Arizona Department of Transportation Receives Three Proposals for South Mountain Freeway P3 Project
Posted in P3s

A crucial highway improvement for the growing Phoenix region reached an important milestone November 2 when the Arizona Department of Transportation received proposals from all three short-listed teams vying to develop the Loop 202 South Mountain Freeway Project.  The three multidiscipline teams are identified in our March 2015 blog.

This $1.9 billion megaproject includes the design, construction and 30-year maintenance of the last section of the Loop 202 Freeway – a route which will stretch 22 miles from the Maricopa Freeway segment of I-10 to the Papago Freeway segment of I-10 in the southwestern quadrant of the Phoenix Metropolitan Area.  It is the single largest highway project ever undertaken by ADOT.  To view a 3D fly-through video animation of the project, click here.

The project has been a critical part of the Maricopa Association of Governments Regional Freeway Program since 1985, when Maricopa County voters approved Proposition 300 – a measure which included its funding.  The freeway is also part of the Regional Transportation Plan funding passed by the county’s voters in 2004 through Proposition 400.

The South Mountain freeway will break new ground as the first highway project procured under Arizona’s P3 statute, and ADOT’s first design-build-maintain project.  ADOT will fund the project capital costs with a combination of available federal funds, regional sales tax revenues and tax-exempt bonds.

ADOT and the proposers adhered closely to the schedule the transportation agency issued at the beginning of the RFP stage of the procurement.  The schedule included several rounds of one-on-one meetings, including meetings to consider alternative technical concepts and plans to avoid right-of-way takes.

Right-of-way acquisition cost and delay risks present the most significant potential pitfalls for the project.  ADOT crafted innovative procedures to offer price evaluation credits for avoiding planned parcel acquisitions and relocations.  The procedures will likely serve as a national template to help project owners with similar needs manage and reduce right-of-way acquisitions.

In a further innovation, ADOT harnessed competition to obtain advance pricing of potential price changes if notice to proceed with construction of the center portion of the project is advanced or delayed outside a benchmark issuance date.  If the agency issues the center portion notice to proceed sooner than expected, it will receive price reductions for the time savings based on the daily price reduction offered by the winning proposer.  If the notice to proceed is issued later than expected, ADOT will raise the price by the daily price increase offered.

This approach will help both parties avoid potential disputes over price adjustments for early or late notice to proceed for the center portion.  The daily amounts proposed will be factored into the construction bid price to determine price scores, motivating proposers to carefully calculate their proposed adjustments.

Proposal evaluations, involving scores of technical experts, are underway.  A best value determination and proposer rankings are expected by mid-January 2016.

For inquiries about the project and the procurement process, contact projects@azdot.gov.

  • Partner

    In nearly 40 years with the Firm, Fred Kessler has gained national recognition as a guiding force for public agencies in the field of transportation public-private partnerships (P3s).  Clients benefit from his vast experience with ...

Nossaman LLP’s 30-plus infrastructure attorneys offer clients, colleagues, strategic partners, and industry media a wealth of practical experience, insider insight, and thoughtful analysis here on Infra Insight. We blog about what we know best, from industry-leading procurements to local and national policy developments that affect the market and our clients.

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