Contract Award for the Automated People Mover at LAX
Transcript of Contract Award for the Automated People Mover at LAX
Automated People Mover
PROJECT OVERVIEW
STAFF RECOMMENDATION
DBFOM AGREEMENT
PROCUREMENT PROCESS
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NEXT STEPS
RECOMMENDED DEVELOPER
EARLY WORKS UPDATE
Improve the passenger experience and reduce traffic congestion in and around LAX.
• Create time-certain travel options for passengers and employees
• Improve access by creating new, convenient locations for passenger pickup, drop-off, parking outside of the CTA, and more efficient access to rental cars
Connect LAX to regional public transportation infrastructure: • Rail, roadways, buses, Metro Station
Seize the opportunity for immediate and long term results through a Public Private Partnership.
• Life Cycle Cost Certainty• Partnership Approach
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Automated People MoverProject Overview
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The Automated People Mover will run on a 2.25 mile elevated guideway and create a new connection to LAXfrom public and private transportation and a new consolidated Rent-A-Car (ConRAC) facility
▪ The APM will connect 6 stations between the ConRAC and the CTA
▪ The new infrastructure is expected to reduce street traffic congestion in and around the CTA
▪ Approximately 200 passengers per train
▪ APM will run every ~2 minutes and will travel from the ConRAC to the CTA in ~ 10 minutes
▪ Ridership Capacity: 10,000 passengers/hr
▪ Cost to Ride: Free for airport users
▪ Maximum Speed of Train: 47 MPH
APM Design & Construction 2018-2023
Automated People MoverProject Overview
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APM Operation & Maintenance 2023-2048
Why DBFOM?
Creates opportunity for innovation in design, construction and operations
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Emphasizes the importance of on-time, high quality delivery and for all parties to structure work accordingly
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Aligns design, construction and operations to ensure project decisions add value around guest experience, improved asset management, sustainability, and inclusivity
Transfers some risks from LAWA to the Developer and encourages Developer to mitigate potential risks
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DESIGN
BUILD
FINANCE
OPERATE
MAINTAIN
What is DBFOM? DBFOM is a public-private-partnership (P3) contracting model that enables public sector agencies to harness private sector innovation and expertise, while sharing risks and responsibilities for financing. In exchange, private partners earn a reliable revenue stream (subject to performance.)
DBFOM
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To deliver the APM, LAWA & The Recommended Developer will enter into a 30 year DBFOM Agreement CONTRACT VALUE INCLUDES:
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DEVELOPER WILL RECEIVE:
AGREEMENT• 5 YEARS- Design & Construction (D&C)• 25 YEARS- Operations & Maintenance
(O&M)
• Construction costs, financed by Developer
• Cost of 25 Years O&M, with inflation escalation
• Cost of Developer’s construction financing
• Six Milestone Payments- during Construction
• Annual Availability Payments- during O&M, disbursed in monthly increments
Automated People MoverDBFOM Agreement
DEVELOPER’S RESPONSIBILITIES
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Developer is responsible for the design & construction of the APM System including: • Operating System (Vehicles & operating
technology) • Fixed Facilities (Stations, guideway,
infrastructure)
DESIGN & CONSTRUCTION
SERVICE AVAILABILITY: 2023
LAWA’S RESPONSIBILITIES
• Developer has contractual obligation to meet a service availability date of March, 2023
• Developer’s failure to meet this date could result in lost Availability Payments which can not be recovered
• Deliver project property (real estate) on schedule
• Complete key enabling projects such as relocating LAWA tenants and some utilities
• Facilitate inter-agency cooperation • Facilitate interfaces with other projects,
such as Metro station & ConRAC
Automated People MoverDBFOM Agreement
DEVELOPER’S RESPONSIBILITIES
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Developer is responsible for the operations & maintenance of the APM System including: • Operating System (Vehicles & operating
technology) • Fixed Facilities (Stations, guideway,
infrastructure)
REQUIREMENTS DURING O&M
HANDBACK
• Developer must meet 99.5% or greater System Availability during O&M
• Failure to achieve 99.5% Availability will result in Payment Deductions and Other Agreement Compliance EnforcementMeasures (more on compliance )
• Refurbishment & replacement schedule for portions of the system throughout the 25 years
• At the end of 25 years of O&M, the APM System must have 5 years of minimum remaining useful life
OPERATIONS & MAINTENANCE
Automated People MoverDBFOM Agreement
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Automated People MoverDBFOM Agreement
COMPLIANCE
APM PERFORMANCE & COMPLIANCE • Creates incentive to correct performance• Includes progressive measures to enforce
compliance• Default is the last resort
PAYMENT DEDUCTIONS• Availability Deductions- Based on a 99.5%
Performance Standard for key APM systems• Non-Compliance Deductions- Based on non-
compliance events (NCE)identified in the NCE table
• Developer will also accrue non-compliance points for breaching key obligations identified in the Non-Compliance Event (NCE) table
• Accumulation of NCE points triggers escalation of enforcement measures such as: Increased LAWA oversight, required remediation plans, increased oversight from Developer’s financiers, LAWA replacing contractors
NON-COMPLIANCE POINTS
• Unavailability deductions are based on duration of unavailability
99.5 % AVAILABILITY STANDARD
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Automated People MoverDBFOM Agreement
•Key contract obligations are in the non-compliance table
•LAWA may add obligations to the table if Developer breaches obligation multiple times
•Non-compliance events result in accrual of NCE points & payment deductions.
