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FTA: Houston's Metro Broke Federal Laws

Thursday, September 09, 2010 - 02:33 PM

(Houston, TX – Wendy Siegle - KUHF)  It’s been four months since the Federal Transit Administration launched its investigation into METRO's procurement practices. The results of the inquiry are in, and it doesn’t look good for the Houston transit agency. FTA officials say METRO violated both federal purchasing laws and Buy America requirements when it handed over two light rail contracts to a Spanish rail car vendor. FTA Administrator Peter Rogoff called METRO’s purchasing process “alarming and disturbing” in letter he delivered in person to Houston Mayor Annise Parker and METRO officials.

METRO confirmed that around $40 million has already been spent with the Spanish manufacturer; officials say it’s too soon to determine if it’s possible to recover the money. According to the letter, METRO and Spanish firm Construcciones y Auxiliar de Ferrocarriles (CAF) knowingly and systematically bypassed numerous federal rules. Rogoff added, “These rules are designed to ensure the integrity of procurements involving taxpayer funds and the requirement to use taxpayer funds in a manner to maximize the creation and sustainment of well-paying jobs here at home.”

Metro CEO George Greanias
Metro CEO George Greanias at podium

But METRO’s new board has been quick to point out that the transgressions were made on the previous board’s watch. “It really represents an important step in closing the books on the old METRO and opening a new chapter in what we've come to call the New METRO,” METRO CEO George Greanias said. The agency has been waiting to receive a much-needed $900 million federal grant for the construction of two light rail lines. In light of the findings, METRO may have to wait a bit longer before the feds cut them a check. The agency will now have to rebid the contract for the project, a process that could take roughly twenty months before any new rail cars a purchased. Greanias originally said the agency would still be able to complete the rail lines by its 2013 deadline. But today, METRO retracted the statement, saying construction will most likely be delayed by a year.

You can read the full story, as well as listen to the audio,  here.

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