Header graphic for print

Infra Insight Blog

Law & Policy

The Texas Department of Transportation Shortlists Three Development Teams for the Grand Parkway Segments H, I-1 and I-2 Project

Posted in Design-Build

On July 31, 2014, the Texas Department of Transportation (TxDOT) issued a Request for Qualifications (RFQ) soliciting qualifications from teams interested in entering into a design-build contract and a comprehensive maintenance agreement for the Grand Parkway Segments H, I-1 and I-2 Project.  Following a two-month process, which included questions and answers from interested industry participants and an industry workshop, TxDOT received Qualification Statements on September 30, 2014. Over the next month, the Qualification Statements were evaluated by TxDOT.  On October 30, 2014, TxDOT announced the short list of the teams most qualified to compete for the Grand Parkway Segments H, I-1 and I-2 contracts. Below is a listing of the shortlisted teams, along with the major equity members, that will be invited to submit detailed proposals.

  • FBW LLC: Fluor Enterprises, Inc., Balfour Beatty Infrastructure, Inc., Williams Brothers Construction Co., Inc.
  • Zachry/Odebrecht/Parkway Builders: Zachry Construction Corporation, Odebrecht Construction, Inc., Traylor Bros., Inc.
  • Grand Parkway Infrastructure: Ferrovial Agroman US Corp., Webber, LLC, Granite Construction Company

TxDOT anticipates issuing a draft Request for Proposals in early November and the final Request for Proposals in December 2014, with the expectation that the winning proposer will be selected and the contracts awarded in April 2015.

State Highway 99, also known as Grand Parkway, is a proposed 180-mile circumferential highway traversing seven counties in the Greater Houston Area.  The shortlisted teams will compete for the latest TxDOT project for segments of the Grand Parkway.  TxDOT is developing Grand Parkway Segments F1, F2 and G through a comprehensive development agreement awarded in 2013 to Zachry Odebrecht Parkway Builders.

Grand Parkway Segments H, I-1 and I-2 is a 52-mile, controlled-access facility that will traverse four counties from US 59 to the SH 146.  One of the goals for the Grand Parkway Segments H, I-1 and I-2 Project is to sustain and expand economic opportunities in the region.

Design and construction costs for the project are estimated to be in the range of approximately $830 million, exclusive of right of way and maintenance costs. The design-build contract and comprehensive maintenance agreement will require the selected bidder to design and build the project and then maintain the project for 25 years after completion.

This is one of several active “mega” design/build projects being pursued by TxDOT, including the Harbor Bridge Project in the Corpus Christi area.

Six Teams Submit SOQs for Reissued UC Merced 2020 Project RFQ

Posted in PPPs, Social Infrastructure

The Regents of the University of California (the “Regents”), on behalf of the University of California, Merced (“UC Merced”), announced on October 30, 2014 that it received Statements of Qualifications (SOQs) from six teams in response to the reissued Request for Qualifications (RFQ) for the UC Merced 2020 P3 Project (the “Project”).

The reissued RFQ was released on September 25, 2014. The six teams that submitted SOQs in response to the reissued RFQ were substantially the same six teams that responded to the initial RFQ released in April 2014.

The respondents and their equity members are (in alphabetical order):

  • EP2 Developers (EP2):  Edgemoor Infrastructure & Real Estate LLC, Plenary Group (Canada) Ltd. and Education Realty Trust, Inc.
  • E3 2020:  Balfour Beatty Investments, Inc.
  • Gateway2Learn:  HOCHTIEF PPP Solutions North America;  Meridiam Gateway2Learn, LLC
  • Innovation Partners:  Hunt Development Group LLC and Shikun & Binui, Ltd.
  • Merced Campus Collaborative:  Lend Lease (US) Investments, Inc., Macquarie Capital Group Limited and ACC OP Development, LLC
  • Merced 2020 Partners:  Skanska Infrastructure Development Inc. and Fengate Capital Management Ltd.

The complete list of respondent team members may be found at the UC Merced 2020 Project website.

The Project represents the second phase of campus development under UC Merced’s Long Range Development Plan and involves a significant campus expansion to support projected enrollment growth from 6,200 current students to 10,000 students by the year 2020.

The project consists of the comprehensive development, design, construction, and financing of academic, administrative, research, recreational, student residence and student services buildings, together with utilities and infrastructure, outdoor recreation and open space areas, and associated roadways, parking and landscaping.  The Project will also include operations and maintenance of some or all of these facilities.  The Regents intend to make shortlist decisions in December 2014.

