For advocates of a 3-mile rail line extension from the Eastern San Gabriel Valley into San Bernardino County, it’s an unfortunate case of déjà vu.

Seven years ago, officials in the San Gabriel Valley and the Foothill Gold Line Construction Authority were forced to make a difficult decision: With four bids coming in way over budget for the 12-mile A (Foothill Gold) Line Extension from Glendora to Montclair, the authority decided to split the project up, using the approximately $1.5 billion they had to build 9 miles of the light rail line to Pomona and then seek funding for the remaining 3.2 miles.

The joint venture construction team of Omaha, Nebraska-based Kiewit and Centreville, Virginia-based Parsons Corp. was originally awarded the contract for the entire 12-mile line. But after the phase split, the authority faced a three-year deadline to obtain hundreds of millions of dollars in additional funds in order to be able to award the remaining three-mile phase to the same joint venture. Otherwise, the project had to be rebid. The funding deadline passed in late 2021.

Meanwhile, the Kiewit-led team completed construction on the first nine-mile segment from Glendora to Pomona around the end of last year, a few months ahead of schedule. That rail segment has now been turned over to the Los Angeles County Metropolitan Transportation Authority and could go into operation as soon as this summer.

Here we go again

Now a similar situation appears to be playing out with the final three-mile extension from Pomona to Montclair. Nearly $880 million in funding has been delivered for the project ($798 million for the 2-plus miles in Los Angeles County and $80 million for the last mile in San Bernardino County). Of that, about $645 million has been earmarked for the construction budget.

But the joint venture construction team of Kiewit and Parsons – which ended up being the sole bidder – last month came in with a bid of $994 million, about $350 million – or 54% – over budget.

Authority executives had been expecting a bid to come in over budget. Chief Executive Habib Balian said in his periodic newsletter to stakeholders, “We are aware that this is a difficult time to be receiving a bid.” He cited a recent briefing from the chief economist of the Associated General Contractors of America: “His presentation was sobering and highlighted numerous factors increasing risk and cost for contractors.” Those include rising labor costs, supply chain issues and, most recently, the imposition of tariffs.

But the authority board viewed the Kiewit-led joint venture’s bid as excessively high and rejected it. They cited independent cost estimates that came in much closer to the budgeted price.

Instead, the board opted to try to solicit other bids. But first, the board voted to change the project delivery parameters. Rather than the traditional design-build approach where the chosen contractor team handles the design and construction, the board chose to do the design first under the purview of a construction manager and then put the construction project out to bid. The design-only contract is expected to go out to bid around mid-year.

Eliminating some uncertainty

The aim, explained authority spokeswoman Lisa Levy Buch, is to take some uncertainty connected with the design work off the table, reduce the risk for the construction contractor and thus entice more bidders to come to the table with presumably lower bids.

But the lack of bidders may also have been due to the Kiewit-led joint venture team always being the prohibitive favorite to get the contract to build this segment. Companies that submit bids must make a significant commitment of resources and time to the effort and if the chance of winning is viewed as a longshot, they might decide to pass.

With the Kiewit-led joint venture’s bid now rejected, that in and of itself may entice more bidders, regardless of the delivery format.

Whatever the case, it will likely be another year or more before construction of this 3-mile segment goes out to bid again. That poses a further challenge as construction materials and labor costs are increasing by double-digit percentages each year, especially with the prospect of tariffs.

While the second round of construction bids may be lower than Kiewit’s $994 million bid, getting within range of the $645 million budgeted amount in a time of rising construction costs will be a huge gap to close.

Nonetheless, Buch said, “We must try to get other bidders. We cannot in good conscience go forward with the Kiewit bid coming in so far above our independent cost estimates and our budget.”

But this likely only postpones the inevitable need to seek additional funds for the extension to Montclair in San Bernardino County, which could push project completion well into the next decade. If additional funds must be sought, doing everything possible to try to get a lower bid would strengthen the authority’s case.

The board could wait until it has funds in hand for the entire extension before awarding the construction contract, or it could opt for a replay of its 2018 decision: build the extension out to the Claremont station and set that last segment into San Bernardino County aside until more funds become available.