Practices for Developing Transparent Best Value Selection Procedures (2015)

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62 APPENDIX D Best Value Protest Case Examples This appendix summarizes four best value award protests and their outcomes from the Oregon, Utah, California, and Minnesota Departments of Transportation (DOTs). Although detailed descriptions for all case outcomes were not avail- able at the time of publication, it is believe that all four cases provide excellent lessons learned. PROTEST CASE 1: I-5 WIllAmETTE RIVER BRIDgE, OREgON DOT Project Description The I-5 Willamette River Bridge project involves replacing two (2) bridges on Interstate 5 (I-5) in Lane County, Oregon: the 1,800-foot bridge on I-5 over the Willamette River and the 100-foot bridge over the Canoe Canal. Interstate 5 runs gen- erally north–south in the project area, forming the boundary between the cities of Eugene to the west and Springfield to the east. The project area was located within the urban growth boundary of both cities. The new bridge is constructed at the same location as the existing bridge, but requires roadway alignment adjustments in the immediate project area. The new bridge includes six (6) lanes of traffic to accommodate the 20-year design for future traffic needs. The total project cost is approximately $206 million while the construction cost is approximately $154 million. The architectural and engineering contract was awarded in May 2008 and the CM/GC contract for pre-construction phase ser- vice was awarded in June 2008 using a best value procurement approach. The new targeted contract completion date for the project is January 31, 2015. Procurement law Chapter 88 Oregon Laws states that: An advertisement for bids shall be published at least once in at least one newspaper of general circulation in the area where the contract is to be performed and in as many additional issues and publications as the public contracting agency may deter- mine. The Director of the Oregon Department of Administrative Services or a local contract review board, by rule or order, may authorize advertisements for bids to be published electronically instead of in a newspaper of general circulation if the direc- tor or board determines that electronic advertisements for bids are likely to be cost-effective. If the contract is for a public improvement with an estimated cost in excess of $125,000, the advertisement for bids shall be published in at least one trade newspaper of general statewide circulation. The director or board may, by rule, require an advertisement for bids to be pub- lished more than once or in one or more additional publications (ORS 279.025). Chapter 647 Oregon Laws indicates that: Within 30 days after receipt of a prequalification application, the public contracting officer shall investigate the prospective bid- der as necessary to determine if the prospective bidder is quali- fied. The determination shall be made in less than 30 days, if practical, if the prospective bidder requests an early decision to allow the bidder as much time as possible to prepare a bid on a contract that has been advertised (ORS 279.041). Review Process The evaluation of proposals is conducted in five (5) phases: 1. Evaluation of minimum proposal requirements; 2. Evaluation of the project and price proposals; 3. Initial ranking of proposals/notice of competitive range; 4. Mandatory interviews and final ranking; and 5. Contract negotiation, intent to award, and contract award. Protest On May 16, 2008, ODOT received a notice in which Kiewit Pacific Company (“Kiewit”) protests the Notice of Intent to award the project to Hamilton Construction Company (“Hamilton”). Kiewit’s protest against ODOT included the following claims: 1. Allowing a proposer to turn in a proposal without that proposer turning in a letter of interest; 2. Allowing two potential proposers to collaborate with each other after the letters of interest were submitted; 3. Failing to pursue clarifications in the interview process that affected scoring of the submitted proposals; 4. Changing the number of allowable interview partici- pants to benefit only one of the proposer teams; and 5. Allowing prohibited communications between the agency and a proposer to change or clarify the RFP after the established February 29 cutoff date. Outcomes Protest Point No. 1 Kiewit claimed that ODOT allowed Hamilton in association with Slayden Construction Group (“Slayden”) to submit their proposal after individual letters of interest were submitted. In response to Protest Point No. 1, ODOT stated that “Section 22.1(a) of the CM/GC Instructions to Proposers

