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The French company Keolis will take over the state's commuter rail operations this summer after a unanimous decision by the Department of Transportation's board of directors.
The $2.68 billion, eight-year deal is the largest operating contract in Massachusetts history. With the option to extend the contract for four years, the value of the contract could exceed $4.2 billion.
MBTA General Manager Beverly Scott says the T was faced with a tough decision between two very qualified candidates -- Keolis or the Massachusetts Bay Commuter Railroad Company, or MBCR, which has operated the system since 2003.
"Both world class organizations," Scott said of Keolis and MBCR. "This was a situation where there was going to be a winner, and I expect that there will be a full cooperation. We all know each other in this industry."
In the end, the decision to select Keolis came down to two things: money and performance.
Keolis's bid for the contract came in a quarter billion dollars below what the MBCR was offering. Keolis also scored an overall "good" rating for operations — one notch above the MBCR's "acceptable" rating.
MBCR Chairman Jim O'Leary called the bid by Keolis unrealistic and said the French firm would have to cut corners in order to make a profit. He also criticized the process, saying his company was given just one 45-minute interview, in which state officials asked just 11 questions related to a 1,000-page proposal.
"We can only conclude that our proposal was never seriously considered or understood," he said Wednesday during public comment before the board's vote. "We had fully anticipated full length discussions, which we have been through in many other proposals throughout the country. That never occurred."
O'Leary says the company is reviewing its options and did not rule out a lawsuit. Scott says she expects the MBCR to protest the decision, and that she understands there may be lawsuits as a result. But she disputes the claim that the T brushed off MBCR's proposal.
"It's not an auction," she said. "You are only asking for discussion if in fact you feel there are truly salient factors that you haven't gotten and you want to get it right."
Under the new contract, the state eliminates any sort of bonuses for the operator and quadruples potential penalties, up to $12 million per year.
Keolis will be required to keep all existing collective bargaining agreements in place until new labor deals are negotiated.
Keolis has about six months to mobilize crews and fleets before it takes over in July. The T has budgeted $9 million to help in that effort.
This segment aired on January 9, 2014.