Tom Warne Report, 16 April 2013
Contractors will be paid even if their bid is rejected by the Florida Department of Transportation for the massive reconstruction project of I-4, according to a plan recently approved by Metroplan Orlando. Companies will be reimbursed up to $12 million for their bid on the design build project if their bid is not accepted.
“Contractors tell us they expect to spend anywhere between $10 million and $12 million to develop a plan, and as a state agency and representing the taxpayers of the state of Florida, we want a good plan that will be viable that will get us the biggest bang out of the dollar that we have on this I-4 Project,” said FDOT spokesman Steve Olsen. He said the losing bids may have value to the department.
Olsen said this will give officials the option to use ideas in proposals even if they did not win with the payment of the $2 million to each unsuccessful team. “We can say, ‘We own it, make it part of that proposal!”
The state will present a financing plan for the $2.1 billion project to Metroplan in the next couple months, and hopes to begin construction by summer 2014.
The payment of stipends is not new but I think this is an important development because of the amount. Very few owners (FDOT and INDOT come to mind) who have gone beyond the $1 million mark. The payment of $2 million for each proposal is small compared to what firms spend to develop their submissions. Sadly, there are still those who don’t understand the full impact of why we pay stipends. First, it’s not for a full expense reimbursement; that’s the misconception. However, it does defray some of the costs of putting a proposal together. Most importantly it sends a couple of messages to the proposers. One is that the owner is serious about a firm putting a lot of effort into preparing ideas and plans and recognizes that effort with a higher stipend. Next, it sends a message about what kind of owner an agency will be. A reasonable and fair stipend sends a message that the owner is going to be fair and realistic about commercial issues on the project. A higher stipend makes money for the owner in the proposal process (just one good idea will far exceed the value of the stipend) and creates the best environment for overall project delivery. TW