Houston METRO METRO Solutions

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Houston METROMETRO Solutions Hybrid Delivery

• Alternative Project Delivery on Texas Projects
• Austin, Texas
• November 28, 2007

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Presentation Overview

• METRO Solutions
• Objectives
• Scope
• Schedule
• Budget
• FTA 5P Program
• Hybrid Delivery HB2300 (May, 2005)
• Key Elements
• Implementation Overview
• Future Challenges

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METRO Solutions - Objectives

• Reduce congestion
• Improve mobility
• Improve air quality
• Build more rather than less,
• sooner rather than later.
• Houston Mayor Bill White

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Historical Context

• DART
• Created 1983
• Light rail miles 45 miles
• System total 93 (2014)
• Weekday ridership 62,000

METRO 1979 7.5 miles 37 (2012) 45,000
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METRORail Grand Opening January 1, 2004
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METRORail Grand Opening January 1, 2004
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METRORail Success Story

• Red Line Most successful light rail line ever
  built in the U.S.
• Average daily ridership of approximately 45,000
• 41 of rail riders never used METRO before

Source 2007 HGAC Survey
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METRORail Success Story

• Half (49) of METRORail riders have a car
  available
• 20 have household incomes over 81,000

Source 2007 HGAC Survey
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Ridership
Metro 125 Million Passengers Amtrak 25 Million
Houston Airport 48 Million Continental 61 Million
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METRO Solutions Components

• 5 new light-rail lines
• University (key east-west trunk line)
  11.04
• North extending from Red Line 5.26
  miles
• Southeast 6.14
• East End 3.31
• Uptown 4.32
• approximately 30.07 miles
• Additional Park Ride facilities
• HOV - HOT Lane modifications
• Up to 4 commuter rail lines
• (US90 A, US290, Outer Westpark, Galveston)

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Schedule

• Under In
• LRT Corridors Construction Service
• North Spring 2008 2011
• Southeast Spring 2008 2011
• East End Spring 2008 2011
• Uptown Spring 2008 2011
• University Spring 2009 2012

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Cost Per Component (in millions)

• LRT Corridors (Preliminary Estimates)
• North 394
• Southeast 460
• East End 206
• Uptown 324
• University 828
  2,212
• Red Line 324
• 2,536
• PR Lots / Transit Centers 171
• HOT Lanes 60
• Commuter Rail Transit (CRT) 160
• 391

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Funding Sources (in millions)

• Federal
• 1,268
• ______
• 1,268

METRO 324 Red Line Credit 640 Bonds
304 METRO Private Funding 1,268
2.54
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FTAs Public-Private Partnership Pilot
Program Current Thinking October 2006
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FTAs Public-Private Partnership Pilot Program
Public-Private Partnership Pilot
Program or Penta-P
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What Is a Public-Private Partnership?

• What Assumption (or reduction) of risk by
  private sector in exchange for opportunity to
  earn financial return commensurate with risk
  assumed (or reduced)
• Premise Integrated project procurement, together
  with discipline of the private sectors
  requirement for financial return, will (i)
  accelerate project delivery and (ii) reduce costs
  of project delivery and operation below current
  levels
• Why PPP for Transit
• Public funds constrained (Highway Trust Fund)
• Construction costs increasing (global demand)
• Marginal operating costs growing (extensions)
• Workforce demographics unfavorable (generational)

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What FTA Could Offer Pilots within New Starts
Program

• Subject to . . .
• Both procedural and rating benefits would be
  conditioned on project sponsors entry into
  agreement with private sector satisfactory to FTA
  prior to recommendation of project to Congress
  for Full Funding Grant Agreement

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HB 2300 Key Elements

• Applies to Civil Design Components
• Underground Utilities
• Paving
• Drainage
• Structures, including elevated platforms and
  bridges
• Components related to vehicular traffic
• Primary power distribution systems
• Transfer stations, depots and other architectural
  features including MEP
• Applies to Transit Project G.T. 100M in which
  the principal municipality has a population of
  more than 1.2 million people
• Selected Civil Engineer (SCE) shall be selected
  IAW Section 2254.004 Government Code
• Facility Provider (FP) evaluations shall
  consider
• FP experience and qualifications
• FP technical competence and capability
• FP past performance
• Feasibility of implementing the project as
  proposed
• Other selection criteria as indicated in the RFP

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HB 2300 Key Elements (Cont.)

