In September 2017, Governor Larry Hogan proposed adding four new toll lanes to the Maryland side of the Capital Beltway and to Interstate 270 as part of the State’s Traffic Relief Plan.
The Governor’s plan calls for private companies to design, build, finance, operate, and maintain new toll roads on I-495 and I-270 through a Public-Private Partnership (P3) Program. The Maryland Board of Public Works (BPW) officially designated the road-widening program as a P3 in June 2019, allowing Maryland Department of Transportation (MDOT) to begin pursuing applications from the private sector. MDOT is legally required to go through a competitive process.
On January 8, 2020, the BPW authorized reworking the process for awarding the contract. MDOT will choose the contractor. The contractor will design the toll lanes, choose a construction contractor, and secure financing. Then the contractor will negotiate the actual toll lane contract with MDOT.
Within MDOT, the State Highway Administration (SHA) is the state entity responsible for the solicitation and management of the P3. MDOT SHA is currently seeking proposals from the private sector for Phase 1 of this project using a multi-step solicitation process. MDOT SHA’s issuance of a Request for Qualifications (RFQ) is the first step in this process. The RFQ asks companies who wish to bid on this project to document their qualifications.
The toll lane plan remains alive but with an uncertain future as a result of continuing opposition, the pandemic, and the current financial crisis. When the list of companies responding to the RFQ becomes available, it may indicate how many potential bidders are still interested in applying for the P3.
Solicitation Schedule Timeline
As a result of the pandemic and other events, MDOT changed the Solicitation Schedule timeline. The following dates were released on March 27, 2020.
Date…Milestone
February 7, 2020…Request for Qualifications (RFQ) issued
May 20, 2020…Statement of Qualifications (SOQ) due
July 2, 2020…Anticipated notification of shortlisted proposers
July 2020…Circulate a draft of the Request for Proposals (RFP) for review by the shortlisted proposers
December 2020…Issue the final Request for Proposals
February 2021…Proposals due
March 2021…Selection of selected proposer
May 2021…Seek Board of Public Works (BPW) approval of Phase P3 Agreement
May 2021…Award and execution of Phase P3 Agreement
The "Phase P3 Agreement" is NOT a contract to build any toll lanes. It gives the winning company the exclusive right to design and build the toll lanes. After the Phase P3 Agreement is signed, the company designs the lanes, segment by segment, and when a segment is designed it negotiates a contract with the state to build it. The state projects the closing on the first segment, to include the American Legion Bridge and possibly I-270 south of Shady Grove, for October 2022. However, it is very likely that the State’s projected dates will change from the schedule in the RFQ, given the requirement of legislative review and BPW approval.
What is an RFQ? SOQ? RFP?
Request for Qualifications (RFQ)
An RFQ is a solicitation, often used in a government procurement, that invites private sector bidders to submit a written statement of their interest and expertise for a competitive project. The RFQ describes the project in sufficient detail to allow potential vendors to submit documents of their qualifications to perform a service or supply a product. It is typically the first step in a multistep procurement process and may be used as a screening step to establish a pool of qualified vendors to respond to an upcoming Request for Proposal (RFP).
MDOT presented an I- 495 & I-270 P3 Webinar on January 29, 2020 to update potential concessionaires about the P3 program, including the RFQ process. An RFQ for the first phase of the program was issued on February 7, 2020. The RFQ initiated the solicitation process to select a Phase Developer to provide preliminary development activities under Phase 1 of the program.
Statement of Qualifications (SOQ)
An SOQ is a vendor’s response to the RFQ, outlining their expertise and qualifications and how well they can align their experience to the criteria outlined in the RFQ. A strong SOQ helps to differentiate a company from its competitors.
A March 27 addendum to the RFQ extended the SOQ submittal date; vendor responses are now due on May 20. After reviewing the submissions, MDOT plans to release a shortlist with 3–5 of the most highly qualified respondents by July 2020. MDOT SHA has established an overall evaluation structure for the solicitation process. Each SOQ will be reviewed in detail and evaluated for financial elements, technical elements, and compliance with the solicitation requirements. The Evaluation Committee will recommend final ratings and a short list of proposers.
Recent Changes in the RFQ
MDOT has overturned commitments that had been made to elected officials and the public in a quietly released Transaction Summary and in several addenda to the RFQ. For a summary of these changes, see MDOT alters RFQ for toll lane P3.
Two bills (HB1249 and HB1424), which might have helped clarify P3s in general and specifics about the I-495 & I-270 P3, did pass in the House this legislative session. However, they did not pass in the Senate and will not become law.
SOQ due date
As a result of the pandemic, the Solicitations Schedule timeline was amended to extend the due date for responding to the RFQ. Economic issues, BPW constraints, and other events may eventually lead to additional delays to the proposed timeline.
Taxpayers risk/ promises broken
“No net cost to the State” is no longer a promise. According to the new project summary, taxpayers will "share" directly in the risk of construction cost escalation and cost over-runs. This contradicts Governor Hogan's central promise that the toll lanes would be built at no real cost to taxpayers. The former "No net cost to the state" has now been modified to say: “MDOT has developed an approach ... that best allocates risks between the State, the contractor and the equity investment market.”
