The Texas Department of Transportation and Abrams-Kiewit Joint Venture Reach Agreement on the Loop 375 Border Highway West Extension Project

On August 22, 2014, the Texas Department of Transportation and Abrams-Kiewit Joint Venture (Developer) reached commercial close on the Loop 375 Border Highway West Extension Project (Project).  The contract, which includes design-build and comprehensive maintenance agreements (collectively the CDA), was conditionally awarded to the Developer in April of this year.  Developer is a joint venture consisting of J.D. Abrams and Kiewit Infrastructure South Co.

The Project is located west of downtown El Paso, south of Interstate Highway 10 (I-10) and extends approximately nine miles from Racetrack Drive near Doniphan Road and New Mexico 273 east to US 54, one mile east of Park Street. The Project includes the design, construction and comprehensive maintenance of a four-lane, controlled access tolled facility from Racetrack Drive to the terminus of the existing Loop 375, in the vicinity of Santa Fe Street, a distance of approximately 5.6 miles.  The cost of the Project is approximately $525 million, excluding maintenance.

The Project will provide an alternate route for Interstate Highway 10 to address needed improvements to system capacity, reliability and regional system linkage for the El Paso metropolitan area.  Under the terms of the design-build CDA, the Developer will design and construct a four-lane controlled access facility, of which the majority is on elevated structure.  The Project includes about 5.6 miles of tolled lanes, ramps, interchanges and intersection improvements.  The Project also includes demolition of existing Union Pacific and Burlington Northern Santa Fe railroad mainline and cross-over track, and the design and construction on new alignment of approximately 10,000 feet of Union Pacific Railroad mainline track, approximately 2,000 feet of setout track and approximately one mile of Burlington Northern Santa Fe cross-over track.

The Developer will perform comprehensive maintenance services under the CDA, including routine maintenance, capital maintenance and incident management, for an initial term of five years after completion of construction.  At TxDOT’s option, the Developer’s performance of comprehensive maintenance services may be extended for up to two additional five-year terms after the initial five-year term.

The El Paso area has experienced significant growth over the past several years, resulting in increasing congestion and challenges to safety and mobility.  To address these concerns, the Project will include plans for improving regional travel and connectivity, and enhancing safety on Loop 375.  Improved access to the University of Texas at El Paso, Fort Bliss, downtown and medical centers will provide additional benefits to motorists.

The Project, which is being constructed in collaboration with the Camino Real Regional Mobility Authority (CRRMA), is expected to break ground in early 2015 and is scheduled to be completed by fall of 2017.

Linda Cunningham co-authored this post.

Arizona DOT Announces Procurement Decision for South Mountain Freeway Project

The Arizona Department of Transportation announced today its decision to deliver the $1.9 billion South Mountain Freeway Project under a single design-build-maintain public-private partnership.  While there will be a long-term maintenance component, ADOT, in collaboration with the Maricopa Association of Governments and the Arizona Division of the Federal Highway Administration, has decided to use available public funds together with public financing to pay for the project.
ADOT received an unsolicited proposal for the project more than a year ago.  Under its P3 regulations, it proceeded with a detailed analysis of the unsolicited proposal, concluding that the proposed acceleration of the project through a single contract had merit.  ADOT, with the assistance of its consultants HDR, PFM and Nossaman, then undertook a risk-adjusted cost assessment and value for money analysis, examining and comparing six different project delivery methods ranging from traditional design-bid-build with delivery of the project in separate segments, to a design-build-finance-maintain availability payment approach.  The quantitative results of the value for money analysis were tightly grouped and non-quantitative considerations received considerable discussion and analysis.

Prior to making its decision, ADOT and its partner agencies sought industry input.  ADOT issued a request for information and held an industry forum in February 2014 to garner industry views on a range of pertinent questions.  Weighing this input together with the quantitative and qualitative considerations in the value for money analysis, ADOT and its partner agencies determined that the DBM alternative will provide the best value for Arizona taxpayers, will provide effective mitigation of risk and will be the most efficient delivery option.
The environmental work on the South Mountain Freeway Project is ongoing, and the Final Environmental Impact Statement (FEIS) is expected in mid to late September.  ADOT’s announcement makes clear that a Request for Qualifications will only be released if a build alternative is recommended under the FEIS.  If it issues a RFQ, ADOT expects to provide a six-week period to respond, with shortlisting within four weeks after it receives statements of qualifications.

Contact for inquiries about the project and the procurement process.

The Maryland "Purple Line" Transit Project Releases its Final Request for Proposals

On July 28, 2014, the Maryland Transit Administration (MTA) and Maryland Department of Transportation (MDOT) issued the final request for proposals for a public-private partnership to design, build, finance, operate and maintain the “Purple Line” light rail transit project using an availability payment approach.  The Purple Line is a 16-mile route extending from New Carrollton in Prince George’s County to Bethesda in Montgomery County, with 21 stations and three links to the Washington DC, Metro and MARC commuter train systems.  The Purple Line has estimated project value of $2.37 billion, with the private sector expected to invest between $500 million and $900 million.  The winning concessionaire will be expected to operate and maintain the project for 30 years after construction (roughly 35 years overall).

Legislative and regulatory efforts to kick off the procurement began in earnest in mid 2013, with release of a request for qualifications issued in November 2013.  Four consortia were shortlisted and initial industry review of the proposal documents and draft contract began in February 2014.

The Purple Line has, as among its champions, Lt. Governor Anthony Brown.  MTA/MDOT also enjoys considerable federal support for the Purple Line, with the Obama Administration allocating $100 million toward construction costs in its March 2014 budget submission to Congress.  A full funding grant agreement is expected from the Federal Transit Administration and the Purple Line is seeking further federal funding support through FTA’s “New Starts Program.”

Proposals are due in January 2015, with the preferred proposer selected as the concessionaire in spring 2015.  Subject to approval by the Maryland Board of Public Works, the concessionaire would likely begin construction by the end of 2015.

More information can be found on MDOT’s website including the primary RFP documents located under “Public-Private Partnerships.”

Simon Santiago and Katherine Bourdon contributed to this post.

‎DBIA seeks industry comment on revised Design-Build Best Practices

As long time participants in the alternative delivery sector know, the Design-Build Institute of America has from its earliest days sought to set forth guiding principles that would be universally applicable across all sectors--no small task. At its annual conference this week in Las Vegas, Mike Loulakis and Diane Hoag presented the latest revised draft of its recommended best practices, called "Design-Build Done Right."

While the organization expects these principles to evolve and be refined over time, it is seeking comments on this new version before November 15, 2013. The committee will take these comments into account in finalizing this document for publication as a living document February 2014.

Comments can be submitted by emailing

Design-Build Done Right: DBIA Seeks Input on its Industry Wide Best Practices

The Design-Build Institute of America has released the first iteration of “Design-Build Done Right,” identifying industry wide best practices for design-build project delivery.  Tracking a project delivery timeline, the practices are grouped into three areas: (1) Procuring Design-Build Services; (2) Contracting for Design-Build Services; and (3) Executing the Delivery of Design-Build Projects.  DBIA’s goal is to identify practices in this document that have two basic characteristics:

1. The practices are written in a way that is intended to be universal in applicability, spanning any type of design-build project, whether public or private, vertical or horizontal, large or small.

