The Metro board yesterday rejected the $49.2 million low bid of a construction consortium that includes a Japanese firm, citing a congressional ban on awarding federally funded contracts to Japanese companies.
This was the first known action under a provision, passed by Congress and signed by President Reagan in December, that bars the awarding of contracts to firms of any country that discriminates against foreign bidders in its own public works projects. The provision was aimed at Japan, which has been criticized by the United States for banning foreign participation in more than $60 billion in planned public works projects over the next decade.
The Metro board acted as U.S. and Japanese negotiators were meeting at the State Department in an attempt to resolve the construction dispute, which has become one of the most contentious trade issues between the two countries.
Metro officials said the rejection yesterday of all bids for construction of a lower level to the Fort Totten station will not delay the planned 1993 opening of the Green Line extension to Greenbelt, which will run beneath the Red Line. But it is likely to keep Japanese construction firms, which already hold one Metro contract, from future work on the rail system.
"No one is going to take a chance of using a Japanese firm in any capacity for any projects," said Metro deputy general counsel Robert Polk. The law "will have the desired congressional effect," he said.
Reagan administration officials said they are opposed in principle to barring foreigners from federally funded projects, but acknowledged that the Metro board's action yesterday could help in the current round of negotiations.
Concerns about Japan's barriers to foreign participation in its public works projects was a major topic in the January meeting here between President Reagan and Prime Minister Noboru Takeshita, whose ruling Liberal Democratic Party receives a large share of its political contributions from the powerful Japanese construction industry. Takeshita brought with him a plan for resolving the dispute. That plan was first hailed by a senior Reagan administration official, but within hours it was described as failing to provide an end to the Japanese barriers.
Sen. Frank Murkowski (R-Ala.), author of the provision with Rep. Jack Brooks (D-Tex.), hailed the Metro board's action and said, "The Japanese private sector needed to know that America is ready to use the leverage at our disposal to open their market. If they didn't think we meant business before, they know it now."
The administration is considering further retaliation against Japan for refusing to allow U.S. construction, engineering and design firms to participate in its public works projects. The sub-Cabinet Trade Policy Review Group recommended retaliation last week after U.S. negotiators reported that the Japanese had backed off commitments made to Reagan by Takeshita.
On the Fort Totten contract, a consortium that included the Japanese firm of Kajima Engineering and Construction Inc. as a 30 percent partner had the low bid of $49.2 million. The majority partner in the joint venture, with a 70 percent interest, was Kiewit Construction Co. of Omaha.
The Metro board chose not to award the contract to the second low bidder, Mergentime Corp. of Flemington, N.J., because its $51.45 million bid was more than $2 million higher than the lowest bid, said John F. McElhenny, Metro's assistant general manager for design.
"It's to our best interest to readvertise," he said.
Reopening the bidding also would allow Kiewit to compete alone, McElhenny said. "In fairness to all the bidders, we decided to readvertise," he said.
Kiewit has two other major Metro contracts for work on the Anacostia station and parking structure, he said.
He said only one other current Metro construction project is under contract to a Japanese firm: turnaround and storage tracks beyond the Wheaton station are being built by Dillingham/Obayashi, a joint venture.
Metro and other transit agencies that receive federal construction and operating funds have long operated under various "Buy America" restrictions imposed by Congress on the Department of Transportation, which disburses the money.
For example, almost all "manufactured articles" purchased by Metro must be American-made, down to "nuts, bolts and washers," said Robert Polk, Metro's deputy general counsel. On construction projects, all concrete, steel and other materials must be American-made, he said.
Congress has made exceptions for rail cars, rail maintenance equipment and rail communication systems, currently requiring that they be half American-made, Polk said.
For example, Metro's cars are made by an Italian firm, Breda Costruzioni Ferroviarie, assembled in Illinois and include American-made motors and brake systems.