided when it was learned prosecutors withheld exculpatory evidence and testimony from the trial. The prosecutors and some of their witnesses were in turn investigated by the Justice Department for prosecutorial misconduct.

Stevens and six others- including former NASA chief Sean O'Keefe- were travelling to a fishing lodge in the remote western part of the state when the single-engine DeHavilland went down. Ironically, Stevens survived a 1978 plane crash that killed his first wife Ann and four other passengers. Stevens remarried in 1980 and had a daughter with his second wife Catherine.

Guilty Pleasure Update- Ice Road Truckers in the Himalayas? Canadians Keep Write On Trucking

Photo Courtesy of Alaskaroads.com

OK- I missed last week's Ice Road Truckers largely because I was imbibing in large quantities of alcohol and watching fireworks before leaving a trail of bottles and patio furniture (but mostly bottles) back to Chalet Fenway. But apparently the History Channel showed a promo that I just now heard about that will feature some of the Ice Road Truckers hauling cement on one of the mountain roads on the Indian side of the Himalayas.

Besides the discussions on the History Channel bulletin boards (apparently some people actually saw the Ice Road Truckers: Himalayas promos themselves but couldn't believe it), a number of articles interviewing Lisa Kelly or Alex Debagorski make mention of their trip to India appear after my customary half-assed internet search while some video of a blue-mohawk sporting Rick Yemm in the Himalayan foothills have been circulating.

OK...besides the really obvious questions like 'What would Lisa Kelly look like in a sari?' or 'Is there some smoldering Bollywood bombshell out there who secretly longs to become a truck driver on a dangerous mountain road?', I have to wonder if the road they're using for Ice Road Truckers: Himalayas would actually be an 'ice road' in the show's definition where they drive across frozen bodies of water. Technically the Dalton Highway might not count but Jack Jessee and Lisa Kelly were shown continuing on past Deadhorse and onto Prudhoe Bay itself.

The two Canadian truckers who have been with the show since its inception- Alex Debagorski and Hugh Rowland- can now add 'author' to their resumes. Last month, Hugh Rowland's On Thin Ice was released by Hyperion press. Alex Debagorski, who wore many hats before the History Channel series even began, has a book due out in November.

Guilty Pleasure Alert- New Season of Ice Road Truckers Begins Tonight

Some people readily 'fess up to having American Idol or Top Model as their requisite guilty pleasure for TV viewing. I'm going to have to say mine is the History Channel's Ice Road Truckers, which has the distinction of being one of the few shows on the network that I've warmed up to and is still around. To be fair, I was watching before the petite Lisa Kelly (above) made an appearance in season 3. The first two seasons were spent on the seasonal ice roads of Canada's Yukon and Northwest Territories with 18 wheelers hauling supplies across frozen lakes into and out of the otherwise inaccessible diamond mines there.

Season 3 featured the Dalton Highway, which serves as a corridor for oilfield equipment and supplies between the North Slope and Fairbanks, AK. Apparently season 4 will see a return to the Dalton Highway, which marks the first time the History Channel and Thom Beers' camera crew hasn't been booted off an ice road.

It's also worth noting that for all the bitching and moaning I did about a set aside, no-bid contract where an Alaska Native Corporation pocketed about $20 million for doing nothing earlier this year, the transportation company that's responsible for most of the commercial traffic on the Dalton is in fact a subsidiary of an Alaska Native Corporation itself.

Grim Milestone Watch- Money Thrown Down a Black Hole....or, The Stimulus One Year Later

I guess you could've considered me a skeptic from the beginning. As it turns out, I'm hardly in the minority these days.

I remember sometime about a year ago catching a special presentation on the History Channel called The Crumbling of America. Like many a 'documentary' that network has been known to air lately, it came off as a tad alarmist- although it did raise several valid concerns over the age and condition of America's infrastructure. I only caught the first part of this special, but the release of this seemed to coincide with the passage of the American Recovery and Reinvestment Act. The conspiracy theorist in me might've thought that this was aired for the purpose of scaring up support for the $787 Billion American Recovery and Reinvestment Act (ARRA).

One of the highlighted structures was the Tappan Zee Bridge, which is the NY State Thruway bridge over the Hudson River north of New York City. It was mentioned how the bridge is being undermined by improperly treated wood pilings that were installed when it was being built in the 1950s. The special went on to suggest that it might actually be cheaper to build a new Tappan Zee bridge from scratch instead of extensively rebuilding the obsolete one.

Well...between the History Channel special, the recovery.gov website and stimuluswatch.org, the only entry I could find pertaining to the Tappan Zee Bridge was a $5,547,824 bid to purchase 7 low-emission passenger buses, two of which will be used for the Tappan Zee Express service. No mention of any work or projects concerning the bridge itself.