Financial disclosure of the final plan has been pushed back to October 2022.
Delayed term sheet
A summary term sheet was previously promised to bidders and was to be included in the RFQ. However, MDOT changed its mind and the RFQ does not include an outline of contract terms. The practical effect is that critical project details, including state roles and responsibilities, are unclear. Without the term sheet listing the basic terms of the contract, companies cannot know what risks the state taxpayers are taking on and what risks the contractor must take on. Bidders who don't have inside information must submit a proposal without knowing precisely what they'll bid on. The earliest the information is likely to be available is in December when MDOT expects to issue a final RFP.
Redefining the project
The first segment may be getting smaller. The first phase of the project has been redefined so it only has to include the American Legion Bridge (ALB). That's different than the plan the BPW voted on in January 2020, which made it clear that the first segment would run from the Virginia side of the ALB to Shady Grove. The first segment must still include the ALB, but it no longer specifies that the north terminus must be at Shady Grove.
Financing Issues
Privatizing Interstates 270 and 495 and monetizing congestion are flawed approaches to traffic relief. Not only will toll lanes alter Maryland’s transportation and land use for the worse for the next fifty years or more, but the state’s fiscal integrity and economic strength will be threatened as well.
Maintaining Maryland’s ability to set its own priorities and making transportation policy independent of private sector profit motives requires revenue to mobilize and sustain an aggressive capital program of infrastructure investment.
Effective capital budgeting in the public sector means identifying infrastructure priorities that will deliver the greatest long-term public benefit and the highest economic return, adopting a revenue policy capable of paying off the debt necessary to finance the investment program, gaining public consent for the revenue policy, ensuring accountability for the delivery of results, and oversight by the people’s elected representatives.
With a dependable revenue stream to support it, the State’s debt ceiling can be increased. Financing is available to AAA-rated states like Maryland at the lowest interest rate in history, without paying profit margins to private companies designed to generate big dividends for their investors. Maryland taxpayers will be paying the highway profiteers more money in the long run than they would be paying in debt service to retire bonds.
Congestion, gridlock, economic lethargy, social inequities, and the lack of transit options are problems that can only be solved with a State transportation strategy that has a solid fiscal foundation, managed by accountable leaders who work for the people of Maryland.
What’s Next?
Environmental Impact Statement
The Federal Highway Administration (FHWA) issued a Notice of Intent on March 16, 2018 to prepare an Environmental Impact Statement (EIS) for the I-495 & I-270 Managed Lane Study. The EIS will be prepared by MDOT SHA for FHWA.
An EIS, mandated by federal law for certain projects, outlines the impact of a proposed project on its surrounding environment. The law requires development of a reasonable range of project alternatives that can accomplish the purpose and need, and consideration of potential impacts to socioeconomic, cultural, and natural resources of the alternatives being considered.
The EIS documentation consists of a draft EIS (DEIS), Final EIS (FEIS), and Record of Decision (ROD). The RFQ is not an indication that environmental reviews have been completed. A DEIS is scheduled for public review in spring 2020, followed by a series of Public Hearings in the summer of 2020. However, there will likely be a longer amount of time between when the DEIS is released and Public Hearings can take place.
ACTION ITEM
Dontwiden270.org believes that MDOT needs to acknowledge the current covid19 situation by formally delaying the EIS process and revising the EIS schedule. Obviously, public meetings cannot take place under current conditions. Write MDOT Secretary Greg Slater and tell him that there must be a sensible delay in the EIS schedule to allow Maryland residents to focus and effectively participate in the consequential decisions related to the I-495 & I-270 Managed Lane Study.
An environmental decision document under the National Environmental Policy Act (NEPA) will be approved by the FHWA before final design and construction begins on any portion of Phase 1.
The Request for Proposal (RFP) process
An RFP is a document that solicits bids from potential contractors and provides details about the project. It is intended to solicit responses from interested parties that will be used in deciding on the best candidate and the best approach for the project. The RFP will request pertinent information such as prior experience, company processes, and team members for the purpose of comparing bidders. It will cover the scope of work, roles and responsibilities, and a project timeline.
A draft RFP is scheduled to be released to the shortlisted proposers in July 2020 followed by dialogue with the proposers. The final RFP is scheduled for issue in December 2020 with proposals due February 2021. RFPs will only be accepted from vendors on MDOT’s shortlist of highly qualified respondents.
Dontwiden270.org will keep you informed about the status of the EIS and the RFP.
CABE Virtual Town Hall
April 16, 2020 7:30 pm
Citizens Against Beltway Expansion (CABE) will hold a Virtual Town Hall on April 16. Get the latest on the $11 billion Luxury Lane expansion plan and the threat to taxpayers, our water bills, our communities, and the environment. Delegates Marc Korman and Jared Solomon, Montgomery County Council Vice President Tom Hucker, and other experts will be speaking.
Click here for details. Register here.
Get your friends and neighbors to join our e-mail list
This is a great way for them to stay current on what’s happening with the highway project and to learn how they can help fight this boondoggle. Go to https://dontwiden270.org/get-involved to sign up. And check out our website dontwiden270.org for more information. We even have a Spanish language section with translations of key documents.