Orange County Transportation Authority Issues Request for Qualifications for the I-405 Improvement Project

Posted in Design-Build

On October 27, 2014, the Orange County Transportation Authority (OCTA) issued a Request for Qualifications (RFQ) soliciting statements of qualifications (SOQs) from qualified firms interested in submitting proposals for the design and construction of the $900 million I-405 Improvement Project (the Project) through a design-build contract. OCTA is seeking a private firm that is experienced in managing, designing and constructing general use roadways.

The Project will consist of designing and constructing an improvement that generally adds one general-purpose lane in each direction of I-405 from approximately Euclid Street to Interstate 605. The Project is located in Orange County, in the Cities of Costa Mesa, Fountain Valley, Huntington Beach, Seal Beach and Westminster.

Firms will have until December 18, 2014 to submit their SOQs in response to the RFQ. OCTA will then review the SOQs and shortlist the most highly qualified firms to provide design-build services for the Project. The anticipated announcement of shortlisted proposers is set for March 9, 2015.

The RFQ is posted on OCTA’s website here.

Federal Court Orders DOT to Respond to Sierra Club’s Unsafe Tank Car Lawsuit

Posted in Rail and Transit

A Federal Court has ordered the Department of Transportation (DOT) to respond to a lawsuit filed by three environmental organizations—Earthjustice, Sierra Club and ForestEthics—in which the parties asked the court to order DOT to respond to the organizations’ request for an emergency order banning the use of DOT-111 tanks cars for the shipment of crude oil by rail.

DOT has 60 days to provide the Court with a response to Sierra Club’s lawsuit, which alleges that DOT is in violation of the law for failing to respond to its “Unsafe Tank Car Petition.”  The petition, filed with DOT on July 15, 2014, argues that the continued transport of crude oil in older model rail cars poses risks to public safety.  The petitioners assert that DOT should restrict the shipment of “volatile crude oil in unsafe DOT-111 tank cars,” and that DOT’s failure to do so previously is “inexcusable given the long string of findings by the National Transportation Safety Board that the legacy DOT-111 tank cars are extremely vulnerable to puncture, spilling oil, and precipitating explosions and fires in train accidents.”

Shortly after the Unsafe Tank Car Petition was filed, on July 23, 2014, DOT and the Pipeline Hazardous Materials Safety Administration (PHMSA) issued a much anticipated proposed rulemaking on Enhanced Tank Car Standards and Operational Controls for High-Hazard Flammable Trains (for a breakdown of the rulemaking, click here).  The Sierra Club issued a statement responding to the rulemaking, arguing that the proposed rules “do not adequately address the immediate and growing threat posed by crude-by-rail accidents.”

DOT and PHMSA have not issued any specific reply to the Unsafe Tank Car Petition and it is this lack of response that Sierra Club sought review of in the federal court.  Specifically, the environmental organizations argued that the Government’s failure to respond puts it in violation of the law that requires federal agencies to respond to matters before it within a reasonable time.

The Federal Court denied a motion filed by the Sierra Club to expedite the petition, which was opposed by DOT.  However, the Court ordered DOT to file a response to Sierra Club within 60 days.  DOT’s response is due on November 21, 2014 and Sierra Club will have fourteen days to respond in turn.  The InfraInsight Blog will provide a summary of DOT’s response when it is submitted.

Enactment of SB 785 Clears Caltrain Electrification for Design-Build

Posted in Design-Build, Legislation, Rail and Transit

California Governor Edmund G. Brown, Jr., has signed California Senate Bill (SB) 785. As my colleague Nancy Smith has observed, enactment of SB 785 is a major step forward for the State of California, because now many more state and local agencies can use design-build.

One of the immediate benefits of this change is that the much-anticipated Caltrain electrification project will be able to proceed as a design-build procurement.  The authority of the Peninsula Corridor Joint Powers Board (JPB) to issue design-build contracts was slated to expire at the end of this year, but SB 785 extends that authority until 2024.

The Peninsula Corridor Electrification Project is a key component of the Caltrain modernization program. It will electrify the Caltrain Corridor from San Francisco’s 4th & King Station to approximately the Tamien Caltrain Station and convert the Caltrain fleet from diesel-hauled passenger coaches to electric multiple unit train sets. In conjunction with the project, the JPB plans to increase frequency of service up to six trains per peak hour per direction by 2019.

In 2019 service between San Jose and San Francisco will utilize a mixed fleet of EMU’s and diesel locomotives. Diesel locomotives will be phased out (or used on the lighter density service between San Jose Diridon Station and Gilroy) as the EMUs come one line.

“The electric trains will enhance capacity and allow the system to deliver cleaner, quieter, shorter trip times and, potentially, more frequent service for the corridor,” PCJPB said.  “It will allow Caltrain to almost double the system’s forecasted daily ridership by 2040. Greenhouse gas emissions will be reduced by 177,000 metric tons, automobile vehicle miles traveled will shrink by 619,000 miles daily, and billions of dollars in economic value will be created, including nearly 100,000 new jobs.”

