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75–849 PDF 2012

A REVIEW OF AMTRAK OPERATIONS, PART II: 

THE HIGH COST OF AMTRAK’S MONOPOLY 

MENTALITY IN COMMUTER RAIL COMPETITIONS 

(112–102) 

HEARING 

BEFORE THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

SEPTEMBER 11, 2012 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JOHN L. MICA, Florida, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ANDY HARRIS, Maryland 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

JAIME HERRERA BEUTLER, Washington 

RANDY HULTGREN, Illinois 

LOU BARLETTA, Pennsylvania 

CHIP CRAVAACK, Minnesota 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BILLY LONG, Missouri 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

JEFFREY M. LANDRY, Louisiana 

STEVE SOUTHERLAND II, Florida 

JEFF DENHAM, California 

JAMES LANKFORD, Oklahoma 

REID J. RIBBLE, Wisconsin 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

VACANCY 

NICK J. RAHALL II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

STEVE COHEN, Tennessee 

LAURA RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

(III) 

CONTENTS Page 

Summary of Subject Matter and ‘‘Amtrak Commuter Rail Service: The High 

Cost of Amtrak’s Operations,’’ by Oversight and Investigations staff, September 11, 2012 .................................................................................................... v 

TESTIMONY 

Joseph H. Boardman, President and Chief Executive Officer, Amtrak .............. 22 

Joseph J. Giulietti, Executive Director, South Florida Regional Transportation 

Authority ............................................................................................................... 22 

C.H. ‘‘Chuck’’ Harvey, Deputy CEO, Operations Administration, Peninsula 

Corridor Joint Powers Board—Caltrain ............................................................. 22 

Ray B. Chambers, Executive Director, Association of Independent Passenger 

Rail Operators (AIPRO) ....................................................................................... 22 

Edward Wytkind, President, Transportation Trades Department, AFL–CIO .... 22 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Hon. Corrine Brown, of Florida .............................................................................. 50 

Hon. Eddie Bernice Johnson, of Texas ................................................................... 52 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Joseph H. Boardman ............................................................................................... 53 

Joseph J. Giulietti ................................................................................................... 68 

C.H. ‘‘Chuck’’ Harvey ............................................................................................... 90 

Ray B. Chambers ..................................................................................................... 104 

Edward Wytkind ...................................................................................................... 122 

SUBMISSIONS FOR THE RECORD 

Slides referenced during the hearing by Hon. John L. Mica, a Representative 

in Congress from the State of Florida and Chairman, Committee on Transportation and Infrastructure ............................................................................... 4 

Hon. Corrine Brown, a Representative in Congress from the State of Florida 

and Ranking Member, Subcommittee on Railroads, Pipelines, and Hazardous Materials, request to submit: 

Letter from Joe McHugh, Vice President, Government Affairs and 

Corporate Communications, Amtrak, to Hon. John L. Mica, August 

28, 2012 .................................................................................................. 11 

National R.R. Passenger Corp. v. Veolia Transp. Servs., Inc., 791 

F. Supp. 2d 33 (D.D.C. 2011), verdict form, filed May 10, 2012 ........ 13 

Joseph H. Boardman, President and Chief Executive Officer, Amtrak: 

Responses to questions from Republican members of the Committee 

on Transportation and Infrastructure .................................................. 57 

Responses to questions from Hon. Corrine Brown ................................. 61 

Joseph J. Giulietti, Executive Director, South Florida Regional Transportation 

Authority, responses to questions from Hon. Corrine Brown ........................... 85 

C.H. ‘‘Chuck’’ Harvey, Deputy CEO, Operations Administration, Peninsula 

Corridor Joint Powers Board—Caltrain: 

Responses to questions from Republican members of the Committee 

on Transportation and Infrastructure .................................................. 100 

Responses to questions from Hon. Corrine Brown ................................. 102 

Ray B. Chambers, Executive Director, Association of Independent Passenger 

Rail Operators (AIPRO): 

Responses to questions from Republican members of the Committee 

on Transportation and Infrastructure .................................................. 110 

Responses to questions from Hon. Corrine Brown ................................. 112 

Page

IV 

Edward Wytkind, President, Transportation Trades Department, AFL–CIO, 

responses to questions from Hon. Corrine Brown ............................................. 127 

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(1) 

A REVIEW OF AMTRAK OPERATIONS, PART II: 

THE HIGH COST OF AMTRAK’S MONOPOLY 

MENTALITY IN COMMUTER RAIL 

COMPETITIONS 

TUESDAY, SEPTEMBER 11, 2012 

HOUSE OF REPRESENTATIVES, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, Washington, DC. 

The committee met, pursuant to notice, at 10:11 a.m. in Room 

2167, Rayburn House Office Building, Hon. John Mica (Chairman 

of the committee) presiding. 

Mr. MICA. I would like to call this meeting of the House Transportation and Infrastructure Committee to order. Welcome, everyone, this morning. Somber day of the 11th anniversary of 9/11, but 

we appreciate everyone’s attendance this morning. 

We will recess this hearing at approximately 10:45, and then return. There is a ceremony on the Capitol steps for Members until 

approximately 11:30. It is my intention to try to reconvene at 

11:30, sharp as possible, in getting Members back. So maybe we 

can get through opening statements and the opening comments 

from our witnesses. 

So, again, welcome, everyone. The order of business will be opening statements by Members, and then we will turn to our witnesses. And how many panels do we have today, folks? One? One 

panel. OK. So, welcome to witnesses, and we will hear from you. 

We will defer questions until we return, so everyone will have a 

chance to make their presentation and then begin questions after 

that memorial service recess. 

This morning the title of the hearing is ‘‘Amtrak Commuter Rail 

Operations: The High Cost of Amtrak’s Monopoly.’’ That is the title 

of the hearing, and this is the second in a series of at least three 

hearings that we will be conducting. And appreciate Mr. Shuster’s 

cooperation, Ms. Brown’s cooperation, Mr. Rahall, holding these 

committees at the—holding these hearings at the committee full 

level. I think it is a—these are very important issues. And I think 

that Amtrak deserves the full attention of the full committee. 

First of all, I preface my remarks by saying I am a strong supporter. In fact, I have been called one of the cheerleaders for not 

only transportation, but also for rail, passenger rail service, in the 

United States of America. I believe that where the systems can 

meet the needs and make sense and have good routes and service, 

they are an excellent investment of taxpayer funds. I have said before if we didn’t have an Amtrak we would need an Amtrak to deVerDate Aug 31 2005 15:42 Nov 28, 2012 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\9-11-1~1\75849.TXT JEAN
2 

cide routing and to—also to ensure that we have national service, 

which I also support. 

I might say I am also a strong supporter of the fine men and 

women that work at Amtrak. We have thousands of employees who 

go to work every day, do a great job. I am also fully committed to 

making certain that their labor agreements are adhered to, and 

that they receive full compensation and benefits according to the 

agreements they have received. 

I preface those remarks, because sometimes people say that I 

don’t favor passenger rail service or a national system or have it 

in, in some way, for Amtrak. And it is quite the opposite. We 

should make Amtrak a success story. But we have got a ways to 

go. 

And I appreciate the service of Mr. Boardman and some of his 

predecessors in trying to do the best they can. Some of the constraints they have were imposed by Congress. Congress does set 

the terms by which the contract operates, and by which we subsidize some of their operations. So that being said, I will address 

some of the issues that, again, I think are important. 

Our last hearing we focused on food service, and some folks said I was getting into the weeds. But when you spend $833 million, 

nearly $1 billion on subsidizing food service over a decade, that is 

the kind of weeds that have got in the country’s finance—financial 

weeds, and I believe that we can do a better job in getting us out 

of a high subsidization. What particularly concerned me during 

that hearing is the last 3 years we have actually lost ground from 

$79 million, I think, to $83 billion or $84 billion losses. So, at a 

time, again, when every Federal dollar is—should be carefully 

managed, we need to do better. 

Today we are going to focus on one of Amtrak’s 10 general businesses, and that is operating local commuter rail systems under 

contract to—primarily to public transit agencies. I have asked the 

investigative staff of the Transportation and Infrastructure Committee and the rail subcommittee staff to investigate and review all 

of the rail operating contract competitions over the last decade, and 

how Amtrak has performed in the competitive environment. 

I think this morning, as we release this report—the report is entitled, ‘‘Amtrak Commuter Rail Service: The High Cost of Amtrak’s 

Operations’’—we will see pretty good documentation that, in fact, 

Amtrak is attempting to be in a business that they are not succeeding in. And also, that it does have significant costs to the taxpayers to compete in. And, again, in a time with limited resources, 

we have got to look at everything that we can to make Amtrak’s 

bottom line as positive as possible. 

The result of this investigation, again, are in this report. And the 

committee—some of the major committee findings are as follows. 

First of all, despite every ticket being subsidized by an average 

of nearly $50 by taxpayer, Amtrak has consistently failed to successfully compete against the private sector passenger rail operators, and some of those who provide services for commuter rail contracts. This is particularly disturbing, when Amtrak is underwritten by a subsidy of, I guess, last year, close to $1.4 billion, and 

it has been in excess of $1 billion almost consistently over the past 

years. 

3 

There is cost to putting these proposals together. There is cost 

to competition. And even when they lose in competition and they 

are competing against an unsubsidized private sector vendor, the 

taxpayers lose. So there is a double loss in even competing against 

the private sector. And we have pretty good documentation that 

they compete, they win, and actually do the work for less. In fact, 

commuter rail agencies, we found, will save $107 million—that is 

an average of 11.5 percent—by awarding contracts to private operators. 

Unfortunately, also we found that Amtrak has tried to stifle competition with frivolous litigation and also instances of interfering 

with the transition of commuter rail operations to private operations. That is particularly disturbing, because whether they are 

using Amtrak dollars of revenue, or funds that are provided 

through subsidization. They are using those monies to file suits 

against private contractors who, in fact, I think the courts have 

found legitimately participated in the competition and won the 

competition with lower prices than subsidized Amtrak. 

So, unfortunately, I am left to conclude that Amtrak should not 

be in the commuter rail business at all, that—and there are plenty 

of private sector providers who can provide this service and, again, 

provide it at lower cost. And I believe that Amtrak should not be 

allowed to use taxpayer funds to sue private entities for competition-related lawsuits. 

We have got a couple of slides here I will go through. 

[The slides follow.] 

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Mr. MICA. And it shows, first of all—I don’t know if we passed 

this out, but the slide lists every commuter rail operating contract 

competition held in the last 10 years in which Amtrak competed. 

In every case, Amtrak either lost the competition to a private operator, or—who scored better and was able to provide the service at 

a lower cost, or Amtrak withdrew during the course of the competition. 

Second slide we will put up there, again, is of great concern. In 

January 2007, South Florida Tri-Rail awarded its rail competitions 

to a private vendor. And that vendor had a national—an international reputation of providing transportation services with some 

200 contracts in the U.S. and Canada for rail/bus transit, on-demand transit, airport shuttle, and charter service operations. Unfortunately, Amtrak lost the competition to this private contractor, 

in a full and open competition bidding in which they bid 67 percent 

higher cost, and scoring significantly lower in the RFP evaluation. 

Unfortunately, Amtrak retaliated by filing a suit in Federal district court alleging that the private contractor wrongfully recruited 

and enticed members of Amtrak staff to work for the private contractor if they won the contract. 

After some 5 years of very costly litigation to both parties, the case went to trial. Amtrak spent a total of $2.1 million and either 

it was their revenues that could have put them in a more positive 

financial light and situation, or Federal subsidization dollars, to try 

to take the contract from the private vendor. Unfortunately, the 

private vendor had to spend nearly $3 million defending itself in 

the case. I think that is cause to look at legislation that would 

make the loser pay on this instance. In some of those lawsuits I 

think it is grossly unfair, particularly the private sector, to have to 

defend itself against the publicly subsidized entity, and then bear 

the burden, as they had to, to defend themselves in court. 

The slide three shows Amtrak’s effort to stifle competition. If you 

look out the window, you can see the VRE, Virginia Railway Express operations. And in 2009, Amtrak lost its operating contract 

with VRE to a private contractor. And Amtrak’s bid was some $24 

million higher than the private contractor, and its evaluation 

scores were lower than the private operators. The transition from 

Amtrak to the private operator was just tortuous and, unfortunately, Amtrak made it difficult, tried to make it impossible. 

Some of you may have read about this. In fact, it was reported 

by the Washington Post that VRE was so dismayed by Amtrak’s interference, that the agency explored taking legal action against 

Amtrak. And some of the examples of interference, Amtrak 

changed the certification requirement for train crews coming into 

Union Station, and refused to allow private vendor engineers to 

train with Amtrak crews in order to learn the routes. And, unfortunately, it is also alleged that Amtrak labor representatives told its 

workers they would be blacklisted if they accepted jobs with the 

private contractor. 

The fourth slide is potential savings for State-sponsored routes. 

Nineteen States contract with Amtrak to operate intercity passenger rail service on State-supported routes, less than 750 miles. 

But not all operating costs are covered by the fair box and State 

support. We do underwrite that. PRIIA provisions require States to 

9 

cover 100 percent of their—all their capital and operating costs, beginning next year, the first of October a year from now. And this 

will increase the States’ costs by $120 million a year. 

As I noted earlier, commuter rail agencies have saved 11.5 percent average by contracting out operations to private versus Amtrak providers—Amtrak serving as a provider. 

Let me say I am a strong supporter of these State-supported 

routes. And this is one of the areas in which we have had significant increases in passenger rail service. In fact, if I am correct, a 

large portion of Amtrak’s increase in ridership is in that area. And 

it is a good partnership. It needs to be continued. 

But again, we need to look in tough financial times, or just to 

make Amtrak as efficient as possible, of having that service again 

be competed fairly and squarely. And if the private sector can do 

it, honoring labor and other commitments, then they should, in 

fact, have at it. 

So, that is some of the findings from this report that we are releasing today from the Majority side. Welcome the Minority adding 

anything in the record they like to supplement the Majority report. 

Our intent, again, is to try to make Amtrak a positive operation, 

to increase ridership, to do it at the lowest possible subsidization 

or the lowest cost, and in some instances, God forbid, we should actually turn positive revenue, and that can—there are plenty of examples around the world, and even in the United States, where 

that does occur. In fact, we have private vendor operators that operate passenger rail service and do make a profit. So that can, in 

fact, be achieved. 

