The only thing that surprises me about Chap Petersen's proposal to open up huge transportation projects to competitive bidding is that it's even necessary at all. I mean, how could we not have competitive bidding on projects that spend millions, or even billions, of our tax dollars? How could anyone could possibly be against competitive bidding?
Peterson said his bill rose out of the controversy over the Tysons tunnel, where supporters wanted to carry a three-mile segment of the rail through Tysons Corner. Critics argue one reason the tunnel can't be built is because of the state's refusal to reverse a "no-bid" contract with Bechtel Infrastructure and Washington Group International that calls for an aerial track. Gov. Tim Kaine said he killed the tunnel idea because it was too expensive."There was lot of discomfort in the community over the sole-source contract with [the firms], and people felt like the process had not been competitively bid," Peterson said.
Well, yeah, I'd think there would be a "lot of discomfort in the community" over simply handing "Big Dig" Bechtel billions of dollars without any serious competition or open bidding. I urge everyone to strongly support Chap's SB449, to require competitive bidding on "all facets of any project having an aggregate value in excess of $1 billion undertaken pursuant to the Public-Private Transportation Act of 1995 (PPTA)." This is basic commonsense for the Commonwealth.
Thanks for drawing attention to SB 449, applying the state's competitive bidding laws for large public-private projects. Obviously, this bill comes from Tysons Rail and the community's concern over that process. In the last few days, I've had multiple conversations with Secretary Homer on this subject. We agree to disagree on some issues. However, according to the Secretary, there is one important fact to clarify: there were original competitive proposals for the Tysons rail project -- those were eventually rolled into one contract that is now the proposal before the FTA. Again, I'm not defending the entire process but want to be fair on that point.
*December 15, 1998 - Raytheon submits unsolicited PPTA conceptual proposal starting the PPTA process with the Commonwealth of Virginia. Raytheon proposes a "guaranteed fixed-price design-build operate maintain contract (DBOM) for BRT" and a "guaranteed fixed-price for final design of the proposed rail system." Raytheon also proposes to "provide a fixed-price proposal to build, operate, and maintain the rail system" after the conclusion of the final design of rail.*December 20, 1998 - Commonwealth advertises a 30-day notice/response period soliciting competing proposals for the "Dulles Corridor Transportation System" - no additional detail is provided or requested (notice is advertised in only one national paper and no international papers).
*January 15, 1999 - Tysons-Dulles Corridor Group (TDCG), which includes Bechtel and West Group, submits a "competing" PPTA conceptual proposal prior to the 1/18/99 deadline. TDCG proposes a "Two Part" comprehensive agreement, each Part with its own detailed proposal and negotiation -- initial NEPA work and design as Part 1, an option on Part 2, but no fixed-price on Part 2 until Part 1 is complete.
*July 13, 1999 - Each proposer makes an oral presentation to PPTA Initial Review Committee.
*July 16, 1999 - Raytheon is informed that its "proposal" is being "forwarded to the Commonwealth Transportation Board (CTB) for conceptual approval." TDCG is informed that the Raytheon "proposal" alone is being "advanced" for conceptual approval. (NOTE: This selection marks the end of any further "competition" in the PPTA process as it has been applied to the Dulles Corridor project.)
*October 27, 1999 - Raytheon recommends to the Commonwealth to include Bechtel on their team.
*February 17, 2000 - CTB moves to advance Raytheon proposal to PPTA Advisory Panel.
*August 2000 - CTB formally advances Raytheon proposal to PPTA Advisory Panel for review and evaluation.
*October 26, 2000 - After CTB action, Raytheon adds TDCG members to its team (i.e. both "competitors" win), with the Commonwealth's consent, forming the Dulles Transit Partners team (DTP). Washington Group International subsequently buys Raytheon.
*October 2000 - DTP submits "first detailed proposal" to the Commonwealth. (Note: No further competition.)
*February 5, 2001 - PPTA Advisory Panel acknowledges DTP as successor-in-interest to Raytheon.
*February 2001 -- PPTA Advisory Panel recommends a comprehensive agreement for "financial planning and preliminary engineering" only.
*April 2001 - Commonwealth however determines it cannot execute a comprehensive agreement for anything less than the "complete" Dulles Corridor "Rapid Transit" Project. (Note: Why?)
*April 2001 - Commonwealth engages DTP under a separate sole-source contract to develop preliminary financial and implementation plans for the Dulles Corridor Rapid Transit Project.
*April 2001 - Commonwealth issues Revised PPTA Implementation Guidelines.
*June 2001 - DTP venture is formalized.