2. The practices are important enough to directly affect project performance. Stated differently, if these practices are implemented, there is an increased probability that the design-build program/project will be successful. If these practices are not implemented, the performance of the program/project may be compromised and expectations of one or all of the participants may not be met.

I have been told that DBIA expects to follow up with industry specific best practices to enhance and elaborate on the broad concepts presented here.   DBIA intends to refine its best practices series over time based on input from the industry so please email them directly at with your comments! 

California High-Speed Rail Authority Executes Initial Design-Build Contract for First High-Speed Rail System in the United States

On August 16, 2013, the California High-Speed Rail Authority (Authority) executed a design-build contract with a joint venture among Tutor Perini Corporation, Zachry Construction Corporation and Parsons Transportation Group Inc. for the initial segment of the first high-speed rail system in the United States.  The initial segment is 29 miles long and is located in California's Central Valley.  The contract is valued at approximately $985 million, plus an additional $53 million in provisional sums.  Please refer to the Authority's web site for further information.

From Coal to Roads: VDOT Uses Coal Synergy Concept to Improve Access in Southwest Virginia

On July 31, 2013, the Virginia Department of Transportation (“VDOT”) executed a $108 million lump-sum design-build contract with Bizzack Construction, LLC (“Bizzack”) for the design and construction of the rough-grade roadbed for the U.S. Route 460 Connector “Phase II.”  The “460 Connector Phase II” project is a 6.2-mile four-lane, limited access highway located between the U.S. Route 460 Connector Phase I, which is under construction near Breaks Interstate Park, Route 460 and the proposed Route 121 (Coalfields Expressway) interchange in Buchanan County, Virginia.  This route is designated as part of “Corridor Q” by the Appalachian Regional Commission and part of the Appalachian Development Highway System, a program originally envisioned by President Lyndon B. Johnson to bring commerce and transportation to Appalachia.  

The design-build contract employs an innovative coal synergy concept to provide a road to rough grade, resulting in a substantial reduction of anticipated costs compared to traditional construction methods.  A second contract would pave the road and complete the project for motorists to use.  Completion of the rough-grade roadbed is scheduled for early 2018.

Bizzack, through its subsidiary, Rapoca Energy, had secured considerable surface and subsurface real property rights as well as arrangements with mining companies in the vicinity of the planned right of way.  Through this design-build contract, Bizzack at once gives the mining companies a place and use for their mining spoils and access to areas previously uneconomical to pursue mining, but for VDOT’s desire for a road.  VDOT avoids the cost for “fill” and other road-bed material needed to construct the road to highway design speeds and slopes. 

The coal synergy concept thus reduces road building costs substantially by using a coal companies’ larger-scale earth moving equipment and construction techniques to prepare the road bed to rough grade, and allowing the companies to recover marketable coal reserves during the road bed preparation.  To maximize the coal synergy opportunities, the design-build contract contains provisions so that portions of  the revenues from the sale of the marketable coal would reduce the contract price if marketable coal is extracted above a certain quantity.  Virginia Transportation Secretary Sean Connaughton specifically addressed the cost-savings advantages of the coal synergy strategy in prior remarks about this project, observing that it affords the Commonwealth of Virginia the ability to deliver the 460 Connector Phase II project at “a much reduced cost.”

To mark this major milestone, Governor Bob McDonnell, VDOT Deputy Commissioner Charlie Kilpatrick and Virginia Senator Phillip Puckett braved the foggy conditions to host an event on August 10, 2013 in Buchanan County, Virginia.  Governor McDonnell highlighted the project as a “key connection” that “will open up southwestern Virginia to more job and business opportunities.”

FHWA Proposes Fix Avoiding Need for Special Approval to Include Alternative Technical Concepts in Design-Build Procurements

On August 1, 2013, the Federal Highway Administration (FHWA) issued a Notice of Proposed Rulemaking (NPRM) and request for comments regarding proposed changes to FHWA’s design-build regulation that would eliminate a requirement for proposers to submit base proposals where the contracting agency allows them to submit alternative technical concepts (ATCs) in their proposals.  ATCs have proved to be highly beneficial, encouraging innovation, cost savings and reduction of environmental impacts and increasing the overall value to procuring agencies through the best value selection process.

In 2002, when the FHWA regulation was originally promulgated, design-build procurements were experimental, and there was very little experience with use of ATCs.  The 2002 rule regarding ATCs (23 C.F.R. 636.209(b)) stated, in part, that ATC proposals may supplement, but may not substitute, for base proposals that respond to the RFP requirements.  The policy underlying this requirement was to ensure fair and open competition and to ensure that all proposers are competing for the same project. 

During the eleven years since the original rule was adopted, agencies asking proposers for ATCs have concluded that the base/option proposal requirement is impracticable.  ATCs can have a significant impact on the project design, and the cost of advancing two (or more) different design concepts and preparing alternative proposals is high.  The policies underlying the original rule can easily be addressed by placing boundaries on the ATCs, for example, by requiring that the ATC be equal or better than the underlying RFP requirements.  That is the approach that has been adopted by most of the transportation agencies using ATCs, obtaining approval from FHWA to deviate from the regulatory requirement through SEP-14 applications.

FHWA is now proposing to revise paragraph (b) of the original rule by deleting the requirement to submit base proposals where a contracting agency is allowing the submission of ATC proposals and adding a sentence providing that the confidentiality of ATCs will be maintained except to the extent disclosure is necessary for the contracting agency to maintain compliance with a permit or other applicable legal requirement.  Such disclosure may be necessary, for example, if a submitted ATC demonstrates that a feasible and prudent 4(f) alternative exists for which a 4(f) determination had concluded that there was no such alternative, in which case the alternative must be disclosed to maintain 4(f) compliance.

The NPRM can be viewed at:  FHWA is inviting comments, in particular, regarding the anticipated economic impact of the proposed changes.  The NPRM provides that comments must be received on or before September 30, 2013 and that late comments will be considered to the extent practicable. 

TRB Releases Report Providing Overview of Performance-Based Specifications

State agencies have increasingly turned to alternative contracting methods such as design-build and public-private partnerships to deliver highway construction projects.  As a result, the use of performance-based specifications has also increased.

To provide a better understanding of how these specifications function, the Transportation Research Board (TRB) recently released Legal Research Digest 61, which provides an overview of performance-based specifications, explores how they differ from traditional design or method-based specifications, and explains the risk allocation differences between them.  Particularly helpful is the report’s discussion of how courts have addressed disputes related to performance specifications in design-build contracts, including how courts have applied the Spearin doctrine, which generally posits that owners are unable to hold contractors responsible for consequences of following the owner’s specifications.

TRB’s report can be found here.

Thanks to Frank Liu for his assistance with this entry.

