contract award for the automated people mover at lax

Contract Award for theAutomated People Mover at LAX

Automated People Mover

PROJECT OVERVIEW

STAFF RECOMMENDATION

DBFOM AGREEMENT

PROCUREMENT PROCESS

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NEXT STEPS

RECOMMENDED DEVELOPER

EARLY WORKS UPDATE

Improve the passenger experience and reduce traffic congestion in and around LAX.

• Create time-certain travel options for passengers and employees

• Improve access by creating new, convenient locations for passenger pickup, drop-off, parking outside of the CTA, and more efficient access to rental cars

Connect LAX to regional public transportation infrastructure: • Rail, roadways, buses, Metro Station

Seize the opportunity for immediate and long term results through a Public Private Partnership.

• Life Cycle Cost Certainty• Partnership Approach

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Automated People MoverProject Overview

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The Automated People Mover will run on a 2.25 mile elevated guideway and create a new connection to LAXfrom public and private transportation and a new consolidated Rent-A-Car (ConRAC) facility

▪ The APM will connect 6 stations between the ConRAC and the CTA

▪ The new infrastructure is expected to reduce street traffic congestion in and around the CTA

▪ Approximately 200 passengers per train

▪ APM will run every ~2 minutes and will travel from the ConRAC to the CTA in ~ 10 minutes

▪ Ridership Capacity: 10,000 passengers/hr

▪ Cost to Ride: Free for airport users

▪ Maximum Speed of Train: 47 MPH

APM Design & Construction 2018-2023

Automated People MoverProject Overview

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APM Operation & Maintenance 2023-2048

Automated People MoverDBFOM Agreement

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Why DBFOM?

Creates opportunity for innovation in design, construction and operations

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Emphasizes the importance of on-time, high quality delivery and for all parties to structure work accordingly

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Aligns design, construction and operations to ensure project decisions add value around guest experience, improved asset management, sustainability, and inclusivity

Transfers some risks from LAWA to the Developer and encourages Developer to mitigate potential risks

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DESIGN

BUILD

FINANCE

OPERATE

MAINTAIN

What is DBFOM? DBFOM is a public-private-partnership (P3) contracting model that enables public sector agencies to harness private sector innovation and expertise, while sharing risks and responsibilities for financing. In exchange, private partners earn a reliable revenue stream (subject to performance.)

DBFOM

Automated People MoverProcurement Process

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To deliver the APM, LAWA & The Recommended Developer will enter into a 30 year DBFOM Agreement CONTRACT VALUE INCLUDES:

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DEVELOPER WILL RECEIVE:

AGREEMENT• 5 YEARS- Design & Construction (D&C)• 25 YEARS- Operations & Maintenance

(O&M)

• Construction costs, financed by Developer

• Cost of 25 Years O&M, with inflation escalation

• Cost of Developer’s construction financing

• Six Milestone Payments- during Construction

• Annual Availability Payments- during O&M, disbursed in monthly increments


DEVELOPER’S RESPONSIBILITIES

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Developer is responsible for the design & construction of the APM System including: • Operating System (Vehicles & operating

technology) • Fixed Facilities (Stations, guideway,

infrastructure)

DESIGN & CONSTRUCTION

SERVICE AVAILABILITY: 2023

LAWA’S RESPONSIBILITIES

• Developer has contractual obligation to meet a service availability date of March, 2023

• Developer’s failure to meet this date could result in lost Availability Payments which can not be recovered

• Deliver project property (real estate) on schedule

• Complete key enabling projects such as relocating LAWA tenants and some utilities

• Facilitate inter-agency cooperation • Facilitate interfaces with other projects,

such as Metro station & ConRAC


DEVELOPER’S RESPONSIBILITIES

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Developer is responsible for the operations & maintenance of the APM System including: • Operating System (Vehicles & operating

technology) • Fixed Facilities (Stations, guideway,

infrastructure)

REQUIREMENTS DURING O&M

HANDBACK

• Developer must meet 99.5% or greater System Availability during O&M

• Failure to achieve 99.5% Availability will result in Payment Deductions and Other Agreement Compliance EnforcementMeasures (more on compliance )

• Refurbishment & replacement schedule for portions of the system throughout the 25 years

• At the end of 25 years of O&M, the APM System must have 5 years of minimum remaining useful life