*January 18, 2002 - Landowners Economic Alliance for the Dulles Extension of Rail (LEADER) is formed with former Governor Linwood Holton and former Senator Charles Robb as co-chairmen to examine the use of a tax district to fund a portion of Fairfax County's share of the project.
*March 26, 2002 - Secretary Clement affirms support for the project and use of the PPTA process and directs the project director to request a detailed proposal from DTP.
*April 2, 2002 - Commonwealth requests a detailed proposal from DTP for future work on the project.
*May 31, 2002 - DTP submits "second detailed proposal" to the Commonwealth. (Note: No further competition.)
*December 5, 2002 - PPTA Advisory Panel (chaired by then Deputy Secretary Homer) uses the April 2001 PPTA Guidelines to evaluate the "second detailed proposal" and identifies the Commonwealth's ability to terminate any comprehensive agreement with DTP at various stages (including at the end of preliminary engineering, before start of design-build) as a key feature. PPTA Advisory Panel also summarizes DTP's "second detailed proposal" as having an outdated financial plan (+ a year old); a preliminary design-build term sheet "unacceptable as a starting point for negotiation;" and a business objective described only as "profit," i.e. no "return on investment" because no private investment is proposed. (Note: No further competition.)
March 18, 2003 - Commonwealth commences negotiation of a comprehensive agreement with DTP. (Note: No further competition.)
*April 1, 2004 - Commonwealth is informed of West Group's withdrawal from the DTP venture.
*June 10, 2004 - FTA approves Phase I to move into Preliminary Engineering noting the provisions ("suggested by FTA") in the planned comprehensive agreement that give the Commonwealth the ability "to end its relationship with DTP with regard to future stages of the project development and construction."
*June 11, 2004 -- Commonwealth and DTP sign a Comprehensive Agreement for the Dulles Corridor Rapid Transit Project. Agreement provides DTP the right to provide preliminary engineering and development services to the project - the price for these services for Phase I is fixed at +$52.5 million. Agreement gives DTP the right to negotiate a sole-source, no-bid contract for design-build work after the conclusion of preliminary engineering. If DTP's price is turned down, a penalty might be owed (under some circumstances) and the design-build work goes to competitive bid. In any case and at any time, the Agreement provides the Commonwealth the right to terminate the agreement for Public Convenience at its sole discretion (see recommendations of FTA 6/10/04 and PPTA Advisory Panel 12/5/02 above). If termination occurs prior to "Notice-to-Proceed" for design-build work, the maximum penalty (if any is due) is repayment of certain pre-agreement costs and an incentive fee; if termination occurs after "Notice-to-Proceed" for design-build work, the penalty is calculated by a more costly formula. (NOTE: There has been no competition on any aspect of the project since the conceptual proposal phase five years earlier. In fact, the final Comprehensive Agreement awarded to both "competitors" has most of the features of Tysons-Dulles Corridor Group's conceptual proposal for a "Two Part" contract which "lost" in the "competitive" phase of the PPTA process (12/98-7/99). Raytheon's conceptual proposal for a "guaranteed fixed-price design-build operate maintain (DBOM) contract" which "won" in the "competitive" phase is completely gone in the final agreement.)
*September 25, 2006 -- Fairfax County Board of Supervisors votes unanimously to send a letter to Governor Kaine requesting a meeting of the DCAC, requesting that critical project features be restored, and requesting that the project be put to competitive bid.
*October 2006 - MWAA assumes lead role in negotiating the DTP design-build contract for Phase I.
*October 2006 - Commonwealth's Project Management Plan states that $67.8 million has been spent on Phase I Preliminary Engineering work. Phase I Final Design work is estimated at an additional $119 million.
*October 31, 2006 - DTP, MWAA, and Commonwealth establish "terms and conditions" of DTP design-build contract for Phase I.
*December 18, 2006 - DTP is scheduled to submit a complete "firm fixed-price proposal" for the Phase I design-build contract (negotiated 10/31/06, see above) to the Commonwealth and MWAA but only submits partial pricing materials.
*January 8, 2007 - Fairfax County Board of Supervisors unanimously calls for more competition, calls for the tunnel to be considered with the aerial in that competitive process, calls for transparency and accountability, calls for Fairfax County to have more control and a decision making role in major project decisions (as a major funding partner), and calls for FTA to review the tunnel and to protect the $900 million federal commitment regardless of which alternative is finally selected. Chairman Connolly states in an open letter that "a tunnel is preferable to an aerial alignment, and that a project this large should be put out for a competitive bid."
* January 16, 2007 - MWAA (and VDRPT) is scheduled to complete +30-day evaluation of DTP's complete firm fixed-price design-build proposal for Phase I. (Note: DTP's complete firm fixed-price for Phase I design-build not yet submitted - status unknown??)