•Accruing too many points could ultimately lead to termination (default)
Element Category
Required Task
Minimum Performance
Reqmts
Non-Compliance Event Points
Interval of Recur-rence
D &C Non-Compliance
Deductions in $
(for new or recurred events)
Relevant section
of contract
docs
D&C
Labor LocalHire
Requirement
Meet the 30%minimum annual utilization of Local Workers required by Section 9.9.2
20 + 5 for every 1% below the
requirement
N/A $50,000 + $2500 for every 1% below the requirement
DBFOMA 9.9.2
Maintenance of Traffic
D &C Period Planned Lane
Closure
No lane shall be closed outside the time period detailed in the approved Traffic Control Plan on: World Way Upper & Lower levels
10 15 minutes $50,000 Part 2A, 16.4.1,
Table 16-1
O&M
Operations Pedestrian Walkways
Moving walkway shall be repaired within 5 hours of initial failure
2 3 hours $2500 Part 3, 4.3.3
Performance APM Operating
System Shutdown
No APM Operating
System Shutdown
greater than 6 hours but less than or equal to 24 hours
80 + 6.7 every hour
shutdown continues beyond 6
hours up to 24 hours total
Refer to formula for
points
$750,000 + $125,000 every hour Shutdown
continues beyond 6 hours up to 24 hours
total
Part 3, 3.2.2.1
NON-COMPLIANCE EVENTS
RFP DEVELOPMENT
INTEGRATED TEAMS•Gateway/Mitsubishi•LAXCA/Ansaldo/Woojin•LINXS/Bombardier
DEVELOPER ENGAGEMENT• Aesthetic Review• Technical Meetings• Commercial Discussions
EDROPERATING SYSTEM SUPPLIERS (OSS)
PRE-QUALIFYING
SOQFIXED FACILITIES SUPPLIERS (FFS)
SCORING & EVALUATION
TECHNICAL PROPOSAL EVALUATION•70 SME’S•Tech. Merit•Visual•User ExpSCORING•9 Member Scoring Panel
PRICE PROPOSALSSelection of LUCP
LINXS
MAR JUN OCT JUL JANNOV
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2016 2017 2018PROPOSAL
DEVELOPMENTIndustry FORUM
FEB
EVALUATION & SCORING STEPS
APM Developer selection process was a qualification-based evaluation with two independent steps to determine Lowest Ultimate Cost Proposer (LUCP)
Steps in Evaluation
Percentage of Total Evaluation
Scoring
2. Evaluate Financial Proposal
1. Evaluate Technical Proposal
60% 40%
6000 Points 4000 Points
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COMPONENTS
TECHCNICAL EVALUATION & SCORING CRITERIA
A. Technical Merit
B. Visual Appeal
C. User Experience
POINTS
APM System Approach to Execution of Project Construction
Project Safety & Security
Inclusivity
Sustainability
Architectural Appeal of the APM Fixed Facilities
Public Outreach/Stakeholder Communication
Approach to Maintenance of Traffic/Mitigation of Construction ImpactsApproach to Operations & Maintenance
Vehicle Aesthetics
User Experience
TOTAL 6000
1000
700 500 500
700 600 200 300 500
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750
250
TECHNICAL PROPOSAL EVALUATION & SCORING
Technical Proposal Review• A team of approximately 70 technical experts,
organized by the evaluation criteria set forth in the RFP, reviewed the technical proposals, summarized their findings and submitted those findings to a scoring panel of nine individuals.
