118(technically)-mile stretch of SR 44 from San Ysidro to Bloomfield will be expanded from two to four lanes

Project passes through three counties, four tribe and pueblo lands, and property belonging to the Bureau of Land Management, the U.S. Forest Service, and private owners.

New Mexico law did not allow for design-build procurement at the time NM 44 was constructed. But the NMSHTD was able to create many of the efficiencies of design-build through a professional services contract. This allowed the NMSHTD to outsource services it would have traditionally self-performed – design, construction management and long-term pavement management. Procurement of construction was done separately under the traditional low-bid system.

By using a professional services contract to outsource design and construction management to the same company (the Project Development Contractor or PDC), the State was able to gain many of the efficiencies found in design-build projects – flexibility, quicker construction, cost savings, and streamlined decision-making.

The NMSHTD required the road and pavement design to meet the NMSHTD and FHWA standards. However, the PDC's designer and construction manager were given the flexibility to adapt the design to address the varying conditions along the 118-mile project. The flexibility in design and construction management granted to the PDC was balanced by a requirement in the professional services contract that the PDC guarantee the quality of the pavement condition over time.

This guarantee took the form of a 20-year, long-term, fixed price performance-based rehabilitation and reconstruction agreement covered by $114-million bond. During the challenging design phase and rapid construction phase of NM44, this long-term responsibility ensured that the private sector would act like an owner and the State would receive the quality it demanded. This pavement warranty agreement provides preventive maintenance and rehabilitation to keep the road above the contractually agreed specifications. These specifications include objective measurable criteria such as IRI, cracking and rutting.

New Mexico State Highway and Transportation Department (NMSHTD)
New Mexico Finance Authority

$100 million sole source GARVEE bonds (long term), insured & tax exempt
$214 million State highway revenue bonds (tax exempt)

Design, construction management, warrant road built with 20 year pavement performance guarantee

Mesa LLC, with CH2M Hill (design) and Flatiron (construction management)

Completed November 30, 2001

Closed

The innovative use of professional services contracting allowed the NMSHTD to enjoy many of the benefits of a design-build project approach without requiring the State to abandon the traditional low-bid method of procurement. This innovative approach has been called Design-Bid-Construction Management-Maintain (D-B-CM-M). It is estimated that innovative financing combined with the contracting approach has cut the total project time from 27 years to within 3 years. In this case, the total project time is considered the period from initial planning to completion.

The NMSHTD has determined that the initial warranty cost of $62 million will save the taxpayers $89 million in maintenance cost over a 20-year period.

First federal highway grant anticipation notes to pledge revenues beyond the current authorization period.

First GARVEEs to pledge solely Federal revenue with no state back-up.

First long-term warranty used in the U.S.

Coverage in Innovative Finance Quarterly, 2001 ,

Coverage in Innovative Finance Quarterly
NM 44 Project SummaryPrepared by Mesa, PDC, LLC -
Four Lanes to the Four Corners

Case Study by National Council for Public-Private Partnerships

SR 44 Overview

Rhonda G. Faught, P.E.
Cabinet Secretary
New Mexico Department of Transportation
Tel. (505) 827-5110
rhonda.faught@nmshtd.state.nm.us