So, those are my comments. Again, I think we have got folks 

here now. I am pleased to yield to the ranking member of the rail 

subcommittee, Ms. Brown from Florida. 

Ms. BROWN. Thank you, Mr. Chairman. And here we go again. 

Mr. Chairman, I want to state for the hearing’s record that we 

never were consulted on this oversight report. We never saw it or 

heard about it this time. When we were in the Majority, we always 

gave you advance copies of oversight reports so we could best prepare for the discussion. It is very sad that we are wasting the committee’s time micromanaging Amtrak while totally ignoring critical 

issues in our transportation system that truly need to be addressed 

by this Congress. 

Does any Member of Congress really think that this issue is 

more important than the critical mission of preparing our waterways for port—ships, addressing the glaring problems of our aviation system, or planning how we will address transportation funding in the all-too-near future? Recent headlines have warned that 

Al Qaeda is considering targeting U.S. rail lines. So, naturally, on 

the anniversary of 9/11, the chairman is holding a hearing on Amtrak limited commuter contracts. 

I want to talk about what this hearing is about and what it is 

not about. This hearing is not about Amtrak’s monopoly or commuter rail competition, as the title would seem to suggest. It can’t 

be. Amtrak doesn’t actually have a monopoly on commuter rail in 

the United States. A monopoly is defined as a situation in which 

a single company or group owns all or nearly all of the market for 

a given type of product or service. According to the American PubVerDate Aug 31 2005 15:42 Nov 28, 2012 Jkt 000000 PO 00000 Frm 00045 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\9-11-1~1\75849.TXT JEAN
10 

lic Transportation Association, there are 29 commuter rail operations in the U.S. Twenty-one of those are outsourced to private 

companies. Of the 21, Amtrak has 6 contracts, or 28.6 percent of 

the market. That is not a monopoly. 

This hearing is not about Amtrak’s loss of commuter rail. It can’t be. Amtrak made more than $15 million in profits on its commuter 

rail service. We continually hear how Amtrak isn’t doing enough. 

In this situation, Amtrak’s profit helped reduce its operational 

costs, and its reliance on increased Federal funds. 

I hope this hearing is not about a Republican attempt to punish 

Amtrak for pursing legal actions against Veolia, or to justify a legislative earmark contained in H.R. 7 to prohibit Amtrak from pursuing legal actions or defending itself in court. I suspect, however, 

this is done for Veolia, since, according to the letter from Amtrak 

to Chairman Mica on August the 28th of 2012, Amtrak has never 

pursued legal action against any other private commuter rail operations. I ask unanimous consent to include the letter in the record. 

Mr. MICA. Without objection, so ordered. 

[The information follows:] 

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Ms. BROWN. The chairman wants to include this provision in future legislation. But it is worth noting that Amtrak won the legal 

action. And by the way, Mr. Chairman, if the loser had to pay, then 

they would have received the reimbursement from the lawsuit, 

since they won. 

The U.S. District Court for the District of Columbia found wrongful conduct by Veolia in its bid against Amtrak for the contract 

with Tri-Rail. Wrongful conduct. In fact, I’d like to ask unanimous 

consent to include the verdict in today’s hearing record. 

Mr. MICA. Without objection, so ordered. 

[The information follows:] 

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Ms. BROWN. This is what this hearing is about. Good, old-fashioned politics and a nod to the Republican Party job-killing platform which endorses the dismantling of Amtrak in favor of 

outsourcing service to low-wage, low-benefit, private operations. 

The best evidence for this is the chairman’s press statement leading up to this hearing, one which said he would put an end to Amtrak and others, while referring to the holy jihad against Amtrak. 

And, by the way, Amtrak is an American company. It appears he 

meant war, when he used the term, although this is not what it 

means. Regardless, it is insulting on this day of remembrance. It 

is insulting to me, it is insulting to Amtrak, and its employees, and 

it is insulting to Amtrak riders. And I am sure it is insulting to 

Muslims that live in this country, particularly on the anniversary 

of 9/11. 

What this hearing should be about on September the 11th is the 

security of our Nation’s transportation system. This committee 

should be taking the time to reflect on the lives that were lost on 

these tragic attacks and what we can do to secure that this Nation’s mass transportation system now and in the future is always 

safe. 

But we are not holding a hearing on rail security, or even aviation security, for that matter. Nor are we holding a hearing on 

pipeline security or hazardous material security. We are having a 

hearing, once again, criticizing Amtrak, all while Members of Congress are gathering on the east front steps of the Capitol at 10:45 

this morning in remembrance of 9/11. 

The fact is on this very day 11 years ago, Amtrak and its employees worked around the clock to provide one of the only traveling 

options for many in this country. Within minutes of the incident, 

Amtrak jumped into action. It mobilized and established a command center, evacuating a number of stations for inspections of 

trains and infrastructure and dispatching police officers and staff 

throughout Amtrak facilities to patrol and conduct on-site inspections. On the Northeast Corridor, Amtrak added about 300 percent 

more seating capacity to fill the traveling gap. Over 1,600 daily 

seats were added to long-distance trains and another 300 to the 

west coast train. 

Amtrak also provided transportation to New York City for families and friends of victims, firefighters, police, medical teams, military, and other public office, and even airline crew members. In 

partnership with the American Red Cross, Amtrak transported 

thousands of emergency relief kits to New York City. In fact, with 

the airline grounded, the U.S. Postal Service turned to Amtrak to 

carry the mail. 

These are the things we should be discussing today. In fact, I 

would like to close with asking the chairman unanimous consent 

to hold a moment of silence right now to reflect on 9/11. 

Mr. Chairman. 

Mr. MICA. I am most pleased to grant the lady’s request for a 

moment of silence in the committee. If we would observe that, 

thank you. 

[A moment of silence was observed.] 

Ms. BROWN. I yield back the balance of my time. 

15 

Mr. MICA. Thank the gentlelady. Thank her for her opening 

statement. And let me just say, too, that I had received at the end 

of the last week the draft of the staff report, and the draft did say 

‘‘monopoly.’’ I share the gentlelady’s concern, and I have read that 

title. This is the draft report, and I felt the same way. And the 

complete report does not cite ‘‘monopoly.’’ The gentlelady is correct, 

and the correction was made in what has been submitted today. 

So that item is corrected, and I want to make certain the record 

reflects that. I did not have the actual final copy after my edits 

were made over the weekend. 

I will say, too, that I said in my opening statement that I would 

welcome the Minority to add to this report. And normally we leave 

the record open for 10 days, or something like that. But I would 

be glad to leave it open for 30 days for the Minority to submit the— 

a Minority section to the report. 

Ms. BROWN. A question for the chairman. Mr. Chairman, I understand, and we appreciate you extending the 30 days. But is 

there any reason why we could not have had the information prior 

to? Because you are releasing this information to the public as if 

it is 100 percent correct, or there is no Minority report. I mean it 

seems to me that this Committee on Transportation in the past 

used to work together. We used to have a bipartisan committee. We 

used to be the most bipartisan committee in this Congress. This 

does not exist any more. 

Mr. MICA. Well, sorry the gentlelady has that feeling and perception. But again, I got the report, I believe, on Friday, edited—made 

my edits over the weekend. You have it today. And you are also 

welcome to fully participate in the hearing and also add any commentary that you like, as the Minority. And I will keep the record 

open for 30 days to allow that. 

Let me now yield to the chairman of the rail subcommittee, the 

gentleman from Pennsylvania, Mr. Shuster. 

Mr. SHUSTER. Thank you, Mr. Chairman. I appreciate you holding this hearing today. And I welcome our witnesses. I see some 

of them are back again for a number of visits here, so I appreciate 

to hear from you today. 

Also like to welcome some of my constituents that are here today, 

some of the hard-working guys that make Norfolk Southern keep— 

continue to run on time up in Altoona, Pennsylvania. So welcome 

to you fellows for making the trip down here today. 

I also want to thank the gentlelady from Florida for taking 

that—or making that motion to have a moment of silence. Today 

is 9/11, and we certainly should be—every day should be, but especially today in our thoughts and our prayers, the people who perished at the World Trade Center, the Pentagon, and then, in my 

district, Shanksville, Pennsylvania, where those brave 40 people 

had the first counterattack on the war on terror. And they live in 

our memories forever. 

I am pleased that the chairman has put forth his focus on these 

important issues. And I disagree with the gentlelady from Florida. 

This is one of the issues that we need to focus on: passenger rail 

service in this country, making it better, stronger, safer. And the 

only way we can do that is by examining what has gone on and 

what hasn’t gone on. And it is good, old-fashioned take-a-look, let’s 

16 

find out the things that work, let’s find out the things that don’t 

work, and let’s change them. Let’s make some changes for the positive. 

The committee staff has completed this extensive investigation 

that Chairman Mica is releasing. It is looking at the competitive 

rail contracts over the past decade. And there are, as the chairman 

mentioned, 26 commuter rail systems around this country, over 450 

million people ride on them. And out of those, as the chairman 

mentioned, 19 are—have contracted out some element of their services. And 11 commuter rail services have contracted out service in 

a competitive bid for operations contracts. 

The past 10 years we have seen a significant increase in the level 

of competition between major private rail operators. And, as Chairman Mica has noted, Amtrak has been unsuccessful to secure a 

single commuter rail operation contract over the past 10 years. And 

with the rising demand for service, it is critically important for 

commuter rail agencies to continue to work to look for ways to improve service while reducing costs. And commuter rail agencies 

have saved $107 million, or 11 percent—over 11 percent—by 

awarding such contracts. 

I think it is important, also, to point out that some of my colleagues and some of the stakeholders in passenger rail and rail 

service in this country like to look to Europe and use them as an 

example of how there is no commuter rail service or passenger rail 

service that doesn’t have Government involvement, which is true. 

But the Europeans today are at breakneck speed, moving fast and 

furiously, towards implementing competition in their system. 

So, on the one hand, we look to Europe and say, ‘‘Well, look what 

the Europeans are doing.’’ While, on the other hand, when they do 

something we don’t agree with, then we disregard it. I think it is 

important, and I hope to, in the future, bring those folks over. 

Chairman Mica and I were—I forget where we were, but we were 

somewhere at a meeting with many of these European rail companies that are doing just that. And by 2014, I think the entire European Union has to have competitive bids going on within the passenger rail, because they see the benefits of competition. 

State-supported routes, such as the keystone corridor in Pennsylvania, which is a sector of Amtrak’s passenger rail service, has 

seen the greatest growth over the past two decades, up almost 50 

percent in the past 4 or 5 years. These routes have carried 5 million passengers in fiscal year 1990. And in 2011, ridership is up to 

14.7 million passengers. 

Currently, 19 States contract with Amtrak for the operation of 27 

State-supported routes. States and regional agencies pay most of 

their operating costs of services not covered by fare book revenues. 

But section 209 of the Passenger Rail Investment and Improvement Act requires Amtrak, in consultation with the FRA and each 

relevant State, to develop and implement a single, nationwide, 

standardized methodology for establishing and allocating the operating and capital costs—Amtrak and the States concerning the 

State-supported routes. 

The methodology for allocating costs is scheduled to take effect 

in October 2013, meaning that States will be responsible for covering a majority of their costs, their State’s cost—supported routes. 

17 

According to Amtrak, 16 States will see an increase in the amount 

of support they must provide. Totally, more than $120 million. And 

this methodology was developed as a menu approach, such that 

States can better control costs by picking and choosing among Amtrak’s services. 

Upon implementation, we believe that the estimates are about— over $90 million that they will be able to compete for in operational 

services in these State-supported routes. And potential savings 

could cover the $120 million increase that these States will see in 

the coming months and years. 

The competition for Intercity Passenger Rail in America Act outlined by this committee last year offered States greater control and 

authority over the passenger rail services, including incentives to 

competitively bid passenger rail services. And although this proposal has not moved forward, we believe that it is a good framework for us to use next year to move forward and try to improve. 

And that’s the bottom line: improve passenger rail in this country. Because I believe, with the—when you look at the population 

growth over the next 30 years in this country, we’re going to go 

from about 300 million to 400 million people. And the congested 

corridors, the Northeast Corridor and others around this country, 

need to have passenger rail that is efficient, that is safe, and that 

helps us to reduce that congestion that’s on our highways around 

this Nation. 

So, with that, I am looking forward to the testimony today. And 

thank you, Mr. Chairman. 

Mr. MICA. Thank the gentleman. Now recognize the gentleman 

from Maryland, Mr. Cummings. 

Mr. CUMMINGS. Thank you very much, Mr. Chairman. Let me be 

clear that I agree with Ms. Brown and with my other colleagues 

on this side of the aisle. On this day, when we pause to mark the 

anniversary of the terrorist attacks on September 11, 2001, that 

forever changed our Nation, including its transportation industry, 

our hearing should be focused on assessing whether our transportation system networks are fully secure. In fact, the Coast Guard 

Subcommittee, upon which I sit, held a hearing this morning entitled, ‘‘Tenth Anniversary of the Maritime Transportation Security 

Act: Are We Safer?’’ 

This hearing is focused specifically on examining the implementation of the maritime security legislation passed in the wake of 9/ 

11 attacks in order to answer the question we should be asking 

here: Are we safer? 

However, the hearings here in the full committee is not focused 

on any topic related to security in any mode. Instead, the Majority 

is continuing its senseless attack—and I do consider it an attack— 

on Amtrak. In this case, by claiming that Amtrak has a monopoly 

mentality in commuter rail operations. And I am glad you clarified 

that, Mr. Chairman. 

This claim, of course, is unfounded, and seems particularly bizarre, given that Amtrak is engaged by contract with only a few 

of the more than 25 commuter rail systems in operation in the 

United States. For example, Amtrak operates only one of the three 

lines that comprise the MARC system in my district. The other two 

lines are operated by CSX. Yesterday, Amtrak issued a statement 

18 

indicating that its ridership is surging this year with 11 consecutive monthly ridership records. 