Now, while I was aware that much of America's infrastructure needed upgrading and repair, I had my doubts about how this administration planned on going about it. Perhaps most telling was President Obama's bold proclamation that a brand-new Maglev railway would be constructed between Southern California and Las Vegas. If I remember correctly, the Union Pacific Railroad has been looking to expand capacity on its LA-Salt Lake City line (which runs through Las Vegas) for some 10-15 years. Whenever the UP attempts to lengthen a siding or install double-track along their Mojave Desert line, an environmental group will file some sort of injunction demanding the railway ceases work because the tracks run through some endangered species habitat. Then the railroad is ordered to conduct a lengthy environmental impact study, paid for out of their own pockets. And whatever project UP intended to start falls by the wayside thanks to red tape, litigation and environmental obstructionism.

Now, keep in mind that the UPRR has been running through the Mojave desert for over a century. Now, imagine the hurdles that could be thrown out in front of a maglev railway being built through the same desert from scratch. The only people who would benefit would be the lawyers working on behalf of environmental groups seeking to halt construction.

And that is actually one of the less egregious examples. The San Francisco Chronicle and bloggers Zombie, New Class Traitor and myself documented the Federal government awarding Alaska Native Corporation Suulutaaq a $54 million dollar no-bid contract for a rail relocation project for the Napa Valley Wine Train that they promptly subcontracted for $33 million. There are also some pretty stark examples of wasteful ARRA spending here and here.

President Obama seems to have been aware of the growing discontent regarding the stimulus prior to the State of the Union address. With no significant private-sector job creation to speak of, the used-car-salesman in chief shifted the goalposts in the middle of the game and instead touted the effectiveness of the ARRA in saving the jobs of policemen and teachers. To be fair, that would probably be better tack for Obama than togo out there and tout the number of 'green collar' jobs that had been created under his watch.

The cynic in me couldn't help but notice that most public-sector unions, especially teachers unions, had heavily invested in President Obama's campaign so I suppose it's only fair for them that they got some bang for their buck. I guess the rest of us will have to wait to get 'stimulated' by Cap & Trade or Card Check.

This time last year, we were starting to hear what poor shape our infrastructure was in. 365 Days and a few hundred billion dollars later, the infrastructure is no better off...nor is the American taxpayer.

Wine Country Boondoggle- Contractor For Napa Valley Railroad Stimulus Project Pockets $20 Million For Doing Nothing

(Amy Miller)

According to California Watch and the San Francisco Chronicle, a project involving a new bridge and track realignment for Northern California's Napa Valley Wine Train as part of the larger Napa River flood-control project was awarded $54 Million in stimulus funds. The Napa Valley Railroad is a privately-run tourist railroad that takes tourists and sightseers between Napa and St. Helena, CA and serves meals and wine in restored coaches. The Wine Train began operations when the Southern Pacific announced it was abandoning it's Vallejo to Calistoga, CA branch in 1985. Former Rice-A-Roni and Ghiradelli Chocolate President Vincent De Dominico and local entrepreneurs would purchase the right-of-way from Southern Pacific, four 1950s vintage former VIA Rail Canada/Canadian National Montreal Locomotive Works FPA4 diesels and some former Rio Grande passenger cars. The wine train began operations in 1987, and aside from ballast for the railroad's maintenance-of-way, very little freight is hauled over the line.

The current project and the contractor that was awarded the funding in a no-bid contract have come under scrutiny. Anchorage, AK-based Suulutaaq Incorporated was founded by Alaska tribes and enjoys special access to Federal Contracts including the Napa River Flood Control project.

However, Suulutaaq turned around and subcontracted the project to Peter Kiewit Sons, Inc.

Federal records show that Suulutaaq is paying Kiewit $28.1 million - 53 percent of the total stimulus contract. Suulutaaq is keeping about $20.4 million, or 38 percent of the total. The rest, about $4.7 million, goes to other subcontractors, all from the lower 48 states.

So that means Suulutaaq basically pockets $20 million of taxpayer funds by subcontracting a public works project that was closed to bidding. In other words, the company made $20 million without even lifting a finger.

Walnut Creek, CA contractor Robert G. Brosamer had planned to put in a bid on the proposed project as early as 2008, but was told that no bids were being sought at the time as it was looking like the project was a "done deal with an ANC [Alaska Native Corporation]".

Brosamer, the Walnut Creek contractor, said the public was paying a premium for the Wine Train project, saying, "It would have been a hell of a lot cheaper if they had put it out to bid."
"The reality is, Suulutaaq isn't doing much," Brosamer said.

However, as the article points out, very few of the jobs awarded to ANCs actually go to Alaska Natives:

Critics have complained that the no-bid contracts provide relatively few jobs and little investment income to the tribes while costing taxpayers a fortune.

Alaska Native corporations don't have to prove that they're socially or economically disadvantaged," Sen. Claire McCaskill, D-Mo., said at a 2009 hearing. "They don't have to be small businesses. And they can receive no-bid contracts worth billions of dollars."The companies employ few Alaska Natives and "rely heavily on non-native managers," she said.

The current CEO of Suulutaaq is Samuel Boyle, who burned through an estimated $14 million worth of venture capital as CEO of sailnet- an online retailer of sailing and boating equipment that went bankrupt in 2005.

"My comment to anybody connected to this thing - if Sam Boyle is involved, watch out," said Arizona venture capitalist Kent Mueller, who said he lost more than $1 million in Sailnet.

[Hat tip: Zombie]