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S AN TA C LARAValley Transportation Authority

~ e c e m b e r 5, 2011

E u g e n ~ BradleySilicon'Valley Transit UsersP. O. Box 390069Mountain View, CA 94039-0069

Dear Mr. Bradley,

Thank you for your recent correspondence regarding items on the agenda for the December 8meeting of the Santa Clara Valley Transportation Authority Board ofDirectors.In answer to your first question regarding the amount of funding requested of the Federal TransitAdministration's New Starts program, as you noted, VTA has requested New Starts funding inthe amount of $900 million in our New Starts submittal. This amount was agreed to after mutualdeliberation with the Federal Transit Administration (FTA), and was based on FTA's assessmentand analysis of cost, schedule, and risk contingency. The amount of our request reflects a 61percent local/state share and 39 percent federal share, which led the FTA to assign the project amedium-high New Starts Funding Share rating and an overall mediumNew Starts rating. Boththe rating and the ratio of local and state to federal funding are significant factors considered inthe funding ofNew Starts projects. To the extent we are able to increase our federal share offunding, more local funding can be used to deliver Phase II, Berryessa to Santa Clara.You also asked about construction change orders. As you know, VTA has selected the DesignBuild delivery method for the C700 Line, Track, Stations and Systems Contract because thismethod is anticipated to reduce overall costs and also to reduce the overall schedule forcompleting the project. These advantages are derived by assigning both final design andconstruction responsibilities to the Design-Build contractor.The Design-Build method typically reduces costs by enabling the Design-Build Contractor tocomplete final designs in a manner that best fit his construction approach, and by reducing theowner's cost for managing final design, and construction. The schedule duration is also reducedbecause the Design-Builder can produce the final design and construction plans andspecifications in a sequence that best matches his planned construction activities. On the SVBXProject, these savings are estimated to be $85 million in cost savings and a 6-month schedulesavings as compared to the traditional Design-Bid-Build approach.

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The Design-Build methodology also reduces the likelihood of construction claims and changeorders that normally result from problems with the final plans and specifications produced by theowner. Because the final plans and specifications are produced by the design builder, theresponsibility for the completeness and accuracy of final designs remains with the DesignBuilder and not with VTA. Therefore, the Design-Build methodology typically results in fewerclaims and change orders than would normally be encountered when using traditional DesignBid-Build approach.VTA has assembled a project management team with significant experience managing DesignBuild contracts. This team includes construction management professionals from the privatesector, cooperating agencies and from BARTwith experience in successfully delivering BARTprojects using the Design-Build method. VTA expects the Design-Build method to make apositive contribution to meeting or exceeding the cost and schedule objectives for the SVBXProject with fewer construction change orders.On a separate note, pursuant to your request, please find the two letters of interest we havereceived thus far indicating an interest in serving as officers on the VTA board.Thank you for your interest and please do not hesitate to contact us if you have questions oneither of these items.

Regards,

Michael BurnsGeneral Manager

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