In each month of the current fiscal year, Amtrak has posted the 

highest ridership total ever for that particular month, with the 

final month of September also expected to be a new record. In addition, July was the single best ridership month in the history of Amtrak. Further, from fiscal year 2002 to fiscal year 2011, Amtrak ridership increased 44 percent and set a new annual record—excuse 

me, set new annual records in 8 of those 9 years. Rather than celebrating this success and seek ways to build on it, to expand transportation options in this Nation, and to create jobs, the Republicans are seeking only to destroy Amtrak. 

The platform adopted by the Republicans during their convention 

explicitly calls for the elimination of Amtrak, stating—and I 

quote—‘‘It is long past time for the Federal Government to get out 

of way’’—presuming they meant ‘‘get out of the way’’—‘‘and allow 

private ventures to provide passenger service to the Northeast Corridor. The same holds true with regard to high-speed and intercity 

rail across the country.’’ That is from the platform. 

Unmoved by the Republicans’ ideological obsessions, the traveling public is clear. It supports Amtrak. And it has made Amtrak 

a vital part of our Nation’s transportation networks. 

I note that in the days after 9/11, when the airlines could not operate, as Ms. Brown said, Amtrak did. And the system surged capacity to meet expanded demand after the terror attacks. Given 

that millions of Americans ride Amtrak, on today of all days our 

committee should be focused on examining whether the system is 

as safe as it can be. 

Rather than seeking to derail Amtrak, we should also be focused 

on understanding the factors contributing to the success and identifying the steps that we can take to strengthen this critical system 

to make it more effective and more efficient. And with that, Mr. 

Chairman, I yield back. 

Mr. MICA. Thank the gentleman. Mr. Duncan? 

Mr. DUNCAN. Thank you very much, Mr. Chairman. Thank you 

for calling this hearing and continuing to exercise oversight over 

the operations of Amtrak. There is nobody on this side that has 

anything against Amtrak. We just are concerned about the 

megabillions, the many, many, many billions of losses that have 

been incurred by Amtrak over the years, and they continue at the 

rate of hundreds of millions, even to this day. 

But this hearing touches in part—or at least coincides nicely— 

with a bill that Senator Thune and I have introduced called the 

Freedom from Government Competition Act, and it is an issue that 

I’ve been interested in for a number of years. In fact, we passed 

in an earlier Congress a very limited form of that bill. And we have 

that bill introduced again in this Congress because it is been, usually the number one concern, but always one of the top three concerns of all the White House Conferences on Small Business, competition from Government agencies that don’t pay taxes and receive 

huge subsidies. 

In fact, at a White House Conference on Small Business in 1955, 

this statement was issued. It says, ‘‘The Federal Government will 

not start or carry on any commercial activity to provide a service 

19 

or product for its own use if such product or service can be procured from private enterprise through ordinary business channels.’’ 

And that problem has been raised by groups as diverse as hearing 

aid operators, alarm system operators, school bus operators. It is 

tough enough to survive in small business or even medium-sized 

business in this day and age against ordinary competition. But to 

have to compete with the Government agencies makes it even 

tough. 

And so, I appreciate your calling attention, Mr. Chairman, to all 

of the problems that Amtrak is having. Because if this agency is 

to continue, it certainly needs to do a much better job than it has 

done thus far. Thank you. 

Mr. MICA. Thank the gentleman. Mr. DeFazio. And I don’t see 

any other requests for speakers. Do we have some—Mr. DeFazio— 

because we will—OK, we will go—if other Members want to go 

ahead and go over to the Capitol, the—— 

Mr. DEFAZIO. Very quickly, Mr. Chairman, so we can—— 

Mr. MICA. Well, you will get your full time. 

Mr. DEFAZIO. Oh. 

Mr. MICA. If other Members want to go, you may want to proceed 

to the Capitol for the memorial service. But we’re going to—I’m 

going to stay, and then scoot over. 

Mr. DeFazio, you are recognized. 

Mr. DEFAZIO. Thank you, Mr. Chairman. Obviously, it is a somber day. And you and I worked on aviation security issues, in particular, or transportation security issues at great length after the 

tragedy of 9/11. And you know, it is a somber day to be here. 

I do share the views some have expressed on this side that perhaps today would have been more appropriate to focus on transportation security in general, because I believe it is a task that is yet 

undone in America. We are still vulnerable in many ways, even in 

the areas where we have made the greatest investment, which is 

aviation. But that is not to be. 

So, to the issue at hand, it is 1 day before another incredibly 

somber anniversary, a bit more recent, which was the horrendous 

rail crash in California at Chatsworth. And 25 people died. One of 

the entities here, the one particularly in regards to litigation, 

Veolia, was the responsible operator. And as I believe was determined ultimately, their engineer was very engaged in texting at 

the time. And that’s why 25 people died. And, as I understand it, 

subsequently they were removed as the operator. 

And now there are questions being raised whether we should 

have—you know, Amtrak is required to carry what I think probably in this day and age is inadequate liability insurance, which is 

$200 million for a crash. It was exceeded in the case of Chatsworth. 

And so I find it incredible that anybody would be recommending 

that we not have more robust caps for liability, whether it is Amtrak or a private provider or a State provider on rail service. So 

that’s one issue. 

The other is, as was pointed out by Ms. Brown, it would be ironic 

to say that we should have loser pays on these contract disputes. 

I mean I actually am intrigued by the loser pays concept in certain 

areas of law. But in this case, since most of the decision, with the 

20 

exception of damages, was in favor of Amtrak, I guess Veolia would 

have had to pay. So I don’t see how that follows, exactly. 

And finally, you know, these contract disputes, I—you know, if 

we’re going to say that a public entity can’t dispute egregious conduct or improper conduct in competitive bidding process, then 

maybe we should just say that nobody can litigate in these issues. 

And so someone cheated to get a contract? Hey, they cheated and 

got it fair and square; it is their contract. Let’s save the money on 

litigation and let them go ahead and—with the contract. 

So I would find it really odd to tie the hands of one entity who 

might provide competitive bids, while others are free to litigate 

and, in fact, do frequently litigate the award of Government contracts between private operators across a multitude of Government 

contracts. 

And I make one further observation. I am not as versed in all 

of what underlays the economics of the operation of these lines. But 

my understanding, having spent some time on rail issues, and in 

Europe, is that there is no entity which is responsible for both the 

rail, the rail bed, the crossings, and the operating who makes—it 

was private, and makes money. You know, in the case that’s widely 

touted in Britain, I met with those people too, it is a very impressive operation. But the Government was responsible for the rail 

and the rail bed and the rail crossings. They operated the trains. 

And I further understand that, you know, that contract is lapsing 

at this point, or being rescinded. 

So, you know, to say that, you know, we can do these things 

without any sort of public subsidies, in the case of all these private 

contracts on all these commuter rails, there is a public subsidy. 

And, you know, that’s the question we have to decide here. Do we 

want to provide more efficient, safer rail service across America? 

Do we want to compete with the rest of the world in rail, or do we 

want to be the only great Nation on earth without adequate rail 

service? And that is what we should be focusing on, not these minutia that don’t make much sense. Thank you, Mr. Chairman. 

Mr. MICA. I thank the Members. What we’re going to do is recess 

now until 11:30. And then we—I thought we might get to you all 

first, but we will start with hearing your opening testimony. 

The committee stands in recess until 11:30. 

[Recess.] 

Mr. MICA. Call the committee back to order, and welcome everyone back. It is fitting on this day that we do take a few minutes 

and reflect on those that were lost on September 11th, and the 

service did just that on the steps of the Capitol. 

I can’t help but remember—and was reminded—standing next to 

Roger Wicker the now-Senator from Mississippi, that he and I, 

with several other Members in the Pentagon the morning of September 11th with Secretary Rumsfeld for a breakfast, and actually 

were there as the planes hit the World Trade Center. And I remember that morning with Secretary Rumsfeld leaving. I got delayed getting the information from staff about the planes hitting 

the World Trade Center, as the new chairman of the aviation subcommittee, and, actually, I think I informed Secretary Rumsfeld. 

As the first plane hit, we were standing at the end of the breakfast conference table where we had met the previous hour, and 

21 

then the second plane—Sharon Pinkerton, our staff director, had 

advised me. I remember arguing with her that a second plane could 

not hit the World Trade Center, because it was impossible. That’s 

why we had set up the air traffic control system. A plane had hit, 

I guess, the Empire State Building, and they put that in place. 

But on—the irony of that is the committee went up about a 

month before to New York City and at the request of Neil Levin, 

who was the New York Port Authority director overseeing the airports. Bill DeCota was the airport director. And in August we went 

up to look at the congestion at JFK Laguardia and Newark. And 

Neil took me to all three airports and then on the Monday after 

spending time at each airport, we met and had an Aviation Subcommittee hearing in the World Trade Center. I think it was on 

the 60-something floor about a month before 9/11. 

And after the hearing, Neil had invited the Members of Congress 

to the Windows on the World. They had a little conference dining 

room that was next to the restaurant that they—actually, the New 

York Port Authority owned the World Trade Center and had developed it. Neil had told me the story of that. 

Unfortunately, on September 11th, Neil Levin and everyone who 

helped us at the hearing were all at a meeting, a breakfast meeting, the morning of September 11th and all of them were killed, except for one individual, Bill DeCota, the airport director, who had 

gone to a conference in Montreal, survived, only to die several 

years later on an operating table on September 11th, the great 

irony in his life. 

The plane that flew in the Pentagon—again, I left at about 9:20 

to come back here to this building—and as I arrived I saw the 

smoke coming up. But on the plane was Barbara Olson, who 

worked for our committee across the hall, the Government Reform 

Committee. I remember seeing her at a reception not too long before that, and sort of saying goodbye to her there. But she was one 

of the passengers on the flight that crashed into Shanksville. Telephoned her husband, Ted Olson. Many of you may know him. 

And then, Terry Lynch, who worked with me in the U.S. Senate, 

was an aid to Senator Shelby. He was in the Pentagon and actually 

killed that day. So can’t help but remember those people today and 

every day and this day. So all of us have our memories. Now I’ve 

got Ms. Brown back, and maybe joined by some other Members. 

So we will return to our regular order of business, and we’ll hear 

from—we have Mr. Boardman, the Amtrak president; Joe Giulietti, 

who is Tri-Rail executive director; Chuck Harvey, deputy CEO, Peninsula Corridor Joint Powers Board; Mr. Ray Chambers, Association of Independent Passenger Rail Operators. And welcome back 

to Ed Wytkind, who is the president of the Transportation Trades 

Department for AFL–CIO. 

So, most of you have been here or know the procedure. If you 

have anything you’d like submitted for the record, we’d be glad to 

do that. 

Welcome, Mr. Boardman, you are recognized. 

22 

TESTIMONY OF JOSEPH H. BOARDMAN, PRESIDENT AND 

CHIEF EXECUTIVE OFFICER, AMTRAK; JOSEPH J. GIULIETTI, 

EXECUTIVE DIRECTOR, SOUTH FLORIDA REGIONAL TRANSPORTATION AUTHORITY; C.H. ‘‘CHUCK’’ HARVEY, DEPUTY 

CEO, OPERATIONS ADMINISTRATION, PENINSULA CORRIDOR JOINT POWERS BOARD—CALTRAIN; RAY B. CHAMBERS, EXECUTIVE DIRECTOR, ASSOCIATION OF INDEPENDENT PASSENGER RAIL OPERATORS (AIPRO); AND EDWARD WYTKIND, PRESIDENT, TRANSPORTATION TRADES 

DEPARTMENT, AFL–CIO 

Mr. BOARDMAN. Thank you, Mr. Chairman. Good morning, Ms. 

Brown. 

Mr. MICA. Can you pull that up as close to you as possible? 

Mr. BOARDMAN. Thank you. As you said, everybody has their 

story about 9/11. And 11 years ago, on a day just about like today, 

our Nation was attacked. And I was the commissioner of transportation for Governor George Pataki of New York. 

One of my department offices was the North Tower of the World 

Trade Center. And while most of my employees were able to escape, without physical injuries at least, I lost three decent, hardworking public employees: See-Wong Shum, Charles A. Lesperance, 

and Ignatius Adanga. 

During the aftermath I promised their families I would not forget 

them. So please join me one more time for a moment of silence for 

those three, and for all the families that lost loved ones that day. 

[A moment of silence was observed.] 

Mr. BOARDMAN. Thank you. At 1:00 eastern today, Amtrak will 

blow all its train whistles in memory of all the victims of 9/11. For 

each of our business lines—and commuters are one of them—our 

number one goal is safety. And in our strategic plan we state that 

we offer commuter partners, passengers, and employees safe and 

secure service wherever risks are minimized—where risks are 

minimized on every train and at every station every day. 

Today we are conducting the 27th RAILSAFE—Regional Alliance 

Including Local, State, and Federal Efforts is what RAILSAFE 

stands for—in cooperation with hundreds of police throughout the 

Nation, and in close cooperation with TSA. We have conducted 

RAILSAFE 26 times. And the last RAILSAFE involved 260 law enforcement agencies across the Nation with 1,493 officers, 192 Amtrak stations, 271 commuter stations, 44 States, the District of Columbia, and Vancouver, Canada. 

Amtrak is the leader in the use of vapor wake and explosive dog 

use throughout our system, and is being studied by the Federal 

agencies, local police, and even other railroads for the techniques 

we employ to keep our customers safe. Amtrak has a total police 

force of 492 officers and members with both special operations unit 

and K–9 teams. 

We are proud of our relationship with the TSA, recently winning 

their highest rating of the gold standard under their base program, 

where they look at system security programs, identifying 

vulnerabilities that should be addressed. And the program is voluntary, but fits well in Amtrak’s desire for safety and security for 

our customers. 

23 

Amtrak—and it is already been stated—really has a paltry 12 

percent of the commuter market, in terms of value. Other private 

sector competitors have the remaining 88 percent. Mr. Chambers’s 

members alone have greater than 50 percent of the market. And 

the Union Pacific Railroad, a freight railroad, has 17 percent of the 

market. Amtrak has no monopoly on commuter contract value, 

mentally or materially. 

Amtrak was formed to rescue private railroads from the losing 

proposition of providing passenger service in 1971. System ridership growth of 44 percent since 2000. State corridor ridership is up 

63 percent, nearly double since 1998. Our expectation is that in 

2012 we will set another record, making nine records in the past 

10 years. 

