File photo of Chicago skyline.Tim Boyle/Bloomberg
Bombardier Inc. is taking on the mayor of Chicago and the city's transit agency in a harshly worded protest alleging that a $1.3-billion (U.S.) rail car contract awarded to a rival Chinese bidder was "rigged."
Bombardier Transit Corp. – a unit of Bombardier Transportation – is formally requesting that the Chicago Transit Authority cancel the contract, disqualify CSR Sifang America and award the contract for the construction of 847 cars to Bombardier instead.
It's yet another complication for Montreal-based Bombardier, which is being threatened with a lawsuit for tens of millions of dollars by the Toronto Transit Commission for numerous delivery delays on a batch of new streetcars and is far behind schedule and over budget on its new C Series jet.
The CSR Sifang America partners include Chinese state-owned rail-car manufacturer CRRC Qingdao Sifang and CSR America. CRRC Qingdao Sifang is a subsidiary of CRRC Corp. Ltd. of China, which is aggressively expanding into North America, with the Chicago transit deal representing a major foothold.
In a 51-page protest memorandum filed with the CTA, Bombardier alleges that "interference" by Mayor Rahm Emanuel, former chief of staff to U.S. President Barack Obama, and local labour leaders "caused the authority to award this federally funded contract to CSR in return for a commitment to provide Chicago jobs and a new local factory."
Federal law and CTA's own rules prohibit the use of federal funds for local job creation at the expense of other communities, according to the Bombardier filing.
Bombardier's bid – which came in $226-million higher than that of CSR – did not include a commitment to building a local manufacturing facility. The cars for the most part would have been made at its factory in Plattsburgh, N.Y.
Bombardier alleges that the mayor's office announced on March 6, 2016 – three days before the CTA's board was to consider which bid to accept – that the contract for the rail cars would include new jobs and a multimillion-dollar investment in an assembly facility in Chicago, indicating a decision had already been made.
Bombardier – which has partnered with CSR companies in Chinese joint-venture projects – also alleges that the CTA's evaluation of CSR's experience and qualifications as a manufacturer capable of meeting stringent North American standards was inadequate.
CTA spokesman Brian Steele said in an e-mail message Wednesday that "CTA has an established process in place for reviewing bid protests, which will include a thorough and fair review of all the documents Bombardier submitted. That said, this contract was handled the same way every CTA competitive procurement is handled. CTA is confident that all of the procurement processes and applicable laws were followed properly, ensuring a fair and equitable contract award."
Officials in the mayor's office did not respond to repeated requests for comment Wednesday.
An official at CSR America Inc. said there would be "no official comment for the moment."
Bombardier won the previous contract to supply a new batch of cars to CTA; it says that between 2006 and 2015, it delivered 714 units to the agency. But a recent Chicago Tribune report said the aisles in those cars, designed to provide more standing room at rush hour, "proved unpopular with some riders, who do not like getting their feet stepped on while seated."
Bombardier says in its protest brief that its proposal to the CTA would create 339 jobs and retain 179 more, twice the number in CSR's bid.