Firm Convicted in Deaths Loses Subway Job : Metro Rail: All bids are voided on a tunnel segment. Company was found guilty of homicide in Milwaukee methane explosion.

Bids to build a section of the Metro Rail subway through ground peppered with methane gas have been thrown out after the contract nearly was awarded to a company convicted in the deaths of two Milwaukee tunnel workers killed in a methane explosion.

In the wake of the bid rejections, new methane gas safety regulations are being drafted for future tunnel contracts. The standards, Los Angeles County officials said, probably will bar Illinois-based S.A. Healy Co. and companies with similar histories from winning subway contracts.

The danger from underground methane gas has been a major concern since the beginning of the Metro Rail project. Fears were heightened and the route of the subway changed after a methane explosion in the Fairfax District five years ago.

The new rules will not be finished for a few weeks, officials said. But at a minimum, bidders will be required to submit a history of any work involving methane.

County transportation officials, who acted on the bids in a closed session Jan. 23, declined to say whether rejection of the bids and the new regulations occurred because of the history of the low bidder.

But Ed McSpedon, head of Rail Construction Corp., the public agency building the subway for the commission, said: “From what I know about them (Healy), I would say it’s very likely they would have difficulty passing the requirements we would impose on future work.”

McSpedon said that the new rules would require bidders “to demonstrate to us that if they have done work in methane areas, they have done it safely.”

Requiring contractors to resubmit bids on the project is not expected to delay completion of the subway system, he said.

Healy was the financial partner in a Metro Rail joint venture with M. L. Shank Co. The $46.4-million bid was the lowest of seven submitted for the subway segment between Alvarado Street and the intersection of Wilshire Boulevard and Vermont Avenue.

County transit staff had recommended that the contract be awarded to the Shank/Healy venture because the bid was nearly $5 million lower than the nearest competitor and met all other requirements. Construction was scheduled to begin this month and Shank was preparing to drain MacArthur Park lake when the bids were rejected, according to county transit documents.

“We’re certainly depressed about what happened,” said Mike Shank, president of M. L. Shank. He said transit authorities are entitled to reject the bids but “our low bid is out there for the world to see. I haven’t fully decided if I want to bid it (again) with or without another partner.”

The Transportation Commission, which oversees construction of the entire light-rail and subway system, voted in executive session Jan. 23 to scrap all bids on the section in question. Under state law and terms of the bid procedures, public agencies can reject all bids on a project without giving a reason.

Commission officials declined to comment on what was discussed during the executive session.

“It (the bidding) was discussed in executive session and that, in and of itself, is a confidential matter,” said Commissioner Jacki Bacharach. It was Bacharach, in a subsequent public session, who moved that all bids be rejected. The vote was unanimous among the six commissioners present.

“We just rejected all bids and we are rewriting the RFPs (requests for proposal) to include more information on experience with methane,” she said. The new advertisements for bidders are scheduled to be released today and a new contract is expected to be awarded in mid-March.

On Dec. 28, jurors in a Milwaukee County Circuit Court found S. A. Healy Co. guilty of homicide by reckless conduct for the deaths of two workers in a methane gas explosion at a sewer tunnel construction project. A third man, Healy’s project superintendent, also died in the Nov. 10, 1988, blast. Spokesmen for Healy were unavailable for comment, but Shank said he believes Healy is appealing the conviction.

Shank, who held Metro Rail contracts with a different partner for two tunnel sections during the first stage of construction, said he knew when he teamed with Healy that criminal charges were pending in Wisconsin.

“But I also felt that Healy wasn’t responsible for it,” Shank said. “There are in this world things that are accidents despite the best efforts of the company. Accidents happen on construction jobs and they (Healy) feel it happened because somebody disobeyed the company’s written rules.”

In terms of public reaction, however, Healy and Shank picked one of the most vulnerable areas for a company with methane gas safety problems to seek a contract.

The rejected bids were for the start of the second phase of construction on the subway system that ultimately will stretch for 17 miles from Union Station to the San Fernando Valley. The 4.4-mile first segment is slated for completion in September, 1993, about 18 months behind schedule.

The $1.45-billion second phase, which will extend from the intersection of Wilshire Boulevard and Alvarado Street to Hollywood Boulevard and Vine Street when it is finished in 1998, has been the subject of public debate because of methane gas.

In March, 1985, at least 20 people were injured in a methane gas explosion and fire that destroyed a Ross Dress for Less discount clothing store near 3rd Street and Fairfax Avenue. The naturally occurring gas fed fires that leaped from countless cracks in the ground, forcing the closure of one-half mile of 3rd Street and the evacuation of 160 nearby buildings.

As a result of public and congressional pressure after the 3rd and Fairfax explosion, the route of the subway was moved north to Hollywood Boulevard, despite assurances from Southern California Rapid Transit District engineers that construction along a Wilshire Boulevard corridor closer to the explosion would have been safe.

Because of the extensive web of oil fields underlying much of the Los Angeles Basin, engineers have said pockets of methane gas are common. Transit officials continually emphasize the absence of problems with methane in Metro Rail construction.

A $1.2-million fire in a partially completed tunnel segment near Union Station last July was ruled an industrial accident by fire and transit authorities who ruled out methane gas as a cause. After that fire, however, officials replaced about half of the safety officers on the subway project, saying that they were too inexperienced to ensure the safety of workers.

On June 24, 1971, a methane gas explosion at a Metropolitan Water District tunnel under construction near Sylmar killed 17 men. Two project officials later pleaded guilty to gross negligence. The disaster led directly to stringent new tunnel industrial safety laws.