Common Misperceptions About the Napa Railroad Relocation Project
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Misperception: The Napa Railroad Relocation Project was a no-bid contract
• The U.S. Army Corps of Engineers has publicly stated that it chose to use a negotiated 8(a) contract in order to avoid more delays in getting this phase of the construction started.
• Suulutaaq, the contractor, responded to the U.S. Army Corps of Engineers Request for Proposal with more than a 1900 page proposal for completing the project.
• The U.S. Army Corps of Engineers conducted an independent cost analysis and a review of Suulutaaq’s pricing as required by Federal Law before any contract was awarded.
• The U.S. Army Corps of Engineers entered into final negotiations with Suulutaaq to set a firm fixed price and then awarded a multi-year contract in September 2008,
long before there was a Stimulus Act.
• The construction contract is between the U.S. Army Corps of Engineers and Suulutaaq. The Napa County Flood Control District is not a party to the federal construction contract and
was not involved in the contracting process or decision.
Misperception: The Napa Valley Wine Train is a significant financial beneficiary of the project
• The Napa Valley Wine Train has not and will not directly received a single dollar from this project.
• The funds were given to the Army Corps of Engineers as part of a larger flood control plan designed to protect the City of Napa from floods like the one that devastated the city in 1986
and then again in 2005. The combined total amount of damage from both floods came to $215 million.
• The Napa Relocation Project is an enormously important piece of the overall flood control plan. It is not possible to implement the overall plan without performing the work contained in
this phase of the project.
• The Napa Flood Control project is not a political project. It is a project for the community that will protect over 3,000 properties from flooding and over $160 million of the project funding has
been generated locally by half a cent sales tax increase.
Misperception: Money isn’t being spent on local vendors and subcontractors
• Suulutaaq has subcontracted local firms whenever possible.
• Almost all of the materials, equipment and supplies are being purchased in Napa.
• The vast majority of people hired for the project are coming from within an 80- mile radius of Napa.
• Suulutaaq estimates that the project will spend approximately $40M within 35 miles of Napa, over $50 million within 60 miles of Napa.
Misperception: For a $65 million project, only 12 jobs have been created
• The federal reporting formula for numbers of jobs created displayed on Recovery.gov reflects full-time equivalents (FTE) for the work to date, not necessarily the number of jobs created or
saved by the project.
• This is a multi-year construction job. The number of jobs will vary with the seasons, weather conditions, phase of construction, and times when there are restrictions on river access.
• The Federal Government’s rules for reporting Stimulus job creation forced Suulutaaq to report less than 24 jobs for the last quarter.
• Over the next two years, Suulutaaq estimates the project will directly employ several hundred people and affect another one hundred indirectly.
Misperception: Why isn’t the stimulus money going to the Napa Creek Project first?
• Both the Railroad Relocation project and the Napa Creek project received stimulus funding simultaneously but funds are allocated at a different timeframe.
• In May of 2009 when the stimulus funds were allocated to Napa, the railroad project had already been awarded the previous year, and construction was already well underway. The Napa
Creek project was still in the design phase with no environmental clearance and incomplete land acquisitions.
• The railroad project being immediately ready to use the funds received the first money.
• Final plans for the Napa Creek construction project will be completed in March 2010 with a contract award anticipated for May 2010.
Misperception: Suulutaaq isn’t doing much work on the project and is pocketing $20 million in unearned profit
• There is no $20M in unearned profit. Contrary to some reports, the whole project was not subcontracted out. That would be unethical and illegal.
• This project is far larger and more complex than simply replacing a railroad bridge and adding flood walls around a train station. The notion that the project only accomplishes those two
things appears to be the root cause for a lot of confusion about the project and its cost.
• Suulutaaq is actually performing 44% of the total work effort – a far larger percentage than is usual for the General Contractor and way beyond the 15% required by federal law. Suulutaaq
is paying for all the labor, materials and equipment to perform its 44% of the total effort.
• A short list of Suulutaaq’s responsibilities include overall project management, raising two streets 3 - 5 feet, building a floodwall to protect businesses, relocating all the underground utilities
in the area, and a host of other tasks. A complete description of these tasks is available on the About Page.
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