OPERATIONS & MAINTENANCE


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COMPLIANCE

APM PERFORMANCE & COMPLIANCE • Creates incentive to correct performance• Includes progressive measures to enforce

compliance• Default is the last resort

PAYMENT DEDUCTIONS• Availability Deductions- Based on a 99.5%

Performance Standard for key APM systems• Non-Compliance Deductions- Based on non-

compliance events (NCE)identified in the NCE table

• Developer will also accrue non-compliance points for breaching key obligations identified in the Non-Compliance Event (NCE) table

• Accumulation of NCE points triggers escalation of enforcement measures such as: Increased LAWA oversight, required remediation plans, increased oversight from Developer’s financiers, LAWA replacing contractors

NON-COMPLIANCE POINTS

• Unavailability deductions are based on duration of unavailability

99.5 % AVAILABILITY STANDARD

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•Key contract obligations are in the non-compliance table

•LAWA may add obligations to the table if Developer breaches obligation multiple times

•Non-compliance events result in accrual of NCE points & payment deductions.

•Accruing too many points could ultimately lead to termination (default)

Element Category

Required Task

Minimum Performance

Reqmts

Non-Compliance Event Points

Interval of Recur-rence

D &C Non-Compliance

Deductions in $

(for new or recurred events)

Relevant section

of contract

docs

D&C

Labor LocalHire

Requirement

Meet the 30%minimum annual utilization of Local Workers required by Section 9.9.2

20 + 5 for every 1% below the

requirement

N/A $50,000 + $2500 for every 1% below the requirement

DBFOMA 9.9.2

Maintenance of Traffic

D &C Period Planned Lane

Closure

No lane shall be closed outside the time period detailed in the approved Traffic Control Plan on: World Way Upper & Lower levels

10 15 minutes $50,000 Part 2A, 16.4.1,

Table 16-1

O&M

Operations Pedestrian Walkways

Moving walkway shall be repaired within 5 hours of initial failure

2 3 hours $2500 Part 3, 4.3.3

Performance APM Operating

System Shutdown

No APM Operating

System Shutdown

greater than 6 hours but less than or equal to 24 hours

80 + 6.7 every hour

shutdown continues beyond 6

hours up to 24 hours total

Refer to formula for

points

$750,000 + $125,000 every hour Shutdown

continues beyond 6 hours up to 24 hours

total

Part 3, 3.2.2.1

NON-COMPLIANCE EVENTS


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RFP DEVELOPMENT

INTEGRATED TEAMS•Gateway/Mitsubishi•LAXCA/Ansaldo/Woojin•LINXS/Bombardier

DEVELOPER ENGAGEMENT• Aesthetic Review• Technical Meetings• Commercial Discussions

EDROPERATING SYSTEM SUPPLIERS (OSS)

PRE-QUALIFYING

SOQFIXED FACILITIES SUPPLIERS (FFS)

SCORING & EVALUATION

TECHNICAL PROPOSAL EVALUATION•70 SME’S•Tech. Merit•Visual•User ExpSCORING•9 Member Scoring Panel

PRICE PROPOSALSSelection of LUCP

LINXS

MAR JUN OCT JUL JANNOV


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2016 2017 2018PROPOSAL

DEVELOPMENTIndustry FORUM

FEB

EVALUATION & SCORING STEPS

APM Developer selection process was a qualification-based evaluation with two independent steps to determine Lowest Ultimate Cost Proposer (LUCP)

Steps in Evaluation

Percentage of Total Evaluation

Scoring

2. Evaluate Financial Proposal

1. Evaluate Technical Proposal

60% 40%

6000 Points 4000 Points


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COMPONENTS

TECHCNICAL EVALUATION & SCORING CRITERIA

A. Technical Merit

B. Visual Appeal

C. User Experience

POINTS

APM System Approach to Execution of Project Construction

Project Safety & Security

Inclusivity

Sustainability

Architectural Appeal of the APM Fixed Facilities

Public Outreach/Stakeholder Communication

Approach to Maintenance of Traffic/Mitigation of Construction ImpactsApproach to Operations & Maintenance

Vehicle Aesthetics

User Experience

TOTAL 6000

1000

700 500 500

700 600 200 300 500


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750

250

TECHNICAL PROPOSAL EVALUATION & SCORING

Technical Proposal Review• A team of approximately 70 technical experts,

organized by the evaluation criteria set forth in the RFP, reviewed the technical proposals, summarized their findings and submitted those findings to a scoring panel of nine individuals.

