Monday, May 27, 2019

Updated: Transdev must does have pretty good odds

RTA is in the process of deciding on whether or not it wants to renew its relationship with Transdev this year or contract out operations to a different management company.  It's tempting to think, then, that the fact that 2 of the 4 candidates being considered for CEO have Transdev ties is a pretty big tell as to where that's headed.

Regardless of whether Transdev wins the contract this year, its role is expected to be diminished somewhat.   RTA will still outsource most of its operations management. But the executive level leadership will be directly hired by and accountable to the publicly appointed board.  Maybe that's a distinction without much of a difference. It would certainly seem that way if the new CEO is hired straight out of Transdev.

One of the four candidates is former longtime RTA executive Mark Major. Major, technically, is a former Transdev employee. But it's worth noting that he tried not to be.
Major, 58, a Loyola University graduate, spent more than 30 years at the RTA in various roles, including general manager from 2006 to 2008. In that role, he sought to keep the RTA's operations under local employees' control, but lost out to Transdev, which hired Justin Augustine III to run the agency.
Major was actually pushed out of RTA just last year in the midst of a controversy over the new Canal Street ferryboats. 
Under a resolution the RTA approved in January 2016, the agency was supposed to spend no more than $10 million on the catamaran-style boats, which will carry up to 149 passengers each across the river between Canal Street and Algiers Point.

The firm chosen to build them, Metal Shark of Jeanerette, originally had until late May 2018 to complete them. But Transdev later negotiated a revised $10.7 million contract with Metal Shark with a March 21 delivery date.
Apparently the extra money was a rush order to get the boats up in running in time for Mitch Landrieu to have a big celebratory ribbon cutting before leaving office. That didn't work out so well. As of the beginning of May this year the new ferries still weren't ready.

So what went wrong?  A lot of things. This September 2018 article summarizes a series of delays incurred last year due to failed inspections.
Though the ferries were complete enough by May to warrant inspection by the U.S. Coast Guard, the inspectors said the ferries’ stairways were too steep and the access plates for their fuel tanks were on the wrong side of the tanks. Metal Shark had to remove the stairways and the fuel tanks and start over.

In July, one of the boats began test runs on the Mississippi, and Transdev’s crews began to learn how to operate both vessels. But training stopped after only a week as the RTA and Transdev found still more problems. The boats didn't drain correctly and there were issues with how some of the equipment was mounted. A door seal failed, and there weren't enough safety signs, according to the RTA.

What was worse, though, was this wasn't the company's first such complaint. That Advocate article also notes that the previous year Metal Shark ferries delivered for use in New York City had to be taken out of commission when the boats, "began leaking and corroding after only a few months in the water."

That was interesting to me so I looked up a few more details. Turns out the New York City deal with Metal Shark involved a strange kind of competition with an Alabama based firm called Horizon.  Here is how that went.
Two years ago Metal Shark and Horizon were selected to build — on an aggressive schedule — 19 aluminum catamaran Incat Crowther-designed 85’4″x26’3″ ferries for New York City. Both yards were given contracts for a certain number of ferries by ferry operator HNY Ferry Fleet LLC, the Hornblower subsidiary that is running the system for the city. By November 2016, 16 contracts had been let and there was what amounted to a competition, based on what Hornblower saw during each yard’s construction process, to see who would build the additional boats.

In 2017, Horizon made the first delivery to New York’s NYC Ferry Service, with Metal Shark making its first delivery right behind it. But the aggressive schedule proved too much for Horizon, logging far more labor hours than it had anticipated, helping plunge the shipyard into a financial quagmire that eventually led to a Chapter 11 bankruptcy filing in October 2017. Meanwhile, the ferry service was an almost immediate success and Metal Shark was given additional contracts to build more boats for the service. 
So after driving Horizon into bankruptcy by undercutting it and delivering a faulty product in the process, Metal Shark went on to buy Horizon out in 2018. Really living up the "shark" part of the name, I guess.

But there is more. In October, RTA board member Al Herrara was forced to resign after it came out that a business he owns entered into a deal to sell parts to Metal Shark. 
Herrera billed Metal Shark of Jeanerette $8,500 for pipe fittings, pipe flanges and other materials his Kenner company, Best Bolt & Nut Corp., provided for the new ferries in November and December 2017, invoices obtained by The Advocate on Wednesday show.
The Bolt and Nut deal is a clear ethics violation. As a parting shot, though, Herrara went on to claim "whistleblower" status accusing RTA leadership of "questionable bidding and billing practices" although it isn't clear what he was referring to specifically.  Whether any of this contributed to the construction delay is anybody's guess.