* January 16, 2007 - Funding commitments expected from Fairfax County and other funding partners +30-days prior to finalizing DTP's design-build contract. (Note: DTP's complete firm fixed-price for Phase I design-build not yet submitted - status unknown??)
*February 12, 2007 - MWAA (and VDRPT) is scheduled to complete design-build negotiation with DTP for Phase I. Contract terms are said to be changed from 10/31/07, see above, to "reduce price," i.e. reallocating risk from DTP to public sector funding partners).
*March 16, 2007 - MWAA is reported in the Washington Post to set April 5, 2007 as the "deadline" for completing DTP contract negotiations advising DTP that the price is too high. DTP fixed-price proposal is said to be presented in a massive, difficult-to-comprehend format involving twelve (12) large volumes with additional multi-volume addendums. It is not clear whether Fairfax will be given proper review time as provided in the VDRPT's schedule: 1) a 30-day review of contract terms and price prior to being asked for a funding commitment plus 2) a subsequent 30-day period for finalizing the DTP contract.
*March 30, 2007 - Commonwealth and MWAA announce design-build deal with DTP in which only $1.1 billion (41%) out of a $2.4-$2.7 billion project will be built on a fixed price basis. [Note: Public officials had previously stated that they would procure a "firm fixed-price" for the entire job.] Later disclosure at a Fairfax County public meeting in June 4, 2007 shows that the Phase budget is now $2.647 billion with a completion date of 2013 (compared to a $2.065 billion budget and 2011 completion date a year earlier in March 2006).
*March 31, 2007 - MWAA is scheduled to execute design-build agreement with DTP - deadline missed, executed June/July 2007.
*April 4, 2007 - DTP is scheduled to begin acquisition of "right-of-way properties" - 4/4/07 thru 1/8/08 (assumes r.o.w. land acquisition period of 9-months) - deadline missed, now scheduled for July/August 2007.
*April 24, 2007 - FTA is scheduled to approve entry into Final Design for Phase I - deadline missed, now scheduled for August/September 2007.
*May 23, 2007 -- FTA sends a letter to TysonsTunnel.org a) rejecting the request to reopen the NEPA environmental review of the project to give full consideration of the tunnel and b) stating that remedies and relief concerning "full and open competition" on the design and construction contract must first be exhausted with the State. Subsequent notice of the decision in the Federal Register sets a 180 day clock for legal challenge of the decision.
*June 6, 2007 -- MWWA Board approves DTP Design-Build Contract and responds to criticism of secrecy by ordering that the contract be made available to the public (with certain redactions for project sensitive information).
*June 11, 2007 - MWAA posts draft DTP Design-Build Contract on its web site.
*June 14, 2007 - Former Secretary Coleman sends a letter to Fairfax County citing areas of unusual risk to County DTP design-build contract and contrasting it with typical provisions in a standard WMATA fixed-price contract which include among others: inappropriate secrecy provisions; award of the construction contract without a fixed-price; award of the construction contract prior to final design approval (an area of major cost overruns in the "Big Dig" project -- $730 million of overruns); a supposed "fixed-price" portion of the contract which really is not, instead adjusting automatically to price changes of major construction items, e.g. steel and concrete; closed and uncompetitive procurement procedures for subcontractor "allowance" work; award of utility relocation work under separate contract and without a fixed-price; loose provisions to control "differing site condition" costs (an area of major cost overruns in the "Big Dig" project -- $357 million of overruns); "Concurrent Non-Project Activities" which are expected to be designed and built as part of the project but have an unclear relationship to the proposed contract; provisions allowing the contractor to cause the conditions for its own Change Orders and Delays Claims - i.e. "to write their own ticket" -- increasing cost to the taxpayer.
*June/July 2007 - MWAA executes DTP Design-Build Contract prior to FTA Final Design approval which contains significant penalty clauses to the owner if the project does not advance on a certain schedule.
*July 27, 2007 - The US-DOT Inspector General ("IG") issues a Baseline Report on the project. The report validates everything that the critics have been saying about the project including (among other concerns) citing "no competition" and "timing of contract award" as a primary factor in significant cost increases and schedule delays (a $1.2 billion increase and a 4-year delay in just a 27 month period) and even likening the project to the Big Dig in Boston. The IG Report further identifies the Seattle Central Link Light Rail Project as a possible model for clearing up the problems on the current project. Rather than receive a "no" from the FTA for funding, the Seattle project took a year or so "timeout," came back cleaned up and completely restructured, and is now back "on track."
*July/August 2007 - MWAA is scheduled to allow DTP to begin acquisition of "right-of-way properties" for the aerial project under the current Comprehensive Agreement.