Indiana Finance Authority and Indiana Department of Transportation Set Date for I-69 Section 5 Industry Forum

The Indiana Finance Authority (IFA) and the Indiana Department of Transportation (INDOT) will hold the I-69 Section 5 Industry Forum on May 22, 2013.  Sign in will begin at 10:00 a.m. ET and the program will start promptly at 11:00 a.m. at the Government Center South Auditorium, 300 West Washington Street, Indianapolis, Indiana 46204.  Governor Mike Pence, INDOT Commissioner Michael Cline, Public Finance Director of the State of Indiana Kendra York, and INDOT Deputy Commissioner for Innovative Project Delivery Jim Stark are expected to address the attendees.  The presentations will cover the I-69 Section 5 project scope, objectives, procurement timeline, delivery model and Request for Qualifications.

The first 67 miles of the new 142-mile I-69 corridor opened in November 2012 and construction is now underway on all 27 miles of I-69 Section 4.  All highway design, construction and financing firms interested in participating in a design, build, finance, operate and maintain procurement for the Section 5 project are encouraged to attend the forum.

All interested attendees are encouraged to RSVP to Sydney Dudek at by 5 p.m. ET on Friday, May 17, 2013.  Those unable to attend in person and wishing to participate virtually should contact Ms. Dudek to ensure registration.

For more information about I-69 between Evansville and Indianapolis, visit the project website.

DBIA Announces the 2013 Design-Build in Transportation Leadership Awards

The Design-Build Institute of America announced today the 2013 Design-Build in Transportation Awards, which will be presented on March 19, 2013 at the 2013 Design-Build in Transportation Conference in Orlando, Florida.

The California Department of Transportation was named 2013 Transportation Owner Agency of the Year.  Caltrans has made great strides with design-build recently through its Design-Build Demonstration Program.  Caltrans also reached financial close this year on its high profile Presidio Parkway project, which will use the design-build-finance-operate and maintain, or availability payment, delivery method.

Ananth Prasad, the Florida Secretary of Transportation, will be honored with the 2013 Transportation Owner Award.  Mr. Prasad is an advocate for alternative delivery methods, and in 2012 alone FDOT awarded over 59 design-build contracts.  Florida is also a leader in innovative financing of transportation projects, with both the Port of Miami Tunnel and the I-595 Express Lanes being delivered as availability payment projects.

Roger A. Johnson is another individual awarded the 2013 Transportation Award.  He is the Deputy Director of Los Angeles World Airports.  He is currently overseeing two design-build projects valued at over $570 million at Los Angeles International Airport.  LAWA is planning an additional $1 billion worth of design-build projects as part of its modernization of the airport.

Finally, John Bourne of HNTB will be presented with the 2013 Transportation Practitioner Award.  Mr. Bourne was formerly the Deputy Director and then Director of the Utah Department of Transportation’s I-15 reconstruction program, a $1.6 billion design-build project.  Since joining HNTB he has been active in working with departments of transportation in states such as Minnesota, Texas, and Utah.  He recently served as HNTB’s project manager on the I-15 CORE project, a $1.1 billion fixed price/best design procurement.

The announcement can be found on the DBIA website.

Tappan Zee Bridge Contract Awarded

As reported in our December 18 post, the New York State Thruway Authority unanimously approved award of the design-build contract for the Tappan Zee bridge replacement project to Tappan Zee Constructors, LLC.  All required approvals for contract award have now been obtained, and the Authority issued the notice to proceed on January 18, 2013.

UDOT's $1.1 Billion I-15 CORE Complete Ahead of Schedule and Under Budget

The Utah Department of Transportation (UDOT) has announced the completion of the Utah County I-15 Corridor Expansion (I-15 CORE) project ahead of schedule and under budget. The 24-mile design-build project added two travel lanes on I-15 in each direction, rebuilt or replaced 63 bridges and 10 freeway interchanges and replaced the existing roadway from Lehi to Spanish Fork with 40-year concrete pavement without decreasing the number of lanes during the majority of construction.

As one of the State of Utah’s largest highway construction projects, the $1.1 billion design-build project was completed in an unprecedented 35 months.

The I-15 CORE was built by Provo River Constructors, a consortium made up of Fluor Corporation, Ames Construction Company, Inc., Ralph L. Wadsworth Construction Company, Inc. and Wadsworth Brothers Construction Company, Inc.

For further information, please visit the UDOT website.

NYS Thruway Board Approves $3.1 Billion Design-Build Contract for Tappan Zee Bridge

On December 17, 2012, the Board of the New York State Thruway Authority (“NYSTA”) unanimously approved award of the design-build contract for the Tappan Zee bridge replacement project to Tappan Zee Constructors, LLC (a consortium of Fluor Enterprises, Inc., American Bridge Company, Granite Construction Northeast, Inc., and Traylor Bros., Inc.).  New twin spans will replace the existing Governor Malcolm Wilson Tappan Zee Bridge, which is to be demolished and removed.  The contract award requires additional State approvals before it becomes effective.  Notice to proceed is expected to be issued in January 2013. 

Tappan Zee Constructors, LLC was one of three proposers that submitted responses to a request for proposals issued by NYSTA in March 2012, shortly after passage of landmark design-build legislation in New York in December 2011.  The other two proposers were headed by Bechtel Group, Inc. and Skanska AB. 

Tappan Zee Constructors, LLC provided the lowest price and fastest completion schedule for the replacement bridge.  The $3.14 billion price tag is well below initial forecasted estimates for the project, which ranged from $5 to $6 billion.  The unexpectedly low bid reduces the financial pressure on NYSTA by lowering the cost of financing the project (e.g., a lower bid allows for lower leverage and lower debt service).  The state has applied to the USDOT for TIFIA credit assistance for up to 49% of eligible project costs under the expanded MAP-21 TIFIA credit assistance program. 

The existing Tappan Zee Bridge, located about 20 miles north of Manhattan, is 56 years old and carries 138,000 vehicles each day between Westchester and Rockland counties, 40% more than its designers intended. 

The new bridge will roughly double the total width of the existing bridge, carrying eight lanes of traffic and adding a rush-hour bus lane, wide shoulders and a crossing for pedestrians and bicycles.  The bridge is required to be built “transit-ready” – that is, built with the capability of carrying a future mass-transit link across the Hudson River.  The project was granted expedited federal environmental approval by President Obama and US Transportation Secretary Ray La Hood in October of 2011. 

This project is notable for many reasons, including its status as the first design-build project undertaken by the New York State Thruway Authority and as the largest transportation design-build project to date in the United States.

Developer Selected for TxDOT's IH 35E Managed Lanes Design-Build Project

On December 13, 2012, the Texas Transportation Commission conditionally awarded the design-build and capital maintenance agreements for the IH 35E Managed Lanes Project to AGL Constructors, a joint venture comprised of Archer Western Contractors, LLC, Granite Construction Company and The LANE Construction Company. AGL Constructors was one of four teams the Texas Department of Transportation shortlisted for the project earlier this year. The other proposer teams included:

  • Dallas to Denton Constructors, a joint venture comprised of Zachry Construction Corporation and SNC-Lavalin Transportation USA, Inc.
  • IH 35E Infrastructure, a joint venture comprised of Ferrovial Agromán S.A., Webber, LLC and Texas Sterling Construction Co.
  • Northern Link Constructors, a joint venture comprised of Fluor Enterprises, Inc., Balfour Beatty Infrastructure, Inc. and Kiewit Infrastructure South. Co.

