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Improving Connectivity: The Custer Interchange Project

Appendix C Innovative Financing/Innovative Contracting Skill Set

Idea Name Detailed Description Implementation Details (barriers, skills set coordination, etc.)
Fund Entire Project
  • GARVEE Bonds (Grant Anticipation Revenue Vehicles).
  • Bond debt paid with future federal dollars.
  • Can be used to fund entire project allowing for accelerated project development.
  • There is a $150 million statutory limit. Increasing this would require a 2009 Legislative Action.
  • State agency may have an aversion to debt.
  • Long term debt should be in conjunction with a capital improvement plan.
  • Current interest rates are lower than the construction interest rate.
Build Project Segments as Funding Becomes Available Use other possible funding sources for the local match. Encourage:
  • City or County Impact Fees.
  • Developer Contributions - Fees, Right-of-Way.
  • Transportation Improvement District.
  • Hospitality Fees.
  • Required local match could be met with these fees.
  • Community/developer cooperation is needed to implement impact fees.
  • Requires extensive community support.
Public/Private Partnerships
  • Use private activity bonds.
  • A private entity finances the project. Tax-exempt bonding is available for the private company.
This is a new concept in Montana.
Cost Control/Savings
  • Better early cost estimation.
  • Additive alternates.
  • Alternate designs (e.g. bridge design).
  • Escalation clauses.
  • Use other estimation tools to increase accuracy, such as Monte Carlo Simulation.
  • Involve other disciplines like construction.
  • Perform early constructability reviews.
  • Have a base bid and one or more alternates. The alternates are awarded based on available funding. Possible projects:
    • Base=Cedar, Alt=Frontage Rd.
    • Base=Bridge, Alt=Ramps
  • Precast, rolled in place, etc.
  • MDT and the contractor share risk. MDT already uses fuel and asphalt, but there may be something else based on when the project(s) are advertised.
Compress Schedule
  • Use design/build contracting.
  • Incorporate benefits of design/build.
  • Incentive Contracting.
  • Major detour - build a temporary structure adjacent to the existing structure or to the North of Lowe's.
  • Requires that funding be programmed to meet construction schedule.
  • Need to have NEPA in place, ROW complete.
  • Fast track design and construction by doing more concurrently.
  • Have contractor constructability reviews.
  • A+B (cost plus time). Incentives/Disincentives on milestones. Lane rental.
  • Close Custer structure. This would decrease construction time and decrease traffic control costs.
  • It would provide access to the north for emergency response vehicles.
  • A cost analysis is needed to see if the costs of the temporary structure are less than the savings issues.
Traffic management
  • Exclude work during peak hours.
  • Night work.
  • Detailed contract sequencing.
  • Specify non-working hours.
  • There may be some areas that this is not acceptable.
  • The work zone mobility rule should be in place prior to this work, so traffic control should be addressed in the plans.
  • The contractor can submit alternates to the traffic control plan, but there needs to be contract language addressing that this is not eligible as a VE proposal.
Optimize Contract Packaging Split into smaller projects to maximize competition and match funding. Possible order:
  • Cedar Street Widening.
  • Frontage Road and Int. improvements.
  • Custer Road and Structure Ramps.
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Updated: 10/27/2015
Federal Highway Administration | 1200 New Jersey Avenue, SE | Washington, DC 20590 | 202-366-4000