the point is we need to aggressively look at concerns and challenges and address those concerns and move onto the next one because there will be others. we meet with them regularly. i personally meet with the pmo, the individual that wrote that report, at least three to four times a week. >> thank you. >> anybody else? in that case, members of the public who wish to address the board on this issue? >> julie choy, stanley chan and -- last speaker. >> good afternoon. >> chair nolan, board, director reiskin. i am president of the asian american contractors association, local businesses and construction industry all lbes. i'm here today to talk about the point that chair nolan brought up, the lack of participation of local san

francisco-based contractors. i went through my e-mail archives to see her respondents about this project. it goes back to 2008, there with me as i go through some of the e-mails that i found . in march 2008, sfmta started to reach local businesses and provide a network, in april 2008, the asian american architects and engineers, and the asian-american contractors association began to work with carter rohan and mr. fungi discuss this project to make sure local businesses get a part of this project. in september 2008, mr. fungi met with our association to discuss the opportunity to unbundling the project and our chance to participate .in 2008 there were more financial management seminars; in 2009, the former president

of our association sent a letter to nathaniel ford [sounds like] suggesting unbundling and making sure we get part of the action. forward to 2011, 2012, we had meet and greets with the potential bidders. and then in 2012 october the other shoe drops; we learned the package would be rebound the; we felt awash with the realization that this was not an average. we have a project that is low local participation. >> we have additional possibilities for local businesses? >> again,

the public contract code requires doing at least one half of one percent; to the extent that there is work to be done that is below that threshold, there is potential for the contractor to engage firms to do that work, roughly four million or less. i am not suggesting there is a whole lot of work out there outside of what has been listed in those very small, relative to the size of the contract, pieces but it is possible. >> you care to comment on that? >> yeah. we are going to have another member of our organization speak. with regards to that, again, we have found that there was one local contractor listed. non-minority. very disappointing to our

organization, our constituents and i hope it is disappointing to the board. we buy our lunches and pay our payroll taxes here; we have been engaged with mta for five years. thank you. >> stanley chan, followed by oren hellstrom [sounds like]. >> my name is stanley chan, president of value fire protection. we have been operating out of san francisco for 25 years. we have many projects in sfo, puc, parks and rec and so on. we are familiar with many agencies in san francisco. i want to share with you my very unpleasant and

outrageous experience with mta in my experience. to summarize our company was poised to become a second-tier subcontractor to a first-tier subcontractor. upon learning that our first tier got the job, two hours later they called us back to say tutor found a way to satisfy the sbe requirements him or somewhere else so they don't need us more. six months of work went down the drain; years of contact with the prime contractor went down the drain. this project is huge, 840

million dollars. i urge not to move forward for the following reasons. it sets a dangerous precedent to ignore chapter 14 lbe ordinance which many supervisors have supported. all other supervisors support it. two, it ignores the impact of the local economy that could be generated from participation in this. can i submit this? >> of course. we would be happy to see it. next speaker. >> good afternoon. >> good afternoon oren feldstrom -- the coalition is an umbrella

group composed of numerous minority owned trade associations here in seven cisco such as the african american chamber of commerce, the asian-american contractors association and others. we have been working with many years to increase opportunities for smaller, local, minority owned firms the cities 14 lte program and the federal dbe program. local businesses and especially minority businesses are hurting. when the economy goes south it is our members who get first and hardest. we have had a number of our businesses over the last couple years just hanging on, downsizing, leaving the city or going out of business. that is why there was commenced excited about this project, 840

million dollar contract right in the heart of san francisco, what an opportunity to engage local and small minority owned businesses that is why to us it is unbelievable to us that this body is poised to award a contract of that size , that magnitude one of the largest ever in the city with virtually no local participation in the local minority business participation , we also think there are serious legal questions about whether or not this contractor working go forward. mr. chan just gave you his story; others that we have heard since we sent in our letter objecting to this concert the word racist serious questions about the good faith and fair dealing that this . rant contractor has been involved with we are not asking for local preferences. we are asking that this received the scrutiny that this deserves, but it gets sent back to muni's dbe contract compliance officer to interview folks like mr.

chan and other businesses that were rejected. >> next speaker please. >> deraline davis [sounds like] >> i am also on the cbe coalition of business equity. i am appalled to with this but is done as it relates to small businesses. it is unacceptable. i have been in the central subway project and then kicked off that project for no apparent reason. also there are other small contractors, they have not had a fair opportunity to participate. this body should go back and look and review the legalities of this contract, and how it impacts small

businesses like mine to work in san francisco, where we pay taxes every day. >> thank you. next speaker please. >> alex chu, followed by lance carren [sounds like], last speaker. >> my name is alex chu, president of the asian-american attorney and cpa firms. we are also a member of the coalition for economic equity and also the council of asian-american business associations. we are here to voice our request that you reconsider the awarding of this contract. we support wholeheartedly what has been said so far about opposing this contract. we support the coalition's position. i don't know.