Independent Scoring Panel• The scoring panel was made up of public sector
experts in transportation and airport operations from throughout California
• Those 9 individuals reviewed the technical experts’ comments and also reviewed the proposals in their entirety
• The scorers independently scored each proposal • The LAWA procurement manager tabulated final
technical proposal scores according to the formula in the RFP and turned the scores over to City Attorney for secure storage before financial proposals were received.
APM INDEPENDENT SCORING PANELISTS
Deputy Chief Executive Officer Long Beach Transit (LBT)
Project Manager, Group Manager of Train Control Modernization.
San Francisco Bay Area Rapid Transit (BART)
General Manager
City of Los Angeles Department of
Transportation (LADOT)Deputy Executive Director, Facilities Maintenance & Utilities Group LAWADeputy Executive Director, Environmental Programs LAWAChief Innovation and Technology Officer LAWA
Chief Experience Officer LAWA
Deputy Program Manager
Landside Access Modernization Program
(LAMP)/LAWA
Deputy Chief Executive Officer
Los Angeles County Metropolitan Transit
Authority (Metro)
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FINANCIAL PROPOSAL EVALUATION & SCORING
▪ Each Developer’s financial proposal consists of Capital cost, O&M cost, and Financing cost and was expressed as a single NPV in each proposal
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▪ In accordance with the APM RFP, any price proposal that exceeded $300M more than the Developer with the lowest priced proposal would not receive any price points
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Each financial proposal included an NPV, Net Present Value,for comparison acrossproposers
• The Tier 1 Proposer with the lowest price received 100% of the 4000 available price proposal points.
• Other proposers, within the $300M cap, would have received scores pro-rated against the lowest cost proposer.
Automated People MoverProcurement Process
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LINXS: SUMMARY
LAWA Staff recommends LINXS to the Board of Airport Commissioners as the APM Developer based on their proposal to design, build, finance, operate and maintain the APM.
• LINXS had the highest technical score • LINXS had the lowest cost of the three
teams that proposed
LINXS scored the highest in all three major technical scoring & evaluation categories ; technical merit, visual appeal, and userexperience.
LINXS scored first in six of eleven subcategories
LINXS scored second in all other subcategories
LINXS cost to design & construct the APM: $1.95 B
Automated People MoverRecommended Developer - LINXS
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APM PRICE COMPETITION
• This process resulted in a competitive price from the
winning team.
• LINXS’S design and construction costs came in 4% lower
than the original cost estimate.
($2.028B est. vs. $1.95B actual)
• LINXS presented the lowest cost for both design &
construction and operations & maintenance.
LINXS Gateway LAXCA
Proposed Net Present Value (NPV) $2.63B $3.41B $3.11B
Total 1st year Availability Payment $97.1M $127.0M $115.1M
Design and Construction Cost as presented in Original Bids
$1.95B $2.16B $2.37B
Total Bid over life of Agreement* $4.46B $5.77B $5.07B
*Subject to final contract negotiation
Automated People MoverRecommended Developer - LINXS
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LINXS scored highest in 6 of 11 evaluation criteria within the 3 major technical categories.
•APM Fixed Facilities •Approach to Maintenance of Traffic •Approach to Operations and Maintenance• Inclusivity•Sustainability•User Experience
LINXS: PROPOSAL HIGHLIGHTS
FIXED FACILITIES
MAINTENANCE OF TRAFFIC
INCLUSIVITY
SUSTAINABILITY
Automated People MoverRecommended Developer - LINXS
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LINXS: PROPOSAL HIGHLIGHTS
FIXED FACILITIES
• Longer station platforms to facilitate passenger flow
• Station roofs with circular skylights
• Placing the Maintenance & Storage Facility at-grade, instead of elevated
• Engineering the guideway over 2 parking structures.
