Government Issues

Chicago to restart railcar procurement with job-creating approach

Posted on July 30, 2014

Chicago Transit Authority (CTA) will restart its procurement of up to 846 railcars worth up to $2 billion with a new approach that can create thousands of good jobs manufacturing the trains, Chicago Mayor Rahm Emanuel announced.

CTA’s new solicitation for bids will include a "U.S. Employment Plan" that asks manufacturing companies to disclose plans to create American jobs and opportunities for disadvantaged American workers, and evaluates the quality of their responses with a system of price credits. With the U.S. Employment Plan, the purchase could support up to 20,000 good American jobs[1].

RELATED: New 'L' trains not expected until 2019, Chicago Transit says
 
The Chicago Federation of Labor (CFL) partnered with Mayor Emanuel’s office to sponsor this new job-creating initiative.
 
“The jobs disclosure and evaluation tools used in this purchase can improve Chicago’s transit system, create good jobs, and revive Illinois’ manufacturing economy, all at the same time,” said Jorge Ramirez, President of the Chicago Federation of Labor. “This approach to transit procurement, as outlined by the Jobs to Move America coalition, creates more competition between companies vying to create good American jobs.”

RELATED: U.S. workforce development webinar educates railcar manufacturers

The CTA anticipates seeking bids for the new 7000-series rail cars later this year. For the first time, the agency will require bidders to provide the number and type jobs related to the production of the new rail cars, and to outline their job recruitment and workforce training plans. Additionally, the CTA will use a "Best Value Request for Proposals" (RFP) instead of an "Invitation for Bids" (IFB), allowing the agency to evaluate competing bids on a number of criteria, including the plans for job creation.

The CTA will use price credits to reward global manufacturing companies that train and hire disadvantaged workers such as veterans, women, and residents of low-income neighborhoods, and those that create U.S. jobs, and build American factories. The CTA will submit its plan to the Federal Transit Administration to ensure compliance with federal requirements.

“This is an exciting opportunity to make sure our public dollars are spent to create good jobs in our communities,” said Susan Hurley, Executive Director of Chicago Jobs with Justice. “We intend to work diligently with other community partners to make sure this bid and subsequent bids are leveraged to create new manufacturing plants in Chicago, in areas where they are most needed.”
 
In October 2013, the CTA issued an Invitation for Bids to manufacture up to 854 new rapid transit cars, including an addendum which asked companies vying for the $2 billion contract to voluntarily provide specific information on how many jobs they plan to create in America and how they will generate opportunities for American workers.  
 
In May 2014, the Chicago Tribune reported that the CTA decided to throw out the two bids it received from the IFB, submitted by Bombardier and Sumitomo Corp./Nippon Sharyo U.S.A., and “restart the procurement process by the summer in an effort to drum up more competition and lower pricing.” The Jobs to Move America coalition cheered the news, encouraging the CTA to leverage the railcar purchase with even stronger bid language to promote good-paying, American manufacturing jobs.

Advocates say the expansion and improvement of Chicago’s transit system is a tremendous opportunity to address the city’s unemployment crisis with an influx of good American jobs. Illinois’ manufacturing sector has declined by 20% over the last decade.

"By including incentives for job creation and workforce development in its procurement, CTA is using its purchasing power for community benefit,” said Edwin Hill, President of the International Brotherhood of Electrical Workers (IBEW). “IBEW applauds Mayor Emanuel and the CTA for using the power of this $2 billion purse to spur job creation and opportunities for Chicago working families.”
 
The CTA joins other public transit agencies like the Los Angeles Metropolitan Transportation Authority and Amtrak, that have recently included U.S. Employment provisions in their purchases of buses and trains. The Jobs to Move America coalition developed the U.S. Employment Plan model policy to help transit agencies maximize publicly-funded bus and train purchases by requiring American jobs plans from each bidding company, and including job creation and workforce training in the criteria for evaluating bids.

Every year, U.S. transit agencies spend about $5.4 billion on bus and rail car purchases; totaling an estimated $50 billion investment over the past decade. The national Jobs to Move America coalition — uniting more than 40 community, labor, civil rights, philanthropic, academic and environmental organizations — advocates for cities to maximize these investments.

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