there is much more i can say this point. the small businesses in san francisco are suffering. even though there is an uptick in the economy, the uptick has not helped small businesses. we request that you consider this contract. without taking into consideration the impact on the local economy as well as the lack of assistance to the local, small businesses. thank you. >> next speaker. >> lance carrin, last speaker. >> mr. carrin. >> let's see. two minutes. hello again.

i want to follow the discussion, not sure your name, mr. heinicke, mr. fungi, regarding the problems of the schedule. i recommend the article in the morning's examiner by joe eskinosi [sounds like], a full rundown of the problems. you have a 4.7 week contingency where you should have 10 -- i'm sorry, 4.7 month contingency, should have a 10 month contingency as far as scheduling on a 65 million dollar contingency. you should have 160. mr. fungi said it was dated, it was dated may 16th, reflected

up until the end of april. if we were in year four of six years, it would not be a big deal but you have not started this project. you are already in deep trouble as far as the federal government is concerned. i really recommend that you bone up on this; [indiscernible] and get the agency back on track. i would like to point out also that apparently there's serious trouble at union square station, driving piles. maybe-- those are my comments. i encourage the board to get up to speed on this and stay with

your agency. thank you. >> albert wong, followed by howard wong. >> i like to follow up - my name is albert wong, value fire, i work with stanley. i like to follow-up with other points of view brought up. not only by moving up the project said a dangerous precedent for the city agency to ignore the lbe ordinance, in disregarding the benefits to the local economy that can be generated. but also many of us, the contracting communities, have dreamt and aspired to participate in a once-in-a-lifetime 840 million project. now we are about to have this dream taken away not by others but by our own agency.

this project will be built and maintained with local monies for many years to come; local communities are to arrive benefits throughout the project especially from the onset, where it impacts the most. this project must be billed by san franciscans. finally, we are to use everything in your power and wisdom to disapprove this unprofitable proposition. the lbe organizations will applaud and remember your actions. >> afternoon mr. wong. >> howard wong, savingmuni.com. half of my career has been overseeing large city projects; i am aware of the problems

that projects can fortell at any point in the project. with the award of the tutor perini contract, the project report dated may 16, 2013, will drop the central subway contingency to 65 million dollars, or approximately 4% of the project cost. when the federal requirement at this point according to the fta is 10%, or 160 million. but - savemuni.com analysis indicates that perhaps this is even worse than it seems based on records that we have obtained the contingency might be closer to 3%. given the fact that major construction of tunneling and

station deep excavation has not started at this point of the project is prudent to have large contingencies for project with high risk as the fta acknowledges. in 2009, the fta recommended a contingency of 20%, 330 million dollars. the report they wrote in 2009, they said there was an 80% chance this project would cost 2 billion or a 420 million contingency. in the consultant's report, the average has been 39%, requiring a contingency of 600 million. this project will go over budget.

>> mr. chair. commissioners, al norman, -- bayview contractors. i am against your awarding the contract to tutor perini. the only way you work for them as they take your number; you don't think there's. the majority of the people who get left out are the ones for whom you paid these laws. we ask you not to award this contract,; you will not get participation from anybody. those are the same contractors i work for 10-20 years ago and i got in trouble just working

for them. i am asking you not to word this contract. it is not worth it. what happened to us, the people who have to go to the polls and vote the measures for you to get the, money for transportation and of the tunnel, and the system and get out and support the mayor? we ask you as citizens and business owners in the city and county of san francisco not to award this contract. i don't care who you give it to but you need to go out and then again and do it all over again. if nothing else put it back out to bid. >> thank you. >> -- >> good afternoon everyone.

i just could not help coming up here and making a few comments. first we are very cognizant of the local business enterprise hiring programs in the city. we have done some of the largest public works in the city from the mosconi second phase to the muni metro turnaround; to the majority of the san francisco airport. we understand these are small business goals. we talk to all the local contractors despite to what you hear. this job is a very complicated, very difficult, one-of-a-kind belowground station excavation project. we did not get a lot of local enterprise quotes on the major categories because it's extremely complex and larger. one of the largest subcontractors is a local subcontractor.