In September 2013, the JPB approved the use of the design-build contracting approach for the electrification project. A Request for Proposals (RFP) will be issued January 2015. A contract award is expected in fall 2015.

Recruitment – University of California, Riverside

Posted in Job Opening

Nossaman is assisting friends at the University of California, Riverside with publicizing the following two job opportunities.

The first position is a newly-refined position as Director of Capital Asset Management, reporting to a new Assistant Vice Chancellor for Capital Asset Strategies.  Responsibilities of the Capital Asset Management (CAM) unit will include real estate projects (on campus and off campus), leases, licensing, space management, GIS services, faculty housing, public-private partnerships and related matters.

The second position is the new Assistant Vice Chancellor (AVC) for Capital Asset Strategies (CAS).  Responsibilities of the AVC of the Capital Asset Strategies Division, of which CAM is a part, also include physical and environmental planning for campus facilities (including research, medical, academic, and administrative) and sustainability.  The AVC for CAS reports to the Vice Chancellor of Planning and Budget.  The Vice Chancellor is part of a relatively new campus leadership team with ambitious goals for quality growth, modernization and excellence across the academic and physical realms of the campus.

For more information, please contact Barbara A. Lloyd at barbara.lloyd@ucr.edu.

Major Step Forward for California Design-Build: SB 785 Signed September 30, 2014

Posted in Design-Build, Legislation

With the enactment of Senate Bill 785, the State of California has taken a major step forward in authorizing state and local agencies to use design-build.  Although many California agencies have the ability to use design-build without the need for specific enabling legislation, other agencies require specific design-build legislation in order to be able to use design-build effectively, either because they are precluded by law from using a best value selection process for design-build or do not have the ability to bundle design and construction into a single contract.

The new statute consolidates and amends existing laws allowing state and local agencies to use design-build, resolving various problems and inconsistencies with prior legislation.  The bill grants authority to the following agencies (and repeals their existing design-build authorization):

1. State agencies:  The Department of General Services and the Department of Corrections and Rehabilitation, for public works projects in excess of $1,000,000 (Public Contract Code 10187 et seq., article entitled “State Agency Design-Build Projects”).

2. Local agencies:

a) The following agencies, for public works projects in excess of $1,000,000 (Public Contract Code §22160 et seq., chapter entitled “Local Agency Design-Build Projects”):

(1) A city, county, or city and county.

(2) A special district that operates wastewater facilities, solid waste management facilities, water recycling facilities, or fire protection facilities.

(3) Any transit district, included transit district, municipal operator, included municipal operator, any consolidated agency, as described in Section 132353.1 of the Public Utilities Code, any joint powers authority formed to provide transit service, any county transportation commission created pursuant to Section 130050 of the Public Utilities Code, or any other local or regional agency, responsible for the construction of transit projects.  (Existing authorization remains effective until 2017 for solicitations already underway as of January 1, 2015.)

b) Sonoma Valley Health Care District and the Marin Healthcare District, for hospital or health facility buildings and related improvements (Health and Safety Code §32132.5).

c) San Diego Unified Port District, for buildings and related improvements in excess of $1,000,000 (SB 785 § 15).

The legislation specifically states that it does not affect affect, expand, alter, or limit any rights or remedies otherwise available at law—making it clear that agencies using design-build based on other authority will not be affected by passage of SB 785. Continue Reading

NCPPP and PBBC Host First P3s for Public Buildings Summit

Posted in PPPs

The inaugural P3s for Public Buildings Summit will be held on November 17-18, 2014 at the Hyatt Regency in Miami, FL. The summit will be hosted by the National Council for Public-Private Partnerships and the Performance Based Building Coalition.

The summit will explore ways that P3s can be developed and implemented to replace the nation’s deteriorating public buildings, including schools, hospitals, courthouses, universities, police stations and prisons.

  • Topics of discussion will include:
  • Financing of projects;
  • Federal policy challenges and solutions;
  • Case studies of successful projects;
  • The future of the market place; and
  • International successes.

To view the summit agenda, click here. To register for the summit, click here.

House Transportation & Infrastructure Committee’s Panel on Public-Private Partnerships Release Recommendations

Posted in Policy, PPPs

On September 17, the House Transportation & Infrastructure Committee’s Panel on Public-Private Partnerships (P3s) released its report and recommendations.  The group, empaneled in February of this year, was tasked with examining “issues regarding public-private partnerships across all aspects of the Committee’s jurisdiction.”  The panel held two hearings and seven roundtable discussions in addition to other meetings and briefings. The report recognizes that the nation’s infrastructure needs are extraordinary and P3s in certain situations can provide innovative solutions, and in some ways, incentives for projects to be delivered on-time and on-budget.

