2011 Nevada Transportation Conference Welcome everyone. Looks like I am the last session. I am going to run through NDOT’s Pioneer Program which includes all of our Alternative Project Delivery methods. Then open it up for any questions you may have.

Pioneer Program The Pioneer Program is a result of NDOT’s efforts to find solutions to our transportation funding shortfall and to meet the state's growing needs All innovative delivery projects Design Build (DB) Construction Manager/General Contractor (CMGC/CMaR) Public Private Partnerships (P3 - DBF, DBFOM, etc) We developed our Pioneer Program based on recommendations from the Blue Ribbon Task force to pursue Public-Private Partnerships. It has evolved to include all of our alternative project delivery methods. With these delivery methods we have developed guidelines for the different roles and responsibilities of all involved.

Pioneer Program Common themes for the Pioneer Program are shown on this slide. What you don’t see in this list is low bidder. The lowest bidder doesn’t necessarily get the project. Instead, the proposing team that has the Best Value proposal does.

Organizational Structure Transportation Board Director Pioneer Program Director Deputy Director–Chief Eng Pioneer Program Manager (Project Management Chief) Project Manager External Consultants Technical, Legal, and Financial Unsolicited Proposal Advisory Committee Walk through the organizational structure and emphasize which parts of org chart may interest the audience. Oversight by Board. Consider discussing what the “Advisory Committee” does as well as what each of the “teams” do. These are unique projects, some we’ve never done before (in the case of P3); therefore, we need consultant experts. Project Review Team Development Team Implementation Team

Pioneer Program Guidelines Detailed internal project development and delivery processes Delivery method selection Procurement: process, roles and responsibilities and required approvals (Board, FHWA, Director, etc) Stipend criteria NDOT does DBB really well and can probably do it while asleep because it is so familiar. Pioneer Program projects comes with new and different roles and responsibilities for all involved in the development and delivery of them. These guidelines will be a tremendous support for each time we go through this process. The guidelines provide guidance on delivery method selection and how to calculate a stipend. Allows NDOT to own the ideas of unsuccessful proposers and incorporate them into the ultimate design/project, provided the unsuccessful proposer accepts the stipend by signing the “document”. Provides for a minor amount of compensation for the work that goes into preparing these proposals. Could say that proposers can spend millions on these, and the stipend doesn’t cover all costs by a long shot. Stipend for I-80 which was approximately a $70M project was $100K.

Traditional vs Innovative Delivery Construction Preliminary Design Final Design Bid DBB Preliminary Design Procurement Final Design (Risk & constructability) Legend DB Construction NDOT Contractor Walk through process. Emphasize when “design” is done jointly with NDOT (CMGC) and when responsibility shifts to the contractor (DB team). Emphasize that design doesn’t have to be complete for construction to begin thus the time savings. Preliminary Design Procurement Final Design CMGC Contractor Input (Risk & constructability) Construction Time Savings

NRS 408 Design Build Costs less than another method; or Completed sooner than another method; or Project is unique, highly technical and complex Transportation Board/FHWA approvals required One project per fiscal year between $5 - $20 Million Can’t use DB for any project we feel like. It must meet 3 criteria as specified in NRS 408. Approvals are required. We can do several DB projects >$20M per fiscal year but we can only do 1 DB project <$20M per fiscal year. It this year’s case, that was the I-15 ITS DB project.

Projects Design Build NDOT design build contracts I-15 North Las Vegas - Complete I-15 South Las Vegas – Under construction I-15 ITS - In procurement I-15 Mesquite - In procurement I-80 Reno - In procurement Board Meeting is April 4 Currently negotiating final contract terms for our 3 DB projects with the design builders.

