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The Texas Department of Transportation and Lane-Abrams Joint Venture Reach Agreement on the State Highway 360 Project

Posted in Design-Build

On May 15, 2015, the Texas Department of Transportation (TxDOT) and Lane-Abrams Joint Venture  (DB Contractor) entered into a design-build contract (DBA) and associated comprehensive maintenance agreement (COMA) for the approximately $300 million SH 360 Project (the Project).

Pursuant to the DBA, DB Contractor will design and construct and potentially maintain approximately 9.7 miles of improvements to SH 360 consisting of two toll lanes in each direction from approximately Green Oaks Blvd/Kingswood Blvd to US 287, in addition to frontage road and intersection improvements.  The Project also includes grade separation of the US 287 northbound and southbound main lanes with the SH 360 frontage roads.  The Project includes additional potential option work, which would complete the ultimate improvements at nine cross streets along the project right of way.  At TxDOT’s option, DB Contractor will perform comprehensive maintenance services under the COMA, including routine maintenance, capital maintenance and incident management, for up to three five-year terms after construction is complete.

Lane-Abrams JV was one of four proposers that submitted a Proposal for the Project.  Lane-Abrams JV is a joint venture consisting of Lane Construction Corporation and J.D. Abrams.  The major non-equity and other team members of the Lane-Abrams JV team include:

  • AECOM Technical Services, Inc.
  • Blanton & Associates, Inc.
  • CSJ Utility Coordinators, LLC
  • Fugro Consultants, Inc.
  • Hayden Consultants, Inc.
  • Infrastructure Corporation of America
  • K Strategies Group, LLC
  • Michael Baker Jr., Inc.
  • Pinnacle Consulting Management Group, Inc.
  • Rios Engineering, LLC
  • Rodriquez Engineering Laboratories, LLC
  • SE3, LLC

The parties anticipate construction to begin in late 2015. The Project, which is being constructed in collaboration with the North Texas Tollway Authority (NTTA), is scheduled to be completed in the fall of 2017.

Cities and State Legislature Organizations come together in Washington to Tout P3s during Infrastructure Week, 2015

Posted in News

As part of Infrastructure Week, 2015, several interested organizations banded together for an afternoon meeting on Monday, May 11, that focused on public-private partnerships as a way out of the infrastructure crunch.  Projects, big and small, stand to benefit from engaging the private sector to solve an array of infrastructure challenges.  The event was hosted by the Pew Charitable Trusts, and moderated by Cleveland City Councilman Matt Zone, who is also the 2nd Vice President of National League of Cities (NLC).  Art Smith, President of the National Council for Public-Private Partnerships (NCPPP) gave a primer on P3s, followed by perspectives from private equity investment, risk management professionals and engineering consultants, all of whom presented case studies on P3 successes.  Indiana State representative Ed Soliday presented the current state-level P3 legislative landscape, applauding the flexibility in Georgia’s most recent P3 statute and advising his fellow state-level legislators to allow the P3 market to give value to their constituents.

Attendees peppered the speakers with questions ranging from the prospects for federal level P3 legislation to the viability of local level P3s.  Co-hosts NCPPP, NLC and the National Conference of State Legislatures called the event a success.

California Needs to Spend $853 Billion for New Infrastructure

Posted in News

To help promote Infrastructure Week—which brings together thousands of stakeholders from around the country to highlight the critical importance of investing in and modernizing America’s infrastructure systems, and the essential role infrastructure plays in our economy—Nossaman is reposting this article on California’s infrastructure needs. To learn more about Infrastructure Week, which runs May 11-May 15, please visit www.infrastructureweek.org or follow Infrastructure Week on Twitter @RebuildRenew.

California is the most populous state in the Country; if it were a country it would have the world’s 8th largest economy.  So it’s probably no surprise to hear that a new study has found California needs to spend $853 billion to improve its transportation, water and K-12 schools infrastructure over the next decade just to keep up with expected growth in the economy and the population.  The question is how to pay for these needs and how to prioritize what gets built and when.

The report is the second in a series prepared by California Forward, a group that “distills the work of public commissions and private think tanks and articulate[s] specific reforms to restore the ability of elected leaders to solve problems, public managers to improve results, and voters to hold government accountable for those results”.  Here’s a link to their report.

