Construction

SEP-14 Workplan: 290 East Toll Project

April 20, 2009

Mr. Ted West, P.E.
Urban Engineer
U.S. Department of Transportation
Federal Highway Administration
300 East 8th Street
Austin, Texas 78701

Subject:
Central Texas Regional Mobility Authority
290 East Toll Project
Request for SEP-14 Approval

Dear Mr. West:

This letter constitutes an application for SEP-14 approval of the Central Texas Regional Mobility Authority ("Mobility Authority") plan to enter into a series of construction contracts for development of the 290 East Toll Project in Travis County, Texas using a competitive bidding method. This contracting process is authorized by Chapter 370 of the Texas Transportation Code (lithe Code") regarding the development of toll projects by Regional Mobility Authorities. In the interest of mitigating increasing costs and to provide more schedule certainty under this contracting method, the Mobility Authority is seeking FHWA approval to utilize lump sum bidding and no-excuse bonus processes as part of the implementation of the 290 East Toll Project.

Enclosed are five (5) copies of the work plan proposed under SEP-14 for the 290 East Toll Project. This project is part of an overall strategy to relieve the heavy traffic congestion in the Central Texas region. Once completed, the 290 East Toll Project will significantly increase mobility, reduce congestion, increase safety, increase economic development opportunities, decrease travel times, reduce air pollution, and increase qualify of life in the Central Texas region. Therefore, we respectfully request that FHWA approve the enclosed work plan.

The Mobility Authority, in conjunction with the Capital Area Metropolitan Planning Organization and the Austin District of the Texas Department of Transportation, has been granted "stimulus" funds under the American Recovery and Reinvestment Act of 2009 for the construction of Segment 1 of the 290 East Toll Project. Given the aggressive time lines associated with authorization and use of these funds, the Mobility Authority would greatly appreciate your earliest consideration of our application.

Should you have any questions or require additional information during your review of this application, please feel free to contact me directly.

Sincerely,

Wesley M. Buford, P.E.
Director of Engineering

WORK PLAN FOR THE 290 EAST TOLL PROJECT
Central Texas Regional Mobility Authority Application for SEP-14 Approval

A. INTRODUCTION

This work plan is submitted by the Central Texas Regional Mobility Authority ("Mobility Authority") for review and approval by the FHWA of the proposed 290 East Toll Project ("Project") as a project under the provisions of Special Experimental Project No. 14 (SEP-14).

The proposed Project includes 6.2 miles of toll facility extending from US 183 (western terminus) to SH 130 (eastern terminus) in Travis County. The proposed improvements will consist of 3 tolled lanes in each direction and 3-lane, non-tolled frontage roads. Local traffic will continue to access adjacent properties by use of non-tolled frontage roads and signalized intersections. However, increased capacity of the 3-lane frontage roads will improve mobility for local traffic. The tolled mainlanes with grade-separated interchanges will service through traffic. Additionally, four direct connectors at the US 290/US 183 interchange will be constructed as part of the Project.

To maximize expediency and flexibility in the implementation of the project given the availability of existing right-of-way, completion of utility relocations, and potential funding delays, the Mobility Authority is currently designing the project in three segments:

• Segment 1 – Four direct connectors at the US 290/US 183 interchange.
• Segment 2 – From US 183 to FM 3177 (Decker Lane)
• Segment 3 – From FM 3177 (Decker Lane) to east of SH 130 (near FM 734)

The Mobility Authority, in association with the Capital Area Metropolitan Planning Organization and the Austin District of the Texas Department of Transportation, has been granted "stimulus" funds under the American Recovery and Reinvestment Act of 2009 for the construction of Segment 1.

The successful implementation of the Project will relieve congestion and improve safety on the US 290 corridor by segregating through traffic and local traffic, and by providing increased capacity for local traffic. The completion of the Project will result in enhanced mobility and improved safety for the Central Texas region by providing an efficient link between the US 183 and SH 130 corridors. Additionally, the proposed improvements will sustain and stimulate regional growth.

B. SUMMARY OF EXPERIMENTAL PROJECT FEATURES

The Mobility Authority requests FHWA to approve the following experimental aspects of the Project:

• Use of lump sum bidding: The bidders will be provided with a set of bid documents including plans, specifications, and quantity estimates. The bidders will be required to develop a unit price bid for the work that will be converted to a lump sum price for the selected contractor.
• Use of a no-excuse bonus: The Mobility Authority will give the contractor two contract dates for substantial completion of the work. If the work is completed in advance of the Central Texas Regional Mobility Authority April 20, 2009 SEP-14 Work Plan for the 290 East Toll Project Page 2 of 4 earlier date, the contractor will receive a bonus. There are no excuses such as weather delays that may be claimed for not meeting the earlier completion date. On the other hand there are no disincentives (other than normal liquidated damages) for not meeting the later completion date.

C. PURPOSE

The primary purpose for the use of lump sum bidding is to provide the Mobility Authority greater cost certainty at an early stage. This approach allows for a level of risk of quantities to be placed upon the contractor. Deferring this risk to the contractor should establish a more accurate estimate of the total construction cost because variances between plan quantities and as-built quantities, except for significant changes as defined in the contract, will not result in a contract value change. The Project will utilize a revenue loaded schedule, based upon the lump sum price, for payment applications which will reduce the cost of the construction management consultant in performing field measurements and preparing pay documents. Burden of proving major quantity differentials will be place upon the contractor.

