Legislature(2003 - 2004)
03/23/2004 01:35 PM Senate L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 358-ALASKA RAILROAD TRACK WORK
CHAIR CON BUNDE announced SB 358 to be up for consideration and
that it is a work in progress and he didn't plan to move it
today.
MR. RICHARD SCHMITZ, staff to Senator John Cowdery, explained
that until recently the Department of Transportation (DOTPF)
would treat the railroad the same way it would treat a utility
or power company when crossing a highway by putting the work out
to bid.
Over the last few years, there have not been bids put
on some of this work and the railroad itself has come
in and done it because they have the equipment to do
it. So, the purpose of the bill is to basically go
back and allow DOT to have the choice of either
putting the work out to competitive bid or just
allowing the railroad to do the work under a utility
type agreement....
MS. WENDY LINDSKOOG, Director, External Affairs, said that
Eileen Riley, Vice President of Projects, Engineering Signals
and Technology, ARRC, would help her answer questions. She
supported Mr. Schmitz' statements elaborating that SB 358
retains the DOTPF's ability to work with the private sector
under the competitive bid process for the DOT projects that
include track construction, like a crossing over a road.
In addition, SB 358 amends the state procurement code
so that DOT can also work directly with the ARRC on
track work through a reimbursable service agreement
similar to other utilities. Prior to 1996, the Alaska
Railroad could conduct work with DOT projects under
the utility agreement arrangement. The railroad work
was treated just as a utility relocation with cost
reimbursed in the same manner as the relocation of any
other utilities similar to a power line or a water
line. The utility agreements include cost estimates
that are reviewed and approved by DOT in advance of
the work. After 1996, due to private sector interest
in the track work part of these projects, the state
procurement code was amended requiring DOT to contract
track work under the competitive bid process.
Over the years, contractors have bid and won the track
construction work from DOT. Today, however, some of
the specific railroad work does require highly
specialized equipment that is not cost effective for
the private sector to support or maintain in Alaska.
This has affected the level of interest on certain DOT
projects and it also has contributed to some recent
work that was not completed to railroad industry
standards. For an example, in the past year, the
railroad has had to redo some projects including a
mainline crossing at C Street in Anchorage and in
Talkeetna along the spur road. These factors led to
support for SB 358 from the Alaska Railroad, DOT and
the Associated General Contractors.
The goal of the bill is to ensure that DOT projects
involving rail construction can move forward by giving
DOT the flexibility to use either the competitive bid
process or to work directly with the railroad. And
more specifically, SB 358 would allow basic track
construction work to be done by the private sector
and, I say basic track construction work, but it would
also allow the highly specialized work like a mainline
crossing to be constructed by the railroad at the
discretion of DOT. Either way, Alaska laborers are
constructing the project.
Finally, we believe that there are advantages to
working with the railroad directly on certain projects
and the advantages for DOT would include some lower
costs and savings of time. There are a couple of
reasons for some cost savings. For starters, the
railroad does buy railroad materials in quantity and
we're able to pass those savings along. We own the
specialized equipment; it's very expensive and we also
have the skilled labor force who know how to work the
equipment and work around track issues. So, therefore,
cost savings are realized because the railroad does
not have to mobilize the specialized equipment out of
state. We already have it here in Alaska. Excessive
contractor premiums will be avoided for the small
specialty market and the railroad provides federally
required inspection and coordination for road
projects. DOT must pay the railroad for these services
even under the competitive bid process. An example
would be flagging, so that everybody who is working
around the track is protected from moving trains.
The advantage of this bill for the Alaska Railroad, in
our opinion, would be enhanced quality and assurance
that our industry standards are being met. The
Railroad, the DOTPF and Associated General Contractors
do support SB 358.
CHAIR BUNDE noted that there were concerns from the private
sector and asked if those had been addressed.
MS. LINDSKOOG replied that they had not heard any opposition
after a couple of hearings, but last week received word from
some companies that were concerned. Local 341 Laborers were
being used for this work. Other facts have come forward, but
their concern over quality issues hasn't changed on certain
parts of the rail projects that are highly specialized. One of
the companies may even be new to the scene. The bill has been
drafted in a manner as to allow DOT the flexibility to use
either method to get the work done.
CHAIR BUNDE asked her to work with DOT and the contractors to
see if there is some middle ground.
SENATOR HOLLIS FRENCH asked if this bill just applies to
railroads where they cross roads.
MS. LINDSKOOG answered that the bill amends the state
procurement code. When DOT has a road project, sometimes it
might be over a rail crossing or maybe straightening out the
highway like along Turnagain Arm where the railroad track has to
be moved. DOT is funding and managing the work, so it can mean
more than a crossing.
MS. NONA WILSON, Legislative Liaison, Department of
Transportation and Public Facilities (DOTPF), said Mark O'Brien,
Chief Contracting Officer, is out of town and had been working
closely with Ms. Lindskoog who has already hit all the major
points. She offered to answer questions.
CHAIR BUNDE said he would delay action on the bill until Mr.
O'Brien could testify.
MR. J.R. WOOD, owner, Railway Support Services, said he is
concerned that the bill would limit the procurement of the
Alaska Railroad from the DOT to just railroad crossing per se.
For instance, the job he just bid on in Wasilla is approximately
4,000 ft. adjacent to the highway.
Our major concern here is that we feel there are
quality contractors here available that can do the
work. In fact, I have worked with one of them that I
bid against this year. We do work in the transit
industry where the standards are much higher than they
are in the freight industry and we manage to maintain
those standards, which are nationwide....
MR. WOOD said that he has hired and trained more than 80
personnel including personnel with the local laborers union who
are exceptional workers and could compete with any railroad
laborer in the country.
Some of the specifications we follow up here are not
nearly as tight as they are in the states. I feel that
probably our abilities to perform the work and our
efficiency because we do work as 'hungry contractors,'
would be much greater.
MR. MARK CONDON, President, Condon Railroad Construction, said
he had been working on projects in Alaska for the last four
years and planned on continuing bidding on projects, but said,
"If they go through with this, it would pretty much put us out
of business."
MR. JOHN LANDERFELT, Laborers Local 341, opposed SB 358 as it
has potential to work harm against contractors who are now
engaged in this kind of rail work and, therefore, his
membership. He felt that the problems could easily be resolved
through the bidding process. He suggested holding the bill until
all the parties concerned could come to the table and work
things out.
CHAIR BUNDE said that was his recommendation as well - to see if
they could come to some compromise and bring that back to the
committee. There being no further business to come before the
committee, he adjourned the meeting at 2:52 p.m.
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