63 recognizes that even at the time of the Proposal Due Date, the Proposer may not have completed formation of a legal Entity such as a partnership or joint venture.” In this case, the proposal submitted by Hamilton did not show intent to form a legal Entity with another firm. Rather, Hamilton proposed as a sole Entity with Slayden as a subcontractor to Hamilton. Protest Point No. 2 Kiewit contended that communications between Hamilton and Slayden were prohibited in accordance with Section 3.4 of the CM/GC Instructions to Proposers. In response to Protest Point No. 2, ODOT stated that Sec- tion 3.4 of the RFP is designed to promote a fair and equitable selection process. That section provides that no member of a proposer’s organization “may communicate with members of another Proposer’s organization to give, receive, or exchange information, or to communicate inducements, that constitute anti-competitive conduct in connection with this procure- ment.” On February 20, 2008, Slayden notified ODOT that Slayden would not be submitting a proposal but would be a Subcontractor of Hamilton on this CM/GC project. Based on the information available, ODOT has concluded that the communications between Hamilton and Slayden and with ODOT showed no evidence that their motives was to gain any advantage in the procurement process. Protest Point No. 3 Kiewit claimed that ODOT did not address comments or jus- tifications shown as “unclear” or “lacked details” on Kiewit’s proposal in the interview process. In response to Protest Point No. 3, ODOT stated that the proposal evaluation committee developed seven interview questions to clarify information in the scoring process. The same questions were asked of each proposer. The purpose of the proposer interview is to confirm or modify the scor- ing of the proposals based on the process identified in the RFP. Based on the review of available information, ODOT has concluded that the Agency did not fail to seek additional clarification from Kiewit at the interview. In fact, some or all of the final comments provided on Kiewit’s Proposal evalu- ation consensus worksheets were completed after the inter- view process. Protest Point No. 4 Kiewit contended that ODOT changed the number of participants allowed to participate in the interview from which they did not benefit. Kiewit also claims that increas- ing interview participants was not allowed based on Sec- tion 20.4 in RFP. In response to Protest Point No. 4, ODOT stated that in response to the invitation to interview letter sent by the Agency on March 25, Hamilton confirmed to bring a total of six team members to the interview. Additionally, Sec- tion 20.4 of the RFP points out that: “The CM/GC’s Princi- pal Participant, Project Manager and Construction Manager named in the Proposal must be present at the interview. In addition, the Proposer may bring two (2) additional mem- bers of its choice to the interview.” Hamilton’s proposal identified two Principals. As a result, ODOT determined that Hamilton’s request to bring six (6) team members to the interview did not violate the provisions of Section 20.4 of the RFP. Further, the Agency provided Kiewit the oppor- tunity to identify any additional team members, but Kiewit did not respond to ODOT’s offer, therefore indicating to the Agency that they were satisfied with the participants allowed or required in the RFP. Oregon therefore has con- cluded that Hamilton gained no advantage, and Kiewit was not aggrieved by Hamilton having six (6) team members at the interview. Protest Point No. 5 Kiewit claims that Hamilton’s request should have been sub- mitted as part of the formal request for clarification process which closed on February 29, 2008. In response to Protest Point No. 5, ODOT stated that Hamilton’s communication was received in response to the invitation to interview, which was not governed by the RFP time limitations. Further, Section 3.3 of the CM/GC Instruc- tions to Proposers—Informal Communications, states that: “Information that the Agency issues to Proposers in writing responding to Proposer questions in contexts other than the formal request/protest process outlined in these Instructions to Proposers will not have the effect of changing any Con- tract term or Specification, but may be useful in interpreting the Contract.” As a result, ODOT made no change to any contract term or specification in responding to Hamilton’s informal communications. In conclusion, based on the agency’s review and analysis of Kiewit’s protest and relevant documents, ODOT deter- mined that they had exercised the contract award process properly and concluded that Kiewit’s protest is without merit and therefore is denied. PROTEST CASE 2: I-15 UTAh COUNTRy CORRIDOR EXPANSION, UTAh DOT Project Description The I-15 Utah Country Corridor Expansion (“I-15 CORE project”) is one of the largest D-B road construction projects in Utah. The I-15 CORE project was initiated to alleviate traf- fic congestion and increase public mobility and safety. The

