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Suggested Citation:"VIII. THE RIVER LINE (SOUTHERN NEW JERSEY LIGHT RAIL TRANSIT SYSTEM)." National Academies of Sciences, Engineering, and Medicine. 2012. Competition Requirements of the Design/Build, Construction Manager at Risk, and Public-Private Partnership Contracts—Seven Case Studies. Washington, DC: The National Academies Press. doi: 10.17226/14639.
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Page 33
Page 34
Suggested Citation:"VIII. THE RIVER LINE (SOUTHERN NEW JERSEY LIGHT RAIL TRANSIT SYSTEM)." National Academies of Sciences, Engineering, and Medicine. 2012. Competition Requirements of the Design/Build, Construction Manager at Risk, and Public-Private Partnership Contracts—Seven Case Studies. Washington, DC: The National Academies Press. doi: 10.17226/14639.
×
Page 34
Page 35
Suggested Citation:"VIII. THE RIVER LINE (SOUTHERN NEW JERSEY LIGHT RAIL TRANSIT SYSTEM)." National Academies of Sciences, Engineering, and Medicine. 2012. Competition Requirements of the Design/Build, Construction Manager at Risk, and Public-Private Partnership Contracts—Seven Case Studies. Washington, DC: The National Academies Press. doi: 10.17226/14639.
×
Page 35

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33 est of certified DBEs by providing adequate project in- formation about the plans, specifications, and require- ments of the contract and list all project drawing and documents. The contractor had to solicit the interest of certified DBEs and allow for 2 consecutive weeks for DBEs to respond to the solicitation. The City of Portland and TriMet had identified spe- cific areas of construction activities that would be po- tential subcontracting opportunities for DBEs. The con- tractor was required to describe how it would allocate the subcontracting opportunities to a broad range of qualified DBE firms to maximize the number of con- tracts in ranges of $10,000 to $50,000 and $250,000 to $1 million. The contractor was stipulated to document in writ- ing all DBE solicitations, list them in the DBE docu- mentation form, break out contract work items into economically feasible units, and identify opportunities to maximize DBE participation from Portland metro- politan areas. The contractor was encouraged to utilize small contract packages to maximize DBE participa- tion. The contractor was required to negotiate in good faith with interested DBEs and record these negotia- tions as evidence, which had to be made available for TriMet's review. The contractor was required to further conduct a thorough investigation of a DBE’s capability before re- jecting it as unqualified. The contractor was required to make efforts in assisting interested DBEs in obtaining financial support such as bonding, lines of credit, or insurance, and material support such as necessary equipment, supplies, material, or other services as re- quired by the contractor. Contractor had to maintain records of all subcontracts entered into with DBEs and records of materials purchased from DBE suppliers. Dispute Resolution The contract stipulated that unresolved disputes be- tween the contractor and TriMet's project manager be referred to TriMet’s Director for Project Implementa- tion, Capital Projects and Facilities Division (Project Director). If the dispute still remained unresolved, it had to be referred to TriMet's Executive Director of the Division for resolution. The Executive Director had to then issue a written decision to resolve the dispute. Pending resolution, the contractor had to proceed as directed by the Project Director. If the dispute remained unresolved at this stage, then the contractor and TriMet were required to submit the dispute to media- tion to resolve it. In such an event, the parties were required to act in good faith in a nonbinding mediation process. Mediation was a condition precedent to litiga- tion. The mediator would be selected by mutual agree- ment of the parties, but in the absence of such agree- ment, each party would select a temporary mediator, and those mediators would jointly select the permanent mediator. All costs of mediation would be borne equally by the parties. Project Performance The contractor was compensated for the preconstruc- tion services and construction services separately in the form of a predetermined lump-sum fee. The total com- pensation to the contractor for preconstruction services was set at a ceiling of $446,100. The total fee for com- pensation for construction services was set at a ceiling of $5,390,000 in the form of a fixed fee. As per the terms of the contract, the contractor had to provide and pay for the task orders, labor, facilities, and services neces- sary for the execution and completion of the contract work. The contractor was reimbursed at predecided unit prices for the task orders. The contractor was re- sponsible for supervision of project performance and for the selection of means of contract performance. The total cost for the Portland Mall Segment was approxi- mately $220 million, and the segment opened for ser- vice in September 2009. When combined with the 1-205 segment, the total cost for this phase was $575.7 mil- lion. At the time of this digest, no preaward claims were filed, and no postaward claims have occurred. However, this project encountered changes primarily due to un- anticipated utility relocations and differing subsurface conditions. VIII. THE RIVER LINE (SOUTHERN NEW JERSEY LIGHT RAIL TRANSIT SYSTEM) Project Overview Upon its opening in 2004, the New Jersey Transit Corporation (NJ Transit) renamed the Southern New Jersey Light Rail Transit System (SNJLRTS) the River Line. This system provides 34 mi of new LRT service from Trenton to Camden along the Delaware River, running roughly parallel to Route 130. It connects rid- ers to the larger transportation networks of NJ Transit, Amtrak, Port Authority Transit Corporation, and Southeastern Pennsylvania Transit Authority (SEPTA). The River Line consists of 20 stations, 3 park-and-ride facilities, 17 bridges, and 50 grade crossings along the Delaware River corridor; the system also uses ad- vanced, articulated, clean-burning-diesel, light-rail ve- hicles. With the goal of accelerating the availability of ser- vice and integrating the design, build, and operations process, NJ Transit pursued a DBOM approach for this project. NJ Transit awarded the contract to Southern New Jersey Rail Group, LLC (Rail Group), a limited liability corporation consisting of Bechtel Corporation and Bombardier, from a field of five prequalified bid- ders. Rail Group provided the low bid of $605 million to design and build the rail system as well as operate and maintain it 10 years after the project reached revenue- ready status. The original fixed price for the design and construction services totaled $441 million, while the 10- year O&M component totaled $153.5 million.