Independent Scoring Panel• The scoring panel was made up of public sector

experts in transportation and airport operations from throughout California

• Those 9 individuals reviewed the technical experts’ comments and also reviewed the proposals in their entirety

• The scorers independently scored each proposal • The LAWA procurement manager tabulated final

technical proposal scores according to the formula in the RFP and turned the scores over to City Attorney for secure storage before financial proposals were received.

APM INDEPENDENT SCORING PANELISTS

Deputy Chief Executive Officer Long Beach Transit (LBT)

Project Manager, Group Manager of Train Control Modernization.

San Francisco Bay Area Rapid Transit (BART)

General Manager

City of Los Angeles Department of

Transportation (LADOT)Deputy Executive Director, Facilities Maintenance & Utilities Group LAWADeputy Executive Director, Environmental Programs LAWAChief Innovation and Technology Officer LAWA

Chief Experience Officer LAWA

Deputy Program Manager

Landside Access Modernization Program

(LAMP)/LAWA

Deputy Chief Executive Officer

Los Angeles County Metropolitan Transit

Authority (Metro)


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FINANCIAL PROPOSAL EVALUATION & SCORING

▪ Each Developer’s financial proposal consists of Capital cost, O&M cost, and Financing cost and was expressed as a single NPV in each proposal

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▪ In accordance with the APM RFP, any price proposal that exceeded $300M more than the Developer with the lowest priced proposal would not receive any price points

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Each financial proposal included an NPV, Net Present Value,for comparison acrossproposers

• The Tier 1 Proposer with the lowest price received 100% of the 4000 available price proposal points.

• Other proposers, within the $300M cap, would have received scores pro-rated against the lowest cost proposer.


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Automated People MoverThe Recommended Developer Team

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LINXS: SUMMARY

LAWA Staff recommends LINXS to the Board of Airport Commissioners as the APM Developer based on their proposal to design, build, finance, operate and maintain the APM.

• LINXS had the highest technical score • LINXS had the lowest cost of the three

teams that proposed

LINXS scored the highest in all three major technical scoring & evaluation categories ; technical merit, visual appeal, and userexperience.

LINXS scored first in six of eleven subcategories

LINXS scored second in all other subcategories

LINXS cost to design & construct the APM: $1.95 B

Automated People MoverRecommended Developer - LINXS

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APM PRICE COMPETITION

• This process resulted in a competitive price from the

winning team.

• LINXS’S design and construction costs came in 4% lower

than the original cost estimate.

($2.028B est. vs. $1.95B actual)

• LINXS presented the lowest cost for both design &

construction and operations & maintenance.

LINXS Gateway LAXCA

Proposed Net Present Value (NPV) $2.63B $3.41B $3.11B

Total 1st year Availability Payment $97.1M $127.0M $115.1M

Design and Construction Cost as presented in Original Bids

$1.95B $2.16B $2.37B

Total Bid over life of Agreement* $4.46B $5.77B $5.07B

*Subject to final contract negotiation


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LINXS scored highest in 6 of 11 evaluation criteria within the 3 major technical categories.

•APM Fixed Facilities •Approach to Maintenance of Traffic •Approach to Operations and Maintenance• Inclusivity•Sustainability•User Experience

LINXS: PROPOSAL HIGHLIGHTS

FIXED FACILITIES

MAINTENANCE OF TRAFFIC

INCLUSIVITY

SUSTAINABILITY


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FIXED FACILITIES

• Longer station platforms to facilitate passenger flow

• Station roofs with circular skylights

• Placing the Maintenance & Storage Facility at-grade, instead of elevated

• Engineering the guideway over 2 parking structures.