Today, for every passenger who flies between New York and the 

District of Columbia, three take the train. We’ve cut our debt in 

half in the past 10 years, from nearly $4 billion down now to $1.6 

billion. Systemwide, on-time performance is over 80 percent, up 

from 70 percent 4 years ago. Our cost recovery is the best of any 

passenger railroad or agency in the United States, at 85 percent. 

Mr. Chairman, if you compare us to what you call us, a Sovietstyle railroad, you would see that while we grew our ridership 37 

percent between 2000 and 2010, the Russian railways fell 33 percent. 

The Nixon administration’s rescue of the passenger rail service 

in the United States is a success. I think Herzog, Keolis, First 

America, RATP Development, and Veolia Transportation are much 

more interested in the State corridor services that we provide than 

they are with the 12 percent of the commuter business that Amtrak has. And I think that’s why we—they—may have wanted this 

hearing, as well. 

To me, having the hearing for the commuter service really makes 

no sense. In 1997, Congress took away many of what are now considered State-supported trains. But at the time they were considered national network trains. And then, in 2008, Congress took the 

next step and required the States to become responsible for the 

nearly $200 million of Federal subsidy provided to Amtrak for 

those State corridors. 

Amtrak was required to work out the reimbursement levels from 

those States. And that will start in 2013. That task has been completed by Amtrak. And, in essence, it provides the opportunity for 

our competitors here today to engage in provision of State corridor 

service. 

Now, the States always had the ability to use other operators, 

but it wasn’t until Congress acted to strip away the State subsidies 

through the section 209 that the States had the incentive to compete their service. I do not believe that Congress needs to provide 

any additional advantages to Keolis, Veolia, RATP Development, 

Herzog, First America, or any other competitor to Amtrak than 

they already have. They have proven ability to compete with and 

secure business that Amtrak has operated. 

Commuter service is different from the State corridor services, 

some of which operate for several hours. So the existing model of 

competition needs to do a few things such as protecting the public 

through proper and consistent levels of insurance and indemnity 

24 

provisions. I spelled those out to the committee in a February 26, 

2010, letter. Ensuring that labor protections and retirement issues 

are secure. Safety certifications are complete for any operator of 

service. Ensuring that scheduling is coordinated on a national basis 

to provide the only remaining national intercity, coast-to-coast, border-to-border, public transportation system in the United States. 

The interstate highway system would not work if it wasn’t connected. Nor will a broken-up, uncoordinated puzzle of passenger 

rail services. I find it wrong that Amtrak, America’s railroad, 

seems to be constantly berated by some Republican Members, while 

foreign-owned management companies are extolled for their experience. One of them is a subsidiary of the French national railroad, 

SNCF, France’s railroad. I wonder how Amtrak would be received 

in France? Thank you. 

Mr. MICA. I thank the witness. 

And we will turn now to Mr. Joe Giulietti from Tri-Rail in south 

Florida. 

Mr. GIULIETTI. Good morning, Chairman Mica and Ranking 

Member Brown, and members of the Transportation and Infrastructure Committee. My name is Joe Giulietti. I am appearing before you today on behalf of the South Florida Regional Transportation Authority, where I serve as the executive director, and oversee the Tri-Rail commuter railroad. I thank you for the opportunity 

to testify today, and to discuss issues relating to competitive contracting in the commuter rail industry. A copy of my full testimony 

has been submitted to the committee. I will summarize my testimony, and would be pleased to answer any questions you may 

have. 

First, let me take a brief moment to tell you about my background and that of SFRTA. Then I plan to summarize our experience with competitive contracting on our system. I am in my 41st 

year in this industry, and have had a wide range of experience in 

both passenger and freight railroad operations. I started as a 

brakeman and have worked as a locomotive engineer, transportation manager, superintendent. I have worked for Penn Central, 

Amtrak, Conrail, Metro-North Commuter Railroad in New York, 

and now Tri-Rail. I have worked in New Haven, Boston, New York, 

New Jersey, Philadelphia, and Florida, and I have worked closely 

during my career with the Federal Railroad Administration and 

the Federal Transit Administration, as well as the National Transportation Safety Board. 

As you may already know, Tri-Rail service commenced in 1989, 

following the purchase of the right-of-way by the State of Florida 

from CSX Railway. And Tri-Rail has been operated under agreement with private contractors since its inception. 

Mr. Chairman, let me summarize several key points about contracted services and the issue for concern for systems such as TriRail that rely on contracted services. One, competitive contracting 

for train operations and maintenance services has served us well 

since we commenced passenger service in 1989. Two, there is no 

need or justification for adding new certification and/or liability 

coverage requirements, as was proposed in Senate bill earlier this 

year. And, three, while we welcome Amtrak’s participation in the 

commuter rail industry on a level playing field with other private 

25 

contractors, we fear that their recent lawsuit over whether one contractor can approach employees of another for submission in competitive procurement will chill the marketplace and only make the 

job of evaluating competing proposals more difficult. 

Passenger safety is the number one priority on our Nation’s commuter railroads. Contractors know they need to share this priority, 

or they can be replaced through the competitive process. SFRTA 

has used private contractors and their operations since inception. 

The first operation was UTDC, now a division of Bombardier. Subsequent contracts were awarded to Veolia, Herzog Transit Services. 

Current contract is awarded to Veolia for operations and Bombardier for maintenance. Splitting the contract encouraged more 

competitors to bid. 

Amtrak was awarded our contract to dispatch the New River 

Bridge, and the SFRTA has had the great success with contracted 

services. And I believe it will work for the States, as well. 

Under the proposed increase of liability coverage for commuter 

railroads, while Congress has not previously intervened in the 

State and local review of various contracting options offered by Amtrak and other private operators in the railroad industry, CEOs in 

the commuter rail industry were very concerned earlier this summer with provisions contained in the Senate Commerce Committee’s rail title of S. 1813 during the consideration and development 

of MAP–21. 

Major concerns include liability insurance is a significant cost 

item for commuter rail industries. Merely establishing new minimum coverage requirements for non-Amtrak commuter rail operations without explicitly clarifying the status of limitation of liability for such operations would not only fail to address the uncertainty, but would exacerbate current difficulties in negotiating necessary liability agreements and securing affordable insurance. And 

proposed 35601 would make liability difficulties worse than under 

the current law. 

Amtrak recently sued Veolia in Federal court in Washington, DC, 

on the grounds that Veolia had, by including the names of Amtrak 

employees in its proposal, aided those employees in a breach of 

their fiduciary responsibility to their employer. And, as such, 

should pay damages in the amount of lost profits to Amtrak. Although no monetary damages were awarded, there are several 

major concerns raised. 

In my opinion, this lawsuit will create significant challenges for 

agencies such as Tri-Rail. It will limit the ability to include potential employees in proposals in an already limited talent pool. And 

it will create a chill in the marketplace and lead to greater hesitancy by contractors and reduce competition. 

Mr. Chairman, I have submitted my report, and I thank you for 

this opportunity. 

Mr. MICA. Thank you. And we will make that part of the record. 

Let me now introduce and recognize Chuck Harvey with Peninsula Corridor Joint Powers Board. 

Mr. HARVEY. Thank you, Mr. Chairman and members of the committee. My remarks this morning will cover the recent procurement 

process followed by Caltrain to secure an operating contractor for 

our rail service. 

26 

To place this recent procurement into context, the Peninsula Corridor Joint Powers Board, known as Caltrain, assumed operation of 

the system in 1992, when it was acquired from the Southern Pacific Transportation Corporation. The Joint Power Board consists of 

three public partners from San Francisco, San Mateo, and Santa 

Clara Counties, who share the ownership of Caltrain, including the 

entire 50-mile right-of-way which runs from San Jose to San Francisco, all rolling stock stations, and an equipment maintenance facility. Since 1992, the system has grown significantly, with ridership recently surpassing 50,000 per day. 

Amtrak was selected as Caltrain’s operator in 1992, and was 

again selected in 2001, after a competitive solicitation. Caltrain’s 

partnership with Amtrak over the past 20 years has contributed to 

the growth and success of the system. The decision to solicit competitive proposals for this contract was based on good procurement 

practice, the expiration of the current contract, and the presence of 

potential new proposers in the marketplace. The specific objectives 

of Caltrain included improving operating performance and customer service, realizing efficiencies, and ensuring the continuity 

and enhancement of a robust safety culture. 

In order to achieve these objectives, Caltrain adopted a unique 

new compensation methodology that would have the effect of providing the contractors profit for performance in areas that were 

identified as important to Caltrain. This performance fee program 

provides for no minimum or no guarantee level of profit, and establishes amounts that will be paid for meeting and exceeding certain 

performance targets. In this manner, alignment with Caltrain’s objectives would be ensured. This is in contrast to the guaranteed 

fixed fee that had been paid as part of previous contracts. 

The procurement process took over 2 years to complete. The requirements for the new contract were identified, including scope of 

services, evaluation criteria, and other methodologies. The proposals were—the request for proposal was issued, which generated 

a great deal of interest among qualified firms. 

Caltrain received proposals from five firms: Keolis; PCRS, a joint 

venture of Amtrak and Bombardier; PRS, a joint venture of 

RailAmerica and RATP Dev; TASI, a subsidiary of Herzog; and 

Veolia. A committee was formed for evaluating the proposals, 

which included more than 30 individuals from Caltrain and our 

partners, who offered expertise on all key technical areas, with a 

scoring team comprised of five senior team members. 

In order to ensure that a fair and objective mechanism was used 

to evaluate the proposals, weighted criteria were established to 

score the proposals. Qualifications and experience of the firm and 

key personnel was worth up to 20 points, management operations 

and maintenance plans worth up to 55 points, and the cost proposal worth up to 25 points, for a total of 100. 

After initial scoring of the proposals, Caltrain determined that 

four firms were in the competitive range and invited them for 

interviews. These interviews were rigorous, all-day sessions which 

were followed by committee representatives making site visits to 

rail properties to solicit feedback from each firm’s—of each firm’s 

performance. 

27 

The next step in the process was to request best and final offers 

from the firms. These final offers were evaluated and scored, and 

a consensus ranking was established. The highest ranked proposer 

was TASI, with the Amtrak joint venture ranked second. While the 

TASI cost proposal was not the lowest, it was a realistic proposal 

that provides cost efficiencies over the term of the contract. It was 

also 5 to 10 percent lower on an annualized basis than the secondranked proposal from the Amtrak joint venture. 

It is important to note that none of the firms participating in this 

process filed a formal protest of the award, as allowed in the process. And the contract was awarded to TASI. 

The transition from Amtrak to TASI operation was complex, and 

took many months to complete. At the onset of this transition, it 

was important for Caltrain and TASI to work closely with organized labor to ensure their questions and concerns were addressed. 

Federal labor law required all existing employees be protected in 

various aspects of their jobs, requiring TASI to negotiate 11 different implementing agreements with the unions. 

Approximately 90 percent of the existing workforce agreed to become TASI employees and continue to provide Caltrain service. A 

close collaboration with the regulatory agencies, including the Federal Railroad Administration, was also ensured that those charged 

with the safety oversight of Caltrain understood and supported our 

transition plan. 

Finally, the close-out of the Amtrak contract and a nearly 20- 

year relationship has required a lot of due diligence. Amtrak has 

been fully cooperative during this process. TASI assumed operation 

of the Caltrain service on May 26, 2012, and the service is operating as expected. 

Mr. Chairman, I have included for the committee an appendix to 

my testimony that provides many more details of the procurement 

process followed by Caltrain that I could not cover in the time allotted. I thank you for the opportunity to appear today, and I look 

forward to answering your questions. 

Mr. MICA. Thank you for your testimony. And we will include the 

appendix to your testimony as part of the record, without objection. 

Mr. Ray Chambers, and he is the executive director of the Association of Independent Passenger Rail Operators. Welcome. You are 

recognized. Pull that up real close, Ray. 

Mr. CHAMBERS. OK. Thank you, Mr. Chairman, Ms. Brown, and 

members of the committee. I very much appreciate this invitation 

to testify on behalf of AIPRO today, which is one of the newer rail 

organizations in Washington, DC. We are an organization of five 

independent rail operators. We compete against each other and 

Amtrak to provide passenger rail operations under contract to commuter authorities. 

AIPRO was established to actively encourage the expansion of 

passenger rail service in the United States. Our mission is to promote the public benefits of our current passenger rail system, while 

working with partners in the industry to increase passenger rail 

opportunities through a competitive marketplace wherever possible. 

We believe that there should be a bipartisan, national commitment to establish a viable, intercity, and urban high-performance 

28 

passenger rail network in America over the coming decades. This 

network should be built on the existing framework of commuter 

and intercity passenger service, and it should be implemented 

through public-private partnerships and the competitive process, 

wherever possible. 

An expanded passenger rail network in the United States made 

possible by additional quality operators offering competitive pricing 

and innovation will expand America’s mobility options, will reduce 

urban congestion, and most importantly, will create jobs that would 

not otherwise be available. 

Now, today, Amtrak maintains a de facto monopoly on intercity 

rail passenger service. However, as Ms. Brown and Mr. Boardman 

and many others have pointed out, there is vigorous competition in 

the commuter passenger arena. And that, of course, is the focus of 

this hearing. We believe the reason there is vigorous competition 

in the commuter arena is because it works. It works. 

Another purpose of this testimony is to shoot down a myth that 

independent operators are not safe; that they’re fly-by-night; that 

they’re relatively small; that they’re anti-union. Most don’t want a 

patchwork of these kinds of operators running throughout the 

country. So this, then, leads to the feeling that, at least for intercity, Amtrak is the only realistic option as a provider of rail passenger service. 

Well, the myth is patently not true, in terms of the reach and 

the breadth of the scope of these operators. Our members have a 

wide global reach. We’ve got vast American experience. We operate 

thousands of trains every year. We carry an excess of a billion passengers every year in the international marketplace. 

In fact, some of our members—I think three or four of them are 

themselves the size or larger than Amtrak. In the United States, 

three of the AIPRO members are operating some 252,000 passenger trains per year, and are carrying 72 million people each 

year. In 2011, Amtrak claimed about 110,000 annual trains, I believe, about 30.2 million passengers. And, of course, Amtrak has 

been growing, as has passenger service, generally. 

