Toll Road News - August 23, 2007
Richard Capka federal highway administrator has sent a blistering letter to Texas authorities saying the US Government will subject it to extra scrutiny for a period of two years - read: long delays - if it persists with procurement on SH121 in violation of federal contracting laws. FHWA legal counsel Robert Rae several weeks ago made criticisms of the proposed cancellation of the toll concession with Cintra in favor of the North Texas Tollway pointing out the legal problems posed. But Capka's new letter turns up the heat substantially threatening serious sanctions against Texas.
Texas DOT's procurement for the 121 project in accordance with Texas law SB792 "violates federal law" the letter says bluntly.
The letter dated Aug 16 spells out two breaches of federal law involved in the state's handling of SH121:
- acceptance
acceptance of the NTTA bid after the competitive procurement process had selected Cinta
- acceptance of a public sector bid in competition with private bids
TxDOT's procurement process in SH121 "works against the very foundation" of federal provisions for competitive procurement, Capka writes. This is because NTTA was permitted to bid after the terms of Cintra's bid had been public released - at the time TxDOT said it had selected Cintra.
"Allowing a bid submission after closure of a project's selection is an egregious violation of the basic requirements of a fair and competitive process. Here the final bid submitted by Cintra, along with many other proprietary details of Cintra's submission had been disclosed and were publicly available at the time NTTA submitted its proposal."
This contravenes 23USC112.
The letter accuses of TxDOT in its implementation of SB792 of having introduced "uncertainty and doubt" into the procurement process.
TxDOT's second violation of federal law, the Capka letter says is allowing a public entity to bid against a private entity: "Federal regulations specifically prohibit a public entity from bidding again a private entity," says Capka citing 23CFR636.112
FHWA regulations do not allow federal aid funds to participate in any violation of federal law, therefore a variety of sanctions will be imposed.
The letter announces:
- withdrawal of the special exceptions program (SEP-15) waiver granted to expedite SH121 and two other unnamed highway projects for accelerated environmental clearance
- withdrawal of approvals for TIFIA federal loan and Private Activity Bonds support
- a request for reimbursement of the US Government for its expenses in incurred in considering and evaluating the TIFIA loan associated with SH121
- no future federal funds for SH121
- additional oversight and approval requirements for future Texas applications so long as Texas breach of federal law is not remedied
- more "far reaching compliance measures" if Texas violates federal law again The letter ends on a conciliatory note saying that FHWA believes that TxDOT can come into compliance with federal law even at this late date - an apparent allusion to the Texas Transportation Commission not having signed off on the NTTA deal for SH121. The letter appears to be saying Texas can still be in compliance with federal law if it calls off aborting the Cintra procurement, and rejects the proposed long term lease to the NTTA.
That very subject is up for discussion at the Texas Transportation Commission today.
The letter leaked in Texas and is the subject of a Texas newspaper report this morning.