• Eliminates the need to demolish & rebuild parking structures

• Major cost savings & minimizes operational impact

• Theme Building Viewing Platform

• Impactful Experience LA Exhibition Space


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FIXED FACILITIES

Theme Building Viewing Platform

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FIXED FACILITIES

Experience LA Exhibit Space with 800 sq. ft. Programmable LED Wall 24

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FIXED FACILITIES

Inter-Modal Transportation Facility East (ITF-E) Station 25



MAINTENANCE OF TRAFFIC

MOT plan focused on:

• SAFETY- Clear separation of work zones from vehicular traffic

• COORDINATION- Effective plans to work with 3rd party partners including City Dept. of Transportation & CalTrans

• EFFICIENT CONSTRUCTION- Longer spans reduce number of columns in rights of way

• Eliminating demolition & reconstruction of parking structures also reduces traffic impacts


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SUSTAINABILITY

• LINXS will generate 1.27 MW of energy; more than 2x the RFP requirement

SOLAR ENERGY

MAINTENANCE & STORAGE FACILITY• MSF will meet LEED Gold Standard

• Trains will be washed at MSF using recycled water

ELECTRIC VEHICLE CHARGING • LINXS will install EVC station

infrastructure at 10% of all parking spaces

• LINXS will install full charging station equipment at 6% of all parking spaces

Maintenance & Storage Facility (MSF)

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INCLUSIVITY

STRATEGIC. COMPREHENSIVE. INNOVATIVE.

Strong Leadership• The Inclusivity Manager has an outstanding

reputation in the field & a robust team with clearly defined roles

• Team manages both business inclusion & workforce development commitments

Additional Commitments• Hire 90% of D&C first period apprentices from

HireLAX and local programs for disadvantaged & underrepresented local populations

• Total commitments to certified firms: $555,000,000

• Establish Union Sponsorship Fund to pay for new apprentice union dues

• Provide 300 scholarships for local youth during D&C

• Establish a 1-to-1 standard for replacing women employees

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INCLUSIVITY

Project Phase Local Hiring

Small Business

Enterprise (SBE)

Local Business

Enterprise (LBE)

Local, Small Business

Enterprise (subset of

LBE)

Disabled Veterans Business

Enterprise(DVBE)

Design No requirement 22% 8% 3% 3%

Construction(5 YRS) • 30% of work force 18% 7%

5% (vs. 3%reqmt.)

3%

Operations & Maintenance

(25 YRS)

• 60% of hours worked by local workers (vs. 50% reqmt.) ,

• 50% from LAX impact zone (no reqmt.)

• 10% disadvantaged

17% 10% 5% 3%

•LINXS has committed 5% of its Construction contracts to Local Small Business Enterprise (LSBE) firms or 66% increase over the 3% required by the RFP

•LSBE commitment represents approximately $85M•Total commitments to certified firms: $555,000,000

• Set-aside packages for every phase of project

•Waive bonding for some contracts up to $5M

• Cover bonding costs for subcontractors

• Allow sub-contractors to bill as often as weekly during design & construction

•Mentoring in all project phases

•Weekly office hours for certified firms

• Certified Firm Liaison

• Capacity Building Partners such as: National Association of Minority Contractors, Merriwether & Williams, & Disabled Vets’ Enterprise Alliance

SUPPORT FOR ENTERPRISES

CERTIFIED CONTRACTING COMMITMENTS

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LINXS: Team

Equity Members

APM Fixed Facilities

Contractor

APM Fixed Facilities Designer

APM Fixed Facilities O&M

Provider

APM Operating System Supplier

APM Operating System O&M

Provider:

Identified Subcontractor Guarantors Lenders and

underwritersKey External

Advisors

ACS Infrastructure Development, Inc.

Balfour Beatty Infrastructure, Inc.

HDR Engineering, Inc.


Bombardier Transportation (Holdings) USA Inc.


Arellano Associates

ACS Servicios y Concesiones, S.L.

Bank of America Merrill Lynch

Bank of Tokyo-Mitsubishi UFJ, LTD.

Balfour Beatty Investments, Inc. Dragados USA, Inc.



Fryman Management, Inc. Balfour Beatty plc Citigroup Global

Markets, Inc.

Turner Surety and Insurance Brokerage, Inc.


Flatiron West, Inc. Fluor Enterprises, Inc.

Fluor Enterprises, Inc.

Modern Times, Inc.

Bombardier Transportation (Global Holding) UK Limited

Ramirez & Co. Ashurst LLP



HOCHTIEF PPP Solutions North America, Inc.

HOCHTIEF PPP Solutions North America, Inc.

Raul V. Bravo + Associates Dragados S.A. Intech Risk

Management Inc.

HOCHTIEF PPP Solutions GmbH

Rosendin Electric, Inc.

