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Given its first chance to discuss the status of what will be arguably the most important contract for the success of the train system, Honolulu’s rail authority board steered clear of tough questions.

Attorneys previously had advised the board of the Honolulu Authority for Rapid Transportation
to refrain from weighing in on the decision to award the $1.4 billion contract to Ansaldo, despite its rocky history. They wanted to wait until administrative appeals brought by Sumitomo and Bombardier were resolved.

The discussion of the so-called core systems contract, led by HART Audit/Legal Matters Committee Chair Ivan Lui-Kwan, glossed over the stickier parts of the weekend ruling that rejected Sumitomo’s appeal. And the financial woes of Finmeccanica, the parent company of winning bidder Ansaldo Honolulu, were hardly mentioned at all.

Finmeccanica’s troubles have been well-documented. Last month, the company’s chairman was probed over . The chief executive that could include a sale of the unprofitable transportation division.

Sumitomo Vice President Gino Antoniello raised those points in testimony Thursday morning.

“The parent company said, ‘You’re no longer a core business.’ The parent said, ‘We don’t want you, we’ll sell you,'” Antoniello said. “The parent chose that route because they’re not making money. The parent chose that route because they haven’t performed well in the past.”

When board members gently asked Interim Executive Director Toru Hamayasu about Ansaldo’s finances, he pointed to the letter he sent to the company this week seeking some final paperwork and requesting information on “any material changes in the financial capacity” since the city first evaluated prospective bidders. Hamayasu said the “acid test” will be if the company can secure the bonding that will show a financial institution believes the company is a good bet to make good on its promises.

Ansaldo’s financial stability and the company’s past performance were not included in the evaluation criteria the city used to compare the bidders. Sumitomo in its appeal to the Hawaii Department of Commerce and Consumer Affairs complained that “price realism” should have encompassed those factors.

Senior Hearings Officer David Karlen ruled that the city followed the terms of its Request For Proposals (RFP) and technically adhered to procurement law, but he made a point of noting that “the City’s evaluation process was not a textbook example of how such an evaluation should be accomplished.”

Despite that lukewarm analysis of the city’s procurement, Lui-Kwan took Karlen’s ruling as a ringing endorsement.

“Quite honestly, as a board member, I was comforted by having a third party evaluator … able to provide more objective information,” he said. “This hearings officer was extremely thorough in considering and taking evidence and analyzing every one of Sumitomo’s claims.”

Carrie Okinaga, chair of HART’s Board of Directors, was largely silent. She was Corporation Counsel before joining HART, and was the city’s top lawyer when it announced the award to Ansaldo earlier this year.

Don Horner, who gave indications recently that he might be an independent voice on the board, was not present. Horner said Tuesday at the Hawaii Board of Education that he’d be out of town for a couple of days to take his son to college.

Pressed afterwards about whether the RFP could or should have been written to weigh financial capacity and past performance in its comparison of bidders, Hamayasu told Civil Beat that would have been unfair to smaller or less experienced companies that otherwise offer the best value. The city had already determined that Ansaldo, Sumitomo and Bombardier were all qualified to do the work.

The companies had submitted competing bids to design, build, operate and maintain the train system — everything from the cars to the track, from traction power to communications systems.

“Once you qualify, once we looked at it, why is it that it’s part of price realism?” he said. “Once you’ve set that stage as a qualifier, then everything is equal. … We’re saying that’s not going to be a fair game. Once you pass the preliminary, you’re going to the semifinal as everybody at the same starting point. We’re interested primarily in the quality of the proposal and the cost, not so much as how big these guys are or how financially capable.

“Once you’ve determined everybody’s qualified, then small company, big company, or some people with a little bit of a problem versus the spotless record, no, okay, they’re qualified,” he said. “Even with somebody that’s had a bad history, if he has a good product, why not give him the contract? That’s the best value for the city. We’re not saying that he has any kind of shaky thing. We have full confidence that all of these people can deliver. Otherwise we wouldn’t be doing this. Then he wouldn’t be qualified.”

Bombardier has already appealed its case to Circuit Court and asked for relief from the Federal Transit Administration. Antoniello said Thursday that Sumitomo is still weighing its options and will make a decision soon.

Meanwhile, a contractor who was part of the Sumitomo team has filed a complaint with the Regulated Industries Complaints Office alleging that Ansaldo was not a licensed contractor at the time it made its first bid, contrary to state law.