Panel Awards $43-Million Rail Pact Amid Protests

Over the sharp objections of several local black and women business owners, the Los Angeles County Transportation Commission awarded its largest rail construction contract so far to a firm that was not the original lowest bidder.

The commission, on a 7-4 vote, awarded the $43-million contract to build the middle section of the 21-mile Long Beach-to-downtown Los Angeles light rail line to Missouri-based Herzog Contracting Corp., which originally was the second-lowest bidder. The lowest bidder, Idaho-based Morrison-Knudson Co., was taken out of the running because the commission attorneys said the company’s proposal indicated that it “was not willing to indemnify the commission against lawsuits,” said Paul Taylor, commission deputy executive director.

The controversy Wednesday centered on accusations from Rep. Mervyn Dymally (D-Compton), local minority subcontractors and the Black Business Assn. that Herzog did not have enough minority and female subcontractors. They also objected that a minority-owned company that will be used by Herzog was not licensed in California and was not financially healthy. Herzog, represented by attorney and lobbyist Mickey Kantor, disputed the charges and listed several Southern California minority and women-owned firms he said will be used as subcontractors.

Morrison-Knudson Co. officials, noting that the commission went against its own staff recommendation to reject all the bids and start again, charged that Kantor influenced votes on the commission. Kantor denied the charge.