The primary purpose for the use of a no-excuse bonus is to provide the Mobility Authority greater schedule certainty by increasing the probability of early or on-time completion through contractor incentives.

D. SCOPE

The scope of this SEP-14 request is limited to the Project. The TxDOT Standard Specification Items 1 through 9 will be modified to provide for the lump sum bid and the no-excuse incentive clause.

E. SCHEDULE

The Mobility Authority's goal is to complete the Project by the end of 2013. To achieve this goal, the Mobility Authority has established the following preliminary schedule (all dates in the future are subject to change):

• Environmental Clearance for Project:
  • March 2009 – Finding of No Significant Impact issued by FHWA for the entire project
• Segment 1:
  • May 2009 – Segment 1 Final PS&E documents complete
  • June 2009 – Segment 1 Authorization of Federal Funds
  • October 2009 – Segment 1 Start Construction
  • October 2011 – Segment 1 Substantial Completion
• Segments 2 & 3:
  • December 2009 – Segment 2 & 3 Final PS&E documents complete
  • February 2010 – Segment 2 & 3 Authorization of Federal Funds
  • 2010 – Segment 2 & 3 Start Construction [to be defined; contingent on funding]
  • 2015 – Segment 2 & 3 Substantial Completion [to be defined; contingent on funding]
• SEP-14 Report to FHWA:
  • January 2012 – Initial report to FHWA [addressing Segment 1]
  • 2015 – Final report to FHWA [addressing entire Project]

F. GOALS

The Mobility Authority and TxDOT anticipate that the experimental features described herein will achieve the following goals:

• Improve the Mobility Authority's ability to forecast Project construction cost accurately early on in the Project
• Increase the probability of early or on-time completion

G. DESCRIPTION OF BIDDING

The Mobility Authority will require bidders to be pre-qualified by TxDOT prior to submitting their bid. The Mobility Authority will prepare a bid set of documents that will include the plans, specifications, and an estimate of quantities for the Project. Bidders will be required to submit unit prices for all quantities of work. The selection will be based on the lowest responsive bidder. After contractor selection has been made, the contract price will be converted to a lump sum price calculated by the unit rates and plan quantities submitted with the bid.

H. SPECIAL PROVISIONS

Special provisions and general notes will be issued to implement the lump sum bidding and the no-excuse incentive clause. The following is a summary of the general notes and special provisions to be used:

000-01 Measurement and Payment

The special provision defines the Project as a lump sum payment project. It provides four mechanisms whereby the lump sum may be adjusted. They are as follows:

1. Provisions for "Special Measurement Items" – When the contractor bids the Project, they have the opportunity to review the plans and inspect the jobsite to make a reasonable judgment of total quantity to make a lump sum bid, except for three items (excavation, embankment, drill shafts) that may be indeterminate at the time of bid.
2. Provision for owner or contractor initiated change order work
3. Provision for bonus or penalty on items intended as an incentive for quality work
4. Provision for incentive, disincentive, and lane rental intended as an incentive for early completion of the Project and to minimize disruption to the traveling public during construction

004-001 Scope of Work

The special provision establishes the "contract intent" of the Project being a lump sum payment contract and the responsibility of the work quantities as belonging to the contractor, except for "changes in the work." The special provision requires using unit bid pricing for change order work, unless the character of the work is significantly changed. The special provision defines a significant change in the character of the work, thereby, triggering a change order, when the character of the work is materially changed, any of the three special measurement items (excavation, embankment, and drilled shafts) vary by more than 5% of the bid quantity, or the accumulative change orders affect the quantity of a major item by more than 25%.

008-001 Prosecution and Progress

The special provision defines the requirements of how the contractor is to prepare the "revenue loaded" schedule and how they are to submit their monthly pay request. The special provision requires the monthly pay request to include a certification document by a representative of the contractor that the pay request is accurate. The certification requirement should significantly increase the likelihood of the contractor submitting accurate pay requests, therefore, reducing cost to the Mobility Authority.

The special provision includes a clause where the float is a mutually shared resource between the contractor and the Mobility Authority. This reduces the risk of delay claims and associated costs.

The special provision includes a no-excuse bonus incentive for early completion, a daily incentive (if the no-excuse date is not met), liquidated damages for late completion, and lane rental fees.

009-001 Measurement and Payment

The special provision removes the requirement of the engineer to measure work items except for the Special Measurement Items and removes the use of the "Plan Quantity Items." The special provision defines the process of the contractor submitting and the engineer reviewing monthly pay estimates. These are required to be consistent with Special Provision 000-001 Measurement and Payment and the needs for a lump sum payment project.

I. MEASURES; EVALUATION

The Project, with the requested experimental features, will be evaluated on a range of factors, including:

Construction cost: When construction of the Project is complete, the final cost of construction will be compared to the as bid lump sum price for construction. This will indicate how well the lump sum payment approach helped obtain the goal of accurately forecasting the final Project construction cost.

Project completion: The Mobility Authority will compare the actual substantial completion date to the substantial completion milestone, originally set in the contract for the no-excuse bonus, to determine what effect the clause had on impacting the actual substantial completion date.

J. REPORTING

The Mobility Authority will submit a final report to FHWA upon completion of the Project. The report will include an evaluation of the techniques used, the industry and Agency reactions and issues, and a recommendation as to whether or not to use this construction method on future projects.

K. CONCLUSION

We believe the procedures described herein will result in successful construction of the Project. We look forward to working with the FHWA as the Project progresses, and to providing you and others with the benefits of our experience.