Construction Manager / General Contractor (CMGC) Plan NDOT Design NDOT Design Consultants Contractor Negotiate GMP Generally explain the CMGC process. Explain that “design” can be done in house or by a consultant. GMP Not Achieved Build Contractor Bid Build

CMGC Process Max Price Partnering Risk Assessment Design Workshop Estimate Risk Mitigation Max Price Partnering Explain the overall process. The entire team participates in the design workshops where the project is discussed, risks are identified and mitigated. Explain what the ICE is and what their role is in this process: Three separate estimates are prepared and compared a few times along this process. The contractor’s (opinion of probable construction cost), the designer’s and then the ICE’s. Approach to prices are discussed (assumed a hot plant x miles from the project, assumed excavated material can be re-used, etc), but specific unit prices ($100/ton of pbs) are not discussed. Estimates are compared and when close enough, the GMP is established and the contractor gets to work. NDOT will establish formal partnering with the CMGC. Conduct design workshop along with risk identification and assessment Facilitated by staff experienced in design and construction ICE will be attending Agree on risk allocations Prepare Project Construction Costs: OPCC ICE Designer OPCC 1 OPCC 2 OPCC 3

NRS 338.169 CMGC Enabling legislation exists UDOT, ADOT, CalTrans Public Works Board Local cities & counties Excludes NDOT UDOT, ADOT, CalTrans FHWA – Every Day Counts Initiative Assembly Bill 69 Explain legislative restrictions and our efforts to use this delivery method. Explain that this isn’t new and that our neighboring states are using this method.

Design & Constructability Improve constructability, improve quality, reduce change orders and overruns, identify risk and assign an owner Less time/detail required to communicate design (DB) NDOT owns/controls design (CMGC) Why innovative delivery vs traditional

Innovation NDOT can select innovation independent of contractor experience or abilities Contractor participation is expected to encourage innovation Contractor participation is expected to moderate the risk of new technology innovations Why innovative delivery vs traditional NDOT has never done Accelerated Bridge Construction (ABC). Now, thanks to the I-15 Mesquite DB project where innovation is encouraged, NDOT gets to try this and not at our risk.

Schedule Procurement takes time Overall less time in design and construction Design is tailored to contractor’s abilities Construction can begin before design is complete Good for long lead items Phased contract MOT improves with contractor input Why innovative delivery vs traditional

Risk Contractor will help identify and manage risks Transfer some risks to contractor & shared risks Allocation of risk is based on party that is best equipped to handle that risk Why innovative delivery vs traditional

Public Relations Faster delivery time Improved Quality Greater opportunities for innovation Reduced impacts to the traveling public Why innovative delivery vs traditional Get it done quicker, more accurately and for less: win-win for the public

Cost Contractor input into MOT and utilities should reduce cost Risk transfer comes with a cost We are paying for contractor involvement during design phase Stipend costs Why innovative delivery vs traditional

The P3 Spectrum Fully Public Fully Private Build-Operate-Transfer Design-Build-Finance Operate-Maintain Design-Build Finance Explain the spectrum and different types of P3 projects: they can be mostly public with some private or the mostly private with some public oversight. In the U.S., unlike other developed countries, governments have traditionally provided highway infrastructure. However, in the 1980’s this tradition began to change with early attempts by the states of California and Virginia to involve the private sector in developing new toll roads. Since then, there has been gradual but continual growth in the number of states who have implemented Public-Private Partnership programs for delivering new highway infrastructure Selected P3 Objectives: Accelerated delivery of critical highway infrastructure. Improved risk allocation. Achieve lower life cycle costs. Access improved skills, technologies, innovations, knowledge, resources, etc. Access new sources of capital. Operations & Maintenance

How are P3s Different? Public Private Partnerships Delivered in different ways Design, Build, Operate, Maintain, Finance Long term agreements Tolling Risk transfer Payment structure Unsolicited vs solicited proposals Senate Bill 83 Explain different ways P3 can be delivered. These can be long term agreements, up to 10, 20, 30, 40 etc years They may or may NOT involve tolling Risk of whether or not users choose to pay a toll to enjoy a predictable, repeatable travel time, so private partner can recoup his investment may be born entirely on the private partner. Payment structure can vary from NDOT having to invest a large up front, to annual payments, to the private partner paying NDOT for the right to toll. Can be unsolicited or solicited types of projects.

Why is the Pioneer Program Important to you? Coming to a project near you Different roles and responsibilities for everyone Could probably delete this slide…or delete the “RE” bullet/sub-bullet

Future Steps Pioneer Program Obtain approval of state legislators this Spring to utilize CMGC, solicit for P3 projects and allow tolling Immediately move forward with the next stage of project development (pending legislative approval) Scoping, screening, approval, procurement, etc.

Questions?