The report discusses the existing revenue sources to fund this infrastructure need and finds there’s a $358 billion gap.  And the report itself acknowledges this is likely an underestimate of what is truly needed.  The State Department of Water Resources alone estimates the need for $200 billion of new water treatment and delivery facilities over the next 10 years.  For transportation the gap is even greater—almost $300 billion in large part due to the failure of the gas tax to keep up with needed repair, reconstruction and development of new roads, highways, bridges and transit systems.

Identifying and prioritizing funding for this vast infrastructure need is not just about where the money is going to come from—we need to look more closely at how we deliver these projects to better allocate the risks of cost, schedule and long-term maintenance and encourage private innovation in ways that will produce long-term benefits.  This report is the second in a series—another is expected and we would encourage the authors to consider how the private sector can be more involved in helping to solve the problem through the use of private finance techniques and innovative contracting methods, such as long-term, performance based public-private agreements.

University of California Issues Draft RFP for UC Merced 2020 Project

Posted in Social Infrastructure

UC Merced campusThe Regents of the University of California, on behalf of the University of California, Merced, issued a draft Request for Proposals (RFP) for the UC Merced 2020 Project on May 7, 2015.  The draft RFP was provided to the three proposers that were shortlisted in January 2015:

  • E3 2020:  Balfour Beatty Investments, Inc.
  • EP2 Developers:  Edgemoor Infrastructure & Real Estate LLC, Plenary Group (Canada) Ltd., and Education Realty Trust, Inc.
  • Merced Campus Collaborative:Lend Lease (US) Investments, Inc., Macquarie Capital Group Ltd., and ACC OP Development LLC

According to Daniel Feitelberg, Vice Chancellor for Planning and Budget at the University of California, Merced, the final RFP will be reviewed by the University of California’s Board of Regents, and may be released to the shortlisted teams by the fourth quarter of this year.

The UC Merced 2020 Project consists of the comprehensive development, design, construction, financing, operations, and maintenance of academic, administrative, research, recreational, student residence, and student services buildings.  The planned campus expansion is intended to support projected enrollment growth from 6,200 current students to 10,000 students by the 2020-2021 academic year.  The project will be developed on a 219-acre university-owned site which includes the current campus and 136 acres of adjacent, undeveloped land.

Developer Selected to Build U.S.’s Longest Cable Stayed Bridge in Corpus Christi, Texas

Posted in Bridges, Design-Build

The Texas Transportation Commission has conditionally awarded a comprehensive development agreement to Flatiron/Dragados for the longest cable stayed bridge in the United States.  The new Corpus Christi Harbor Bridge will allow larger ships to deliver their cargo to the Port of Corpus Christi, serving as an economic catalyst for the region and the State of Texas.

The conditional award, which took place at the April 30 meeting of the Texas Transportation Commission, authorizes TxDOT and Flatiron/Dragados to enter final negotiations for the design, construction, finance and maintenance of the bridge through a comprehensive development agreement.  Flatiron/Dragados, a joint venture comprised of Flatiron Constructors, Inc. and Dragados USA, Inc., was one of four teams the Texas Department of Transportation shortlisted for the project in June of last year.

The other proposer teams included:

  • Harbor Bridge Constructors, a limited liability company owned by Walsh Infrastructure, LLC.
  • Harbor Bridge Partners, a limited liability company owned by Kiewit Development Company.
  • Traylor-Zachry-Fluor Crosstown Builders, a limited liability company comprised of Traylor Bros., Inc., Zachry Construction Corporation, and Fluor Enterprises, Inc.

All four shortlisted teams submitted technical and price proposals on March 24 and April 7, respectively. The proposal submitted by Flatiron/Dragados was determined to offer the best value to the state of Texas based on price and various technical criteria. Final award to Flatiron/Dragados is conditioned upon successful completion of negotiations and finalization of the agreement, as well as compliance with various legislative conditions to execution of the agreements. Commercial close is anticipated to occur in the fall of this year.

The Corpus Christi Harbor Bridge Replacement Project includes the construction of a new, cable-stayed bridge over the Port of Corpus Christi Ship Channel.  The design proposed by Flatiron/Dragados includes a mainspan of 1655 feet, which, when completed, will be the longest cable-stayed span in the United States.  In addition to the construction of the new Harbor Bridge, the project also includes the demolition of the existing Harbor Bridge, as well as improvements to US 181 and SH 286.

The project will address structural deficiencies and navigational restrictions of the current bridge, and improve safety, connectivity, and level of service in the area. The purpose of the project is to correct these established needs and to promote, enhance and spur economic development in the area. The scope of the comprehensive maintenance agreement includes the design, construction, finance and 25-year maintenance of the project.