All four shortlisted teams submitted technical and price proposals on November 12 and 19, respectively. AGL Constructors proposal was determined to offer the best value to the state of Texas based on price and various technical criteria. Final award to AGL Constructors is conditioned upon successful completion of negotiations and finalization of the agreements, as well as compliance with various legislative conditions to execution of the agreements. Commercial close is anticipated to occur early next year.

The IH 35E Managed Lanes Project is the first phase in a multi-phase program to relieve traffic congestion along an existing 28-mile corridor of IH 35E in Dallas and Denton Counties. The scope of the design-build contract includes the design and construction of tolled managed lanes, general purpose lanes, collector-distributor roads and bridges. The scope of the capital maintenance agreement includes the optional long-term maintenance of the project’s managed lanes component.

A copy of TxDOT's press release can be found on the TxDOT website.

Sid Jiménez co-authored this entry. 

Port of Long Beach Awards Design-Build Contract for the Gerald Desmond Bridge Replacement Project

The Long Beach Board of Harbor Commissioners approved a $649.5 million dollar contract for the design and construction of a replacement for the Port of Long Beach’s obsolete and deteriorating Gerald Desmond Bridge.  The design-build agreement is the single largest contract ever awarded by the Port. 

A joint venture team headed by Shimmick Construction Co. Inc., FCC Construction S.A. and Impregilo S.p.A. (SFI) will design and construct the replacement bridge, which will rise more than 200 feet over the water and include a separate bicycle and pedestrian path.  The new bridge will be the first long-span cable-stayed bridge built in California and will enable post-Panamax ships greater access to the Port of Long Beach and Port of Los Angeles.  Construction of the new bridge, designed to ease traffic and congestion and improve safety, is expected to start in 2013 and is scheduled for completion in 2016.  The Port of Long Beach and the California Department of Transportation jointly procured the project and the Los Angeles County Metro and U.S. Department of Transportation contributed additional funds for the project. 

The Gerald Desmond span, which opened in 1968, is a major commuting route for the region, and a major trade corridor, carrying 15 percent of all containerized cargo imported to the United States. The bridge connects Terminal Island, the heart of the port complex, with the Long Beach (710) Freeway as well as downtown Long Beach.

While the contract for the joint venture is about $650 million, the total cost of the overall bridge replacement project is estimated at about $1 billion, including site preparation, demolition and other considerations. Over the four years of construction and demolition, the work is expected to employ 5,000 people a year on average.

A Nossaman team advised the Port of Long Beach and its Board of Harbor Commissioners on procurement and contract issues for this high-profile and groundbreaking cable-stayed bridge project.

Click here to learn more about this project.

Shortlist Announced for TxDOT's IH 35E Managed Lanes Design-Build Project

On April 26, 2012, the Texas Department of Transportation (“TxDOT”) announced the shortlist for the proposed IH 35E Managed Lanes Project in Dallas and Denton Counties.  The shortlisted teams were selected based on qualification statements submitted on March 23, 2012 in response to the request for qualifications (“RFQ”) issued by TxDOT on January 23, 2012.

The RFQ solicited separate qualification statements from teams with experience in design-build and toll concession contracting.  TxDOT decided to move forward with the design-build alternative with a capital maintenance option.  The four shortlisted teams and their respective equity members are:

AGL Constructors
-  Archer Western Contractors, LLC
-  Granite Construction Company
-  The LANE Construction Company

Dallas to Denton Constructors
-  Zachry Construction Corporation
-  SNC-Lavalin Inc.

IH 35E Infrastructure
-  Ferrovial Agromán S.A.
-  Webber, LLC
-  Texas Sterling Construction Co.

Northern Link Constructors
-  Fluor Enterprises, Inc.
-  Balfour Beatty Infrastructure, Inc.
-  Kiewit Infrastructure South. Co.

IH 35E serves the rapidly growing areas of southern and central Denton County, as well as major Dallas suburbs.  Since it opened as part of the original national interstate program almost 50 years ago, the northern portion of the corridor has been under a constant state of maintenance, upgrade, expansion, evaluation, planning, design and construction.

On February 23, 2012, TxDOT announced the shortlist for the Grand Parkway Project Design-Build Project and on March 29, 2012, TxDOT announced the shortlist for the Horseshoe Design-Build Project.

Sid Jiménez co-authored this entry.

TxDOT Announces Short List of Teams for Horseshoe Design-Build Contract

On Dec. 9, 2012, 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 potential capital maintenance agreement for the Dallas Horseshoe Project.  Following a three-month process, which included questions and answers from interested industry participants, TxDOT received seven Qualification Statemelnts on Feb. 22, 2012.  Over the next month, the Qualification Statements were evaluated by TxDOT.  On March 29, 2012, TxDOT announced the short list of the teams most qualified to compete for the Horseshoe design-build contract.  Below is a listing of the shortlisted teams, along with the major equity members, that will be invited to submit detailed proposals.

Name Major Equity Members
Dallas Horseshoe Solutions Granite Construction Company
CH2M Hill Engineers, Inc.
Traylor Bros., Inc.
NorthGate Horseshoe Constructors JV Kiewit Infrastructure Group, Inc.
Zachry Construction Corporation

Pegasus Link Constructors

Fluor Enterprises, Inc. (Fluor)
Balfour Beatty Infrastructure (BBII)

TxDOT anticipates issuing an Industry Review draft Request for Proposals in April 2012 and the final Request for Proposals in early July, with the expectation that a design-build contract can be executed with the best value proposer in winter 2012-13. 

Aptly dubbed the “Horseshoe Project” due to its U-shape, the $818 million highway project will upgrade the I-30 bridge, part of the Mixmaster, and both the north and southbound I-35E bridges in one of the most congested areas in downtown Dallas. TxDOT has concluded that the use of the design-build development approach is the best way to ensure cost-effective and expedited delivery of this project and provide needed congestion relief to the public, while addressing safety and traffic congestion concerns.

This is one of several active “mega” design/build projects being pursued by TxDOT, including the Grand Parkway in the Houston area.

Metro Gold Line Foothill Extension Construction Authority Issues RFQ

On March 19, the Metro Gold Line Foothill Extension Construction Authority issued a Request for Qualifications (RFQ) soliciting statements of qualifications from prospective proposers to provide design-build services for intermodal parking facilities and enhancements associated with the Metro Gold Line Foothill light-rail extension. 

