Tri-Met won't buy Rocky Mountain steel for light rail

In a unanimous vote Jan. 24, the Tri-County Metropolitan Transportation District of Oregon (Tri-Met) board of directors awarded a contract for supplying rail on its new Interstate light rail MAX line extension in north Portland to Pennsylvania Steel Technologies, rejecting a lower bid from Rocky Mountain Steel Mills (RMSM) of Pueblo, Colo.

The decision caps a six-month campaign by the United Steelworkers of America, arguing that RMSM, a subsidiary of Portland-based Oregon Steel Mills, should not get the contract because it was not a "responsible contractor."

The Steelworkers Union has been engaged in an unfair labor practices dispute with Rocky Mountain Steel since 1997, when the company locked out and replaced 1,100 striking workers. Since then the company has been charged with numerous violations of labor and environmental laws.

Last October, the Tri-Met board passed a resolution on "responsible contracting" that clarified a 1999 Oregon law under which public agencies like Tri-Met are supposed to consider a company's "record of integrity" in awarding contracts. The Tri-Met resolution fleshed out the definition, requiring bidders to disclose legal actions taken against them by government agencies.

Last year, RMSM was fined almost half a million dollars for more than 1,000 violations of workplace safety and health standards; it was sued by the State of Colorado for violations of federal air quality standards; and the company was ordered by an administrative law judge to reinstate and provide back pay to locked-out workers for violations of federal labor law.

About 300 union workers have been recalled by the company and are working at the Pueblo plant alongside the replacements.

RMSM has appealed the back-pay order to the National Labor Relations Board in Washington, D.C. Over 130 people packed the Metro council chambers at the Jan. 24 Tri-Met board meeting. The vast majority of the crowd were union supporters, including members and staff from more than 20 unions, several religious leaders, members of the New Party and the Pacific Green Party, and a group of students from Metropolitan Learning Center. Some wore special T-shirts printed for the occasion, each one making a different argument against Oregon Steel.

About 20 supporters of Oregon Steel Mills were also present, including management and workers flown up from Pueblo to testify.

Each side was given 15 minutes to comment.

"I believe that integrity starts with human rights," declared Reverend Patrick Demmer of the Greater Denver Ministerial Alliance, who had flown from Colorado to testify against Oregon Steel Mills. "When I was a boy and I did something wrong away from home, I was punished for it at home," Demmer said. Similarly, he argued, Tri-Met had an opportunity to make a statement that Oregon Steel's acts in Pueblo would have consequences elsewhere.

Vicki Tagliafico, Oregon Steel's director of communications and planning, opened the company-side testimony. She criticized Tri-Met for using a "request for proposal" process rather than a "low-bid" process, to make its decision. She said the process permitted the agency to make a politically-based decision that would be bad for area taxpayers, since her company's bid for the 2,300 tons of rail was $162,420 less than Pennsylvania Steel's.

Next, several RMSM replacement workers read prepared statements in support of the company. "I went for the money, but I stayed because I'm proud," said replacement worker Gail Scott. "I have family, too."

Tri-Met staff, evaluating bids from the two companies, had recommended Pennsylvania Steel, a subsidiary of Bethlehem Steel.

To a person, Tri-Met board members insisted that the contract was not a judgment on RMSM's corporate "integrity," but rather was a business decision made on technical grounds.

Tri-Met General Manager Fred Hansen said the issue of "integrity" was not looked at until the end of the process, at which point Pennsylvania Steel was already favored on the basis of quality control and ability to deliver on time.

The basic contract is for 2,200 tons of T-rail at a price of $1.382 million. A second contract for 523 tons of "specialty rail" also was awarded to Pennsylvania Steel for $1.2 million. Specialty rail is used for switches, turnouts and curves.

"In a contract of this size $162,000 is an amount that can easily be spent if the rail doesn't arrive on time," said board member Dave Bolender.

Board chair George Passadore abstained from the vote and the discussion that preceded it to avoid the appearance of conflict of interest. Passadore is Oregon regional president of Wells Fargo Bank, a major lender to Oregon Steel. The bank is on the Do Not Patronize List of the AFL-CIO.

February 2, 2001 issue

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