New Ohio Transportation Bill Allows Public-Private Partnerships And Limited Design-Build Procurement

Ohio has joined a growing number of states turning to public – private partnerships, or PPPs, to help fund much needed infrastructure projects.  On March 30, Ohio Governor John Kasich signed a new $6.8 billion transportation bill into law. House Bill 114 allows the Ohio Department of Transportation to enter agreements with private entities to develop, finance, maintain, and operate transportation infrastructure.   

Ohio has joined a growing number of states turning to public –private partnerships, or PPPs, to help fund much needed infrastructure projects.  On March 30, Ohio Governor John Kasich signed a new $6.8 billion transportation bill into law. House Bill 114 allows the Ohio Department of Transportation to enter agreements with private entities to develop, finance, maintain, and operate transportation infrastructure. 

Under the new law, ODOT can solicit proposals for transportation projects from private entities, and private entities can also submit proposals for unsolicited projects.  ODOT can then select proposals, with or without negotiations, based on qualifications, best value, or both, provided the selection is based on a competitive process. The department is required to consider the following factors in evaluating and selecting a bid or proposal to enter into a public-private initiative:

• The ability of the transportation facility to improve safety, reduce congestion, increase capacity, and promote economic growth;

• The extent that the private entity's proposal addresses the needs identified in the appropriate state, regional, or local transportation plan by improving safety, reducing congestion, increasing capacity, or enhancing economic efficiency and the private entity's proposal is on the transportation improvement program for the affected metropolitan planning organization or the state transportation improvement program;

• The proposed cost of and financial plan for the transportation facility;

• The general reputation, qualifications, industry experience, and financial capacity of the private entity;

• The proposed design, operation, and feasibility of the transportation facility;

• Comments from local citizens and affected jurisdictions;

• Benefits to the public and the affected transportation facility;

• The safety record of the private entity;

• Any other criteria that the department considers appropriate.

To qualify, unsolicited proposals must meet the following criteria:

• Address the needs identified in the appropriate state, regional, or local transportation plan;

• Benefit the public;
• Be independently originated and developed by the proposer;

• Be prepared without ODOT supervision;

• Include sufficient detail and information for ODOT to evaluate the proposal in an objective and timely manner;

• Be made by a private entity that is not prohibited by law from making an unsolicited proposal.

In a further break from traditional “low bid,” design-bid-build procurement, ODOT may also spend up to $1 billion annually on projects using a design-build project delivery method. For these special design-build  projects, ODOT may use a value-based selection process, combining technical qualifications and competitive bidding elements, including consideration for minority or disadvantaged businesses that may include joint ventures.  ODOT may also compensate up to two unsuccessful bidders for the value of their preliminary design concepts.

ODOT may also provide that prior to the bid opening, the official engineer’s project cost estimate will be confidential information not subject to public record requests and that, after the bid opening, only the total estimate may be published.  The unit price components and cost estimate of any particular work item will be kept confidential and not deemed public records. ODOT may award a contract for these special projects even though it exceeds the official engineer’s estimate if ODOT determines that the successful bid is fair and reasonable.

These new provisions are intended to help ODOT leverage taxpayer dollars through public-private partnerships and to provide the public sector with the cost and schedule benefits of the design-build process frequently used in private projects. 

Posted by: D. Scott Gurney

Categories: Construction Contracts, Current Developments / Legislation, Federal and State Procurement / Bid Disputes