Flatiron Construction Corp. Infrata Limited

HNTB Fluor Corporation Operis Group plc

HOCHTIEF Aktiengesellschaft Deloitte Tax LLP

HOCHTIEF PPP Solutions GmbH White & Case LLP

DLA Piper

Early Works UpdateAutomated People Mover at LAX

• The Early Works Agreement allows LINXS to begin work on the APM project prior to final execution of the full DBFOM Agreement at Financial Close.

• Significant progress to date includes:

Automated People MoverEarly Works Update

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Early Works Agreement awarded by BOAC on February 15, 2018

• LINXS Project Execution Office, Fluor Aliso Viejo – 60 Staff• Design Office – HDR / HNTB Offices- 54 staff• LINXS Inclusivity Office • Submission/Review of Key Submittals

• Basis of Design• Project Site Safety Plan• Design Quality Management Plan• Design Criteria (Stations, Guideway Structures, M&SF and

Roads)• Project Communication Plan• FAA Form 7460*• Geotechnical Planning Report*• Draft Design Construction Interface Document*

• Upcoming Activities:• Potholing to identify UG utilities • Geotechnical Borings

New Opportunity for Cost Savings Automated People Mover at LAX

Cost saving opportunity through fully tax-exempt financing

Automated People MoverAvailable Levers for Cost Savings

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Cost saving opportunity proposed by LINXS• After award of the Early Works agreement, LINXS identified a financial innovation to lower LAWA’s

total project cost. • LINXS proposes to use fully tax-exempt, long-term debt to finance the APM project, rather than

initially proposed AMT PABs (which includes an AMT “penalty” in its pricing).• A DBFOM can be eligible for proposed tax-exempt debt structure, if it satisfies key requirements:

1. Developer’s services to LAWA must flow-through a non-profit entity

2. Equity investment in the Developer should be structured as debt

LAWA retains sole discretion to further evaluate and approve the cost savings opportunity• APM DBFOM Agreement currently allows changes for the new structure to become operable at

LAWA's sole discretion via springing provisions ONLY if approved by BOAC. The new structure will also require changes to be effected via new assignment and implementation agreements to allow Developer's assignment to non-profit entity and change to form of equity investment.

• Staff will perform due diligence regarding financial benefits, not-for-profit entity, interparty agreements and risks prior to May 3rd Board meeting as basis for recommendation regarding BOAC’s decision regarding structural changes.

• DBFOMs incentivize “win-win” solutions – LAWA will only recommend approving the new structure if the financial benefits are material and equitably shared between Developer and LAWA

Staff RecommendationsAutomated People Mover at LAX

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Automated People MoverStaff Recommendations APPROVE

• Approve the DBFOM Agreement and related ancillary agreements* with LINXS in the NTE Amount of $4,895,750,000.

APPROPRIATE• Appropriate capital funds in the amount of $3,842,000,000.**

• Approve a budgeted owner’s contingency in the amount of $145,700,000 (approx. 7%)

APPROVE

• Authorize the CEO to approve and execute change orders up to the budgeted contingency amount, provided that prior to execution of any change orders in excess of $5,000,000 the BOAC shall review and authorize the execution thereof.

AUTHORIZE

AUTHORIZE• Authorize the CEO to execute the DBFOM Agreement and

related ancillary agreements* with LINXS.

* Ancillary agreements include a Direct Agreement and an IP MaterialAccess Agreement

** Excludes Operating Availability Payments and certain allowances. Includes budgeted owner’s contingency

Automated People MoverNext Steps

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ACTION DATE

Early Works Agreement approval by BOAC 2/15/18

Trade, Travel, Tourism City Council Committee Hearing on APM Recommended Developer

2/20/18

APM DBFOM Agreement for BOAC Approval 4/5/18

Trade, Travel, Tourism City Council Committee Hearing on APM DBFOM Agreement

4/10/18

APM DBFOM Agreement at City Council & Commercial Close 4/11/18

Developer Submittal of Financial Model and Financing Agreements for Non-Profit Structure

4/11/18

Financial Close and Early Works Status Update for BOAC and if necessary Non-Profit Financing Structure for BOAC Approval

5/3/18

Developer provides notice of Scheduled Financial Close Date 30 days prior

LAWA reviews and provides comments on Financing Agreements 10 days prior

Developer Bond Pricing 6/6/18

Expected Financial Close Date 6/16/18

End of Proposal Validity Period 7/16/18

Automated People MoverNext Steps

contract award for the automated people mover at lax

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