However, my point here in making these comparisons is not to 

‘‘dis’’ Amtrak in any fashion. I’ve got a lot of respect for Joe 

Boardman and for Amtrak and for what they’ve tried to do under 

incredibly difficult circumstances, particularly with the charge of 

operating the long-distance trains. The point that I’m trying to 

make here is that competition works, that our members, our 

AIPRO members, and others out are a major competitive force 

today in American rail passenger operations. 

Further, every AIPRO member works with the railroad operating 

unions. Coast to coast, our operations, from the MBTA in Massachusetts, to the Virginia Railway Express, to Caltrain, are fully 

unionized. We are not anti-union in any respect, and I think I can 

boast personally of some good relationships with some of the legislative representatives here that I’ve worked with over the years. 

We don’t always agree. In fact, Ed and I have frequently disagreed. 

But we are not an anti-union group. 

The commuter agencies around the country have increasingly 

turned to competition. Of the 25 commuter railroads reporting to 

the national database, 17 purchase transportation service under 

29 

contract. Some 11 have gone to competitive bid for operations. Several have gone to bid for maintenance. Amtrak has been involved 

in nine properties where there has been bidding in the last few 

years, and, as has been pointed out, has not succeeded in any of 

those. 

It is clear a growing number of agencies in the commuter world 

recognize that competition provides the very best service at the 

lowest cost. 

So now let’s look to the future. What is this all about? Where are 

we going from here? Well, one, I hope we will preserve and protect 

the ability to provide competition and to move to competition. 

Frankly, a bill that came out of the Senate would have been harmful to competition. I thank the committee leadership here for resisting those provisions in the conference. We need to promote and 

preserve competition wherever possible. 

Looking to the future, as far as our members are concerned, Mr. 

Boardman is correct. Our members are interested in expanding beyond commuter-style competition to intercity operations through 

whatever mechanisms are appropriate. We submit that this commuter model does point the way to States for introducing competition into our national intercity passenger rail network. As has already been pointed out, section 209 of PRIIA is going to require the 

States by the end of this next year to pay the full subsidy cost of 

all corridor passenger service, under 750 miles. I believe there are 

about 27 corridors in some 19 States that are going to see their 

cost greatly increased if they are going to preserve existing levels 

of service. 

So, as PRIIA is reauthorized, I think a good reform is something 

we should work on together: management, organized labor, the 

freight railroads, the States. A good reform would be to incentivize 

the States, to apply the commuter model where possible, to intercity corridor service. And I can assure you that our members will 

be active participants in that process. 

We look for a new vision and a bipartisan program. Thank you. 

Mr. MICA. Thank you, Mr. Chambers. And now I’m pleased to 

recognize Mr. Ed Wytkind, who is the president of the Transportation Trades Department of the AFL–CIO. 

Welcome back. You are recognized. 

Mr. WYTKIND. Thank you, Mr. Chairman—glad to be back—and 

Ms. Brown and other members of the committee, for allowing 

transportation labor the chance to present our views on this important issue. 

Let me first also join my colleagues in marking the moment of 

today, of September 11th, as a day when America was attacked 

and our transportation system faced challenges it never had faced 

before. And the members that we represent dealt with that day by 

performing quiet acts of heroism, helping to transport thousands of 

Americans left stranded. 

It is—the irony is not lost on me, and I’m sure most others, that 

we’re here on 9/11 discussing proposals that would, unfortunately, 

dismantle Amtrak on the very day when, 11 years ago, Amtrak 

workers, among other transportation workers, helped with emergency transportation operations to deal with the wake of the terrorist attacks. 

30 

This is the fourth time I’ve been before this committee in 18 

months. And I am again here talking about privatization measures 

to dismantle or, at a minimum, weaken Amtrak. And we wish we 

were here discussing a number of other important challenges. I 

can’t help but note that, as we’re in a Presidential election year, 

that some of the proposals coming out of this committee remind me 

of the Mitt Romney view of the world, which is we dismantle Amtrak, which he would do by zeroing it out, we cost thousands of 

Amtrak workers their jobs, we subject Amtrak riders to chaos and 

uncertainty on the very corridor that he was Governor once, and 

tragically undermining the Railroad Retirement system. 

I know the facts can be stubborn things, but let me offer a few 

about Amtrak and its performance. As we all know, ridership is 

soaring, on-time performance is the best ever, infrastructure upgrades are paying off, and long-term debt is clearly improving. But 

these facts can be a nuisance when there is another agenda here. 

We are puzzled by the odd rhetoric coming from the committee 

about Amtrak’s role in the commuter business. We know that commuter rail authorities do turn to other entities other than Amtrak 

to perform those services. And it is a fact that, while we want to 

see Amtrak grow its commuter portfolio, that this is a competitive 

marketplace, as evidenced by the hearing today and the folks on 

this hearing panel. 

But let’s be clear. Fair, open, and balanced competition isn’t what 

Mr. Chambers and his clients are looking for here. The motives 

here are really about going after Amtrak and, unfortunately, its 

employees. They have paraded all sorts of ideas on Capitol Hill designed to create a legal and regulatory framework that disadvantages Amtrak when it dares to compete in the marketplace. Imagine that. Failing that, they would like to see Amtrak exit from the 

business all together, so they can have it all for themselves. 

Their aim is consistent with their broader agenda, which is to 

eliminate Amtrak and let private corporations—by the way, many 

of them foreign—to cherry pick those parts of the Amtrak system 

that can yield them the highest profits. I’m certain these corporate 

entities would love to seize every potentially lucrative business segment of Amtrak, and would love Congress to rig the laws to ensure 

their success, sort of like H.R. 7, when they basically said that private contractors—which, by the way, they claim can do it better 

than everybody else—would be held harmless by the taxpayer if 

they lost money. 

What’s obvious is that elements of the private sector wish to 

seize the growing passenger rail market, while avoiding basic rail 

and labor laws that cover Amtrak and its workforce. Under their 

vision for the future, collective bargaining would be undermined, 

Railroad Retirement coverage would be evaded, and other laws 

would be avoided entirely. We reject that vision for our members, 

and we’re not going to apologize for their right to have good middle-class jobs with good benefits. And those are the kind of jobs 

that Members of Congress up here spend all day talking about they 

want to create. 

The Association of Independent Passenger Rail Operators even 

opposed efforts in MAP–21, as Mr. Chambers said, to hold all proVerDate Aug 31 2005 15:42 Nov 28, 2012 Jkt 000000 PO 00000 Frm 00066 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\9-11-1~1\75849.TXT JEAN
31 

viders of passenger rail service to reasonable and common standards. 

So, what does that mean? Let’s get it down to basic English. 

They’re against having the financial fitness to prove that they’re 

worthy of these contracts and able to operate safely. They’re 

against demonstrating liability insurance coverage. No one is for 

that, except Mr. Chambers’s clients. And in full compliance with 

safety and security requirements, which, by the way, every other 

railroad in America led by Amtrak has to do. 

Meanwhile, they want to be leaders in the passenger rail business, but don’t want to be covered by railroad laws like Railroad 

Retirement. It is no wonder that the freight railroads have been 

less than enthusiastic about dealing with a hodgepodge of operators who are not indemnified, like Amtrak is. And it really, to me, 

is a sort of a moment of time for this committee to ask a question. 

Do you really want the Federal Government to seize the private 

property rights of freight railroads on behalf of the private rail operators in this country that want to provide rail service? I hope the 

answer is no. 

We support expansion of commuter rail. We support more money 

going to passenger and freight transportation needs in this country. 

But we oppose measures designed to disadvantage Amtrak and bar 

it from participating in any segment of the evolving business of rail 

transportation. I suspect the 30 million riders at Amtrak would 

love Congress to focus more on giving the company long-term financial stability so it can expand into other rail areas and provide 

better and faster service. Our future will be one focus on one thing, 

which is to promote more passenger rail service in America. 

But we’re not going to support an agenda which is clear. It is to 

get rid of Amtrak and enrich corporations with special treatment 

under our laws. And along the way we’re going to harm way too 

many workers, including harming the Railroad Retirement. Thank 

you, and—for giving us this opportunity. 

Mr. MICA. Thank you again for your testimony, and all of our 

witnesses. Pleased to have your input before the committee on this 

important issue. And we will have an opportunity for questions 

now. So I will recognize myself first for some questions. 

I might turn to—well, Mr. Boardman, I think you had cited my 

comments calling Amtrak a Soviet-style train operation, which I 

commonly do, because it still relies too much on Government and 

not privatization. So I think that you’re correct in that. However, 

your reference to Russia and their loss of passenger service, actually, in the one line that I recently had some familiarity with, recently they held a high-speed rail conference in—international—in 

Philadelphia. And around the table were all the nations: Spain and 

UK and Sweden and Germany. 

At the end was—and everyone had their little name tag at the 

conference. I noticed that name tag. His name was Vladimir. So everyone was giving an update. And then we got to Vladimir, the 

Russian representative. And he described the private—that Russia 

has now engaged the private sector, and they are actually—put in 

service high-speed service between Leningrad and Moscow. So were 

you aware of that? 

Mr. BOARDMAN. Yes. 

32 

Mr. MICA. Yes. So I’m hoping that we can get to a different 

model, and a model that does have the least amount of subsidization. Sometimes you do have to subsidize the service. And I have 

cited on several occasions at least one of the Virgin Rail routes 

which originally had 14 million passengers, it grew in a decade to 

28 million passengers, increased the employment, also a very substantial private sector investment. And I think you’re aware of Virgin Rail’s success, at least on one of those routes. Is that correct, 

Mr. Boardman? 

Mr. BOARDMAN. I see in some of the commercials he did a great 

job delivering newspapers, yes. 

Mr. MICA. Well, again—— 

Mr. BOARDMAN. Yes, I did. 

Mr. MICA. I mean that’s just factual. It started out with a $300 

million a year subsidy 10 years ago. And it is paid dividends, and 

now paying approximately $100 million a year, increasing employment for jobs on the new service, and also doubling the passenger 

count in a little over a decade. So there are examples. They are not 

all applicable. 

Are you aware, too, that—Mr. Boardman—in 2015 that you will 

be able to compete in the European Union, any of those countries, 

for service? 

Mr. BOARDMAN. Through what application? 

Mr. MICA. Well, the European Union has—— 

Mr. BOARDMAN. I mean—— 

Mr. MICA [continuing]. Which is a little bit more socially oriented 

than the United States, but by 2015, any of the member States 

must allow open—— 

Mr. BOARDMAN. Oh, yes. But Amtrak? Do you think Amtrak can 

compete? 

Mr. MICA. Well, I’m hoping not. 

Mr. BOARDMAN. The committee would like us to do that? 

Mr. MICA. I’m hoping not, but I just wanted to make you aware 

of the opportunity—— 

Mr. BOARDMAN. Yes. 

Mr. MICA [continuing]. Since you—I think you closed with what 

about Amtrak competing in France, I think, was your commentary. 

And it is quite interesting. In that same symposium for providing 

high-speed rail, I was quite surprised to learn—and I didn’t know 

this, and I have family from Italy, but—and have been there almost every year since I was 20 years old, but Italy also has private 

sector competition to the existing rail line. Were you aware of that, 

Mr. Boardman? 

Mr. BOARDMAN. I am aware of the fact that Europe is trying to 

propose competition—— 

Mr. MICA. No, but this is Italy. Italy. 

Mr. BOARDMAN. No. 

Mr. MICA. And actually, it is operational. And their plans to expand are dramatic and—— 

Mr. BOARDMAN. Are you recommending that Amtrak go to Italy 

and—— 

Mr. MICA. No, I’m not. 

Mr. BOARDMAN. OK. 

33 

Mr. MICA. I Just—you brought up France and some—and competing—— 

Mr. BOARDMAN. I think that the French wouldn’t like us to be 

there competing with them. 

Mr. MICA. Well, again, the European Union has changed the 

rules. And I guarantee you, whether I’m here or not, Congress will 

change the rules and there will be—— 

Mr. BOARDMAN. I guarantee you whether you’re—— 

Mr. MICA [continuing]. And there will be—— 

Mr. BOARDMAN [continuing]. If you’re here or not, you wouldn’t 

want Amtrak competing in Europe. 

Mr. MICA. No, I’m not advocating that. In fact, I’m not advocating that they compete for commuter rail service. 

Mr. BOARDMAN. I understand that. 

Mr. MICA. And I would also like to get them out of providing any 

of the State-supported intercity passenger rail service. And I would 

like to get them back to their core mission. 

And I think you were here, too, sir, when I opened my comments 

and I said if there wasn’t an Amtrak you would create one to make 

certain that we had a national rail passenger service, quite contrary to some other comments that I heard that I am in some way 

opposed to providing that service. But what you do want—it was 

provided as economically, efficiently as possible. And I know that’s 

your goal—at least I hope it is. 

A couple of other questions were raised. And Mr. Wytkind talked 

about liability and possibly some advantage, either for the private 

sector. And I don’t think that that is our goal. I think that we have 

got to be responsible, as far as liability for both Amtrak, as a provider, and also for the private sector. And they should have equal 

responsibility. Would you agree or disagree with—— 

Mr. WYTKIND. Well, first of all, what I referred to, I wasn’t referring to your goal. I am hopeful that this committee wouldn’t support reducing the liability protections that these private carriers 

carry. 

Mr. MICA. Well, no one has advocated—— 

Mr. WYTKIND. It is their—— 

Mr. MICA [continuing]. That. In fact—— 

Mr. WYTKIND. It is their position that they should not be held to 

the same standard that Amtrak is. And that’s why the freight railroads like to deal with Amtrak, because they’re appropriately indemnified against liability. 

Mr. MICA. Is that your position, Mr.—— 

Mr. WYTKIND. That’s clearly the position I heard by Mr. Chambers. 

Mr. MICA. Mr. Chambers? 

Mr. CHAMBERS. Unless I am missing what you’re saying, it is not 

our position. We believe—— 

Mr. WYTKIND. Just roll back the tape. 

Mr. MICA. Well again, Mr. Chambers, would you respond? 

Mr. CHAMBERS. Yes, we—— 

Mr. MICA. Is that your position? 

Mr. CHAMBERS. There are some major issues out there in terms 

of can we introduce competition. And that’s what this hearing is 

about. Can we introduce competition? 