• Eliminates the need to demolish & rebuild parking structures
• Major cost savings & minimizes operational impact
• Theme Building Viewing Platform
• Impactful Experience LA Exhibition Space
Automated People MoverRecommended Developer - LINXS
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FIXED FACILITIES
Experience LA Exhibit Space with 800 sq. ft. Programmable LED Wall 24
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Automated People Mover
LINXS: PROPOSAL HIGHLIGHTS
MAINTENANCE OF TRAFFIC
MOT plan focused on:
• SAFETY- Clear separation of work zones from vehicular traffic
• COORDINATION- Effective plans to work with 3rd party partners including City Dept. of Transportation & CalTrans
• EFFICIENT CONSTRUCTION- Longer spans reduce number of columns in rights of way
• Eliminating demolition & reconstruction of parking structures also reduces traffic impacts
Automated People MoverRecommended Developer - LINXS
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LINXS: PROPOSAL HIGHLIGHTS
SUSTAINABILITY
• LINXS will generate 1.27 MW of energy; more than 2x the RFP requirement
SOLAR ENERGY
MAINTENANCE & STORAGE FACILITY• MSF will meet LEED Gold Standard
• Trains will be washed at MSF using recycled water
ELECTRIC VEHICLE CHARGING • LINXS will install EVC station
infrastructure at 10% of all parking spaces
• LINXS will install full charging station equipment at 6% of all parking spaces
Maintenance & Storage Facility (MSF)
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LINXS: PROPOSAL HIGHLIGHTS
INCLUSIVITY
STRATEGIC. COMPREHENSIVE. INNOVATIVE.
Strong Leadership• The Inclusivity Manager has an outstanding
reputation in the field & a robust team with clearly defined roles
• Team manages both business inclusion & workforce development commitments
Additional Commitments• Hire 90% of D&C first period apprentices from
HireLAX and local programs for disadvantaged & underrepresented local populations
• Total commitments to certified firms: $555,000,000
• Establish Union Sponsorship Fund to pay for new apprentice union dues
• Provide 300 scholarships for local youth during D&C
• Establish a 1-to-1 standard for replacing women employees
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LINXS: PROPOSAL HIGHLIGHTS
INCLUSIVITY
Project Phase Local Hiring
Small Business
Enterprise (SBE)
Local Business
Enterprise (LBE)
Local, Small Business
Enterprise (subset of
LBE)
Disabled Veterans Business
Enterprise(DVBE)
Design No requirement 22% 8% 3% 3%
Construction(5 YRS) • 30% of work force 18% 7%
5% (vs. 3%reqmt.)
3%
Operations & Maintenance
(25 YRS)
• 60% of hours worked by local workers (vs. 50% reqmt.) ,
• 50% from LAX impact zone (no reqmt.)
• 10% disadvantaged
17% 10% 5% 3%
•LINXS has committed 5% of its Construction contracts to Local Small Business Enterprise (LSBE) firms or 66% increase over the 3% required by the RFP
•LSBE commitment represents approximately $85M•Total commitments to certified firms: $555,000,000
• Set-aside packages for every phase of project
•Waive bonding for some contracts up to $5M
• Cover bonding costs for subcontractors
• Allow sub-contractors to bill as often as weekly during design & construction
•Mentoring in all project phases
•Weekly office hours for certified firms
• Certified Firm Liaison
• Capacity Building Partners such as: National Association of Minority Contractors, Merriwether & Williams, & Disabled Vets’ Enterprise Alliance
SUPPORT FOR ENTERPRISES
CERTIFIED CONTRACTING COMMITMENTS
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LINXS: Team
Equity Members
APM Fixed Facilities
Contractor
APM Fixed Facilities Designer
APM Fixed Facilities O&M
Provider
APM Operating System Supplier
APM Operating System O&M
Provider:
Identified Subcontractor Guarantors Lenders and
underwritersKey External
Advisors
ACS Infrastructure Development, Inc.
Balfour Beatty Infrastructure, Inc.
HDR Engineering, Inc.
ACS Infrastructure Development, Inc.
Bombardier Transportation (Holdings) USA Inc.
ACS Infrastructure Development, Inc.
Arellano Associates
ACS Servicios y Concesiones, S.L.
Bank of America Merrill Lynch
Bank of Tokyo-Mitsubishi UFJ, LTD.
Balfour Beatty Investments, Inc. Dragados USA, Inc.
Bombardier Transportation (Holdings) USA Inc.
Bombardier Transportation (Holdings) USA Inc.
Fryman Management, Inc. Balfour Beatty plc Citigroup Global
Markets, Inc.
Turner Surety and Insurance Brokerage, Inc.
Bombardier Transportation (Holdings) USA Inc.
Flatiron West, Inc. Fluor Enterprises, Inc.
Fluor Enterprises, Inc.
Modern Times, Inc.
Bombardier Transportation (Global Holding) UK Limited
Ramirez & Co. Ashurst LLP
Fluor Enterprises, Inc.
Fluor Enterprises, Inc.
HOCHTIEF PPP Solutions North America, Inc.
