Features: What We Build — March/April 2005

Lone Star CONNECTION

TxDOT's first public-private partnership paves way for faster delivery of a new Austin tollway

By Eileen Schwartz

Construction is under way on the outskirts of Austin on approximately 20 miles of the 49-mile project to be completed by December 2007.

Like most states, Texas has its share of toll road critics. But by using alternative delivery methods, a much-needed congestion relief project in Central Texas could be completed 25 years ahead of a traditional bid process.

"In Texas, it's obvious that there's not enough money around to increase our infrastructure and still maintain what we've already built," says Tim Weight, director of turnpike construction with the Texas Dept. of Transportation's Austin District. "The result may be that tolls are a user fee, which is really what they are. If you want to use it, then you pay for it. It makes that section of road more or less self-supporting."

In its first-ever design-build contract and the largest single highway project in the state's history, TxDOT is partnering on a new tollway with a consortium of firms working as the joint venture of Lone Star Infrastructure. LSI is comprised of Fluor Corp., Aliso Viejo, Calif.; Balfour Beatty Construction, Atlanta; and T.J. Lambrecht, Euless, Texas, all AGC members. Also involved is Omaha's HDR Engineering Inc. acting as the owner's representative, and more than 20 subcontractors and consultants.

They have teamed up to build the 49-mile, $1.5-billion State Highway 130, an Austin to San Antonio corridor designed to relieve congestion by creating a commuter and NAFTA-traffic alternative to Interstate 35.

S.H. 130/45 is just one major interchange within the Central Texas Turnpike Project. The project includes a number of different delivery methods and an innovative mix of financing.

"The challenge associated with S.H. 130 is to build a facility that would improve both safety and mobility in the I-35/ NAFTA corridor," says Robert B. Daigh, TxDOT district engineer for the Austin District. "The Austin/San Antonio section of I-35 is one of the most congested in the state. We needed to find a more efficient way to deliver the needed improvements."

The project broke ground in October 2003 on the four-lane divided concrete road that will run parallel to and east of I-35, extending from just north of the Austin suburb of Georgetown to U.S. 183 in southeast Travis County. TxDOT says a second section will be built through Caldwell and Guadalupe counties, extending the roadway's length to 90 miles.

LSI won the job bidding concrete, even though its bid was higher than one submitted by Granite Construction Inc., Watsonville, Calif. Granite proposed using asphalt because of the region's expansive clays. But LSI's long-term maintenance estimate of $64.5 million over 15 years won over state officials. Still, some sections will require soil undercutting and reconditioning to 72 in. deep.

S.H. 130 is progressing at breakneck speed. Only 18 months after groundbreaking, construction is under way on nearly 20 miles of tollway. With a five-year timetable, construction should be completed no later than December 2007.

"We have more than half of the right-of-way in hand," Weight says. "The biggest milestone is just the fact that we've defined our procedures and processes to the point where things seem to be going smoothly."

Delivering the Job

S.H. 130 is the largest element of the $3.6- billion Central Texas Turnpike Project, a 65-mile, mixed-delivery set of toll roads and interchanges. It's the first road to be developed under a TxDOT design-build contract known as a Comprehensive Development Agreement, authorized by the Texas Legislature in 2001.

CDA is a project delivery method that allows design and construction to be provided by one entity and performed concurrently. On S.H. 130, design concepts from other proposers were incorporated in the project, resulting in a savings of approximately $75 million. The proposers were compensated for their work.
"By partnering with the private sector through a CDA, we have been able to design, acquire right-of-way, construct and move utilities quickly and proficiently," Daigh says.

CTTP project delivery includes both traditional and design-build methods. The project is financed by nearly $700 million in state highway funds, a U.S. Dept. of Transportation TIFIA loan and local contributions for right-of-way and bond proceeds. Texas was the first state to snag a TIFIA loan offered under the federal Transportation and Infrastructure Finance and Innovation Act. The $916.75-million loan carries a 5.41% interest rate but won't be accessed for about five years, when construction costs begin to come due. In the interim, work is being funded through short-term bond notes that have an interest rate about 2% lower. TxDOT should save between $60 million and $70 million in interest by the time it takes possession of the loan.

"The S.H. 130 project as part of the CTTP in the 2002 bond sale provided a fixed-price, fixed-schedule element," says Jeff Curren, HDR senior vice president. "That provided reassurance to the bond market that there are not going to be a lot of changes associated with these construction costs for that element of the work."

Tollway project includes 125 bridges and eventually may include light rail within its corridor.

LSI was on board from the beginning, its three firms having come together several years before submitting their proposal to TxDOT in February 2002. "When we received the notice to proceed for right-of-way acquisition and final design and construction, we had to define the limits of the project so we knew how much right-of-way to acquire," says Douglas A. Fuller, LSI project director with Fluor. "While we were acquiring right-of-way, we were finishing design and putting together support to start construction."

The design-build nature of the project sets it apart from the traditional design-bid-build process in other ways. In addition to concurrent right-of-way acquisition and engineering being handled by LSI rather than by the state, independent quality control on both design and construction teams are part of the organization, providing oversight for the state while working closely with the rest of the partners.

"Design-build is an allocation of risk for TxDOT," Weight says. "The intent is to give the contractor some latitude to determine his own path forward as he builds the project. He can move alignment, restack interchanges or buy more right-of-way rather than building retaining walls, so he can give us the most economical prices."

Throughout the early stages of the project, teams were assembled that included a representative from LSI, quality assurance and the owner to analyze, finalize and refine the design as well as oversee the design criteria as it was being developed.

The same team spirit carries over to the construction. "The project embraces partnership on many different levels of the organization," Fuller says. "A project of this magnitude and scope requires a good partnering relationship between the owner and the design-build contractor. I don't think it's necessarily the tools TxDOT has as it is the degree to which they have embraced partnering with us."

Jeff Overmier, deputy director of construction for LSI with T.J. Lambrecht, agrees. "It's probably a mindset as much as anything," he says. "These open forums are real positive. We resolve issues right away and move forward."

That kind of synergy separates not only design-build as a concept from traditional bidding processes but also demonstrates the potential success of future private-public partnerships with TxDOT. "This project will serve as a stepping stone for future design-build projects in Texas," Daigh says.

"We are certainly not the first to try design-build in transportation, just the first in Texas," says Weight. "One of the Texas twists we put in is the concept of the independent quality [assurance] firms, which is something that hasn't been done before, to my knowledge, in the nation."

The result is a system of checks and balances. While LSI assumes responsibility for all quality assurance, from meeting the design specifications to meeting the completion schedule, the quality assurance firms are required to remain independent from any of the developer firms.

"We have two independent firms whose costs are paid by LSI but report to TxDOT and LSI simultaneously," Weight says. "That is the first line of inspection forces, if you will. Over that, we have HDR, our representative, which also does some checking on the quality firms just to make sure they're doing things the way they should."

Because much of the project is greenfield, environmental compliance takes on a much larger role. "We have onsite environmental compliance inspectors," says John Rempe, Balfour Beatty's LSI director of construction. "They are there to make sure we respect all boundaries and to keep us in compliance through the whole process."

Another key to the success is standardization. "With standardization you get flexibility, which equals the bottom line and time," Rempe says. "The merging of the design-build to the right-of-way, that's really key. The key element is continuous work."