• FP selection based on best value
• Final Design with the SCEs shall be incorporated
  into the authorities contract with the selected
  FP
• FP contract shall provide mechanism for SCE to
  communicate issues of design quality, QA, code
  compliance, VE or life cycle costing
• FP oversight of SCEs limited to
• Design Management
• Coordination of Civil Works Components
• Integration of Design of Systems Components
• Inspection and verification testing during
  construction, if contracted by the authority,
  shall be independent of the FP.
• Vendors with an established office in the
  principal municipality shall be utilized to the
  maximum extent permitted by law

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Implementation Overview

• Timetable
• Implementation Structure
• Industry Review
• Industry Outreach
• Civil Engineers
• Facility Providers
• Prequalification
• Selection

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Timetable
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Implementation Structure
METRO
Facility Provider
Remediation
LRV (Vehicle Supplier)
O M
SCE (Designers)
Design Build (Contractor)
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METRO Solutions Rail Transit Corridors kick-off

• Industry Review October, 2005
• Outlined Program
• Presented Budget
• Expectations
• Discussed HB2300
• Laid Out Goals and Objectives

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METROs objectives - create a win-win situation

• Objectives
• Work to the strength of the market
• Structure fair and reasonable commercial
  relationships
• Work towards total solutions
• Keep sacred commitments
• Schedules
• Budgets
• Performance Standards
• Implement an effective contracting plan
• Ensure partners are successful
• Meet SB/DBE goals

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Industry outreach was critical in assuring strong
competition

• Industry Outreach
• Individual industry meetings
• Meeting
• Potential Facility Providers
• METRO held face-to-face meetings with Facility
  Providers October 25-26, 2005
• METRO provided opportunity for Facility Providers
  and Civil Engineers to meet October 25-26, 2005
• Informal calls and meetings
• Potential Civil Engineers
• METRO held face-to-face meetings with Civil
  Engineers November 10-11, 2005
• Informal calls and meetings
• Webinars January 9-10, 2006
• Presented new SB/DBE program
• METROs SB/DBE goal commitment
• SB 35 overall goal (inclusive)
• DBE 21 annual goal

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After the industry outreach group sessions we met
with a number of Facility Providers individually

• Archer Western Contractors, Ltd
• Fluor Enterprises
• Gilbert Companies (Kiewit)
• Hensel Phelps
• Jacobs
• KBR/Parsons Transportation

• Skanska USA Civil, Inc.
• Texas Sterling
• Washington Group International
• Zachry

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In our meetings we discussed

• HB2300
• Contract Size
• Contract Packaging
• Contract Interfaces
• Contract Type
• Bonding
• Risk Allocation
• Schedule
• Insurance
• Contractor Availability
• Labor Availability

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Getting the message out to local Civil Engineers
was a priority

• Civil Engineers
• Scopes
• Includes all Civil works
• Lump sum contract
• Timing of Work
• Expedited completion (not business as usual)
• Organization
• Initial engineering performed directly for METRO
• Subsequent engineering performed under the
  Facility Provider

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We also met with local firms, including

• HNTB Corp.
• LAN
• PBQD
• PGAL
• Ross Baruzzini
• SB Infrastructure
• Dannenbuam
• Turner Collie Braden
• DMJM Harris
• Booz Allen
• URS Corporation
• Edwards Kelcey

• Malcolm Pirnie
•  Omega Engineers
•  Paradigm Consultants
• Pate Engineers
•  HTS Inc./Continental Materials
•  Brown Gay Engineers
• Montgomery Associates
•  Quadrant Consultants, Inc.
• Reynolds, Smith Hills, Inc.
•  Wilbur Smith Associates
• Chiang, Patel Yerby, Inc.
•  Klotz Associates, Inc.

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We also met with local firms, including

• Hanscomb Faithful Gould
• 3D/I
• Jones Carter
• Huitt-Zollars
• Lopez Garcia Group
• Ground Technology
• Hunt Hunt Engineers
• Infrastructure Associates
• Isani Consultants
• Knudson Associates
• NACC
• Nathelyne Kennedy
• PTI, Inc.

• Crouch Environmental Svcs.
• Edminster, Hinshaw, Russ
• Gunda Corporation, Inc.
• Bradlink
• Brian Smith Construction
• Dodson Associates
• Ergonomic Transportation
• ESPA
• AIA Engineers
• Transystems
• Architechnics/3
• ADT Security Services
• EFC, Inc.