34 Procurement Scope of Work The contract documents for SNJLRTS stipulated the project’s scope as the design, construction, operation, and maintenance of the Initial Operating Corridor from Camden, New Jersey, to Trenton, New Jersey. The de- sign portion of the scope includes producing design drawings, specifications, and calculations. All portions of the design scope must comply with the Mandatory Requirements of the contract and referenced standards, codes, and legislative requirements. Reference Docu- ments were also provided to the proposers for informa- tional purposes only. The construction portion of the scope includes the manufacture, fabrication, and instal- lation of all elements needed to operate an LRT system in the initial operating corridor. The elements of the design and construction scope included the following: • Earthwork. • New and rehabilitated track. • Drainage structures and facilities. • New and modified roadways and grade crossings. • New and rehabilitated structures. • Station stops and parking areas. • Landscaping. • Utility relocations and protections. • Light rail train car storage and maintenance facili- ties. • Control center. • Traffic signals. • Signage and striping. • LRT cars. • Signal and communications system. The scope of the operations portion of the project in- cludes the management and administration of the sys- tem, vehicle operation, full-time dispatching, safety, and security. The track configuration, fleet size, and system design and capabilities had to support a revenue service headway of 15 minutes during peak periods and 30 minutes during off-peak periods in each direction of the Initial Operating Corridor. The maintenance portion of the project scope in- cluded responsibility for maintaining: • LRT cars. • Track. • Signaling equipment. • Grade crossing equipment. • Communications equipment. • Telephones. • Buildings and structures. The scope also addressed street-running sections of the SNJLRTS, which require maintenance for affected highway systems and road traffic signals, associated signal and crossing equipment, and permanent road markings. The contractor operations agreement is for 10 years after the completion of the construction. Additionally, the contract stated that the contractor must obtain and pay the cost of all necessary govern- ment approvals to execute the work. The contractor has the responsibility to maintain all stipulations for gov- ernment approvals as well as to perform any required environmental mitigation in the owner’s permits. Process Overview NJ Transit first solicited statements of qualifications from interested consortia and firms. A key aspect of the prequalification process was the prohibition of propos- ers requiring exclusive agreements of diesel light-rail car manufacturers; this condition was included to per- mit car suppliers to participate in multiple teams, thereby increasing the number of potential proposers. Prequalified teams were then invited to submit an initial, unpriced proposal consisting of an executive summary, management proposal, technical proposal, O&M proposal, identification of cost drivers, and un- priced project schedule. NJ Transit distributed the ini- tial proposals to technical subcommittees to assess con- formance with instructions, general satisfaction of project requirements, evidence the bidder can deliver the project, compliance with goals for minority- and women-owned business enterprise participation, and any proposed alternatives. NJ Transit maintained the sole discretion to invite bidders to confidential meetings regarding initial proposals, regardless of technical sub- committee assessments. Subsequently, proposers submitted final proposals and price proposals. The final proposals included an executive summary as well as management, technical, and O&M proposals. The price proposal included a price proposal, DB escrow documents, and O&M escrow documents. Any unauthorized exceptions to the re- quirements were cause for bid rejection. The technical subcommittees then sent compliant proposals to the evaluation committee for consideration for selection. Selection and Award Criteria NJ Transit’s evaluation committee reviewed the final proposals according to pass/fail criteria and assessed criteria. The pass/fail criteria included acceptable com- pany structure, bid guarantees, performance commit- ment guarantees, financial requirements, and technical requirements. The assessed criteria are depicted in Table 12.

