Light Rail Transit Project Exposition Metro Line Construction Authority Mid-City Exposition Light Rail Transit Project Design-Build Contract Award March 2, 2006

Best Value Procurement A combination of price and technical (non-price) considerations. ▪ Provides greater assurance of performance resulting in: ▪ Enhanced Community and Stakeholder responsiveness. ▪ Cost effective design. ▪ High quality construction. ▪ Timely Project delivery. ▪ Recommended Proposer need not be the one with the overall lowest Price in order to provide the Best Value

Best Value Evaluation Criteria and Weights TECHNICAL FACTORS (70%) Management and Organization Structure; Qualifications and Experience Construction Plan, Project Management Plan, and Overall Approach to the Work Contracting Plan Construction Safety Proposal and Record Quality of the Community, Public and Business Mitigation Commitments PRICE (30%) Design Fee and additional cost Professional Services Fee and additional cost Construction Fee Insurance Costs

Technical (non-price) scores Scores determined by five independent subcommittees, one for each major evaluation criterion 19 individuals served on these committees (3 or 4 per committee) Each person served on only one subcommittee Subcommittees chaired by one member and scores verified by him/her All three proposers were consistently rated in the Good to Exceptional range in all 5 evaluation criteria

Sealed price proposals opened only after all technical scoring was completed No visibility of prices by any of the 19 technical subcommittee members Price proposals checked for completeness

Best Value Scores then were calculated per the RFP formula Technical (non-price score) worth 70% Price worth 30% 

Best Value Total Score Scores Total Score FCI/Fluor/Parsons 96.5 Kiewit/Stacey and Witbeck JV 79.2 Mid-City Constructors JV (Granite/Brutoco) 80.8

Procurement Background September 2005, Authority Board authorized solicitation of proposals for Negotiated Design-Build Contract. January 2006, Proposals received and evaluated. February 2006, Authority Board authorized CEO to negotiate with top ranked proposer, FCI/Fluor/Parsons. February 2006 negotiations focused on the following: Exceptions to the RFP identified by FCI/Fluor/Parsons Clarification of elements of their proposal. Review of price proposal to determine if fair and reasonable.

---Through a competitive procurement --- Structure of Price Proposals Authority Estimated Allowances for Design and Professional Services Costs Authority Estimated Allowance for Construction Cost Elements of Price Proposals Profit (Fee) on cost for Design Profit (Fee) on Professional Services Includes Costs estimated by Proposer over Authority Allowances for Design and Professional Services (if any) Profit (Fee) on Construction In this manner, profit (fee) is fixed for the entire project In addition, costs are fixed for Design and Professional Services ---Through a competitive procurement ---

Fair and Reasonableness Determination Price competition (3 well qualified Proposer Teams) within the Best Value Process Price evaluation completed for the highest ranked proposer complies with Federal Standards (allowability)

Price Evaluation Findings Design: • Proposer documented 9% more hours to perform the Work over Metro’s estimate • Labor rates consistent with current “market” rates • Fixed Price risk included in the Proposer’s hours • Profit (Fee) percentage appropriate for fixed price risk

Price Evaluation Findings (continued) Professional Services: • Proposer bid exceeded the Authority’s estimate • Four areas accounted for the difference: • Escalation • Surveying • Quality Control • Construction Vehicles • Detailed review of the costs showed the Proposer’s cost backup for those areas to be appropriate and extremely well documented.

Process for Establishing the Final Cost of the Construction Packages Construction Packages are prepared for final cost estimating as engineering and design is completed for each discrete portion of the project ("Packages") Total Price for Construction = fixed cost for all packages plus Contractor's Fixed Construction Fee  Contractor submits detailed cost estimate for each Package (includes details of all labor and materials quantities and unit prices) Authority reviews cost estimate

Process for Establishing the Final Cost of the Construction Packages (continued) If cost for the Package is consistent with Authority's evaluation and budget, CEO recommends Board to authorize Notice to Proceed with construction If cost is not mutually agreed, Authority has the right to bid out Package (s) Regardless, Contractor serves as the overall Construction Manager and Engineer of Record for all Packages Contractor's Fixed Fee is reduced for any packages that Contractor is not awarded

Contract Award and Notice to Proceed

Action Required Next Steps Authorize the CEO to award and execute Contract No.1-06 with FCI/Fluor/Parsons in an amount not to exceed $420,207,000. Authorize the CEO to Issue a Notice to Proceed for Design and Professional Services in an amount not to exceed $77,757,000. Next Steps Upon Authorization of award, conform Contract No. 1-06. After California Transportation Commission meetings, March 9 & 16, 2006, execute final contract and issue Notice to Proceed for Design and Professional Services. As design packages are completed, establish the cost of the Construction Packages.