After that the relationship between RTA and Metal Shark experienced some strain. RTA began charging the contractor $1,000 per day in late fees.  In November we learned that the boats would be delayed again due to "corrosion problems."  Metal Shark then began to push back against RTA with somewhat non-specific complaints about the terminals these ferries are supposed to be serving.  A month later, the Advocate found that a consultant hired by RTA had reported Metal Shark's work appeared "rushed" and "not very organized."
"Metal Shark appears to lack direction in coordinating final outfitting and finish work of the vessel," Barry Geraci of the Shearer Group said in a June report about the first catamaran the RTA's contractor designed and built.
By March of this year, however, everything seemed like it was back on track pending a few contractual details and.. something about a "rescue net."  
The dispute between the RTA and Metal Shark centered on whether the new ferries should include an attachable rescue boat or use a rescue net to retrieve passengers who fall overboard.
That story says the parties eventually agreed on "a crane-like device coupled with a rescue harness" to fish people out of the Mississippi so, if you are planning to ride the new ferries, maybe stay away from the railings. Anyway, we were told at this point that the new boats might be ready in time for Jazzfest. They weren't. But, no doubt they'll be along soon.

And now that the Metal Shark saga appears to be ending, what better person to run RTA than the sort of but not really Transdev guy who paid them $750,000 to "rush" the job in the first place? I don't like to bet on these things because I am shit at predictions. But if Transdev has better than even odds at re-upping with RTA in September then it's probably also fair to say Mark Major has better than even odds of getting the CEO nod tomorrow as well.

Update:  They went with this guy.


 The Advocate has a paragraph of his CV here.
Wiggins, 52, joined the Los Angeles transit system as executive director of security in 2015, after more than 20 years in transportation jobs. He has worked for transit systems in Denver, Chicago and Oceanside, California, serving as chief administrative officer and deputy executive director, among other roles.
Let's spend a few seconds googling and see what we come up with real quick.

Wiggins's title in L.A. is Chief of Security and Law Enforcement.  The position was created in 2015.
In the newly established position, Wiggins manages the agency's internal security operations, along with its $100 million contract with the Los Angeles County Sheriff’s Department.

Part of his job involves maintaining Metro’s security standards. But he also focuses on ensuring that the agency’s surveillance systems, fare enforcement technology and communications systems work together efficiently.

In addition, Wiggins aims to increase L.A. Metro’s law enforcement visibility throughout its entire network.
"Fare enforcement" sounds super friendly.  So does the prospect of passing through a body scanner every day just to get to work.
In addition to the Thruvision scanners, the agency is also planning to purchase other body scanners – which resemble white television cameras on tripods – that have the ability to move around and hone in on specific people and angles, Wiggins said.

"We really want to be effective and we need the ability to have a fixed field of view, but we also need to be able to move that field of view as necessary," Wiggins said. "Deploying these technologies together gives us that accuracy and minimizes any delays."
Now we're not saying this means Wiggins is going to go full-on police state managing the buses and what not.  But we should note he does have some experience in that area.
A veteran of the U.S. Army Military Police, he joined Metro's executive team after more than two decades of security-related experience, including a stint training a new police force in Iraq through DynCorp International.
DynCorp is an internationally notorious mercenary paramilitary security force. Famous the world over for operating in such human rights quagmires in Iraq, Afghanistan, Bosnia, Haiti, and post-Katrina New Orleans.  On the plus side, this means our new RTA head could very well have experience getting people to work on time.
While labor trafficking is clearly a human rights issue, McCahon is quick to point out that recruitment fees are also procurement fraud. Under the current contract, Dyncorp and Fluor pay Ecolog to bring them a specified number of workers. The contractors assume responsibility for transporting and housing their workers and are reimbursed by the government for the associated costs. “So if a subcontractor brings over 8,000 workers, and each worker comes with a $2,500 recruitment fee, that’s a $20 million black money kickback,” explained McCahon. “This is the largest contract fraud in the history of reconstruction.” The Army reimburses Dyncorp and Fluor for all of their allowable costs, plus 3 to 6 percent of their costs as profit—so the higher the costs, the higher the profit.
Upperdate: Looks like Transdev is back in
The RTA’s board of commissioners unanimously awarded the contract to Transdev at a meeting Tuesday, following recommendations from a separate selection committee and an outside consultant’s study that urged a structural overhaul of the agency’s leadership. Having also handled financial and policy planning decisions since 2008, Transdev going forward will only oversee operational aspects of the RTA.
I thought they might wait to announce that until after the reorganization was a done deal. But here we are.

Uppestdate:  I forgot to mention one more Metal Shark fact. Yes, Bobby Jindal's LED helped them get state subsidies. Why wouldn't they?

In May 2012, Gov. Jindal dedicated a previous expansion of Metal Shark's facilities in Jeanerette, after the company won a $192 million U.S. Coast Guard contract in November 2011 to build the Response Boat-Small, a watercraft adopted by the Coast Guard to broaden its homeland security mission after the Sept. 11, 2001, terrorist attacks. The company is also building other boat classes for the U.S. Coast Guard, U.S. Navy, local law enforcement agencies and foreign agencies.

The state began working with Metal Shark Boats on the current expansion project in November 2012 and will provide the company with a $750,000 Economic Development Loan Program award, along with the services of LED FastStart®, the nation's top-rated state workforce development program. Metal Shark also is expected to utilize the state's Industrial Tax Exemption and Quality Jobs programs. Construction will begin later this year and hiring for Metal Shark's new jobs is under way.

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