A losing bidder is accusing the Patrick administration of illegally giving a rail enterprise owned by the repressive Communist Chinese government an "inside track" on a lucrative contract to manufacture Red and Orange Line subway cars last year.
In a blistering lawsuit filed in U.S. District Court yesterday, Hyundai Rotem Co. alleges China CNR Corporation, which now has a $566.6 million contract with the MBTA to produce 284 subway cars, unfairly benefited during the bid process when former Gov. Deval Patrick and former MassDOT head Richard Davey met privately with officials from a CNR joint venture during a "trade mission" to Hong Kong.
Patrick and Davey also relaxed previous bid requirements to favor CNR, the suit alleges.
Massachusetts awarded China CNR its first major North American subway car contract last year.
In a statement, MBTA spokesman Joe Pesaturo defended the contract: "As part of a lengthy and thorough procurement process, the MBTA fully considered all materials submitted by each of the bidders, including Hyundai Rotem. Hyundai Rotem's bid was substantially higher than the successful bid and did not present the best value for the taxpayers of the Commonwealth, and so the MBTA did not award the contract to Hyundai Rotem. The MBTA does not believe that the complaint has any merit."
South Korea-based Hyundai Rotem, which claims it filed an administrative appeal with the state in November, demands in the suit that the contract be thrown out and that it be declared entitled to the contract because it produced the next lowest bid — $720.6 million.
"The procurement process was deeply and fundamentally flawed because the MBTA failed to put the bidders on equal footing, made arbitrary and capricious decisions, failed to adhere to the terms of the bid documents or do minimum due diligence of CNR, all in violation of Massachusetts General Laws," the suit contends.
Hyundai Rotem claims that during the December 2013 trade mission to Hong Kong, Patrick and Davey held "improper" private ex-parte discussions with officials from CNR's Chinese joint ventures regarding CNR's plans to build a North American headquarters in Springfield as part of the deal, but "no effort was made" to hold similar meetings with other bidders.
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