Under three broad areas, the panel makes a series of recommendations:

  1. Improving Public Sector Capacity;
  2. Breaking Down Barriers to Consideration; and
  3. Ensuring Transparency and Accountability.

Improving Public Sector Capacity:

The panel recommends directing the U.S. Department of Transportation (USDOT) to create a “Transportation Procurement Office” to work with federal funding recipients to implement best practices for design-bid-build, design-build, and P3 procurements, including P3 model contracts. The Transportation Procurement Office would also develop and institute project delivery performance standards for the same three types of procurements. It would also “issue best practices on standardizing state P3 authorities and practices.” The report also recommends directing USDOT to require State Departments of Transportation (State DOTs) to submit annual reports on project procurement performance as measured against the Transportation Procurement Office’s standards. USDOT should also “encourage the simplification and standardization of P3 contracts,” act as a clearinghouse for “lessons learned,” and encourage inter-state coordination in creating legislation to authorize P3 procurements so that states successfully using P3s can share their expertise. 

In background notes on these recommendations, the panel observes that because State DOTs currently contract for most design work and project construction, they are already engaging in P3s. But missing in these current contract structures are the incentives for on-time and on-budget performance.

Breaking Down Barriers to Consideration:

The panel supports a continuation of the Transportation Infrastructure Finance and Innovation Act (TIFIA) program and encourages “Congress to review Private Activity Bond (PAB) eligibility to support infrastructure P3s across the jurisdiction of the Committee.”  It also makes specific recommendations to USDOT and other federal agencies to encourage the use of P3s, such as clarifying the “statutory authority to allow states to use federal-aid highway funds to ensure robust competition in P3 procurements.”  It encourages federal agencies currently implementing TIFIA to share lessons learned as the federal government begins to implement the new Water Infrastructure Finance and Innovation Act (WIFIA). Additionally, it recommends changes in budgetary scoring rules and fully utilizing existing lease authorities as they relate to property leases.

Ensuring Transparency and Accountability:

The panel makes several recommendations that would provide additional information to the public about components of P3s that use federal grants, loans and tax incentives. The Panel recommends that USDOT be directed to require P3 project sponsors using federal funds to make publicly available a Value for Money (VfM) analysis before advancing the project via a P3 procurement.  The panel also recommends directing agencies to provide a “detailed summary” of federal investment in the project at the time federal funds are committed. The report suggests that key terms and conditions of P3s using federal funds be made available to the public “at an appropriate time in the decision-making process.” Further, the panel recommends requiring public project sponsors to conduct a review of P3 projects that utilized federal funds within three years of construction completion or revenue service and make publicly available information about whether the private partners are living up to the goals of the agreement.

In background notes on these recommendations, the panel observes that VfM analyses currently vary in “quality and content” and are not always publicly available. The panel also heard concerns that the public should be made aware of all factors involved in the P3 delivery method to make a fully informed decision about an agreement that could last for 30 years or more.

FHWA Publishes Core Toll Concession P3 Model Contract Guide

Posted in PPPs, Tollroads/ Turnpikes/ Managed Lanes

The FHWA published its final Core Toll Concessions P3 Model Contract Guide (“Guide”) on September 10, 2014 as part of its mandate under MAP-21 to develop “standard public-private partnership transaction model contracts for the most popular types of public-private partnerships.”  The Guide serves as an educational tool to assist states, public transportation agencies, and other public officials in developing their own public-private partnership agreements. 

The FHWA determined an educational approach is preferred to prescriptive requirements based on feedback received during a “listening session” in January with industry representatives.  Prior to publication of the final Guide, the FHWA also considered written comments received after publication of the draft Core Toll Concession Model Contract Guide in February of this year. 

The Guide covers many of the most important (and most commonly misunderstood) contract provisions in the toll concession P3 model.  It includes an explanation of tolling regulations and the risks of user demand for the project.  The Guide also explains benefit-sharing contract provisions, which are common in toll concession projects and generally require the Developer to share certain financial benefits with the project owner during the term of the contract. 

Because project risks are apportioned differently in a public-private partnership model than in more traditional contract models, the Guide explains how the P3 model may impact supervening events, such as force majeure events or other delay events.  The Guide also details many of the risks associated with potential changes in the equity interests of a contract bidder’s team. 

The FHWA plans to publish an Addendum to the Guide that will address in less detail secondary contract provisions such as performance standards, contract duration, Federal requirements, and performance security. 

The FHWA will also publish for public comment additional draft guides for other contract models in coming months and will publish an Availability Payments Model P-3 Contracts Guide in 2014.