2550 Mariposa Mall, Suite 3015, Fresno CA, 93721 • www.hsr.ca.gov

Central Valley Regional Office

April 30, 2014

Ms. Kinzie Gordon

URS Corporation

2870 Gateway Oaks Drive, Suite 150

Sacramento, CA 95833

Dear Ms. Gordon:

The Regional Consultant for the Fresno to Bakersfield Project Section of the California High-

Speed Rail program is the Joint Venture of URS/Hatch Mott MacDonald/Arup (JV). You have

been providing monthly progress reports to the California High-Speed Rail Authority

(Authority), initially submitting each report to the Project Management Team (PMT), Parsons

Brinkerhoff. Some members of the public have requested and received copies of these reports.

Apparently the report submitted on February 12, 2014 for the reporting period of December 28,

2013 to January 31, 2014 was shared with a Los Angeles Times (LA Times) reporter who

contacted the Authority with questions about statements made in that report.

Specifically the LA Times noted that the JV claims it was “instructed that the 2012 costs needed

to be treated as the baseline costs,” and “voiced their professional opinion” that increased costs

should not be accounted for in the allocated contingency and that “escalation in costs” should be

reflected in a new baseline for the project. The reporter then surmised that the JV is claiming

future cost growth in the Fresno to Bakersfield project section and is being directed by the

Authority not to show that increase in the project cost estimate, but instead place cost growth in

the contingency. The reporter asks whether the JV claims are accurate and why cost increases

were shifted to the contingency. Finally the value of the JV claimed cost growth in the segment

was requested.

Unfortunately a number of the JV statements in the report are misleading and not accurate.

Therefore I ask that you make the appropriate corrections and resubmit the report.

First, as you are aware, the JV’s role is to develop detailed quantities of work for the Fresno to

Bakersfield project section. The PMT then uses these quantities to establish a cost estimate for

the work to be performed by the design-build contractor(s). The final project section cost is

based on the design-build contract(s). The PMT did not revise the quantities submitted by the JV

nor did the PMT direct the JV to reduce the contingency to make up for potential cost increases.

Therefore the JV’s claims “that no adjustments could be made without formal review to obtain

Authority acceptance” are incorrect.

April 30, 2014

Ms. Kinzie Gordon

Page 2

Secondly, cost increases cited by the JV in their monthly progress report were recognized in the Fresno to

Bakersfield Final Environmental Impact Report/Environmental Impact Statement (EIR/EIS). Any

assertion that cost increases were to be accounted for in the contingency is inaccurate.

Finally, roadway improvement costs within the Fresno to Bakersfield project section have not been

overlooked. They have been reallocated and accounted for in Capital Cost Estimate Report that is part of

the Fresno to Bakersfield Final EIR/EIS.

Please submit the corrected monthly progress report for the reporting period of December 28, 2013 to

January 31, 2014 at your earliest convenience. Thank you for your cooperation in this matter.

Sincerely,

Diana Gomez

Central Valley Regional Director

559-445-5172

Diana.gomez@hsr.ca.gov