DALLAS — Houston’s transportation authority, Metro, faces delays and growing costs on a $1.5 billion light-rail expansion after its purchase of 103 rail cars from a Spanish manufacturer was found to violate federal law.
Metro “violated both federal procurement law and the Buy America requirements” during the procurement and award of two light-rail vehicle contracts to the Spanish rail car maker Construcciones y Auxiliar de Ferrocarriles, according to Federal Transit Administration head Peter Rogoff.
The findings came out of a four-month FTA investigation.
“The results of the investigation are both alarming and disturbing,” Rogoff wrote in a letter hand-delivered to Metro chairman Gilbert Garcia and acting president George Greanias on Wednesday.
The letter detailed Metro’s violation of the Buy America law designed to support U.S. industry through government purchases.
The FTA found that Metro negotiated exclusively with CAF and must rebid the procurement to qualify for $900 million in federal funding for the project.
If Metro submits a sound plan for procuring rail cars, Rogoff wrote, the FTA will resume its analysis and discussions of the $900 million grant.
“There is a path forward. It is steep and rocky, but we can do it,” said Houston Mayor Annise Parker.
Garcia said the authority’s board is committed to “changing the culture at Metro to rebuild trust.”
Greanias sought to put a positive interpretation on the letter, noting FTA’s support for the project’s continuation.
U.S. Rep. Sheila Jackson Lee, D-Houston, said the area’s congressional delegation will push for the federal funding.
Construction on three light-rail lines will continue but has been slowed while the authority waited for the federal funding commitment, Greanias said.
Future slowdowns are also possible in light of cash constraints, he said.
A new procurement process could take up to 20 months, he said.
Parker, who criticized the Metro board and management in her campaign for mayor last year, blamed leaders appointed by her predecessor, Bill White, for the troubles.
White is now running for governor of Texas.
Former Metro chairman David Wolff and chief executive Frank Wilson defended the process as innovative and financially prudent.