Congressman Delaney Talks Infrastructure Funding at IBBTA Conference

Posted in Financing, Legislation, Policy

Dollars ahead. Yellow traffic sign.On March 31, 2015, Congressman John K. Delaney (D-MD) spoke at the Washington Briefing of the International Bridge, Tunnel and Turnpike Association (IBBTA) in Washington, DC.  At the event, Congressman Delaney provided an update on a bipartisan bill he has sponsored known as “The Infrastructure 2.0 Act” to fund the federal highway program.  The bill uses international corporate tax reform to provide a six-year funding source for the Highway Trust Fund.  Specifically, the bill establishes a mandatory, one-time 8.75% tax on existing overseas profits accumulated by U.S. multi-national corporations, which replaces the current deferral option and tax rate of 35%.  The revenue generated would contribute $120 billion to the Highway Trust Fund and $50 billion to capitalize the American Infrastructure Fund – a new financing mechanism for transportation, water, energy, communication and education projects.  The bill also establishes a bipartisan and bicameral commission to develop a permanent solution for ensuring solvency of the Highway Trust Fund.

Congressman Delaney expressed optimism that the bill would garner broad support because the revenue generated was devoted to improving the nation’s infrastructure – a topic generally favored by Democrats.  At the same time, the bill also addresses international corporate tax reform – a topic generally favored by Republicans.  One of the outstanding issues, however, is finding the “sweet spot” for a repatriation tax rate acceptable to both political parties and the White House.  The “GROW AMERICA Act 2.0” proposed by the White House Administration offers a 14% one-time, tax rate.  By comparison, the “Invest in Transportation Act,” to be introduced by Senators Barbara Boxer (D-CA) and Rand Paul (R-KY), proposes a tax rate of 6.5%.

Pilot Program Will Allow Local Hiring Preference for Workers on Federal Transportation Projects

Posted in News, Policy

Federal transportation officials are contemplating new contract rules that would make it easier for states and cities to hire local residents to work on transportation projects.  Federal rules currently prohibit the Federal Highway Administration (FHWA) and the Federal Transit Administration (FTA) from allowing contract provisions that do not directly relate to the bidder’s performance of work.  Thus, local hiring provisions have not been allowed in procurements for federally funded projects.  This month, however, U.S. Transportation Secretary, Anthony Foxx, announced a year-long pilot program that will take a closer look at the longtime prohibition.  Mayors of three cities—Eric Garcetti of Los Angeles, Kasim Reed of Atlanta, and William Bell of Birmingham, Alabama—voiced their support for the pilot program.  “When we invest in L.A. infrastructure, we want to maximize our investment in L.A. jobs, and this provides us with a new way forward to boost our local economy as we cut traffic and fight smog,” said Garcetti.  “I thank Secretary Foxx for his commitment to strengthening my city and communities across the nation.”

The program accompanies a recent Notice of Proposed Rulemaking to amend the “common grant rule” that would allow localities to, “impose geographic-based hiring preferences wherever not otherwise prohibited by Federal statute.”  Many local governments already include local hiring provisions in their procurements that don’t involve federal funding.  Such provisions are intended to ensure that the communities in which projects are located benefit from the jobs that result from their investments.

The pilot program announced by Foxx will allow the FHWA and FTA to test and evaluate the merits of such local hiring provisions and whether the existing competitive bidding process can be improved.  Greg Nadeau, deputy administrator of the FHWA, said, “This measure will go a long way to bridging the gap between the qualified workers who need work and projects that need them.”  The pilot program is intended to determine whether the current federal rules “unduly limit competition.”

The U.S. Department of Transportation is particularly interested in contracts for which bidders wish to use local or geographic  hiring preferences, economic-based hiring preferences, or hiring preferences for veterans.

“We want to create ladders of opportunities for them, as well as for low-income workers and veterans, to help put some of the transportation investments we make in the hands of those who would benefit most,” Foxx said.

The agency will not approve projects that would involve altering the requirements of the Disadvantaged Business Enterprise (DBE) Program.  Therese McMillan, acting administrator of the FTA, added: “The investments we make in local communities are truly transformational.  These investments should not only change the landscape of a community, but it should also transform and improve the lives of its residents, too.”

The pilot program is proposed as an experiment under FHWA’s Special Experimental Project No. 14 (SEP-14) and FTA experimental authorities.  The DOT published a related proposal in the Federal Register to modify the “common grant” rule geographic preference provision applied to USDOT programs.  Comments on the proposed rule will be accepted through April 6.