The project will involve the design and construction of multiple 200-plus-space parking structures and 100-plus-space surface parking lots, as well as the implementation of other amenities at the six stations included as part of the light rail extension's Pasadena-to-Azusa segment. 
The main parking facilities anticipated for the project include a two-level parking structure with 300 spaces in Arcadia, a four-level parking structure with 350 spaces in Monrovia, a three-level parking structure with 350 spaces in Irwindale (including the construction of retaining walls, roadway improvements, a lot for a future building and the relocation of utilities), a three-level parking structure with 200 spaces in Azusa-Citrus, a surface parking lot with 200 spaces in Azusa-Alameda, and surface parking lot with 125 spaces in Duarte.  Related intermodal enhancements are expected to include traffic signals, concrete bus pads, bus shelters, benches, retaining walls, sidewalks and ramps, enhanced crosswalks, landscaping and roadway improvements, among other items.
Last year, the Authority awarded a $486 million design-build contract for the 11.5 mile Pasadena-to-Azusa segment (from the Sierra Madre Villa station in the City of Pasadena to Citrus Avenue near the boundary of the City of Azusa and the City of Glendora) to a Kiewit/Parsons joint venture.  The segment is scheduled to be completed in 2015.  In 2010, the Authority awarded a separate design-build contract to Skanska for the Iconic Freeway Structure (I-210 Bridge) within the same alignment, scheduled to be completed this year.
A further 12.6 mile segment extending the Gold Line from Azusa to Montclair (adding six stations in the cities of Glendora, San Dimas, La Verne, Pomona, Claremont and Montclair) is currently in the final environmental review stages, with a draft EIR anticipated this year.  Once completed, a trip from Montclair to downtown Pasadena will take just over 40 minutes, and further to Los Angeles will take approximately 75 minutes. 
Statements of qualifications for the intermodal parking facilities and enhancements project are due on May 15, 2012.

California High-Speed Rail Authority Shortlists Five Design-Build Teams

The California High-Speed Rail Authority has shortlisted five design-build teams in response to its first design-build project for the first segment of the California High-Speed Train System in California's Central Valley. 
The shortlisted teams are: 

  • California Backbone Builders, composed of Ferrovial Agroman and Acciona
  • California High-Speed Rail Partners, composed of Fluor Corp., Skanska and PCL Constructors
  • California High-Speed Ventures, composed of Kiewit Corp., Granite Construction and Comsa EMTE
  • Dragados SA, Flatiron Construction Corp. and Shimmick Construction
  • Tutor Perini Corp., Zachry Construction and Parsons Corp. 

Known as Construction Package 1 of the Initial Construction Section, this first project is located within the Counties of Madera and Fresno and the City of Fresno, and is expected to have a cost between $1.5 and $2 billion.  The shortlisted teams will be eligible to submit design-build proposals to design and build the initial project.  The Request for Proposals is anticipated to be released next month. 
The planned California High-Speed Train System length is approximately 800 miles from Sacramento to San Diego, with nine segments running through the Bay Area, Central Valley, Inland Empire, and Southern California.  The train will travel at speeds up to 220 miles per hour with approximately 15 stops.

New York State Passes Historic Design-Build Legislation

On Friday, Dec. 9, 2011, New York Gov. Andrew Cuomo signed historic design-build legislation into law, giving five state entities - the New York State Department of Transportation, the New York State Thruway Authority, the Office of Parks, Recreation and Historic Preservation, the Department of Environmental Conservation and the New York State Bridge Authority - general authorization to enter into design-build contracts for capital projects for physical infrastructure.  Previously, only public universities had legislative authorization to use design-build. 

The legislation contemplates a two-step procurement process, with the first step involving submittal of statements of qualifications and establishment of a shortlist of design-build teams eligible to submit proposals.  Step two involves "best value" selection based on a review of proposals, and allows the procuring agency to engage in negotiations with the selected firm prior to contract award.  The procuring agency has discretion to establish payment and performance bonds for design-build projects, as it deems necessary, thus resolving concerns about the chilling effect on competition for large projects associated with a 100% bonding requirement.

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The legislation also permits alternative procurement methodologies for construction contracts, allowing award based on (a) a best value determination, (b) guaranteed maximum prices accompanied by cost data and other information, and (c) lump sum bids.

The new legislation took effect immediately and will sunset three years after the date of enactment (although procurements already in process as of the sunset date will be permitted to proceed).   The passage of this legislation is particularly noteworthy since New York, which represents a significant portion of the public works market, has now opened-up for design-build contracting. This chart provides information about other states that have previously passed laws allowing use of design-build for transportation projects. Significantly, the New York legislation allows for design-build projects over $1.2 million, with no limit on the type or number of projects.

It is anticipated that this legislation will play a central role in assisting the State of New York to pursue more innovative, alternative project delivery methods to meet its backlog of infrastructure and capital needs.  Among other things, the new Infrastructure Investment Act (2011 N.Y. Laws ch. 56) will enable the New York State Department of Transportation and the  New York State Thruway Authority to use design-build for the Tappan Zee Hudson River Crossing Project.  The Tappan Zee Project, which will replace an existing bridge across the Hudson River (pictured above),  was granted expedited federal approval by President Obama and U.S. Transportation Secretary Ray LaHood in October of this year.

Tristan Robinson contributed to this post.

*Author Nancy Smith is chair of the Design-Build Institute of America's Legislative Committee.

Texas Transportation Commission Authorizes RFQ for Horseshoe Project

At its October 27 meeting, the Texas Transportation Commission approved the issuance of a request for qualifications for the Horseshoe Project in Dallas County.  The project will be the first under new design-build legislation passed by the Texas legislature during the 2011 session.  Subchapter F, Chapter 223, of the Transportation Code prescribes the process by which the Texas Department of Transportation (TxDOT) may enter into a design-build contract with a private entity that provides for the design, construction, expansion, extension, related capital maintenance, rehabilitation, alteration, or repair of a highway project. Transportation Code §223.242 authorizes TxDOT to enter into, in each fiscal year, up to three design-build contracts for highway projects with estimated construction costs of $50 million or more.

The Horseshoe Project is part of the larger Project Pegasus, a $2.1 billion (construction only) project in downtown Dallas on two major interstates, I-35E and I-30.   All four legs of Project Pegasus are on the list of 2011 Top 100 Most Congested Roadways in the State of Texas.  The Horseshoe Project will replace two key bridges and connecting roadways crossing the Trinity River at I-30 and I-35E, as well as upgrading outdated roadway geometry.  The estimated construction cost of the Horseshoe Project is $800 million. 

The Horseshoe Project is one of several major new design-build projects in the United States, including the Gerald Desmond Bridge replacement project in Long Beach, Calif., VTA’s BART Berryessa extension project in the Silicon Valley, and New York's Tappan Zee Bridge replacement project, which is one of 14 projects chosen by the Obama administration for expedited federal review and approval.