34 

Mr. MICA. On the question of liability, though, which I was addressing to Mr. Wytkind, would you support, you know, what’s 

good for the goose is good for the gander? Labor has advocated that 

position, I believe. And I advocate it. 

Mr. CHAMBERS. Yes. We would support that. 

Mr. MICA. OK. But I think we do need liability reform. And Mr. 

DeFazio has pointed out we do need adequate protection. The last 

incident we had, it wasn’t adequate, and we should make certain 

that that’s in place. 

Also, this thing that somehow we advocate something that would 

diminish labor’s role, first, I think is not accurate. I think if you 

could dramatically increase the number of routes and use of passenger service, whether it is transit, intercity, or long-distance, or 

actually high-speed rail, there would be countless opportunities for 

increasing employment. And all of those would be union memberships. Now, they may be different unions, granted, but I think 

there would be substantial opportunities. 

What do you think, Mr. Chambers? I will throw you a softball. 

Mr. CHAMBERS. Yes. The—— 

Mr. MICA. That’s all you need to say. 

Mr. CHAMBERS. OK. 

Mr. WYTKIND. Could I—since I represent the labor movement, 

could I answer that question? 

Mr. MICA. And we’ll give you an opportunity. 

Mr. WYTKIND. OK, thank you. That’s sort of addition by subtraction, Mr. Chairman. When you just said you want to downsize Amtrak’s role in very important business segments of that company, 

and yet we’re supposed to see job growth at Amtrak, I don’t think 

the math adds up. 

Mr. MICA. Yes. Well, again, my position is, first of all, if you 

could provide it more efficiently and economically, which it is proven, at least in competition in the commuter rail arena, that Amtrak 

cannot compete. 

Amtrak—also I would say, Mr. Boardman, those proposals aren’t 

put together for free, are they? I mean there is cost involved—— 

Mr. BOARDMAN. Oh, yes, there is cost. But if I could respond to 

that—— 

Mr. MICA. But they are spending millions of dollars to compete 

and, in fact, not winning. So, first, we could save that money. 

Mr. BOARDMAN. Well, I didn’t say millions. But it is costly. 

Mr. MICA. I say millions. 

Mr. BOARDMAN. Yes. 

Mr. MICA. From what we have done. 

Mr. WYTKIND. But the whole premise is that you’re trying to disarm the company. You’re asking it to operate more like a business. 

And when it tries to compete, you don’t want them to use a resource to compete. 

Mr. MICA. But I think there are certain things—— 

Mr. WYTKIND. You can’t have it both ways in this committee. 

Mr. MICA. Well—— 

Mr. WYTKIND. It is one or the other. 

Mr. MICA. Again, this isn’t a discussion between two of the panelists; I will ask the questions. But what we have—— 

Mr. BOARDMAN. But I have to be—— 

35 

Mr. MICA. Let me finish with him, then I will come back to you. 

He made a comment, again, saying that somehow we are looking 

at lessening the employment. I think you could dramatically increase the employment in Amtrak and you could also dramatically 

increase the private sector employment. Again, if the service can be 

provided at the most reasonable cost and maximize efficiencies, 

customer service—and it is been proven in countless cases where 

there has been privatization around the world, or even in our own 

competition, where Amtrak competes. 

Mr. Boardman, on—well, and just let me say one thing about— 

one more thing for Mr. Wytkind. Was it 2008 when you all had the 

labor dispute with Amtrak over wages and benefits? Remember 

when we had the meeting with Mr. Oberstar? 

Mr. WYTKIND. Yes, I do remember. 

Mr. MICA. It was 2008. But I would venture to say, too, that 

labor has had a difficult situation with Amtrak. In fact, I think 

those suits involved there had to go to the Presidential board and— 

to secure rights. And actually, I defended the position of labor in 

that instance for resolution, where the brothers and sisters who 

were in the freight rails have consistently been able to resolve their 

issues working with the private sector and also maintaining, what, 

22,000 miles of track over which Amtrak—or 20,000 miles, I’m not 

sure of the exact figure—over which Amtrak runs its passenger 

service, and all being paid a union wage and getting substantial 

benefits. 

Mr. Boardman, you had one other point that you made relating 

to cost recovery. Eighty-five percent? 

Mr. BOARDMAN. Operating—yes. 

Mr. MICA. Operating—— 

Mr. BOARDMAN. Operating cost. 

Mr. MICA. OK. If you calculate in the total subsidy, $1.4 billion, 

we come out to about $49 per ticket cost, not counting how much 

money was given to Amtrak under stimulus. What was the total 

given? 

Mr. BOARDMAN. I don’t see the capital investment as a subsidy. 

I see the capital investment the same way I see the capital investment in highways, in airports, and in ports. It is about the growth 

of this economy. It is not a subsidy to Amtrak. 

Mr. MICA. Well, the last—— 

Mr. BOARDMAN. That corridor, the Northeast—— 

Mr. MICA. Well, the last I checked, if you had given $49 per ticket, per ride subsidy to any of those modes, you would totally bankrupt the United States of America. 

Mr. BOARDMAN. We don’t have a need for any operating subsidy 

above the rail on the Northeast Corridor. And the investment in 

that corridor, whether it is run by us or another private company— 

and we are a private company—— 

Mr. MICA. Well, again, I would differ. I think you’re holding the 

Northeast Corridor hostage. I think we should have four or five 

times the passengers, two or three times the number of employees 

in that corridor. And we would also relieve the air traffic congestion not only for the Northeast Corridor, from which 70 percent of 

our chronically delayed flights emanate, but we would also be a 

36 

better steward of our environment, and we would also move a lot 

more people by rail than we are at this time. 

And I hope that we can have at least the private sector competition we have seen in other parts of the world, whether it is Russia 

or Italy or Romania, in the United States of America. 

With that I will yield now for questions to Ms. Brown. 

Ms. BROWN. Thank you, Mr. Chairman. Thank you, Mr. Chairman. Can you hear me? 

First of all, Mr. Boardman, thank you for coming. You look really 

good. You lost weight. 

Mr. BOARDMAN. Thank you. 

Ms. BROWN. And personally, I just want to acknowledge that 

your father passed away just a few days ago. And thank you for 

being here. And I—you know, the stakeholders in this room, we all 

from time to time have different agreements, but we are one family. 

And I really have to say I’m—I keep saying it. I’m really disappointed with this committee. You know, we get in the weeds of 

how competition should operate. And I don’t think that is the role 

of the United States Congress Transportation Committee. 

We talk about—you know, one of the things that I’ve constantly 

have heard, don’t confuse these Republicans with any facts. I mean 

it is no place for it in this room. I mean they think that they can 

say things over and over again, and that’s the way it should be. 

Well, that’s the way it is supposed to be. You don’t want competition? My friends here, you don’t want us to file lawsuits when 

someone does something wrong? Come on. This is America. And 

there are recourses when you don’t behave a certain way. 

Republicans are all about states’ rights and the States are free 

to choose the operators, whether it is Amtrak or someone else. But 

I want to go back to 9/11, because to me that is the most—that is 

what we need to be talking about. When—first of all, what did Amtrak do after 9/11 to protect the public? And what are the additional securities have we put in place? 

When we went and took out the Osama bin Laden compound in 

Pakistan, one of the things they indicated was that they were going 

to attack our rail system. What have we done, and has the Federal 

Government been the kind of partner you need in this process? 

Mr. BOARDMAN. I think the short answer is the Federal Government has been a very good partner with TSA. Every once in a 

while we have to push back on TSA a little bit as they push forward, trying to get their job done, and we’ve done that. But Amtrak 

has become the leader, I think. 

And what was so surprising to me in the same conference that 

the chairman talked about up in Philadelphia is that the Japanese 

railroads have been watching Amtrak’s security. And their indication is that they believe they’re using some of what we’re doing as 

a model to—for the future, and think that we’re really on the right 

track. 

And that track, really, is in two areas that we really are looking 

at. One is, obviously, explosive and detection and protection. We 

are using relatively new technology with the dogs that we use, 

which are vapor wake, which is basically they—you can explain 

that by if you smell popcorn popping in a microwave, you’re going 

37 

to be able to see where that popcorn went. And where you see us 

squeezing up a crowd and you see a dog there, they’re looking for 

that vapor wake as the crowds go through, because you can’t do it 

the same as they do in the airports. 

The second thing is the active shooter situation, that we’re training how do we get people out of the way quickly, and how do we 

deal with something that occurs. And is what’s occurring really 

going to be a diversion, and there is something else going somewhere else? When I talked in my testimony about RAILSAFE and 

about how we’re working with all the local law enforcement agencies, and the numbers of officers that we will have out today, over 

1,400 of them across the country, it is that relationship, that building of those community relationships, where people own their Amtrak station as a part of their community, that they are really interested in what is really happening there. 

We see a real change. We have our own people within the Joint 

Terrorism Task Force are in there all the time. Communication has 

improved. We follow the lead a lot of Commissioner Kelly out of 

New York City, and what he has tried to do to improve the Northeast Corridor, where we think there is a greater vulnerability. We 

are a part of RAILPOL, which is a global European effort to identify early any kinds of difficulties across the world that we should 

be aware of and knowledgeable about. I get a briefing almost every 

day on what is going on in the world about Amtrak. And it is sometimes a secure briefing. 

We have done our best to train our maintenance of way and 

other workers to look for and become part of see-something-saysomething. Hopefully it is nothing, because we know a lot of times 

people don’t want to be embarrassed and come forward and say 

that they see something and it turns out to be nothing. That is 

what we hope for, that it is nothing. And we are involved in many, 

many ways to improve and harden our infrastructure with cameras 

and fences and working with the freight railroads, as well. 

Ms. BROWN. Has the Federal Government been a partner, as far 

as providing additional monies or grants for security? 

Mr. BOARDMAN. Yes. We have a good working relationship with 

that. We know they are going to be under stress, which will put 

us under stress. We have grown, we think, fairly responsibly. Our 

dog team program, we have 57 teams of dog teams out there that, 

as an extra cost, almost 500 officers at Amtrak, which most other 

railroads don’t have, but it was absolutely necessary to secure our 

customers, and that is what we have done. 

Ms. BROWN. Thank you. And I have additional questions as we 

move on. 

Mrs. SCHMIDT. [presiding.] Thank you. And no, I am not Chairman Mica, I am Congresswoman Schmidt. And I would like to ask 

you two questions, sir. 

How do you explain Amtrak’s failure to successfully win a single 

commuter rail operations competitive contract over the last 10 

years, Mr. Boardman? 

Mr. BOARDMAN. Actually, we have Metrolink, which we received 

about 3 years ago, after the Veolia accident. So we do have an additional commuter contract. But primarily because we have—— 

Mrs. SCHMIDT. Was it competitive? 

38 

Mr. BOARDMAN. No, it was because—— 

Mrs. SCHMIDT. The question was competitive contracts. 

Mr. BOARDMAN. OK, I know. But the fact is that when people go 

through that competitive process, and then later they are really 

looking for somebody that has the experience and ability to bring 

back a safe environment, Amtrak is selected. 

In terms of not being able to compete necessarily with—and we 

have an entirely new group of competitors—the Keolis folks were 

not in the environment until they came to compete on the VRE 

contract. They—RATP Development, which is part of this group, 

have not gotten a contract in this country. And I think the first one 

they proposed on was the Caltrain contract. Veolia, of course, has 

been around for a while. Under the circumstances of what we are 

dealing with, we were not chosen. But we were competitive. Even 

in the Caltrain project, we were the second identified proposer. And 

so we believe we were competitive. We believe we did a good job 

with that. We were not selected. 

Mrs. SCHMIDT. Well, you know, sometimes second is good and 

sometimes it is not, sir. And I won’t belabor this right now. But 

could you please provide the committee with a detailed—and I 

mean detailed—cost breakout for every commuter rail competition 

Amtrak has participated in over the last 10 years? So over the last 

10 years, every contract, competitive contract that you participated 

in, I would like a detailed cost breakout. Could you provide that 

for us in a timely fashion? 

Mr. BOARDMAN. Sure. 

Mrs. SCHMIDT. Thank you. I would like to turn my attention to 

some other folks. 

Mr. Giulietti, in your opinion, despite the fact that Amtrak was 

not awarded any damages in its 5-year litigation with Veolia after 

losing a competition for the Tri-Rail commuter railroad operating 

contract, this lawsuit will have the effect of stifling competition in 

the passenger rail market. Why do you believe this court case will 

stifle future passenger rail competition? 

Mr. GIULIETTI. And my answer to that is that what has happened in the commuter rail industry—Tri-Rail was the first startup 

in 25 years of a commuter rail operation. It was an industry that 

has been in tremendous decline. So, as we have looked at the bids 

that have come forward, those bids have included the same personnel on multiple bidders coming forward. 

If you take a look at this trial—and I participated in the trial— 

the basis was that Amtrak went after Veolia for using some of 

their personnel in the bid document. Now, I want to point out that 

the difference between the two costs—Amtrak came in at $162 million over the 10 years of the contract, Veolia came in at $97 million. But Amtrak took them to court for the fact that some of Amtrak’s personnel were listed on the Veolia bid, two key personnel 

that were listed on the bid. And I may be corrected on that. It 

could be a couple more than two, but that’s what we were focusing 

the trial on. 

So, from a commuter rail standpoint, the fact that what came 

down as a decision on this was the fact that they did not want personnel listed from a company, that Amtrak’s main argument here— 

and excuse me for simplifying—was basically that employees 

39 

should not be allowed to bid or enter into a bid against their own 

company. And that was the basis of the lawsuit. So, Amtrak was 

looking for the total loss of their profits and everything else, and 

not getting this contract. 

If indeed this is held true and goes forward the way that it is 

right now, the only way the commuter agencies are going to be able 

to evaluate bids is that you won’t be able to list the personnel that 

are going to be there, because you could be subject to a lawsuit, 

based on the fact that you have listed personnel from another company. That dampens the ability for an agency to be able to determine who the best qualified are going to be. 

The other end of it is that ultimately, when there is cost to these 

lawsuits, whether it is on this or anything else, the public agencies 

that are putting these competitive contracts out, these bidders that 

are going to bid are going to have to build into their cost the cost 

of the lawsuits and defending the lawsuits. So that is why I say 

it puts a chill in, and it causes a dampening effect in the industry. 