64 project mainly involved reconstructing 24 miles of freeway from Lehi to Spanish Fork, widening the freeway by two lanes in each direction, replacing the original asphalt with new 40-year concrete pavement, and rebuilding 63 bridges and 10 freeway interchanges. The Utah DOT (UDOT) awarded the D-B contract to Provo River Constructors using the best value approach. The total project estimated cost is approximately $1.725 billion. The estimated construction time period is 36 months. Procurement law Under 2006 Utah Code, the DOT may award a D-B contract for any transportation project. Following the procedures and requirements of Title 63, Chapter 46a, and Utah Adminis- trative Rulemaking Act, UDOT will make rules to establish requirements for the procurement of its D-B transportation project contracts. If permitted under its state low, UDOT may use a best value approach to award a contract. Review Process UDOT used a two-phase procurement process for the selec- tion of a design-builder to deliver the project. UDOT short- listed the proposers based on SOQs they received in response to the RFQ. The RFP was issued as the second phase of the procurement process to the shortlisted proposers. UDOT evaluated the written technical proposal based on the pass/ fail, technical factors, and a risk analysis profile of best value elements. The price proposals were evaluated based on the price factors mentioned in the RFP. Protest UDOT awarded the contract for the I-15 CORE project to Provo River Constructors (PRC). Flatiron/Skanska/Zachry (FSZ), a Joint Venture, filed a protest on December 22, 2009, concerning UDOT’s evaluating of its proposal and the award of the contract to PRC. FSZ filed supplements to the protest on December 30, 2009, and January 5, 2010. FSZ claims that its proposal met or exceeded the criteria requested by UDOT and should have resulted in an award to FSZ. The evaluation teams of UDOT concurred and rated FSZ the highest of all the proposers. FSZ remained firm in this position and claimed that the Selection Recommendation Committee (SRC) violated the review criteria procedures. As a result, FSZ requested that UDOT terminate the contract awarded to PRC and award the contract to FSZ. Outcomes No legal action was filed in court. UDOT and FSZ agreed to settle all claims concerning the protest, procurement process, and award of the contract for the I-15 CORE proj- ect. The major outcomes of this protest are briefly sum- marized here. • UDOT paid to FSZ $13 million for the costs incurred by FSZ in its pursuit of the I-15 CORE project as a full and final settlement of any and all claims concerning the protest, including a stipend for the release of claims and other covenants. • Upon receipt of the payment, FSZ released and waived all claims of any type and nature related to this protest. • FSZ agreed to not bring legal judicial or administrative proceedings of any type or nature against the state of Utah, UDOT, and their respective employees or agents. • UDOT was entitled to use all ideas and technical solu- tions presented in FZS’s proposal without further com- pensation. Based on Section 7.5 of the instruction for proposers, UDOT may provide to the successful pro- poser (PRC) the FSZ proposal and include any of the FSZ technical solutions. • UDOT and FSZ acknowledged that neither party was admitting any liability or wrongdoing. The agreement was entered into solely to resolve disputed claims and to avoid the inconvenience and expense of litigation. PROTEST CASE 3: lA I-10/I-605, INTERChANgE CONNECTOR, CAlTRANS Project Description The project is located at the I-10/I-605 Interchange in Los Angeles County. The LA I-10/I-605, Interchange Connector project consists of designing and constructing a direct connec- tor from southbound I-605 to eastbound I-10. It also includes reconstruction of the southbound I-605 to westbound I-10 connector ramp and Dalewood Street adjacent to the east- bound I-10 freeway. The estimated cost of this D-B best value project (in 2010 U.S. dollars) is $61.8 million. The scope of the project includes the following: • Maintain traffic during construction; • Provide positive drainage by means of accepted methods (i.e., curb and gutter, storm drain, ditches, culverts, and detention ponds); • Provide construction surveying; • Coordinate with other construction projects within the corridor to increase mobility; • Coordinate with the local cities; • Coordinate with department’s public involvement man- agement team, including development and implementa- tion of a public information plan as part of the construction phase of this project; • Obtain necessary environmental permits and authoriza- tions, including noise permits from local agencies (if necessary), National Pollutant Discharge Elimination System (NPDES) permit, etc.; and • Maintain the roadway and roadway facilities within the project limit during construction.

