Arizona DOT Announces Procurement Decision for South Mountain Freeway Project

by Nossaman LLP
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The Arizona Department of Transportation announced today its decision to deliver the $1.9 billion South Mountain Freeway Project under a single design-build-maintain public-private partnership.  While there will be a long-term maintenance component, ADOT, in collaboration with the Maricopa Association of Governments and the Arizona Division of the Federal Highway Administration, has decided to use available public funds together with public financing to pay for the project.
 
ADOT received an unsolicited proposal for the project more than a year ago.  Under its P3 regulations, it proceeded with a detailed analysis of the unsolicited proposal, concluding that the proposed acceleration of the project through a single contract had merit.  ADOT, with the assistance of its consultants HDR, PFM and Nossaman, then undertook a risk-adjusted cost assessment and value for money analysis, examining and comparing six different project delivery methods ranging from traditional design-bid-build with delivery of the project in separate segments, to a design-build-finance-maintain availability payment approach.  The quantitative results of the value for money analysis were tightly grouped and non-quantitative considerations received considerable discussion and analysis.

Prior to making its decision, ADOT and its partner agencies sought industry input.  ADOT issued a request for information and held an industry forum in February 2014 to garner industry views on a range of pertinent questions.  Weighing this input together with the quantitative and qualitative considerations in the value for money analysis, ADOT and its partner agencies determined that the DBM alternative will provide the best value for Arizona taxpayers, will provide effective mitigation of risk and will be the most efficient delivery option.
 
The environmental work on the South Mountain Freeway Project is ongoing, and the Final Environmental Impact Statement (FEIS) is expected in mid to late September.  ADOT’s announcement makes clear that a Request for Qualifications will only be released if a build alternative is recommended under the FEIS.  If it issues a RFQ, ADOT expects to provide a six-week period to respond, with shortlisting within four weeks after it receives statements of qualifications.

Contact projects@azdot.gov for inquiries about the project and the procurement process.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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