New Guidance for Transparency in “Best Value” Procurements

Posted in News, PPPs

“Best value” procurements are sometimes criticized as involving a “black box” decision-making process.  A recent report issued by the National Cooperative Highway Research Program (“NCHRP”) discusses practices to increase transparency in such procurements.  The report is NCHRP’s latest installment of its “Synthesis of Highway Practice,” issued on March 5, 2015.  A resource for public agencies, this “synthesis” addresses best practices for developing transparent “best value” selection procedures in public procurements.  These concepts are of particular interest to public and private entities seeking to engage fair, value-based public-private partnership (“P3”) solutions to highway, and more broadly transportation, challenges in an environment of restricted funding and aging national transportation infrastructure.

The synthesis examines practices relating to the procurement process, where cost of the transportation asset is one among several factors in evaluating the winning bidder.  The paper surveys practices across jurisdictions in best value procurement processes and highlights case studies that support transparency in such procurements.

The report lists seven “best value case examples” from procuring agencies that the NCHRP authors “found to have the most effective best value experience.”  Prominent to all were consistent algorithmic value judgments against “clear, easy to understand and project-specific” evaluation criteria.  These judgments translate into “adjectival ratings,” that are in turn given quantitative values for direct scoring “best value” submissions.  “States most frequently using only a few of the available award algorithms and rating methods promote transparency….”.  Other features of successful “best value” practices were separating price proposals from technical scoring, and pre-publishing relative or actual weights of evaluation criteria.  “Approaches that contain the minimal number of evaluation criteria to succinctly align the procurement with stated project goals” were found to promote transparency.

It should be noted that the desire for transparency needs to be balanced against the public agency’s need to be able to make decisions regarding what constitutes the “best value” for the public.  As an example, FHWA’s design-build rule requires federal-aid grantees to identify the relative weightings of the factors and major subfactors used to make the selection, but does not require use of formulas.  Under one view, use of formulas as the basis for selection can be seen as an abdication of the responsibility to engage in an intelligent decision-making process to determine which proposal truly offers the best value to the public.  (For a discussion regarding this issue, see NCHRP Report 561, “Best-Value Procurement Methods for Highway Construction Projects” (2006), p. 54.)  Furthermore, use of a formula does not avoid subjectivity in the evaluation process, since scoring is necessarily the product of subjective decisions by the individuals involved in evaluations.  For projects where the public agency has determined that the advantages of providing greater transparency outweigh the disadvantages associated with loss of flexibility in decision-making, this synthesis offers information regarding different approaches that agencies may wish to consider so as to make the procurement process as transparent and objective as possible.

Arizona Department of Transportation Shortlists Three Teams for the South Mountain Freeway P3 Project

Posted in PPPs

The Arizona Department of Transportation (“ADOT”) announced today it has shortlisted three developer teams vying for the $1.9 billion design-build-maintain contract for the Loop 202 South Mountain Freeway Project.  The three multidiscipline teams, in alphabetical order, are:

  • Connect 202 Partners
    •  Fluor Enterprises Inc.
    • Granite Construction Co.
    • Ames Construction Inc.
    • Parsons Brinckerhoff Inc.
    • DBi Services LLC
    • AZTEC Engineering Group, Inc.
    • Stanley Consultants
    • Kleinfelder Group, Inc.
    • AMEC Environmental & Infrasstructure, Inc.
    • The Transtec Group
    • Gunn Communications, Inc.
    • Tierra Right Of Way Services, Ltd.
    • Universal Field Services, Inc.
    • Acquisition Sciences, Ltd.
  • South Mountain Development Group
    • Kiewit Development Company
    • Sundt Construction, Inc.
    • Kiewit Infrastructure West Co.
    • Parsons Transportation Group Inc.
    • Miller Infrastructures Inc.
    • Kiewit Infrastructure Group Inc.
    • Gannett Fleming, Inc.
    • Kimley-Horn and Associates, Inc.
    • TY Lin
    • Logan Simpson Design, Inc.
    • Terracon Consultants, Inc.
    • Sunland Asphalt
    • Combs Construction Co., Inc.
    • Vastco, Inc.
    • Central Creative, LLC
    • Premier Engineering Corporation
    • Ritoch-Powell & Associates
    • Al Field & Assocates, LLC
    • Overland, Pacific & Cutler, Inc.
  • South Mountain Mobility Group
    • Dragados USA, Inc.
    • Flatiron Constructors, Inc.
    • Pulice Construction Inc.
    • AECOM Infrastructure Inc.
    • AECOM Technical Services, Inc.
    • ACS Infrastructure Development, Inc.
    • Dragados S.A.
    • Flatiron Construction Corp.
    • AECOM Technical Services, Inc.
    • Iridium Concesiones de Infraestructuras, S.A.
    • AECOM Technology Corporation
    • Partners for Strategic Action, Inc.
    • Tierra Right Of Way Services, Ltd.
    • PRR Biz
    • First Strategic
    • Acquisition Sciences, Ltd.
    • FNF Constructiion, Inc.
    • Rummel Construction, Inc.
    • McNeil Brothers, Inc.
    • Roadway Electric LLC
    • Andes Engineering
    • Dibble Engineering
    • DME Consultants, LLC
    • Geomatic Consulting Group
    • J2 Engineering & Environmental Design, LLC
    • Lee Engineering, LLC
    • Michael Baker Jr., Inc.
    • Ninyo & Moore, Inc.
    • POINT Engineers, LLC
    • Shannon & Wilson, Inc.
    • Structural Grace, Inc.
    • Tappendorf Engineering Consultants, PLLC
    • Western Technologies, Inc.
    • Wilson & Company, Inc.

