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Why did Oakland’s Shimmick Construction bail out of CP 2-3 team a week before contract signing?

We clearly are not paying close enough attention to the high speed rail project.

A team of Dragados (35%), Flatiron West (35%) and Shimmick (30%) had the winning bid for CP 2-3, a 65 mile stretch of civil construction in California’s Central Valley. It turns out the work will be done without Shimmick, who is involved in many high profile California transit projects.

There were unexplained delays getting the contract executed. The Authority board okayed the bid in January 2015 but the final contract took almost 6 months to get finished. A very last minute change in the contractor’s joint venture makeup helps explain the delay, but there is no explanation yet for the change itself.

On May 20, the California High Speed Rail Authority notifies the group that final contract documents will be issued. The same day Dragados and Flatiron send a letter asking permission to move forward without Shimmick, which was apparently granted.

The change did not come back to the board and has never been discussed at an Authority board meeting. We had no idea until today, maybe because the notification of the change was at page 184 of the unsearchable contract signature document only recently posted on the Authority’s website.

  • Why would Shimmick agree to leave such a high profile project, especially as they are trying to IPO themselves?
  • Whose idea was the split up?
  • Why didn’t this come back to the board for approval? This wasn’t a substitution of a small subcontractor.
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