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21 comprising 8.1 mi of railway: a 1.8-mi Central Terminal ally, the proposer had to certify, in accordance with the Area loop, a 3.3-mi Howard Beach extension, and a 3-mi contract drawings and specifications, all structures, Jamaica Station extension. The AirTrain comes under facilities, equipment, and labor associated with the pro- the jurisdiction of the Port Authority of New York and ject. New Jersey. The Port Authority composed the contract documents and conducted the request for proposals. Process Overview The Port Authority awarded the contract in May 1998 The Port Authority of New York and New Jersey to the Air Rail Transit Consortium (ARTC), a consor- sent an RFP to several prequalified firms inviting them tium comprised of Slattery Skanska, Inc;, Koch Skan- to submit DBOM proposals for the AirTrain JFK. The ska, Inc.; Perini Corporation; and Bombardier Transit Port Authority required bidders to submit five separate, Corporation. written proposal packages: 1) Proposal Forms, 2) Man- The Port Authority secured project funding and agement Proposal, 3) Price Proposal, 4) Technical Pro- chose to pursue a DBOM agreement. The project fund- posal, and 5) Operations and Maintenance Proposal. ing came primarily from a $3 passenger facility charge An Evaluation Team comprised of Port Authority (PFC), a local tax for all outbound users from JFK air- employees and hired consultants evaluated each pro- port. The PFC funds secured financing of $1.2 billion, posal according to the selection/award criteria (see the and the Port Authority secured the remaining $0.7 bil- next section) before submitting them to the Selection lion by issuing revenue bonds. ARTC assumed respon- Committee. The evaluation process consisted of the fol- sibility for the project's preliminary engineering, design lowing steps: initial screening of proposals, nonprice completion, construction, installation, testing, demon- evaluation, price evaluation, establishment competitive stration, and operations and maintenance (O&M). The range, negotiations followed by best and final offers contract stipulated a 5-year O&M period with optional (BAFO), BAFO evaluation, and contract award. The 1-year contract extensions for up to 10 additional years. Selection Committee assigned numerical scores to each proposal by calculating the Net Present Value (NPV) for Procurement each proposal. The Selection Committee combined the two NPV calculations (NPV1 and NPV2) to compute the Scope of Work Final Net Present Value (NPVT). NPV1 represented the The request for proposals encompassed three phases: Port Authority's required payments to the proposer over 1) preliminary engineering; 2) design completion, con- the life of the project, including payments for the base struction, procurement, installation, testing, and dem- LRT system, O&M costs, and any additional costs in- onstration; and 3) contractor O&M (COM). The Port curred by special requests by the Port Authority. NPV2 Authority provided written technical provisions and represented the payments to be paid by the Port Au- limited contract drawings to proposers to provide a thority to parties other than the proposer for scope foundation for the AirTrain's design. Further, the Port items that the proposer excluded from the proposal. The Authority provided proposers with existing site and Port Authority maintained the discretion for valuing subsurface information from prior site investigations or the payments in the NPVT calculation. projects; few new site investigations were performed by The Port Authority included several disclaimers in the Authority. The technical provisions stipulated that the RFP, including: the contractor design, build/erect, install, and test: · Liability or commitment for providing passenger · Trackway. facilities charges or other revenues to assist in the Air- · Passenger stations. Train's development and operation. · Vehicles. · Obligations to select a proposer for competitive ne- · Trackwork. gotiations or even to carry out competitive negotiations · ATC system. if the Port Authority deems it better to terminate nego- · Communications system. tiations. · Supervisory control and data acquisition system. · Obligation to award or execute a contract pursuant · Traction power system. to the procurement process. · Operations, maintenance, and storage facilities. · Obligation to reimburse a proposer for any costs associated with the proposal process. The technical provisions also stipulated that the con- · Obligation to issue a notice to proceed upon award tractor operate and maintain the system, including the or execution of a contract. use of a Port Authorityfurnished fare collection sys- tem. The contract also states that the Port Authority has The contract documents required the proposer to cer- the discretion to disregard provisions in its own request tify the design of the AirTrain system according to the for proposal if it deem it appropriate in the procurement RFP's basic design criteria and contract drawings and process. agree to construct, operate, and maintain the system according to the detailed specifications, contract draw- ings, and approved contractor deliverables. Addition-
