TxDOT Executes Agreement for Grand Parkway Project

Texas Department of Transportation (TxDOT) executed agreements on March 22 for the development of the SH 99 Grand Parkway project with Zachry-Odebrecht Parkway Builders, JV, a joint venture comprised of Zachry Construction Corporation and Odebrecht Construction Inc.  The agreements provide for the design, construction and long-term capital maintenance of the Grand Parkway project, a 38 mile, greenfield toll road in Houston.

Project Details

The high-priority project reaching final award consists of Segments F-1, F-2 and G of the Grand Parkway, part of a proposed 180+ mile highway, encircling the Houston area. The larger Grand Parkway has been shown on governmental planning documents since the early 1960's.  A few of the other segments of the Grand Parkway are being developed using traditional construction contracts. Segments D and E are currently under construction and Segment I-2 and portions of Segment D are already open to traffic. 

Procurement

In September 2012, Zachry-Odebrecht Parkway Builders was determined to be the apparent best value proposer and conditionally awarded the design-build and capital maintenance agreements.  The best value selection criteria included price, technical and schedule scores. Zachry-Odebrecht's proposed design and construction price is $1.07 billion, including $30 million in options.TxDOT's construction cost estimate exclusive of design was $1.160 billion.  In addition, Zachry-Odebrecht proposed the fastest schedule at 842 days, which is 150 days earlier than the outside deadline set by TxDOT.  The award to Zachry-Odebrecht was conditioned upon successful completion of negotiations and finalization of the agreements, as well as compliance with various legislative conditions to execution of the agreements. The necessary approvals, including a determination of legal sufficiency from the Attorney General's office, were received by TxDOT earlier last week.

Financing

It is anticipated that approximately $3 billion in revenue bonds will be issued in connection with the financing for Segments E, F-1, F-2 and G of the Grand Parkway. In addition, TxDOT has applied for a TIFIA loan.  Financial close is anticipated to occur in May.

The Texas Transportation Commission Selects Apparent Best Value Proposer for Grand Parkway Project

The Texas Transportation Commission selected the apparent best value proposer for the design, construction and long-term capital maintenance of the Grand Parkway project, a 37-mile, greenfield toll road in Houston. The high-priority project awarded on Thursday consists of Segments F-1, F-2 and G of the Grand Parkway, part of a proposed 184-mile highway, encircling the Houston area. A few of the other, smaller segments of the Grand Parkway are being developed using traditional construction contracts. Segments D and E are currently under construction and Segment I-2 is already open to traffic.

Four short-listed proposers submitted technical proposals on August 15 and price proposals on August 22.

  • FBW, a consortium comprised of Fluor, Balfour Beatty Infrastructure and Williams Brothers;
  • Kiewit-Granite Parkway Constructors, a joint venture between Kiewit Texas Construction, Granite Construction Co. and Texas Sterling;
  • Spring Creek Constructors, a joint venture between J.D. Abrams, FCC Construccion, The Lane Construction Company and Shikun & Binui; and
  • Zachry-Odebrecht Parkway Builders, a joint venture comprised of Zachry Construction Corporation and Odebrecht Construction Inc.

Zachry-Odebrecht Parkway Builders was determined to be the apparent best value proposer and conditionally awarded the design-build and capital maintenance agreements. The best value selection criteria included price, technical and schedule scores. According to the RFP, TxDOT's construction cost estimate exclusive of design was $1.160 billion. Zachry-Odebrecht's proposed design and construction price is $1,007,053,000, resulting in significant cost savings. In addition, Zachry-Odebrecht proposed the fastest schedule with completion approximately 7 months earlier than the outside deadline set by TxDOT.

The award to Zachry-Odebrecht 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 at the end of the year.