Meeting_Body
EXECUTIVE MANAGEMENT COMMITTEE
NOVEMBER 21, 2019
Subject
SUBJECT: FINANCIAL ADVISORY SERVICES: PRE-PROCUREMENT AND PROCUREMENT FOR THE SEPULVEDA TRANSIT CORRIDOR PRELIMINARY DEVELOPMENT AGREEMENT
Action
ACTION: APPROVE RECOMMENDATIONS
Heading
RECOMMENDATION
Title
AUTHORIZE the Chief Executive Officer (CEO) to:
A. EXECUTE Modification No. 2 to Task Order No. PS51074-3049000 with Ernst & Young Infrastructure Advisors, LLC, (EYIA) to continue support for development and execution of a contract for a pre-development agreement (PDA) for the Sepulveda Transit Corridor project through contract award, in the amount of $539,575 increasing the not-to-exceed Task Order value from $1,099,280 to $1,638,855; and
B. INCREASE Contract Modification Authority (CMA) by $227,915 from $100,000 to $327,915 in support of any unforeseen additional level of effort.
Issue
ISSUE
Task Order No. PS51074-3049000 currently provides for P3 Financial Advisory Services for the development and execution of a contract for a PDA for the Sepulveda Transit Corridor project. Staff is requesting a modification in the amount of $539,575 for Task Order No. PS51074-3049000, to support Metro’s current procurement and execution schedule, with appropriate schedule contingency. Staff is requesting an increase in CMA by $227,915 to account for any additional unforeseen expenses or required level of effort, to be utilized with appropriate justification.
Discussion
DISCUSSION
A PDA is a form of early contractor involvement in project development for a capital construction project. The goal of a PDA is to drive value in project design through early contractor input into approach, constructability, performance, risk, cost, and schedule, with incentives to drive innovation throughout the project’s lifecycle.
A PDA of the type that Metro determined to pursue draws on lessons learned and best practices for early contractor involvement from around the world. However, a PDA of this type and nature is without meaningful precedent in the US, and the procurement process and form of contract that Metro ultimately developed is more complex than anticipated when the task order was scoped and awarded.
Further, after engagement of EYIA, Metro staff determined that it was in Metro’s interest to allow for award of up to two PDA contracts, contributing additional complexity to the proposal evaluation process.
Due to these two factors, the level of effort required to execute the solicitation process, including financial advisory support for review and assessment of proposals, has increased. An increase in CMA will give staff appropriate contingency budget for any unforeseen additional level of effort.
Financial_Impact
FINANCIAL IMPACT
This Task Order is included in the FY20 Budget in Cost Center 2031 - Public Private Partnerships, account 50316, and project 405701. To date in FY 2019, $10,250,735.98 has been encumbered and $3,845,260.98 has been expended, with $4,239,264.02 remaining in the budget.
Since this is a multi-year contract, the cost center manager and Deputy Executive Officer, Innovation, will be accountable for budgeting the cost in future fiscal years.
Alternatives_Considered
ALTERNATIVES CONSIDERED
Staff considered reducing the complexity of the proposal evaluation approach. However, this would have led to a less thorough and competitive process for determining recommendation for contract award.
Staff also considered utilizing in-house resources to provide financial assessment, however Metro staff generally do not have the qualification to provide complex P3 financial analysis.
Staff's assessment indicated that none of these options were a cost-effective or prudent option for Metro.
Implementation_of_Strategic_Plan_Goals
STRATEGIC PLAN
The Metro Vision 2028 Strategic Plan identifies five goals to guide Metro’s work and initiatives. This modification supports the following goals.
• Goal 1: Provide high-quality mobility options that enable people to spend less time traveling.
Metro’s PDA delivery model for the Sepulveda Transit Corridor is focused on delivering maximum project performance at the earliest possible date, within Metro’s financial constraints. A robust procurement process with a thorough evaluation of all responsive and responsible proposals is a critical part of delivering on this value proposition.
• Goal 2: Deliver outstanding trip experiences for all users of the transportation system.
A key benefit of PDA delivery is higher optimizing project performance over the project lifecycle (reliability, safety, cleanliness, etc.).
• Goal 5. Provide responsive, accountable, and trustworthy governance within the Metro organization.
The integrity of Metro’s procurement process is one of the most important factors in achieving responsive, accountable, and trustworthy governance. Including sufficient technical support for a process with high integrity supports this goal.
Next_Steps
NEXT STEPS
Upon Board approval, staff will execute Modification No. 2 to Task Order No. PS51074-3049000 with Ernst & Young Infrastructure Advisors, LLC, to continue support for development and execution of a contract for a PDA for the Sepulveda Transit Corridor project, through contract award.
Attachments
ATTACHMENTS
Attachment A - Procurement Summary
Attachment B - Task Order Modification/Change Order Log
Attachment C - DEOD Summary
Prepared by: Colin Peppard, Senior Director, Special Projects, (213) 418-3434
Reviewed by: Joshua Schank, Chief Innovation Officer, (213) 418-3345
Debra Avila, Chief, Vendor/Contract Management Officer, (213) 418-3051