Mrs. SCHMIDT. And a followup for you, sir. Do you believe it is 

appropriate for Amtrak to bring a lawsuit of this nature, particularly given the corporation status as a federally funded subsidy? 

Mr. GIULIETTI. You know, I have—understand I am doing this 

from a personal nature, OK? And from a personal nature I was 

very disappointed to see the lawsuit come forward because it, 

again, entered into where the agency had to get involved, OK, and 

there was a lot of expense associated with this. 

I know that that has been the position of the private sector, is 

that Amtrak is able to use public funds to go and initiate these 

lawsuits. And I don’t think it is appropriate for me to respond as 

to whether or not that is right or wrong, OK, but I will say this. 

The fact that this led to the decision that it did, and the fact that 

this has been common practice was very disappointing, and put us 

in a position that I ended up in a courtroom discussing this. And 

I do feel that that part was wrong. 

Mrs. SCHMIDT. Thank you. Mr. DeFazio, do you have any questions, sir? 

Mr. DEFAZIO. Yes, thank you, Madam Chair. You directed a 

question to Mr. Boardman regarding bids that were undertaken for 

commuter rail. And apparently—answered in the affirmative, provided that information. 

Mr. Chambers, would your members be willing—is that information public for the private bidders? 

Mr. CHAMBERS. I don’t know. 

Mr. DEFAZIO. Yes. I don’t think it is. I mean, and I think we are 

talking about proprietary information normally in a contract bidding process. 

Mr. CHAMBERS. We would not provide proprietary information. 

Mr. DEFAZIO. Right. 

Mr. CHAMBERS. Of that I am sure. 

Mr. DEFAZIO. Right. And I would assume that Amtrak would not 

provide proprietary information, either. 

Mr. BOARDMAN. We will only provide what we are allowed to provide. 

40 

Mr. DEFAZIO. OK. All right. I just wanted to get that—because 

I was a little puzzled by that, knowing a little about the contracting process. 

To Mr. Giulietti, I am just a bit puzzled on two things. One is 

you were just addressing the issue of contesting contracts. If two 

private companies wanted to sue one another over a contract, over 

a bid, would that be OK? 

Mr. GIULIETTI. Obviously, the answer is that it is OK, but it is 

extremely disappointing, and it has been a turn in the industry. No 

matter what we are putting out, whether it is—— 

Mr. DEFAZIO. Right. I mean the Federal Government—I mean I 

am trying to build a new VA clinic in my home town, and I now 

have—you know, we got litigation over that between private contractors. I mean at some point everybody gets frustrated by this. 

But I guess the question is why would we just tie one entity’s 

hands and say Amtrak, you know, couldn’t pursue court relief 

when anybody else could. I mean I agree with you that it gets very 

frustrating, so—— 

Mr. GIULIETTI. Should I respond? 

Mr. DEFAZIO. Sure. 

Mr. GIULIETTI. From the standpoint, again, all right, obviously, 

the court is the relief system for finding things that are egregious. 

But I would go back to what was the core here. And the core was 

that we put out a competitive bid. And I am very grateful that Amtrak bid. We only had two bidders on it. We had separated it out 

to ensure that there was going to be competition. The difference between the two bids was $162 million and $97 million over the 10 

years, all right? 

So there is a difference between what I would consider a true 

lawsuit because you are egregiously hurt, OK, versus a lawsuit to 

make a point. And in my opinion, this was a lawsuit to make a 

point, and that is why I have taken the position I have. 

Mr. DEFAZIO. Well, I understand that. But a private company 

would have probably different recourse if some of their execs signed 

up for a competitor who was bidding against them; they would be 

instantly out of a job. And, unfortunately, I believe probably his 

people had some protection where they couldn’t be instantly out of 

a job. So, one way or—yes, Mr. Boardman? 

Mr. BOARDMAN. Well, you are exactly right. And I think that, 

yes, the point was made, and it is an important point to make. 

From 1988 to 1995 I was a chief operating officer of Progressive 

Transportation Services, which was purchased after I left it and 

joined the Pataki administration as commissioner of transportation. And my job there was to do exactly the kinds of things that 

we are talking about here. And I had 11 different contracts that 

I did proposals on. In not one of those cases did I take and approach and hire an employee of another company prior to me presenting the proposal or the bid. 

And there was sometimes in the practice of buses—this involved 

buses—a practice of going and hiring the manager of the system 

prior to actually getting the bid. That was not something that I 

thought was ethical. 

41 

And so, for me, this is very important. I believe—and I try to put 

myself forward in regard to this—that employees are our most important and valuable assets. 

Mr. DEFAZIO. Sure. 

Mr. BOARDMAN. Whether it is VRE—— 

Mr. DEFAZIO. Right. I get it. No—but I’m going to run out of 

time. 

Mr. BOARDMAN. OK, OK. 

Mr. DEFAZIO. But anyway, I appreciate that. 

Mr. BOARDMAN. Thank you. 

Mr. DEFAZIO. Mr. Giulietti and Mr. Chambers, quickly. As I understand it, you objected to provisions in the Senate-passed bill. 

And I would just like to know, in particular, which provisions. I 

mean because one is financial capacity, operating experience. I assume you wouldn’t object to that. Three was applicable safety security requirements. Wouldn’t object to that. There was a part about 

the right-of-way, which would get somewhat technical, dealing with 

the railroads, obviously. 

But number four seems to be the key, which is minimum liability 

coverage. And I guess I am concerned if that is the issue, since we 

have already had one commuter accident which exceeded what 

would be, you know, the $200 million that Amtrak is required to 

carry. Are we carrying adequate liability, and is that the principal 

objection? 

Mr. CHAMBERS. The principal objection to the Senate-passed rail 

title was the mechanism that it set up in the Surface Transportation Board, where the Surface Transportation Board would have 

the ability to essentially engage in as much regulation as they 

wanted to throughout the whole passenger industry, including commuter. On the specific—— 

Mr. DEFAZIO. Beyond these principles we are talking about here? 

Mr. CHAMBERS. Beyond the principles—— 

Mr. DEFAZIO. OK. Well, then, the—OK. So that’s not—— 

Mr. CHAMBERS. It was very broad. It was very dangerous, from 

our perspective—— 

Mr. DEFAZIO. All right. OK, all right. And Mr. Giulietti? 

Mr. GIULIETTI. Yes. On the passenger commuter rail side, we 

have been wrestling constantly. For example, Tri-Rail, when it was 

formed, CSX made it a requirement, even though the State bought 

the corridor, that Tri-Rail had to carry a minimum of $100 million 

worth of liability insurance. There is a lot of States in the commuter rail industry that the State feels that they handle that liability. CSX has used that numerous times—and, in fact, part of 

the whole Central Florida negotiation was that they wanted the 

Tri-Rail system to have to carry $200 million worth of liability coverage now. And they have actually used Amtrak as an example, 

saying Amtrak is buying over $500 million worth of insurance, so 

therefore we should be buying $200 million worth of insurance. 

The issue for the commuter rail properties is the cost of this insurance, and the fact that it can only be procured in overseas markets. Everything above $75 million you have got to go over—and 

I am there with CSX and everybody else, trying to buy insurance 

coverages that are extremely expensive, and we can’t afford the increase. And in several cases, even down in Florida—— 

42 

Mr. DEFAZIO. But—OK. But if claims—I mean, you know, I got to tell you, $75 million for a bad commuter train crash, where is 

the money over $75 million going to come from? 

Mr. GIULIETTI. Well, and that is—again, comes down to public 

policy. And that is why I was—I truly—my main objection was I 

felt that we really needed to talk this thing out. In other words, 

there were some rules coming out that we hadn’t even had an opportunity to go—— 

Mr. DEFAZIO. Well maybe—I mean you would probably agree— 

and thank you, Madam Chair, for the indulgence—but maybe we 

ought to be—have to look at something like what we have done historically with flood insurance or something, where the Feds mandate and set up a pool or something, where people could get into 

a pool. Because I am just thinking these numbers are pretty low, 

given the current environment. 

Mr. GIULIETTI. And, Congressman, that is exactly where the commuter rail industry was. And, in fact, I even joined in with the 

AAR so that we could talk with the freight railroads as well, and 

approach Congress about this. It is a very serious issue, and I 

agree with you. 

Mr. DEFAZIO. I would like to hear about it anyway, sometime—— 

Mr. GIULIETTI. Sure. 

Mr. DEFAZIO [continuing]. If you have the opportunity. Thank 

you. 

Mrs. SCHMIDT. Thank you. I would like to go back to Mr. 

Boardman first. 

Sir, I wasn’t asking for everybody’s competitive bid over the last 

10 years. I was asking only for yours. And so there is no proprietary issue there. And isn’t it true—— 

Mr. BOARDMAN. Well, I wouldn’t want to give out—my competitors my information—— 

Mrs. SCHMIDT. Isn’t it—excuse me. Isn’t it true that Amtrak used 

an employee of Herzog in its bid for the Tri-Rail competition? 

Mr. BOARDMAN. I don’t know. I wasn’t here. 

Mrs. SCHMIDT. OK. Well, I would like to go to—— 

Mr. BOARDMAN. But we don’t object to using—— 

Mrs. SCHMIDT. So—that is OK. I would like to now focus—— 

Mr. BOARDMAN [continuing]. Any of the other employees of 

any—— 

Mrs. SCHMIDT [continuing]. My attention to Mr. Harvey. Mr. 

Harvey, isn’t it fair to say that because of existing labor protections 

in U.S. transit law, contracting out computer rail operations to a 

private operator does not have a negative impact on existing employees—— 

Ms. BROWN. Excuse me. Excuse me. 

Mrs. SCHMIDT. Excuse me. I am sorry, I am asking Mr. Harvey—— 

Ms. BROWN. I know, but I—— 

Mrs. SCHMIDT. Ma’am, ma’am, I didn’t interrupt—— 

Ms. BROWN. But you should give him the opportunity to answer 

the question. 

Mrs. SCHMIDT. Ma’am, ma’am—— 

Ms. BROWN. No, ma’am. You should have given him the opportunity to answer the question. 

43 

Mrs. SCHMIDT. Mr. Harvey—— 

Ms. BROWN. Just as rude as you can be. 

Mrs. SCHMIDT. I am asking you the question, sir. Isn’t it fair to 

say that because of existing labor protections of U.S. transit law, 

contracting out commuter rail operations to a private operator does 

not have a negative impact on existing employees? 

Mr. HARVEY. That depends on the operation. At Caltrain, we 

were signatories to a 13C agreement, and that was developed as 

a course of how Caltrain became a publicly owned railroad before 

it was operated by a private railroad. So it would depend on the 

13C agreements that were signed. In our case, it did not have a 

negative impact. All the employees were protected, and their job 

classifications, their pays, and their benefits. But they still had to 

transition and negotiate implementing agreements with all of the 

unions to transition to a new operator. That was very complex. 

Mrs. SCHMIDT. And I know that there was some carryover staff 

from Amtrak who are now employed by Transit America Services. 

What—about how many percent? I mean I have heard up to 90 percent. Is that a fair and accurate statement, sir? 

Mr. HARVEY. Yes. The entire existing Caltrain team, for the most 

part, came over. There were a few operating engineers who decided 

to stay and drive Amtrak trains elsewhere. There were a couple of 

managers that went back in the Amtrak system. But over 90 percent of all the employees in all crafts decided to stay and operate 

the Caltrain service. 

Mrs. SCHMIDT. OK, thank you. Mr. Chambers, in your testimony 

you spoke to the widely held opinion that Amtrak is the only realistic option as a provider of passenger rail service. Do you think 

there would be interest from the independent passenger rail operators in competing to participate in the operations of State-supported intercity passenger rail services? 

Mr. CHAMBERS. Absolutely there would be interest. 

Mrs. SCHMIDT. And Amtrak, sir, has asserted to us in a recent 

briefing that some independent operators do not carry sufficient liability coverage. What advantages and disadvantages do private 

rail operators have when competing with Amtrak for commuter rail 

service contracts? 

Mr. CHAMBERS. I don’t believe that the private operators, or 

these operators that I represent, have any particular advantage. 

Now, admittedly, the whole arena of liability is a very complex 

area. And I do think that something—such as was being suggested 

by Mr. DeFazio—that we create some sort of a board or panel of 

stakeholders to really thrash through that area for both Amtrak 

and for the independent operators. 

Mrs. SCHMIDT. Thank you. And Mr. Wytkind? 

Mr. WYTKIND. Wytkind. 

Mrs. SCHMIDT. Wytkind, sorry. 

Mr. WYTKIND. Quite all right. 

Mrs. SCHMIDT. In your testimony you mentioned your concerns 

with certain railroad labor related to status the Railroad Labor Act, 

Unemployment Insurance Act, the Federal Employees Liability Act, 

and the Railroad Retirement Act. Are you advocating that all commuter rail agencies and providers of services should be subject to 

those rail labor statutes? 

44 

Mr. WYTKIND. What I am advocating and that which Mr. Chambers does not admit in this hearing today is that the cost differentials that occur in the railroad industry, are often—they come out 

of the hides of employees who don’t get Railroad Retirement from 

many of these employers. And so, this idea, it is preposterous that 

they would say that there isn’t a cost structure difference between 

their members and Amtrak. When Amtrak participates in commuter rail and any other rail segment in our transportation system, they provide a pension system for their employees, who are 

our members. And we should not have to pay the price in so-called 

competition, that the competition be taken out of the hide of the 

employees. And that is exactly what their goal is. 

Mrs. SCHMIDT. One followup for you, sir. Do each of those rail 

labor statutes increase costs for the provision of the service? And, 

if so, do you know, on average, about how much it elevates the cost 

of doing business? 

Mr. WYTKIND. I couldn’t give you—the employers that are involved in the rail industry could tell you what different things cost. 

The statutes we are talking about—the Railway Labor Act is basically a bargaining statute that provides for the ability of employees and management to collectively bargain over wages, benefits, 

and working conditions. The Railroad Unemployment Insurance 

Act is a statutory provision that gives them unemployment benefits 

for seasonal employees and other employees. 

