Reading & Northern vs. Delaware Lackawana

[ShortlinesUSA]

Looks like the Reading & Northern (RBMN) will continue to pursue avenues to force the local rail authority to put the Delaware Lackawana's (DL) operating contract out for bid. It is quite peculiar the contract was non-competitively renewed. This is typically done when a contractor is uniquely qualified to perform the service (that is, no one else is qualified), and we all know there are a large number of companies qualified and willing to perform shortline railroad services.

There are plenty of tools you can use to keep a desired contractor, but simply keeping someone because you're happy with the service is not an option. RBMN may well win this one and force a competitive bid.

http://www.progressiverailroading.co...ntract--44602?

[jdirelan87]

Not sure why RBMN is wasting it's time here. Legally they are probably within their right, but practically speaking its hard to see how this would result in a change of operator. Even if they are successful in forcing PNRRA to complete a selection process, its pretty clear who the authority would select. If the PNRRA is so pleased with the D-Ls performance to sole source them, stands to reason they would be selected again if a RFP was issued. Doubly so if PNRRA already saw a proposal from RBMN and said no. Not to mention that bringing legal action against the authority isn't going to warm up the relationship. Only wildcard I can think of is if RBMN has some sort of magic bullet to take advantage of the recent CP sell to NS that D-L is overlooking or not interested in.

[hoydie17]

It's about giving the perception of fairness, the PNRRA may be very happy with the service provided by the DL, but that's not concrete ground to sole source a contract. Performance within measurable criteria, price and ability to continue performance without degradation are critical in a competitive bidding process.

RBMN clearly feels that they can compete on one or more of those issues, and wants to be given a fair shake at it. The PNRRA should not be able to sole source because someone in the high levels at both the railroad and the authority are good friends and want to preserve that relationship. If RBMN can come in, do the same work at the same level of quality for a lower price, the PNRRA (as a government organization) is responsible to the taxpayers to pursue that option.

[jdirelan87]

Originally Posted by hoydie17

It's about giving the perception of fairness, the PNRRA may be very happy with the service provided by the DL, but that's not concrete ground to sole source a contract. Performance within measurable criteria, price and ability to continue performance without degradation are critical in a competitive bidding process.

RBMN clearly feels that they can compete on one or more of those issues, and wants to be given a fair shake at it. The PNRRA should not be able to sole source because someone in the high levels at both the railroad and the authority are good friends and want to preserve that relationship. If RBMN can come in, do the same work at the same level of quality for a lower price, the PNRRA (as a government organization) is responsible to the taxpayers to pursue that option.

Like I said above, I'm sure legally they are with in their right, but its pretty obvious even in a open competitive environment, D-L would be selected. Don't have the figures in front of me, but I'm willing to bet historically, if you have a sue an entity to open the bidding process, the chances of that entity turning around and selecting you as the operator are pretty low.

[ShortlinesUSA]

I highly agree that RBMN will likely not be the operator, even if the PNRRA is forced to open their operating contract to competitive bidding. I think RBMN's actions are more to force the issue of due diligence to occur, or possibly "taking one for the team" in hopes of being selected in a subsequent bid in the future. I see the RBMN acting more as a whistleblower than trying to force the PNRRA to select them as operator with these actions.

[hoydie17]

Originally Posted by ShortlinesUSA

I highly agree that RBMN will likely not be the operator, even if the PNRRA is forced to open their operating contract to competitive bidding. I think RBMN's actions are more to force the issue of due diligence to occur, or possibly "taking one for the team" in hopes of being selected in a subsequent bid in the future. I see the RBMN acting more as a whistleblower than trying to force the PNRRA to select them as operator with these actions.

Sometimes however, especially in governmental processes, the squeaky wheel gets the oil. If RBMN raises enough hell about it, draws enough public attention, it might just shame the PNRRA enough to give them a contract.

I've seen it happen, Boeing has the KCX tanker program all hung up for nearly the same reason. Although that WAS an open, competitive bid, it was Boeing that made a scene out of it in front of Congress and anyone who would listen about a foreign-owned company building equipment for US forces. Even though unofficially, it was because Boeing simply wasn't willing to accept that they'd been cleanly beaten by a foreign company that was backed by a major US manufacturer.

[ShortlinesUSA]

Good analogy and point, Sean.

[ShortlinesUSA]

RBMN taking it up a notch:

http://www.progressiverailroading.co...ontract--45010