External Stakeholders' Requirements

The Authority also did not ensure it was fully aware of the requirements that other external stakeholders, such as other railroads, would impose on the three projects. These requirements led to still more costs for which the Authority did not originally budget. For example, the Authority asked construction contractors to bid on Project 1 and in fact began construction before it finalized a coordination agreement with Union Pacific that specified the circumstances under which the construction contractor could build within Union Pacific's right of way. The lack of such an agreement led to the construction contractor incorrectly assuming that it could construct a pillar for a bridge within Union Pacific's right of way. When Union Pacific declined to permit the pillar, the construction contractor argued that the Authority was at fault because it had not previously identified this issue and alerted the construction contractor. Although the Authority initially disagreed, it later agreed to share the costs with the construction contractor, with the Authority's share being $414,000. The lack of an executed agreement was not unique to Union Pacific; in a June 2014 letter to the Authority, the construction contractor for Project 1 noted that the Authority had not executed needed agreements with several other external stakeholders-including two other railroad operators and the city of Fresno-which resulted in delays to the project.