65 Procurement law Under the D-B Demonstration Program, a transportation entity may utilize the D-B method of procurement to design and construct projects on or adjacent to the state highway system, including related non-highway portions of the project, based on either best value or lowest responsible bid. A transportation entity shall prepare a set of documents setting forth the scope and estimated price of a project. Based on the documents pre- pared, the transportation entity shall prepare and issue a RFQ in order to prequalify the D-B entities whose proposals shall be evaluated for final selection. For those projects utilizing best value selection, competitive proposals shall be evaluated by using only the criteria and selection procedures specifi- cally identified in the RFP. When the evaluation is complete, the top three responsive bidders shall be ranked sequentially based on a determination of value provided. Contract award shall be made to the responsible bidder whose proposal is determined by the transportation entity to have offered the best value to the public. Review Process The department used a two-phase procurement process for the selection of a design-builder to deliver the project. Caltrans prequalified the proposers based on SOQs they received in response to the RFQ issued by them as the first part of the pro- curement process. The RFP was issued as the second phase of the procurement process to the prequalified proposers. Caltrans evaluated the written technical proposal for responsiveness to the RFP requirements. The technical factors considered dur- ing the evaluation were project management plan, preliminary quality approach, environmental compliance plan, risk man- agement plan, utility coordination, project schedule and con- struction phasing/sequencing plan, transportation management plan (TMP), and safety plan. The price proposals were evalu- ated after the completion of technical proposal evaluation. The contract was to be awarded to the responsive and responsible proposer offering a proposal meeting the high standards set by the department. Protest Caltrans awarded the I-10/I-605 project to MCM Construction after the evaluation of the proposals submitted by the propos- ers. MCM Construction’s proposal was identified as providing the best value to the department. One of the unsuccessful pro- posers protested the department’s decision to award the project to MCM Construction. The unsuccessful proposer believed that the department was either unaware of or did not completely consider the geometric challenges present on this project. This proposer believed that if the department reviewed the submitted infor- mation they would find the following: 1. The apparent best value proposal directly contradicted the intent of RFP; 2. The apparent best value proposal would require multi- ple additional design exceptions; 3. The Master Design Submittal (MDS) submitted by the apparent best value proposal conflicts with the perma- nent striping on an adjacent contract; and 4. The MDS submitted by the apparent best value proposal had a lower design speed on the “SE-C” connector than Caltrans baseline model. The protester also believed that they submitted a better MDS and they deserved a higher technical score on their pro- posal for the reasons mentioned here: 1. Their MDS considered all constraints at SE-C/I-10 merge, including conforming to the new lane align- ment on I-10 as a result of this contract; 2. Their proposed geometry on SE-C connector with high design speed and greater sight distance than Caltrans baseline model; and 3. Minimized impacts to traffic on I-10 and I-605 dur- ing construction by incorporating innovative bridge design and construction techniques. The unsuccessful proposer believed that if the department re-evaluated all the proposals again they would get a higher technical score and they would become the best value pro- poser, could save Caltrans in excess of $1.6 million, and also provides high levels of safety, mobility, quality, environmental compliance, and schedule. Outcomes The protest was reviewed by the department’s protest com- mittee. After reviewing the protest and the information sub- mitted in support of its protest, Caltrans determined that the unsuccessful proposer did not make a persuasive argument as to why the selection would be different based upon the information submitted. PROTEST CASE 4: I 35E mnPASS D-B PROjECT, mnDOT Project Description The I 35E MnPass D-B Project is located in Ramsey County, Minnesota, between the cities of St. Paul and Little Canada. This project is the first MnPASS investment in the East Metro area and an essential link for people commuting between downtown St. Paul and the suburbs to the north. This $98 million project involves extending I 35E a total of approximately 3.4 miles from Maryland Ave. to Little Can- ada Road. The scope of this D-B project primarily includes: • Widening its current 6 lanes to 8 lanes; • Removing the railroad bridge south of Arlington Ave.; • Reconstruction of six interchanges;

66 • Replacement of nine bridges in the corridor; and • Installation of Intelligent Transportation Systems (ITS). Procurement law Minnesota Statutes states that in a D-B design and price-based selection process, selection must be based on best value, which includes an evaluation of price and design, and may include other criteria including, but not limited to, the pro- poser’s experience as a constructor or primary designer. The commissioner will establish procedures for determining the appropriate content of each request for qualifications, and the weighted criteria and subcriteria to be used to evaluate the design-builders including, but not limited to, the proposer’s experience as a constructor or primary designer, including capacity of key personnel, technical competence, capability to perform and the past performance of the proposer and its employees, its safety record and compliance with state and federal law, quality and past performance, and the procedures for evaluating qualifications in an open, competitive, and objective manner (2005 16C.33). Review Process The project began with the issuance of a RFQ on February 8, 2013. MnDOT shortlisted four proposers and