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We also met with local firms, including

• Sirrus Engineers
• United Engineers
• Zarinekelk Engineers
• Associated Testing
• Atser LP
• MUI Services LLC
• Raba-Kistner Consultants, Inc.
• APM Associates
• SES Horizon Consult. Engrs.
• CSA Group
• Asakura Robinsonn Co. LLP
• Bellamy-North Associates
• Berkanbile Craig Landscape Arch.

• Goldston Engineering, Inc.
• Halff Associates
• Kimley-Horn Associates
• IDC Inc.
• Midtown Engineers LLC
• Concept Engineers
• Jacobs
• Walter P. Moore
• CDM
• CH2M Hill
• Cobb Fendley Assoc.

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Civil Engineering contracts were awarded to teams
led by

• North Corridor Dannenbaum Engineering Corp.
• Southeast Corridor LAN
• East End Corridor Omega Engineering Inc.
• Uptown Corridor Huitt-Zollars, Inc.
• University Corridor TCB Transit
• Intermodal Terminal - Ehrenkrantz Eckstut Kuhn
  Architects

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Pre-qualification was used to secure interested
firms early

• Prequalification
• Milestones
• RFQ Issued March 20, 2006
• RFQ Briefing March 30, 2006
• SOQs Received April 24, 2006
• Criteria
• Organization and Project Management
• Financial and Bonding Capacity
• Experience and Qualifications
• Record of Performance
• Project Understanding
• Successful Consortiums
• Bayou City Transit Team (Fluor/Balfour
  Beatty/ACI)
• Houston Transit Solutions Team (Parsons/KBR/Veolia
  )
• Houston Transit Partners (Washington
  Group/Granite)

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The RFP process created an innovative and
collaborative environment

• RFP
• Dates
• Draft RFP issued May 31, 2006
• Workshops 4 Sessions per consortium in June and
  July, 2006
• RFP issued August 15, 2006
• Proposals due September 29, 2006
• Each Proposal Contained
• Management Proposal
• Key Personnel Qualifications and Experience
• Stakeholders/Community Outreach
• Technical and Operations Solutions
• Operations and Maintenance
• Price Proposal
• Value-Added
• SB/DBE
• Management Proposal Minimum requirement
• Value-Added - Enhancements

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The workshops helped identify critical issues and
beneficial compromises

• RFP
• Workshop collaboration on
• Contract Terms
• Scope of Work
• Distribution of Risk
• Value-Added
• Financing Solutions
• Benefits to Public
• Expansion of SB/DBE Opportunities
• Apprenticeship/Mentorship/Job Creation
• Technology Enhancements

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Scope innovations were investigated to expedite
the schedule

• RFP
• Terms and Conditions for each phase
• Development
• Design Build
• Operations Maintenance
• Budgets, Schedules Technology
• Design and build to budget requirement
• Best technology we can afford
• Schedules aggressive but achievable
• Schedule incentives

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METRO encouraged out-of-the-box thinking to
increase project value

• Value-Added Concepts
• Partnership
• Private sector innovation
• Reduce METRO Costs
• Reduce Program Schedule
• Improve Quality
• Share Risk
• SBE/DBE/Stakeholder/Community Outreach/Business
  Assistance
• Received 3 proposals on September 29, 2006

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Received proposals from all three prequalified
teams

• 3 Proposals received September, 2006
• Bayou City Transit Team (Fluor/Balfour
  Beatty/ACI)
• Houston Transit Solutions Team (Parsons/KBR/Veolia
  )
• Houston Transit Partners (Washington
  Group/Granite)

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The evaluation process was professional and
unbiased

• Confidentiality and Security
• Conflict of Interest Forms
• Confidentiality Agreements
• Secured Proposal Room
• Document Control Process
• Evaluation Process
• Responsiveness
• Pass/Fail
• Technical Review
• Scoring

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Technical committees reviewed sections and made
perceptive observations

• Technical Subcommittees
• Commercial and Contractual
• Management and Technical
• Operations and Maintenance
• Cost and Value-Added
• Evaluation Selection Committee
• Selection made December, 2006

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Future Challenges

• Transition to Design-Build Phase
• Multi-year performance contacts for engineers
• Successful negotiation risk exposures
  multi-year contracts
• Professional liability
• Errors and Omissions
• Design submittal delays
• Comment resolution
• Ongoing management of multi-firm design teams
• Performance (cost) exposure for untested 3rd
  party design review processes during D/B

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QUESTIONS AND ANSWERS