DBIA Conference Panel Offers Insights on Teaming

On October 21, I participated on a panel regarding “Successful Teaming” at the 2011 DBIA Conference & Expo in Orlando, Fla.  In the broad sense, “teaming” in the design-build context is collaboration among all project participants to help foster integration and achieve “win-win” solutions for delivering a project.  The panel addressed best practices for drafting teaming agreements and promoting communication and integration among team members.  My presentation focused on why the owner is interested in teaming and how the owner can influence teaming arrangements.  Key takeaways from the panel discussions included the following:

  • Always put your teaming agreement into writing and address key terms and conditions.  Although it may take time and money, it is in the interest of all team members to memorialize the underlying basis and relationship of the teaming arrangement into writing.  The teaming agreement should address the extent the members’ relationship is exclusive, how confidential information exchanged among members should be treated, and how costs will be allocated among members.
  • The owner is not a passive observer.  Rather, the owner is an interested party who can and does influence teaming, both in a direct and indirect way.  For example, during the pre-award phase—especially in the context of public requirements—the owner influences teaming through requirements contained in the solicitation documents.  Therefore, members need to carefully review the solicitation documents to determine the extent that their teaming arrangement needs to be tailored to fit the requirements of a particular project.
  • Perform due diligence before entering into teaming arrangements.  It is important that members conduct a certain degree of due diligence to determine whether a prospective team member will be a good fit.  Matters to inquire about can include a prospective member’s safety record, organizational conflicts of interest, financial stability and resources, and past dealings with the owner.

It was a pleasure participating with my fellow panel members: Robynne Parkinson of the Law Offices of Robynne Thaxton Parkinson, Pat Miller of Baker & Daniels, and Craig Unger of Unger Security Solutions.  And a special thanks to our moderator, Tom Porter of Tom Porter Services, for keeping the panel focused and on topic.

Update: Proposed Legislation Threatens Design-Build and P3s in California

Fred Kessler co-authored this post.

We are pleased to report that AB 294--the bill that was the subject of our blog yesterday--is no longer in play. 

Proposed Legislation Threatens Design-Build and P3s in California

Fred Kessler co-authored this post.

A last-minute amendment to California Assembly Bill 294, if passed, would wreak havoc on Caltrans and local agency plans to use design-build for state highway projects (Public Contract Code section 6800 et seq.) and to enter into public-private partnerships (P3s) for highway projects (Streets and Highways Code section 143).
The language added to the bill would preclude local agencies from hiring consultants to work on the projects, stating that all work must be done through Caltrans employees or consultants under contract with Caltrans.  Project consultants are often hired well in advance of the decision to use design-build or P3s for the project--which means that this bill would create significant inefficiency by requiring new consultants to be brought on board once that decision is made.   

Given the existing sunsets for P3 projects (January 1, 2017) and design-build projects (January 1, 2014), this bill could make public-private partnerships and design-build a hollow tool for California highway projects.
This appears to be an attempt by the Professional Engineers in California Government (PECG) to do an end-run around a recent California appellate court ruling regarding the Presidio Parkway P3 agreement.  Although the legislation would not affect contracts that have already been awarded, such as the Presidio Parkway agreement, the bill would impact future P3 projects under Section 143 and future design-build projects under Section 6800, possibly including some projects that are already in the procurement process.  In the Presidio Parkway case, PECG sought a determination that the agreement was invalid because engineering consultants under contract with the San Francisco County Transportation Authority performed services on the project while section 143 allegedly requires the consultants to be under Caltrans direct contract and supervision.  Caltrans and the SFCTA have pursued the project for many years under a series of cooperative agreements.
The bill, authored by Assemblyman Portantino, was originally short-titled "Design-sequencing contracts" and is now called "Transportation projects: procurement."  It would appear more appropriate to call it "Increased inefficiency in government."
The legislative session closes at the end of next week (September 9), and September 2 is the last day to amend existing bills.  It seems likely this bill will make it to the floor.  The authors of this blog urge readers to contact their legislators and ask them to oppose the bill.

Design-Build Transportation Projects Face Roadblocks in California

Over the past 10 years, California lawmakers have made tremendous strides in providing express design-build procurement authority to pubic agencies in the state. This authority, however, has not been applied evenly across all project types or agencies.

As matters stand in 2011, much broader design-build authority exists for public buildings or “vertical” projects than for transportation or “horizontal” projects.  Within the realm of horizontal projects, projects on the state highway system are subject to a number of constraints that do not apply to other types of projects.  And the express authority provided to a limited number of agencies under California’s Design-Build Demonstration Program and Design-Build Transit law is temporary and set to expire within the next decade.  In general, most public agencies still face an uphill battle if they wish to use design-build for transportation projects.

To reap the full benefits of design-build, the California Legislature would be well-advised to adopt permanent, general legislation that allows public agencies to use design-build on a wider range of projects, leaving the details of the procurement to be determined by the agencies as appropriate for their needs. 

See Nossaman’s article "California Public Contracting Laws: Design Build Authority for Transportation Projects" for more information on California’s most recently enacted transportation-specific design-build laws and on options available to public agencies who do not have express design-build authority but may nonetheless wish to combine design and construction services under a single contract for a transportation project.

Kiewit/Parsons Awarded Design-Build Contract for Metro Gold Line Extension

Brian Papernik also contributed to this post.

Yesterday, the Metro Gold Line Foothill Extension Construction Authority awarded a $486 million design-build contract to a Kiewit/Parsons joint venture. The contract is for the 11.5 mile extension of the Metro Gold Line light rail from the Sierra Madre Villa station in the City of Pasadena to Citrus Avenue near the boundary of the City of Azusa and the City of Glendora.  The Authority previously awarded a separate design-build contract to Skanska for the Iconic Freeway Structure within the same alignment. 

The Authority made the award decision for the Foothill Extension project using a best value selection methodology, considering both price and technical factors. For this project, the most highly rated proposal had both the lowest price and the highest technical rating. Although not always the case, this result is not uncommon for best value procurements, since the proposer with the highest technical rating is likely to have a better understanding of the project and therefore able to figure out ways to reduce costs and manage risks without adversely impacting quality.

The procurement process started in early in January 2010 with a request for interested teams to submit statements of qualifications. The Authority shortlisted three teams and went through a pre-RFP industry review process, issuing the request for proposals in August 2010.  The Authority received initial proposals in January 2011, entered into discussions with the proposers and obtained final proposals from all three teams in June 2011.

Instead of basing its best value determination on a pre-set formula, the Authority used a "qualitative price/technical tradeoff" methodology--an approach that is generally recommended by procurement experts. Federal agencies have moved toward the tradeoff methodology in part due to concerns that use of point scoring and formulas increases the risk of protests, and also based on a belief that it is appropriate for the selection official to have responsibility for making the selection decision. The selection official is required to analyze the differences between the competing proposals and to make a rational selection decision based on the facts and circumstances of the specific acquisition, consistent with the evaluation factors and subfactors stated in the solicitation documents. A number of state and local transportation agencies have used a tradeoff approach for their design-build contracts, including the Maryland State Highway Administration with respect to its Intercounty Connector contracts, although many state and local agencies remain more comfortable using formulas.

The authors assisted the Authority in this procurement as well as the contracts for the initial "Arroyo Seco" operating segment.

The Texas Department of Transportation Intends to Issue RFIs for New Projects

During the recent legislative session, TxDOT received authority under Senate Bill 1420 to develop certain projects, including, among others, the SH 99 Grand Parkway project in the Houston area, as well as the I-35E Managed Lanes project in the Dallas/Fort Worth area through a public private partnership procurement process. On June 10, 2011, TxDOT intends to issue requests for information (RFIs) to assist in formulating strategies for the development of these urgently needed projects. Copies of each RFI will be available on TxDOT's website. TxDOT is seeking RFI responses from individual firms or teams with experience in developing and/or financing large transportation infrastructure projects and plans to hold one-on-one meetings with companies expected to lead prospective developer teams in July 2011.