ADOT received five statements of qualifications for the project last December, and awaited release of the Project’s record of decision before making its shortlisting determination.  The Federal Highway Administration issued the record of decision last week.

This megaproject includes the design, construction and 30-year maintenance of the last section of the Loop 202 Freeway, which will stretch 22 miles from the Maricopa Freeway segment of Interstate I-10 to the Papago Freeway segment of the I-10 in the southwestern quadrant of the Phoenix Metropolitan Area.

The project has been a critical part of the Maricopa Association of Governments Regional Freeway Program since it was first included in funding through Proposition 300 approved by Maricopa County voters in 1985. The freeway is also part of the Regional Transportation Plan funding passed by Maricopa County voters in 2004 through Proposition 400.

The project will be the first highway project procured under Arizona’s public-private-partnership statute, and ADOT’s first design-build-maintain project ever.   ADOT will fund the project capital costs with a combination of available public funds from sales tax revenues and tax-exempt bonds.

ADOT plans to issue the final RFP late this spring, with the best-value selection and award of the design-build-maintain agreement anticipated for the end of this year.

Contact projects@azdot.gov for inquiries about the project and the procurement process.

Mileage-Based User Fee Alliance Promotes Alternate Source of Transportation Funding

Posted in News, Policy

The Second Annual Conference of the Mileage-Based User Fee Alliance (MBUFA) was held in Washington, DC on February 24, 2015.  The MBUFA is a non-profit organization that promotes awareness and education about mileage-based user fees as an alternative for the future funding of improvements to the U.S. transportation system.  Attendees included policy makers, public sector representatives and private sector stakeholders weighing in on the topic “Sustainable Transportation Funding, Road User Fees: Is There Another Option for Achieving Financial Sustainability?”   The concept of a mileage-based user fee is to charge users of transportation infrastructure for its use, rather than relying on gas taxes primarily as the source of transportation infrastructure funding.  The MBUFA conference opened with Representative Earl Blumenauer (D. Ore.), who discussed two bills he introduced to address the nation’s aging infrastructure.  The first, the UPDATE Act would phase in a 15 cent increase in the gas tax over the next three years, then transition to a long-term alternate funding source to replace the gas tax entirely.  The second bill, the Road Usage Charge Pilot Project, would establish a grant program of $30 million to determine the costs and benefits of mileage-based user fee systems.

A subsequent panel spoke to an existing research project and study on the requirements of multistate mileage-based user fees, congestion pricing and implementation.  The panelists described the study, and a case study in the mid-Atlantic, and the I-95 Corridor Coalition’s long-range vision that resulted in a long-range vision that set forth all of the functions that would need to be accomplished by a multistate MBUF system that encompasses all miles traveled by all vehicles by state and jurisdiction as well as tolls and congestion-based charges.

The conference also featured a panel discussion of private sector experts who described the implementing technologies that are already available.  The panelists were asked what the “magic number” might be to allow states to implement a MBUF at no cost to the state.  The experts agreed that that number would vary based on the desired services associated with the fee and other unique factors.

More information about the Mileage-Based User Fee Alliance can be found here.