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The Metropolitan Transit Authority of Harris County, Texas (Metro) “violated both federal procurement law and the Buy America requirements” during the procurement and award of two light-rail vehicle contracts to Spanish rail-car manufacturer Construcciones y Auxiliar de Ferrocarriles (CAF), Federal Transit Administration (FTA) officials recently ruled.

The findings, announced yesterday, were the culmination of a four-month FTA investigation into Metro’s procurement practices.

“The results of the investigation are both alarming and disturbing,” said Federal Transit Administrator Peter Rogoff in a prepared statement. “They reveal a series of systematic efforts through which Metro and CAF sought to bypass numerous federal rules. These rules are designed to ensure the integrity of procurements involving taxpayer funds and the requirement to use taxpayer funds in a manner to maximize the creation and sustainment of well-paying jobs here at home.”

In order for the FTA to continue to direct federal funds to Metro’s fiscal-year 2011 projects, the agency will be required to submit a written affirmation of its intention to rebid the contract and detail a plan to achieve full compliance with all federal requirements, FTA officials said. The FTA has requested $150 million in the federal FY2011 budget for Metro's North and Southeast Corridor light-rail projects. The projected federal investment for the more than $1.5 billion projects is $900 million.

In a statement issued yesterday, Metro Chairman Gilbert Garcia said the agency is trying to resolve issues left over from the previous administration, including the FTA investigation. Nonetheless, the FTA findings provide several positive outcomes, added Metro Acting President and Chief Executive Officer George Greanias.

“First, the FTA made clear that they support Metro's rail expansion program. Also, they laid out a plan to make funds available to keep the program moving forward,” said Greanias. “And, they provided a roadmap for how to move forward, including a re-procurement of the rail-car contract. It will be a steep climb, but we can accomplish it.”