State agency denies company’s appeal over rail bid

The state’s consumer affairs agency is siding with Oahu’s rail transit project in a challenge that rail officials say has already delayed the system’s soft opening by at least several months.

David Karlen, chief hearings officer for the Department of Commerce and Consumer Affairs, said he made an oral ruling Wednesday denying construction firm Nan Inc.’s appeal against the Honolulu Authority for Rapid Transportation, the semi-auto­nomous government agency overseeing the approximately $6 billion rail project.

Nan had submitted the second-lowest bid to build three West Oahu stations, at $85.1 million. In March, the company filed a protest against HART’s plans to award the contract to the lowest bidder, Hawaiian Dredging Construction Co.

Nan called Hawaiian Dredging’s $78.9 million bid for the station work "unreasonable, unrealistic and false." When HART rejected the protest, Nan appealed to DCCA.

Rail officials said the DCCA appeal meant they would have to wait an extra 2½ months to issue the contract when they’re already facing a tight construction schedule.

Karlen said his ruling will become official when he puts it in writing and sends it to all the parties, which would likely happen next week.

At Thursday’s HART board meeting, the agency’s executive director, Dan Grabauskas, was upbeat about the ruling. Getting the decision in writing by June 4 "should allow" the agency to move ahead with Hawaiian Dredging, he said.

However, Grabauskas also noted that the issue would probably push the opening of the rail line’s first 10 miles from June 2018 to sometime in September of that year.

It’s not clear whether Nan will pursue its next option, which would be to appeal the matter in state court — or whether such a move would further delay the station work. The company did not respond to a request for comment Thursday.

Nan filed a protest last year when HART canceled its previous bid to build nine West Oahu stations, which included the three in the bid now at issue, when all of the bids came in significantly over budget. Nan eventually opted to cancel that protest.

Also at Thursday’s meeting, board members voted unanimously to start condemnation procedures against an additional five parcels along the rail line. Four of the five parcels front Waiwai Loop, near the future site of the Lagoon Drive rail station.

Rail officials say they’re still in negotiations to avoid eminent domain but that they need to start the condemnation process now in case those talks fail so that construction can stay on schedule.

The board’s actions on Thursday bring the total number of parcels facing condemnation for the project to eight. Rail officials still have to acquire 153 of 234 total parcels along the route to complete the project.

However, they further report that most of those parcels are relatively small in size — and that they’ve already gained site access to nearly 90 percent of all the parcels to start work.

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CORRECTION: David Karlen’s last name was misspelled in an earlier version of this story.