Texas Turnpike Authority Division

2009 AASHTO2009 AASHTORight of Way & Utilities Committee ConferenceRight of Way & Utilities Committee Conference

Wednesday – April 22, 2009Wednesday – April 22, 2009

Public-Private PartnershipsPublic-Private Partnerships Comprehensive Development AgreementsComprehensive Development Agreements

Request for ProposalsRequest for Proposals&&

Scope of Service DocumentsScope of Service Documents

Donald C. Toner Jr., SR/WA

Director – Turnpike Right of Way

Texas Turnpike Authority Division

Texas Department of Transportation

125 E. 11th Street

Austin, Texas 78701-2483

dtoner@dot.state.tx.us

Office: (512) 334-3834

Fax: (512) 334-3901

TxDOT’s PLANTxDOT’s PLAN

1. Reduce Congestion

2. Enhance Safety

3. Expand Economic Opportunity

4. Improve Air Quality

5. Increase the Value of Transportation Assets

Four Strategies: • Use all financial options to build

transportation projects.

• Empower local and regional leaders to solve local and regional transportation problems

• Increase competitive pressure to drive down the cost of transportation projects

• Demand consumer-driven decisions that respond to traditional market forces

Transportation Transportation ProjectProject

1.1. DevelopDevelop

2.2. DesignDesign

3.3. ConstructConstruct

4.4. FinanceFinance

5.5. OperateOperate

6.6. MaintainMaintain

• Global companies bring resources to the state to help Texas travelers realize the future of safer, smoother, and more efficient transportation sooner.

• The private sector plays a major role in developing Texas’ transportation system

CDA MethodologyCDA Methodology

1. Comprehensive Development Agreement (CDA) is a tool TxDOT uses to enable private investments in the Texas transportation system.

2. CDAs provide competitive selection process for developing regional projects.

3. A public-private partnership opens the door to accelerated financing, design, construction, operations and/or maintenance of a project.

Request for ProposalsRequest for Proposals

Request for ProposalsRequest for Proposals

The Private-Sector is provided the

opportunity to earn TxDOT Business

through a competitive selection

process.

Private Companies Submit Private Companies Submit Their QualificationsTheir Qualifications

1. Describe their technical and engineering experience

2. Provide a conceptual strategy explaining how the project could be completed

3. Submit a Financial Plan

RFP Detailed ProcessRFP Detailed Process

1.1. Authorization by the Texas Transportation Authorization by the Texas Transportation Commission to issues request for proposals Commission to issues request for proposals and qualifications.and qualifications.

2.2. TxDOT issues request for proposals and TxDOT issues request for proposals and qualificationsqualifications

3.3. Deadline to submit proposals and Deadline to submit proposals and qualificationsqualifications

4.4. TxDOT evaluation and short list teamsTxDOT evaluation and short list teams

5.5. Authorization by the Texas Transportation Authorization by the Texas Transportation Commission to issue request for detailed Commission to issue request for detailed proposalsproposals

6.6. TxDOT issues Request for ProposalTxDOT issues Request for Proposal

7.7. Deadline to submit Detailed ProposalsDeadline to submit Detailed Proposals

8.8. TxDOT EvaluationTxDOT Evaluation

9.9. Selection of best-value proposal.Selection of best-value proposal.

10.10. RFP Addendums RFP Addendums

RFP Detailed ProcessRFP Detailed Process

RFP - Series of RFP - Series of AddendumsAddendums1. Cover Letter

2. Instructions to Proposers

3. Book 1 - Comprehensive Development Agreement

4. Book 2 – Project Specific

5. Book 3 – Technical Provisions

The Programmatic Approach Concessions & Design-Build

Book 1Terms and Conditions

Book 2Project Specific requirements

Book 3Programmatic requirements

and Library of Required Standards

Reference Information Documents

(RID)All Books together make up the CDA Contract Documents

Review & EvaluationReview & Evaluation

1. Pass/Fail Analysis Separation of Financial Information from

Qualifications

2. Evaluation Committee Level of Expertise

– Intentional Misrepresentation of “Specifications” or “Scope”

– Specialized Skill– Time/Dedication

3. System to record each lessoned learned Benefit from the pain and agony of the lesson that you

just learned or “experienced”

CDA Evaluation CDA Evaluation ProcessProcess

Proposals Received

A – TechnicalB - Price

Proposals Received

A – TechnicalB - Price

Technical Pass/Fail Reviews

Technical Pass/Fail Reviews

Pricing Alternatives Analysis

Pricing Alternatives Analysis

Technical Subcommittee

Review of Technical Proposals

Technical Subcommittee

Review of Technical Proposals

Pricing Committee Review of Cost Proposals

Pricing Committee Review of Cost Proposals

Technical Evaluation Committee

Reviews

Technical Evaluation Committee

Reviews

Director of TTA Division

Combines Cost and Tech. For Final Scoring

Director of TTA Division

Combines Cost and Tech. For Final Scoring

CDAs delegate risk to the parties best able to manage it:– Assign to Owner– Assign to Developer– Share– Concessions differ from D/B

Risk AllocationRisk Allocation

Risk Allocation & ContractingRisk Shifting Inherent in CDAs

“Traditional” Contracts1. Owner bears risk of constructability and

efficiency of design

2. Designers not accountable for cost

3. Owner responsible for QA/QC

CDAs1. Developer bears risk of constructability and

efficiency of design

2. Developer accountable for cost

3. Developer responsible for QA/QC *

Right of Way Risk Allocation and Risk Shifting in CDAs

“Traditional” Contracts1. Owner bears risk of Right of way

Acquisition

2. Owner responsible for moving utilities

CDAs1. Developer bears risk of right of way

acquisition and schedule

2. Developer responsible utility adjustment and coordination *

Risk Allocation & ContractingAllocating Other Risks

Who can best control the risk?

Who can best manage the risk?

Are contractors willing to assume the risk?

How much will it cost?

Differing site conditions

Force majeure Hazardous materials Paleo/archaeo/bio Permits Railroads Right of way Utility relocations

Confidentiality • Conflict of Interest

• Ethics

• Proprietary Information

Writing the PERFECTPERFECT Document?

-There is no such thing.

Writing a BETTERBETTER document?

-There is the possibility.

•Carefully recording lessons learned

•Managing amendments to the contract

•Preventing precedent setting procedures

Scope of Service Scope of Service DocumentsDocuments

Protecting State InterestProtecting State Interest

Develop a procurement contract that

addresses the unique nature of the

partnership while at the same time

protecting the State's interest.

Scope of Service Document

1. Establishes the business agreement made between a Government Entity and Private Sector

2. Provides project justification derived by the States’ strategic objectives and plans.

3. Describes the opportunity to be benefited or obtained by the transportation project

4. Becomes the basis for evaluating future benefits to both parties involved

5. Set expectations with the Developer and Project Team

What Should Be Identifiedin a Scope of Service Document

1. Cost and Schedule

2. Definitions (also Define quantifiable criteria)

3. Quality Measures

4. Work required and necessary for completion of the project

5. Work that falls outside the Scope

Consideration to:Consideration to:

1. Transparency

2. Complicated Issues

3. Dedication to Project

4. Required Approvals

5. Ethics and Conflict of Interest

PPPs & CDAs are Not Solutions for Every Problem

Texas Turnpike Authority Division