The Railroad Retirement system is one of the premier pension 

systems in the country. And there are people in this room who are 

going to be beneficiaries of it, and perhaps are others in the room 

that are maybe already beneficiaries of it. And this committee’s 

agenda, through the leadership of the chairman, Mr. Mica, their 

proposals would have a significant—to use the words of some of my 

colleagues on the panel—chilling effect on the ability of workers in 

the rail industry to expect to have retirement when they reach that 

age. Because if you take away Railroad Retirement, you have taken 

away their pension system. 

Mrs. SCHMIDT. I will let Mr. Chambers follow, and then I will 

turn my questions over—— 

Mr. CHAMBERS. I believe that Mr. Wytkind has misrepresented 

my position, at least as far as I am concerned. 

It is not the decision of my members or Amtrak or anybody as 

to whether a transit or a commuter rail passenger operation is 

under the Railway Labor Act, Railroad Retirement, or the traditional railroad laws, which, admittedly, are more—much more—expensive. As to that decision the law dictates. Within the law the 

authorities themselves make determinations as to the level of labor 

protection or labor arrangements. 

We are not opposed to the Railway Labor Act or to the railroad 

laws, by any stretch of the imagination. And every one of my members has all of the unions on board on three different properties, 

operating under those laws. They are completely happy to be doing 

so. That is not our issue. And so I don’t like to be mischaracterized, 

that we have some opposition to the railway labor laws. My dad 

was a locomotive engineer for his whole career and a BLE official. 

I grew up under that, and I love the railway labor laws. 

Mrs. SCHMIDT. Thank you. Ms.—— 

45 

Ms. NORTON. Mr. Giulietti, I just want to make sure I understand for the record your position. Your position is that it is appropriate and ethical for one competitor to list the other’s personnel 

in his bid for a contract. That is an appropriate practice, you believe. 

Mr. GIULIETTI. I am going to tell you that that practice has gone 

on for the—almost the last 20 years—— 

Ms. NORTON. Do you believe it is—if there are—— 

Mr. GIULIETTI. Yes, I—— 

Ms. NORTON [continuing]. Two competitors, you are competing— 

I think in this case there were only two. 

Mr. GIULIETTI. That is correct. 

Ms. NORTON. To appropriate the names, through contract with 

them, of course, of your competitor’s employees, unbeknownst to 

the competitor, in bidding against that competitor for a contract, 

whatever is happening—it also happens that people steal and rob 

banks for more than 20 years. My question is, is it ethical and is 

it appropriate? 

Mr. GIULIETTI. And again, I am going to respond that, first off, 

all the public agencies sign on to the 13C agreements and everything else that protect the employees, as you have heard Caltrain 

talking about. The second—— 

Ms. NORTON. Is it ethical or is it appropriate? 

Mr. GIULIETTI. I believe it is both ethical and appropriate, since 

there is such a limited pool of available candidates. The only way 

an agency can make its determination is to know who the candidates are that are being proposed. I think that for Amtrak and 

for anybody else to require their employees to tell them what they 

are doing is another discussion. But in terms of whether or not my 

name would show up on multiple contracts, that has been done in 

this industry, and continues—— 

Ms. NORTON. Because it has been done, it is appropriate. 

Now, the fact that you would appropriate your competitor’s employees in order to get a contract that he is competing for seems 

to imply that you do not have qualified personnel on board to, in 

fact, carry out this contract. Is that not a reasonable assumption? 

Mr. GIULIETTI. I am going to say that is a reasonable assumption. But what you also need to hear is that 90 percent of the employees are going to move with the contract. So, as we have seen 

each one of these change, the employees that are working there 

continue to go to work for the next person that is coming in. 

So, in effect, that is what is going on every single time in every 

one of these contracts, because there are laws to protect those employees’ rights, so they are working with multiple contracts—— 

Ms. NORTON. I mean I am assuming these were management employees. 

Mr. GIULIETTI. No. 

Ms. NORTON. What level of employee—— 

Mr. GIULIETTI. Oh, no, no. You are talking about in the bid. 

Ms. NORTON. Yes. 

Mr. GIULIETTI. In the bid it is predominantly management employees—— 

Ms. NORTON. Well, all I can tell you is you must work in—— 

46 

Mr. GIULIETTI [continuing]. That were listed, yes. No, I apologize, 

I misunderstood. 

Ms. NORTON. You work in an altered universe of ethics, if you 

believe that these are ethical practices, or that somebody ought to 

sit by and take it, and just assume that since it is done in the industry, we ought to understand that, even though we don’t—apparently under Mr. Boardman it has not been done—even though we 

don’t do it, we ought to allow our competitors to do it at will. 

Mr. Chambers, you indicate that—in your testimony I am looking—in your submitted testimony—that there are 27 corridors that 

will be, you say, nearly fully subsidized by 15 States. That is in 

intercity commuter operations. 

Mr. CHAMBERS. Intercity passenger, yes. Under—— 

Ms. NORTON. Now, you would like to apply the commuter 

model—I am looking through your testimony—to intercity corridor 

surfaces. Are you saying that you believe there are 15 States that 

would be prepared to—and I am using your language here—‘‘nearly 

fully subsidize intercity corridor services’’? 

Mr. CHAMBERS. Yes. I am saying there are 15 and maybe 19 

States—I think that number was used—that are going to be required by a provision of PRIIA to fully subsidize intercity rail passenger service on all corridors under 750 miles. And what we are 

suggesting here is that if the States have the ability to put those 

corridors into competition, it would be a good idea. 

Ms. NORTON. Mr. Boardman, what is your view of that? 

Mr. BOARDMAN. Well, I think that certainly the door has been 

opened by the 2008 PRIIA legislation for the States to be looking 

at competition. They could do that now. But because there is the 

209 requirement, where they have to reimburse at least a large 

portion of what the cost is back to Amtrak so that the Federal subsidy is reduced, there is a greater incentive at this point in time 

for something like that to occur. 

I think what has been missed here—and he stayed quiet, and I 

can appreciate; I probably would at the same time—is Mr. Harvey, 

when he did his presentation, really identified the kinds of things 

that you have to look at. It is not just price. It was 25 percent 

price, it was 20 percent the management team, and it was 55 percent the plans and what would be done for the future. 

I think what the States—we have good partnerships with the 

States, and we really provide a connection to the national network 

that would not exist unless somebody above this whole fray exerts 

the policy that that has to occur. And that is one critical piece, and 

I included it in my testimony. 

We are not afraid to compete on a level playing field. We are just 

not. We can compete. But when it is not level—and often times we 

are accused of the ones that—of not keeping it level, and yet the 

chairman admitted in part that it often times is the laws that we 

have to follow that keep it from being not quite so level. That needs 

to be leveled out, not just for us, but for all, if there is going to 

be competition. 

Ms. NORTON. Well, the point of this hearing seems to be that 

Amtrak should not compete at all. 

And you say, indeed, in your testimony, looking at page two, that 

there are costs and there are benefits to competing for this comVerDate Aug 31 2005 15:42 Nov 28, 2012 Jkt 000000 PO 00000 Frm 00082 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\FULL\9-11-1~1\75849.TXT JEAN
47 

muter traffic. You say, unlike the private sector, you cannot crosssubsidize. Therefore, it costs you more to bid. But then you conclude, whatever the cost, private—profit margins have decreased 

significantly in recent years. Yet you say you want to continue to 

compete. 

Mr. BOARDMAN. Well, we—— 

Ms. NORTON. For commuter traffic. 

Mr. BOARDMAN. Good point. We believe, in our strategic plan, 

there are certain commuter operations that fit very well with Amtrak, and we should compete for, strategically. For example, the 

MARC Penn Line service would be exactly one, because it is on our 

tracks. Just like that is why the Union Pacific freight railroad and 

the BNSF freight railroad have one of the largest pieces of this, 

more than what Amtrak has, in the Chicago area. Right now, CSX 

has the other two lines going into Maryland, as Mr. Cummings 

pointed out. And you also have the—one other freight railroad—I 

can’t think right this minute—that provides additional commuter 

services, as well. 

So, there are those areas that we really could compete well with. 

There are other places that we are not. And I think Mr. Giulietti— 

I always pronounce it wrong; I am sorry Joe—also identified the 

fact that Amtrak has provided to many communities a competitive 

environment by actually bidding. As a request, many times, for us 

to bid, knowing that we might not be able to really compete to it, 

but understanding the necessity that they have to have that competition. And that is exactly what happened with Tri-Rail. You 

know, no good deed never ever goes unpunished in that process. 

Mrs. SCHMIDT. Thank you. Ms. Brown, do you have any other 

questions before we wrap up? 

Ms. BROWN. Yes, I do. Thank you. First of all, let me just say 

that I get very emotional when—I don’t care who is chairing—that 

someone would ask the question, and we don’t give them a opportunity to complete their statement. 

I have a question for you, Mr. Boardman, because Mrs. Schmidt 

asked a question what would be the advantage to the competition 

to provide the information that she requested. If I could get that 

same information from Mr. Chambers for—on those same contracts. I mean I know that we are—what are we doing? Letting the 

competition know exactly what we are bidding? Is this public 

record? I mean what is—why would we want to do that? 

Mr. BOARDMAN. Well—— 

Ms. BROWN. Because I can’t trust that any information that you 

give this committee is a confidence of this committee. 

Mr. BOARDMAN. I understand. Most of the time—and Mr. Harvey 

had on the back of his presentation the—basically, the cost structure of all the bidders. So, in that public environment, we certainly 

can provide that. If it was outside the public environment, we 

wouldn’t provide it. 

Ms. BROWN. OK. And the question that was asked about has my 

bid—Herzog bid on the Tri-Rail, they did not. The answer was no. 

I don’t think you knew the answer. 

Mr. BOARDMAN. The—I am sorry, I didn’t quite catch that. 

What—— 

48 

Ms. BROWN. The question was did Herzog bid on the Tri-Rail 

contract. And they did not. 

Mr. BOARDMAN. They did not. 

Ms. BROWN. They did not. 

Mr. BOARDMAN. They did not. We don’t have any objection to our 

employees being approached. We don’t. It is not that. It is listing 

them in a contract without us knowing it. 

Ms. BROWN. Well now, I am very familiar with Tri-Rail. I drove 

it, I rode it. I mean I was very instrumental in making sure that 

you all got the dedicated source of revenue. But I guess here I am 

just a little confused. Because if—let’s just take it to—if one of my 

staffers decided that if I had opposition and that they would say, 

well, if, you know, you lose, we would go to work for you, I would 

fire them on the spot. And so I understand that you took them to 

court, and I would have. And I am glad you took it to court. I mean 

let’s not be confused. You took it to court and you won. 

But let me just ask Tri-Rail. What are some of the additional 

safety factors that you put in place because of the—your location 

and, you know, 9/11? 

Mr. GIULIETTI. Oh, in terms of that, first off, again, we have a 

great relationship with TSA. We also have a great relationship 

with our partners on the corridor, which include CSX and Amtrak. 

And not only did we work together with this, but we also provide 

onboard security, armed security, on board our trains, which gets 

us among the highest ratings in terms of safety. It also enables us 

to reallocate our forces, as is necessary when we perceive that 

there might be some issues on the corridor. 

The State has been a tremendous supporter on this, and we have 

also had the benefit of having three airports that connect with us. 

And TSA has actually brought personnel over to our stations and 

assisted with security testing. And long before it was even required, we went through emergency simulations, and continue to 

do that with all of our partners on the corridor. 

Ms. BROWN. Did you figure out the fare box? Fare box? How to 

get that money? 

Mr. GIULIETTI. The—are we doing the fare box? We are right in 

the middle—we have put the fare boxes in right now. We are working with our partners in Miami. We are trying to get the other two 

counties to come on board with us. But it has been through the tremendous support of Congress that we are able to be able to put 

those out there. Yes. Thank you again. 

Ms. BROWN. One last question for Mr. Wytkind. Mr. Mica said 

contracts should go to the lowest cost bidder. What does that mean 

for the workers? 

Mr. WYTKIND. Pretty simple stuff. We have a history in this 

country where privatization in any industry, particularly transportation, is used to undermine basic benefits and wages of workers. 

And if you are looking for the lowest cost, then you are talking 

about eliminating a legitimate pension system from railroads. 

And Mr. Chambers’s comments earlier are just not accurate. He 

has got members who do not pay into the Railroad Retirement system, including Tri-Rail, which does not. I am not going to get into 

the details about why they should, shouldn’t, or whether they do, 

49 

it is a fact. There is a segment of the railroad industry that does 

not participate under the various railroad laws. 

And it is the position of the association that Mr. Chambers represents to advocate for the so-called commuter model across the entire Amtrak system—which is code. This committee is famous for 

code. For workers, the code is you are not going to get a pension 

system because we are going to use the same model we are seeing 

elsewhere, and we are going to apply it more vastly to the entire 

Amtrak system. That is a loser for employees. 

Ms. BROWN. Well, I want to thank you all for your service, and 

thank you for your coming here. And tell those Amtrak employees 

to keep it up, that they got a team that appreciates them, at least 

on the D side. 

Mrs. SCHMIDT. I would like to—— 

[Applause.] 

Mrs. SCHMIDT. I would like to go back to Mr. Boardman, because 

I think there has been some confusion on the question that I asked 

you originally. And what I really am trying to get at, sir, is how 

much it costs Amtrak to prepare all of those bids over the last 10 

years. 

So, what I would like you to provide for this committee is a detailed cost breakout of every commuter rail Amtrak participated 

in—competition Amtrak participated in over the last 10 years. And 

I think you should be able to come up with that. 

I would like to thank each and every one of you for coming here 

today. In the era that we are in, where every dollar is precious, we 

have to learn how to make dollars work. And we also have to have 

a transportation system that is workable for this country. I am not 

against Amtrak, but I have seen some of the flaws in Amtrak, especially when it cost so much for a simple Coca Cola for Amtrak to 

provide. And with food costs going up in this country, the fact that 

we are losing so much with Amtrak on food cost is only going to 

get wider. There are other cost problems that are going to continue 

to occur with Amtrak. There may be other problems with private 

industries, as well. 

And so, I think it is incumbent on all of us to find ways to use 

those precious dollars in a very wise and judicious manner. Thank 

you all. And this hearing is adjourned. 

[Whereupon, at 1:10 p.m., the committee was adjourned.] 

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