Judge Reopens Eastside Subway Bidding Process

The controversial extension of the Los Angeles subway to the Eastside suffered a setback Wednesday when a Superior Court judge ruled that the Metropolitan Transportation Authority’s selection of a contractor to supervise the project’s tunneling was “skewed by improper external pressure.”

Unless overturned on appeal, the ruling means that the MTA must reopen the selection process, giving Metro East Consultants, which brought the lawsuit on which the judge ruled, another shot at winning the $83-million contract.

Superior Court Judge Robert H. O’Brien expressed concern about the effect of “unusual external pressure” on the contractor selection process but offered no specific examples of such conduct.

“In short, the integrity of the process is in doubt,” he wrote in a three-page tentative decision. “The expected high standard for processing public contracts has been skewed by the improper external pressure.”

The decision was the latest chapter in a legal and political fight that contributed last fall to the resignation of county transit chief Joseph E. Drew and led to a criminal investigation by the agency’s inspector general.

Metro East, a losing bidder, filed suit accusing county supervisor and MTA board member Gloria Molina and her staff of waging a political vendetta against two consortium members, TELACU and Cordoba Corp.

The firms--members of the Metro East team--have long had ties to Molina’s chief Eastside political rival, Los Angeles City Councilman Richard Alatorre, who also serves on the MTA board.

An MTA panel originally recommended that the contract go to Metro East. But after Molina raised questions about the consortium’s qualifications, Drew appointed a team of experts to review all the bids. The experts recommended a different contractor, JMA, and that group eventually received the contract.

Metro East’s suit alleged that the rejection of its bid was unfair and a violation of contracting rules. Its suit relied heavily on the testimony of the MTA’s former construction chief, Stanley Phernambucq, who described Molina’s aide Gerry Hertzberg as constantly harassing him and his staff in an “intimidating, condescending, disrespectful” manner.

Molina has denied that she or her staff interfered, saying that she questioned Metro East’s qualifications because she wanted to avoid a repeat in her Eastside district of the infamous Hollywood sinkhole and other tunneling problems.

MTA lawyers contended that the agency went to “extraordinary lengths” to ensure that the bidding process was fair, and that the ultimate winner was led by engineers responsible for “one of the greatest tunneling achievements in the world”--the Chunnel under the English Channel.

O’Brien said he was not ruling on Metro East or JMA’s qualifications. “The slate should be cleaned and a proper process, free of all influence, implemented,” he said.

The MTA board had been scheduled to vote on finalizing JMA’s contract today.

Thomas R. Malcolm, a private attorney representing the MTA, said he will meet with agency officials todaycto decide how to proceed, including whether to appeal the ruling.

“We feel there was no evidence of external pressure applied,” he said.

When informed of the ruling, Metro East attorney Neil Papiano declared, “Holy mackerel! That’s tremendous. Wonderful!”

He added: “This is a complete victory. Naturally, we’re ecstatic about it. This is what we’ve been saying all along.”

Papiano said that since the “unusual external pressure” to which the judge referred occurred after the MTA staff had decided to recommend awarding the contract to Metro East, the transit agency should start from there. That would mean simply forwarding the recommendation of Metro East to the MTA board for final approval.

“That’s the least expensive and the least problematic thing,” Papiano said. “I think they should get together and quit the haranguing and the bitterness and go through the award process.”

“If they want to spend millions and millions more, and spend more time, I guess they could start over,” Papiano said.

Mayor Richard Riordan, the MTA board chairman, could not be reached for comment on the ruling, but his chief of staff, Robin Kramer, said the ruling’s language was “very, very tough talk, an unvarnished critique of a very ugly process.”

“Should the board determine that the best course is to start over, the value of having a pristine contracting process and the public’s trust would be worth the delay,” she added.

Molina could not be reached for comment Wednesday, nor could Alatorre. His chief of staff, Hilary Norton Orozco, said the councilman was with his mother, who had been rushed to hospital earlier in the day.

Times staff writer Jodi Wilgoren contributed to this story.

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