The IH 35E Project consists of the redevelopment of a 28-mile section of Interstate 35E (IH 35E) from IH 635 to US 380 in Dallas and Denton Counties. The project is planned to include reconstruction and widening of the existing IH 35E to incorporate additional main lanes/general purpose lanes, managed lanes and frontage roads.


The SH 99 Grand Parkway Project consists of an approximately 180-mile circumferential scenic highway crossing seven counties and encircling the Greater Houston area divided into Segments A, B, C, D, E, F-1, F-2,G, H, I-1 & I-2. TxDOT is currently contemplating the development of four to six-lane divided toll road with intermittent frontage roads (varying by location) spanning Segments E, F-1, and F-2, and a portion of Segment G from IH 10 to IH 45 in Harris County. Montgomery County is considering options for the development of the remaining portion of Segment G. Additional segments will be developed in the future as required to meet capacity demands.


Beginning on June 10, 2011, check here for further details regarding the projects, the one-on-one meetings and the requests for information.

Port of Long Beach Issues RFQ for Gerald Desmond Bridge Project

On Wednesday, the California Transportation Commission (CTC) approved the $950 million Gerald Desmond Bridge Replacement Project for one of 10 state project slots available under California’s Design-Build Demonstration Program. 

The CTC’s approval authorizes the Port of Long Beach and the California Department of Transportation (Caltrans) to deliver the project using the best-value design-build method contemplated under the program.  The Port of Long Beach and Caltrans released the request for qualifications (RFQ) for the project’s design-build contract on November 5, 2010.   

"The new bridge will be an iconic structure for Long Beach that modernizes the Port and puts thousands of people to work over the 5-year building period," said Long Beach Mayor Bob Foster.  “It is precisely the right project at the right time for California.”

The Port of Long Beach is one of the largest and busiest Ports in the world and functions as a major inter-modal center for cargo movement throughout the Western United States and beyond.  As the first cable-stayed bridge ever built in California, the new Gerald Desmond Bridge will be landmark for the Port and its surrounding communities.

As a top-tier project at one of the most dynamic and forward-thinking port facilities in the world, the Port of Long Beach expects a high level of interest in this project among the major national and global construction and engineering firms.

Points of Interest:

  • $950 million project
  • Complex construction of the first cable-stayed highway bridge in California
  • Final EIR/EA issued in July 2010
  • CEQA certified on August 9, 2010
  • Project cleared the environmental process on September 23, 2010
  • Received design-build authority from the California Transportation Commission on November 3, 2010

Port of Long Beach's $1B Gerald Desmond Bridge Project Reaches Major Milestone

The Port of Long Beach, one of the largest and busiest Ports in the world and a major inter-modal center for the cargo movement throughout the Western United States and beyond, has reached a major milestone in the approximately $1B plan to replace the Gerald Desmond Bridge on a design-build basis using the authority granted by California’s design-build demonstration program. As the first cable-stayed bridge ever built in California, the project is expected to be a landmark structure for the Port and surrounding communities.

On September 30, the Long Beach City Council approved the environmental impact report (EIR) for the project. The federal environmental approval for the Project is imminent, awaiting only a final signature. The Port expects to issue a request for qualifications as early as the first week in November following the anticipated approval of the project under the design-build demonstration program by the California Transportation Commission. There will be a lot of interest in this project among the major global construction and engineering firms. It’s a signature project at one of the most dynamic and forward-thinking port facilities in the world.

Points of Interest:

  • $1B design-build project
  • Received approval from Long Beach City Council on September 30, 2010
  • Innovative procurement under the same California statute as P3s
  • Complex construction of first cable stay bridge on this scale in California history
  • A vital route for cargo, the bridge carries about 15 percent of the nation’s goods

McGraw-Hill Construction Selects California's Best of 2010 Winners

The Mineta San José International Airport Terminal Area Improvement Program was selected as the Best Overall Top Project and as the best Transportation Project in Northern California for 2010 by California Construction magazine during its annual statewide competition that recognizes construction and design excellence.  The project represents the first major airport design-build project in California and includes design and construction of a new terminal, access and roadway improvements, parking facilities, tenant relocations, demolition of existing facilities, and improvements to other airport facilities.  Nossaman served as special design-build counsel for the project, assisting the City Attorney’s office in negotiating and administering the design-build contract. 

The winning design-builder, Hensel Phelps Construction Company and Fentress Architects, was awarded the $513 million contract in late 2006.  Innovative design alternatives were implemented to produce a significant cost savings.  The project also used an integrated building information model (BIM) to reduce construction delays and the number of changes during construction. 

The Metro Gold Line Eastside Extension Project was selected as the best Transportation Project in Southern California for 2010.  The project extending from Union Station to East Los Angeles, added 6 miles to Metro’s rail system, including 3 light rail lines, a heavy rail subway line, 2 aerial bridges, and 1.7 miles of tunnel.  Both the design-build and design-bid-build methods were used for the project.  Nossaman assisted in the design-build procurement for the $898 million project.  Nossaman also assisted with the preparation and negotiation of cooperative agreements between Metro and various local agencies, utility owners and Caltrans.

The two projects were selected by an independent jury of industry experts in design and construction out of 135 nominated projects.  Awards were based on specific entry criteria, including project management, client service, safety, design and functionality. 

The winners will be featured in the magazine’s December 2010 issue, honored at an awards breakfast, and entered in the National Best of 2010 competition to be judged against winners from other regions.

Foothill Extension Project Moves Forward

On August 30 the Metro Gold Line Foothill Extension Construction Authority issued a Request for Proposals (RFP) to three teams vying for the Foothill Extension Phase 2A light rail alignment work.  The design-build-finance project includes 11.5 miles of new track, a 25+ acre light rail maintenance facility, six stations in five cities, and multiple bridges along with the needed utilities and crossing systems.  Phase 2A is anticipated to generate 7,000 jobs and $1 billion of economic output for the region during construction and will be the first Measure R rail project to break ground.  The public-private partnership with the winning bidder will enable the project to be completed much faster than using traditional mechanisms.

The RFP was issued to three firms that were shortlisted earlier in the year through a competitive process.  The teams competing for the project are the Foothill Transit Constructors (Kiewit Pacific Co. and Parsons Transportation Group Inc.), Shimmick Construction Company/URS Corporation and Skanska USA Civil West California District/Balfour Beatty Rail, Inc.  Proposals are due January 27, 2011 and the award is anticipated in April 2011.  On June 18, 2010 the Authority awarded a Design-Build Contract for the Iconic Freeway Structure under Phase 2A to Skanska USA Civil West California District Inc.

Metro Gold Line Foothill Extension

CTC Authorizes First Regional Design-Build Projects

On April 7, 2010, the California Transportation Commission (CTC) authorized the first two regional design-build projects under the state's innovative contracting authority under Senate Bill 4, SBX2 4. 