35 Table 12. Southern NJ Light Rail Assessed Criteria Criterion Subcriteria Technical Approach • Safety in design and operation • Quality revenue service • Integration of components, sys- tems, civil and building works, and operations • Quality of product and features • Proposal for achieving public ac- ceptance • Life-cycle reduction techniques Quality of Team and Ap- proach • Ability and commitment to project safety, quality, schedule, manage- ment, and exceeding system assur- ance requirements • Experience Benefit to the State • Financial and/or quality of life benefit • Ability and commitment to expan- sion and development provisions The evaluation committee assigned scores to each technical proposal with a maximum achievable score of 300. The RFP did not stipulate any weight for the final proposal criteria nor any method or procedure for as- signing scores. If the proposer’s proposal was considered to be “en- tire and complete and in full and total compliance,” the evaluation committee opened the price proposal. The prices were evaluated using the following formula: [ 1 – (Bid Price – Low Price) ] x 700 = price score (Low Price) Bid Price = Proposer’s price Low Price = Lowest price for any submitted price proposal The committee combined the price scores with the technical scores to generate a composite score. The highest possible composite score was 1000. The bidder with the highest composite score was declared the ap- parent low bidder, and its price proposal underwent a detailed examination. Each proposer assumed proposal preparation costs, regardless of whether or not their proposal was accepted. NJ Transit, at its sole discretion, held the right to re- ject any and all proposals or bids, to waive any minor informalities or irregularities in any of the proposals, and to award the contract to the proposer that it deemed most advantageous. It did not have to award the contract to the lowest bidder nor did it have to make an award at all. Key Contract Provisions Scope, Price, and Schedule A basic, but very significant, aspect of this contract was the language used relative to scope of services, price, and schedule. The contract stated: The parties intend this Contract to be a fixed price con- tract with respect to the design/build services to be pro- vide by [Rail Group], obligating [Rail Group] to perform all Work necessary to obtain completion by the deadlines specified herein, subject only to certain specified limited exceptions. [New Jersey Transit] and [Rail Group] intend for this Contract to significantly limit the opportunity for price increases or extensions of the Guaranteed Completion Date, and to provide for [Rail Group] to bear some risks which are typically the responsibility of the owner of a project (including certain events typically considered force majeure events and design responsibilities). [Rail Group] has agreed in this Contract to assume such responsibili- ties and risks and has reflected the assumption of such responsibilities and risks in its bid price. [New Jersey Transit] has provided [Rail Group] certain Mandatory Documents relating to the Work. [Rail Group] is required in all events to comply with the requirements set forth in the Mandatory Documents. [New Jersey Transit] and [Rail Group] both intend for [Rail Group] to assume full responsibility and liability with respect to fi- nal design, construction and operations and maintenance of the Project. These excerpts from the contract became quite sig- nificant as the project progressed and design and con- struction issues were encountered. Suspension and Termination The owner may decide to suspend, at any time and for any reason, the DB work for the project. The owner also assigns the length of the suspension according to its convenience, but must compensate the contractor for any expenses resulting from such a suspension. Liquidated Damages The contractor guarantees a completion date. In the event that the contractor does not achieve revenue- ready status by the guaranteed completion date, it must compensate the owner $25,000 a day up to a maximum of $10 million. Such payment by the contractor does not excuse the contractor from liability or any other breach of contract requirements. Operations and Maintenance During the operating period, the contractor must perform according to owner-established policies for sta- tion stops, hours of service, levels of service, public and media information, and interfacing with the public. Furthermore, the owner has the responsibility for hir- ing and training all fare enforcement officers, as well as responsibility for maintaining and replacing all fare collection equipment.

Next: IX. COMPARATIVE ANALYSIS AND DISCUSSION »
Competition Requirements of the Design/Build, Construction Manager at Risk, and Public-Private Partnership Contracts—Seven Case Studies Get This Book
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TRB’s Transit Cooperative Research Program (TCRP) Legal Research Digest 39: Competition Requirements of the Design/Build, Construction Manager at Risk, and Public-Private Partnership Contracts—Seven Case Studies explores the use of various project delivery methods, including design-build, construction management at risk, and a number of options considered public-private partnerships, through the examination of seven separate construction projects in various parts of the United States.

The examinations of the seven selected projects are designed to show how particular, and often unique, problems were addressed in each project by utilizing a wide variety of procurement and delivery methods.

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