issued an RFP on April 12, 2013. Based on the four proposals received, MnDOT conducted a very thorough and extensive evalua- tion process, reportedly involving over 1,200 hours. MnDOT employed a specific best value technical proposal evaluation manual (TPEM) for this project. The TPEM added a provi- sion that requires an oral vote of the TRC on the responsive- ness of each technical proposal. Protest MnDOT awarded this D-B project to Ames Construction Inc. The Department of Administration received protests from both C.S. McCrossan (CSM), Inc. and Lunda/Shafer joint venture (LSJV) on August 19, 2013. Both protests were issued according to the RFP’s protest procedures. The Depart- ment of Administration reviewed all of the points raised in the protests. The review included an interview of a Federal High- way official who served on the Process Oversight Committee. CSm Protest The CSM protest was largely based on the argument that TRC made mistakes in scoring their proposal. Specifically, 1. CSM asserted that TRC did not follow the best value TPEM during the evaluation process. 2. CSM claimed that evaluators failed to follow the instruc- tion in the TPEM because of overly vague comments. 3. CSM did not agree with the score they received. Outcomes of CSm Protest Through a discussion of the overall concept of best value, the protest official agreed to the following three points that are common to any best value procurement: • Evaluations are inherently subjective; • Those whose proposal did not receive the highest score will likely disagree with how the proposals were scored; and • It is not appropriate to declare a process flawed without a clear demonstration that the decisions were arbitrary, capricious, or contrary to law. Based on observations by the federal official charged with overseeing this particular process, significant hours were spent by the TRC. The official agreed that the evaluations were thorough and that scores were derived from intense and lengthy discussions on the merits of all major components of every proposal. After reviewing all aspects of the CSM protest no facts presented support a finding that the process was arbitrary, capricious, or contrary to law. Therefore, the CSM’s protest was denied and the original determination by MnDOT was affirmed. lSjV Protest The LSJV protest primarily focused on the following two points: 1. LSJV claimed that there was a lack of clarification about how points would be awarded to the duration of traffic closures; and 2. LSJV contended that Ames’ proposal did not meet the RFP requirements regarding width requirements on the TH 36 Bridge. Outcomes of lSjV Protest In response to Protest Point No. 1, MnDOT stated that closure duration is not the only criteria being scored in this section. In addition, MnDOT does have a Qualitative Rating Guide as part of its manual and could develop and communicate to vendors more information about how that Guide is expected to be applied. However, MnDOT agreed that while the given response did not equate to anything that would make the selection process arbitrary or capricious, clearly comments on the scoring would have provided greater transparency into the process. In response to Protest Point No. 2, MnDOT acknowl- edged this deviation is true. However, MnDOT stated that all four proposals proposed to put four lanes of traffic on the unaltered bridge. The TRC members evaluated the merits of the proposals and determined that maintenance of four lanes of traffic was beneficial to the Project, and the “shortage”

67 of 10.5 inches was insignificant for safety purposes. Never- theless, MnDOT has the ability to enforce the RFP. After studying the specific deviations raised in the LSJV protest, the Protest Official determined the TRC was within its legal authority when it accepted the deviations from the RFP requirements that are addressed in the LSJV protest. In conclusion, the Protest Official has not found any of the arguments to merit a finding that the TRC’s process was arbitrary, capricious, or contrary to law. However, the Protest Official recommends that MnDOT review and refine the lan- guage in its procurement documents to ensure consistency and clarity.

Abbreviations used without definitions in TRB publications: A4A Airlines for America AAAE American Association of Airport Executives AASHO American Association of State Highway Officials AASHTO American Association of State Highway and Transportation Officials ACI–NA Airports Council International–North America ACRP Airport Cooperative Research Program ADA Americans with Disabilities Act APTA American Public Transportation Association ASCE American Society of Civil Engineers ASME American Society of Mechanical Engineers ASTM American Society for Testing and Materials ATA American Trucking Associations CTAA Community Transportation Association of America CTBSSP Commercial Truck and Bus Safety Synthesis Program DHS Department of Homeland Security DOE Department of Energy EPA Environmental Protection Agency FAA Federal Aviation Administration FHWA Federal Highway Administration FMCSA Federal Motor Carrier Safety Administration FRA Federal Railroad Administration FTA Federal Transit Administration HMCRP Hazardous Materials Cooperative Research Program IEEE Institute of Electrical and Electronics Engineers ISTEA Intermodal Surface Transportation Efficiency Act of 1991 ITE Institute of Transportation Engineers MAP-21 Moving Ahead for Progress in the 21st Century Act (2012) NASA National Aeronautics and Space Administration NASAO National Association of State Aviation Officials NCFRP National Cooperative Freight Research Program NCHRP National Cooperative Highway Research Program NHTSA National Highway Traffic Safety Administration NTSB National Transportation Safety Board PHMSA Pipeline and Hazardous Materials Safety Administration RITA Research and Innovative Technology Administration SAE Society of Automotive Engineers SAFETEA-LU Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (2005) TCRP Transit Cooperative Research Program TEA-21 Transportation Equity Act for the 21st Century (1998) TRB Transportation Research Board TSA Transportation Security Administration U.S.DOT United States Department of Transportation