  • The ExpressLane Project is a joint state/local project of the Los Angeles County Metropolitan Transportation Authority (LA Metro) and the Department of Transportation (Caltrans), which will be implemented by Caltrans.  The project will convert existing carpool lanes on Interstates 10 and 110 to high-occupancy toll (HOT) lanes, or ExpressLanes.
  • The Riverside County Transportation Commission (RCTC) SR-91 Corridor Improvement Project is a local transportation entity project slated for implementation by a regional entity.  It will widen State Route 91 with the addition of new freeway lanes, toll/express lanes, expanded freeway-to-freeway connectors and better access to and from the freeway at congested locations.

Other regional transportation agencies will no doubt be encouraged by the CTC’s unanimous approval of these two projects.

SBX2 4, which authorizes alternative contracting for certain projects was approved on February 20, 2009.  The CTC developed its related P3 policy guidance on October 14, 2009. 

A Look At 2009's Major US P3 Transactions

“It was the best of times, it was the worst of times…”  Dickens could have been describing 2009, as the P3 market continued to look strong, notwithstanding the economic downturn. Last year three significant P3 deals reached financial close in the United States: in March the I-595 in Florida, in October the Port of Miami Tunnel also in Florida, and mid-December the North Tarrant Express in Texas. All were remarkable in their own right, and cumulatively earned Nossaman the top spot in Infrastructure Journal’s league tables in the North American Transport P3 legal advisor category. 

We take a look back at what made the deals remarkable and what 2010 might bring…

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Utah DOT Selects Fluor-Led Team to Deliver $1.1 Billion I-15 CORE Design-Build Project

The Utah Department of Transportation has announced its selection of the Provo River Constructors team to deliver the Utah County I-15 Corridor Expansion (I-15 CORE). Provo River Constructors is comprised of Flour Enterprises, Inc., Ames Construction, Inc., Ralph L. Wadsworth Construction Company, Inc. and Wadsworth Brothers Construction Company, Inc. The group will expand the I-15 freeway by two lanes in both directions from Lehi Main Street to Spanish Fork Main, extend the express lane from University Parkway in Orem to Spanish Fork, rebuild and reconfigure 10 freeway interchanges, replace and restore 55 bridges, and provide additional improvements without decreasing the number of lanes during the majority of construction. 

The Department used an innovative procurement methodology, selecting the proposer who offered to deliver the improvements that provided the best value to the Department for a fixed price set by the Department.  Best value was determined with reference to the ability of specified proposal elements to meet or exceed the project’s goals, values and requirements, as set forth in the procurement documents.

Court Upholds Innovative Project Delivery Concepts

A recent court case upholds the concepts of innovative design and quality performance utilized by alternative delivery methods that have become necessary due to shrinking public agency budgets and the need to accelerate critical projects. The case concerned the U.S. Army Corps of Engineers’ (Corps) use of an Indefinite Delivery/Indefinite Quantity (IDIQ) Contract through a two phased proposal process for a $301 million construction project to build a series of military facilities to be performed under a series of future task orders. 

An IDIQ Contract allows the procuring agency flexibility to engage contractors before the exact times and/or exact quantities of future supplies and/or services become known. The goal of the Corps’ project was to meet time, cost and quality targets set by the Army as well as to standardize construction methods to provide new facilities for soldiers and their families. The Corps determined, through market research, that the use of an IDIQ contract was the most appropriate method to meet these goals.

The government’s use of an IDIQ contract was challenged by Tyler Construction Group, a small business general contractor, on the ground that the Federal Acquisition Regulation (FAR) did not authorize the use of an IDIQ procurement for the acquisition of large design-build military construction projects or for major construction projects generally and its use violated the Small Business Act.  The award of the IDIQ Contract was upheld in June 2009 by the U.S. Court of Appeals for the Federal Circuit. (SeeTyler Construction Group v. United States, No. 2008-5177, 2009 WL 1796702 (Fed. Cir. June 25, 2009). 

The Court reasoned that explicit legal authorization is not required to use an IDIQ contract where it is in the best interests of the government, not addressed in the FAR and is not prohibited by law. Further information may be found in the Construction Litigation Reporter, Volume 30, Number 9, September 2009, p. 363-366. 

Although this case involved a federal agency procurement, the reasoning of the court may also apply to state and local agencies interested in using IDIQ to meet their goals. Any agency interested in using IDIQ should consult with counsel before undertaking any procurement action.

Alternative Delivery Methodologies for Mega-projects: The Increasing Use of EIC

A client recently asked our firm about delivery methodologies commonly used for mega-projects.  A recent ENR article highlights this trend towards use of alternative delivery methods, including design-build, contractor at risk and PPPs. 

According to the article, the US Army Corps of Engineers is using design-build and construction management at risk (which the Army Corps calls Early Contractor Involvement (ECI)) on many projects to speed up delivery of the Hurricane and Storm Damage Risk Reduction System, including the Gulf Intracoastal Waterway West Closure Complex (GIWWCC).

The GIWWCC project was the New Orleans District’s first ECI contract. “By using ECI for this key project, our design teams and GIC are able to proceed in construction of some features, while actively participating in and providing pre-construction design services of other features,” says Colonel Alvin Lee, the Corps New Orleans District commander.

In April, Gulf Intracoastal Constructors (GIC), a joint venture of Omaha-based Kiewit Corp. and Traylor Bros. Inc. of Evansville, Ind., was awarded the $6.97-million base portion of the ECI contract for pre-construction services and pile load tests. That allowed the contractor to begin design and construction sequencing even before being awarded the $854.8 million construction portion of the contract June 26 and the pump portion May 28—which has resulted in a much faster delivery schedule than would have been the case had they used design-bid-build. 

According to Susan Maclay, president of the Southeast Louisiana Flood Protection Authority West, local stakeholders are concerned about the uncertainty associated with use of alternative delivery, but having protection in place by June 1, 2011, is a welcome trade-off. “We applaud the Corps for thinking 'outside of the box’ to allow the contractor to use ECI, to design while delivering,” Maclay says.

While the Corps is now utilizing ECI to help protect New Orleans from future hurricanes, it is not the first project sponsor to use the approach. The Louisiana Department of Transportation and Development (LA DOTD) used a similar approach on the Twin Spans repair project to expedite the re-opening of I-10 following Hurricane Katrina. Subsequently, LA DOTD has used a design build approach for the John James Audubon Bridge across the Mississippi River and the I-12 widening Project and is currently in the process of procuring design build contractors for the I-10 Widening Project and the US 90 Interchange @ LA 85.  

TxDOT Moving Forward With DFW Connector

Texas Department of Transportation (TxDOT) officials executed a comprehensive development agreement (CDA) Tuesday October 6 with NorthGate Constructors, J.V., led by Kiewit Texas Construction L.P. (Fort Worth), and Zachry Construction Corporation (San Antonio).  NorthGate Constructors, J.V. will develop, design and construct 8.4 miles of the SH 114/121 corridor known as the DFW Connector. Construction on the $1.02 billion design/build project is expected to begin by 2010 and the project is scheduled to open to traffic in 2014.