HOCHTIEF PPP Solutions North America, Inc.
Raul V. Bravo + Associates Dragados S.A. Intech Risk
Management Inc.
HOCHTIEF PPP Solutions GmbH
Rosendin Electric, Inc.
Flatiron Construction Corp. Infrata Limited
HNTB Fluor Corporation Operis Group plc
HOCHTIEF Aktiengesellschaft Deloitte Tax LLP
HOCHTIEF PPP Solutions GmbH White & Case LLP
DLA Piper
• The Early Works Agreement allows LINXS to begin work on the APM project prior to final execution of the full DBFOM Agreement at Financial Close.
• Significant progress to date includes:
Automated People MoverEarly Works Update
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Early Works Agreement awarded by BOAC on February 15, 2018
• LINXS Project Execution Office, Fluor Aliso Viejo – 60 Staff• Design Office – HDR / HNTB Offices- 54 staff• LINXS Inclusivity Office • Submission/Review of Key Submittals
• Basis of Design• Project Site Safety Plan• Design Quality Management Plan• Design Criteria (Stations, Guideway Structures, M&SF and
Roads)• Project Communication Plan• FAA Form 7460*• Geotechnical Planning Report*• Draft Design Construction Interface Document*
• Upcoming Activities:• Potholing to identify UG utilities • Geotechnical Borings
Cost saving opportunity through fully tax-exempt financing
Automated People MoverAvailable Levers for Cost Savings
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Cost saving opportunity proposed by LINXS• After award of the Early Works agreement, LINXS identified a financial innovation to lower LAWA’s
total project cost. • LINXS proposes to use fully tax-exempt, long-term debt to finance the APM project, rather than
initially proposed AMT PABs (which includes an AMT “penalty” in its pricing).• A DBFOM can be eligible for proposed tax-exempt debt structure, if it satisfies key requirements:
1. Developer’s services to LAWA must flow-through a non-profit entity
2. Equity investment in the Developer should be structured as debt
LAWA retains sole discretion to further evaluate and approve the cost savings opportunity• APM DBFOM Agreement currently allows changes for the new structure to become operable at
LAWA's sole discretion via springing provisions ONLY if approved by BOAC. The new structure will also require changes to be effected via new assignment and implementation agreements to allow Developer's assignment to non-profit entity and change to form of equity investment.
• Staff will perform due diligence regarding financial benefits, not-for-profit entity, interparty agreements and risks prior to May 3rd Board meeting as basis for recommendation regarding BOAC’s decision regarding structural changes.
• DBFOMs incentivize “win-win” solutions – LAWA will only recommend approving the new structure if the financial benefits are material and equitably shared between Developer and LAWA
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Automated People MoverStaff Recommendations APPROVE
• Approve the DBFOM Agreement and related ancillary agreements* with LINXS in the NTE Amount of $4,895,750,000.
APPROPRIATE• Appropriate capital funds in the amount of $3,842,000,000.**
• Approve a budgeted owner’s contingency in the amount of $145,700,000 (approx. 7%)
APPROVE
• Authorize the CEO to approve and execute change orders up to the budgeted contingency amount, provided that prior to execution of any change orders in excess of $5,000,000 the BOAC shall review and authorize the execution thereof.
AUTHORIZE
AUTHORIZE• Authorize the CEO to execute the DBFOM Agreement and
related ancillary agreements* with LINXS.
* Ancillary agreements include a Direct Agreement and an IP MaterialAccess Agreement
** Excludes Operating Availability Payments and certain allowances. Includes budgeted owner’s contingency
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ACTION DATE
Early Works Agreement approval by BOAC 2/15/18
Trade, Travel, Tourism City Council Committee Hearing on APM Recommended Developer
2/20/18
APM DBFOM Agreement for BOAC Approval 4/5/18
Trade, Travel, Tourism City Council Committee Hearing on APM DBFOM Agreement
4/10/18
APM DBFOM Agreement at City Council & Commercial Close 4/11/18
Developer Submittal of Financial Model and Financing Agreements for Non-Profit Structure
4/11/18
Financial Close and Early Works Status Update for BOAC and if necessary Non-Profit Financing Structure for BOAC Approval
5/3/18
Developer provides notice of Scheduled Financial Close Date 30 days prior
LAWA reviews and provides comments on Financing Agreements 10 days prior
Developer Bond Pricing 6/6/18
Expected Financial Close Date 6/16/18
End of Proposal Validity Period 7/16/18
Automated People MoverNext Steps