we did everything within our power and are still open to local businesses who really have an interest in providing service on what's remaining to be done. your agency has all the quotes we took from local businesses; i think you would be interested to find out that there weren't that many quotes despite all the rhetoric to the contrary; we did everything within our power to incorporate them. we have a saying, if you don't bid, you don't work. >> excuse me just a second. in the spirit of what people are saying here, sounds like you are saying the local businesses cannot do the work. >> i'm saying that this is an complexity of the job, there are that many categories were we can utilize local businesses.

in the final analysis we held those same meetings and we got a certain number of quotes; we turn in all the quotes to your mta agency and you would be amazed at how few local quotes we got as compared to those quotes outside of the city. in other words what i was trying to say is, in order to incorporate local businesses they have to come, to have to talk, and have to quote to us. those quotes are all a matter of record we turned them all in. >> i would be interested to see. >> first of all thank you for standing up. you do not have to. i can think of 840 million reasons. >> i am here to be culpable. >> i'm not looking for culpability.

one of the concerns is not so much that when you put the work into a few categories; but by putting work into some of the categories you preclude some of the local businesses from bidding and i want to get a better understanding, your response to what is called the rebundling of the contract; maybe the rebundling is necessary. but i think that what we are hearing is that the rebundling, as they call this, made it more difficult for local business participation and it would be helpful to hear your response to that. >> the truth is that when we went out to bid, in all the circulars, we spoke to each and every subcontractor and supplier and we said we will take rises on each of the four separate contracts and we'll break them up into four separate pieces, is that be the way the competitive bids

come in. electrical in our proposal is split into three packages; roadway electric on the station, and -- electric. split it into 35, 29, and 11 million dollar separate contracts. we offer that in all categories. you can bid on one; all came in broken down by station and tried to mix and match. but that is not how it worked out. >> director -- bridges. >> director bridges: you work

on other projects in san francisco. you had other lbes in those projects? >> yes we did. >> director bridges: am struggling with the rebundling, and not signing local businesses. i would think that you would find some contractors. i'm struggling with that fact. >> i understand. let me clarify. on all the other projects that we bid other than the muni metro tunnels; we find that many of the good one already subcontractors are more directed to the building business as opposed to tunneling subway stations 100 feet below the street, heavy excavation, we have chemical routing, compensation routing, piling, only two bids from

contractors in the u.s. there is so little competition, in the past we got our strongest minority and local support in building finishes; these stations have a limited amount in building finishes and for whatever reason we got bids and gave of his preference to small business; and believe it or not we try to bring in local business where it was possible but we did try to stay with competitive pricing and low bids. unless they were close, we gave the benefit to locals and/or minorities but not to the extent to where our bid would be fouled. our job was under such financial pressure from and not his budget that i do not see how we could do that;

i thought our primary goal was to meet the small business to the extent practical meet as much local involvement; the bid that we have on file with them straight the gaps and how few local business quoted to us. >> thank you. >> last speaker is keith gilliam. >> afternoon. >> good afternoon. my name is keith gillam, i am a quality engineering. we are a small business, a local business. we are part of the tutor saliba team; i want to applaud the city and sfmta for a world-class project at this point; i would ask that you move forward in the word of project and really look at the composition of not

just the local firms but the local people. these firms might be located in else places but the individuals living san francisco. my team has four members who live in san francisco. >> i don't know as much as i would like about this. i am sensitive to the comments that mr. celstrum, and a very false that he represents; we would love to have as many san francisco businesses involved. i am impressive mr. tutor came to answer questions directly, i appreciate that. the way i see it is a little

bit of a legal box for us because of the nature of the funding of this project. putting aside mr. tutor and his firm and their efforts to engage local groups, we can't insist on 14b goals because it is a federally funded project; we cannot insist on local goals as opposed to sbe and those types of goals in a federal project. we are also committed to take the low responsible and responsible bid. if mr. tutor's firm comes in that needs those responsible goals, we are in a box to accept. otherwise if we reject this contract we are sort of stuck and that is where we are and we can't go forward with the

project as a whole. am i misunderstanding that? if that sort of the legal position that we find ourselves in which i realize is not solace for the local sbe's that is a situation that we are in? >> you captured it exactly right; chapter 14b, we are legally precluded from applying the requirements of chapter 14b of the admin code to the entirety of the project with the federal funds providing the lion's share; even if it were a minor share the project is federalized; and those kinds of local rules that are in conflict with federal law we cannot apply as much as we would like to. i spend a lot of time working on improving 14b to improve the outcomes from 14b when i was public works d