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22 Selection and Award Criteria mentation of the project; and sufficient contractual rela- After identifying the responsive proposals, the Selec- tionships with subcontractors. tion Committee reviewed the required forms included in Each proposer included Project Management Plans Package One (Proposal Forms). The Port Authority re- for Phases I and II of the project that show the pro- quired that no cost or price information appear in Pack- poser's ability to organize subcontractors, interface with age One or any of its required forms. After review of the Port Authority, manage the construction within the Package One, the Selection Committee reviewed the established criteria, maintain the project schedule four subsequent proposal packages, consisting of the within budget, and provide the necessary experience four major "Group Criteria": Management, Price, Tech- and personnel to successfully complete the project. The nical, and Operations and Maintenance. Within the proposer had to provide project descriptions for any "Group Criteria" the selection committee considered similar projects executed within 10 years of the pro- several subcriteria. The contract documents do not posal submission and descriptions of projects completed stipulate weights for each of the criteria or subcriteria, by any major subcontractor identified as a potential merely stating that the Selection Committee has the major contributor to the AirTrain JFK project. authority to assign a group percentage value based on Group Criterion 2: Price.--The Pricing Package in- the selection criteria totaling 100 percent and that the cluded the Contract Guaranty Agreements provided in weights would be assigned in terms of relative impor- the attachments to the RFP. The Selection Committee tance, with the management proposal having the most required all prices to be quoted in United States dollars, importance and the O&M proposal having the least but would consider some payments in foreign currency importance. if such arrangements showed significant cost savings Table 5 shows the group criteria (listed in order of for the overall project. The Price Proposal had to begin importance) with the subcriteria for each group crite- with an overall price summary of the fixed lump-sum rion. prices (as identified in subsequent parts of the price proposal) reported in Year of Expenditure dollars, in- Table 5. AirTrain JFK Selection Criteria cluding escalation. The first subcriterion, Phase I Pre- liminary Engineering Lump-Sum Price, included a de- tailed summary of lump-sum costs associated with each Group Criteria Subcriteria summary work category for the project: facilities design, Management 1) Financial and Legal In- systems design, project management, and program con- formation trol. Additionally, the RFP required proposers to in- 2) Proposer's Organizational clude cash flow curves for each of the work categories in Structure and Resources the engineering phase, a summary cash flow curve for 3) Proposer's Approach the entire project, and a schedule to correlate the pric- 4) Proposer's Experience ing with the project schedule for Phase I.24 Price 1) Phase I Preliminary En- The second subcriterion, Phase II Final Design and gineering Lump Sum Price Construction Lump-Sum Price, required all costs asso- 2) Phase II Final Design and ciated with the design, construction, installation, and Construction Lump Sum Price successful demonstration of AirTrain JFK. Proposers 3) Phase III Contractor Op- had to provide a lump-sum breakdown for each section erations and Maintenance of the project to correlate with the Work Breakdown (COM) Lump Sum Price Structure provided in the Management Proposal Ap- 4) Fixed Prices for Options proach. The Port Authority divided the AirTrain project Technical 1) System and Vehicle Per- into five major Line Sections: Howard Beach Station to formance Characteristics Federal Circle Station, Federal Circle Station to Cen- 2) System and Subsystem tral Terminal Area (CTA), CTA, Federal Circle Station Design and Other Features to Jamaica Station, and Project-wide. The Port Author- Operations and 1) Technical Adequacy ity required pricing information for each of 15 work Maintenance categories for each section of the total project: guideway facilities, station facilities, other facilities, infrastruc- ture and site work, utilities, track work and other Group Criterion 1: Management.--The Port Author- guideway equipment, power and supply distribution, ity required the proposing team to show the efficacy of automatic train control, communication supervisory their composition and legal structure, their ability to control and data acquisition (SCADA) and security sys- guarantee work, the viability of their financial re- tems, fare collection, vehicles, project management ad- sources, and their compliance with bonding and insur- ministration and engineering, design, construction ance requirements. The proposer also had to prove the management, and right-of-way and other environ- availability of skilled, experienced, and well-equipped mental cleanup. In addition to cash-flow curves for each design, construction, and O&M organizations; sufficient capability for technical work, production, and imple- 24 A cash flow curve typically illustrates a contractor's ex- pected or actual cumulative expenses for a project.