Transportation

Program Development

Rule 16: Unsolicited Proposals for Transportation Infrastructure Public-Private Partnerships

Effective Date: 10/10/2022

Admin. Code Reference: R926-16

Rule Type: Current Rule

R926. Transportation, Program Development.

R926-16. Unsolicited Proposals for Transportation Infrastructure Public-Private Partnerships.

R926-16-1. Purpose and Authority.

(1) Purpose. This rule provides a procedure for submitting, screening, evaluating, and implementing an unsolicited proposal to form Transportation Infrastructure Public-private Partnerships (TIPPPs); soliciting a proposal to compete with an unsolicited proposal based on concepts within the unsolicited proposal; and excluding an unsolicited proposal covered specifically by other rules or that are the responsibility of another state entity.

(2) Authority. This rule is authorized by Subsection 72-1-201(1)(h) and Section 63G-6a-712.

R926-16-2. Definitions.

Except as otherwise stated in this rule, terms used in this rule are as defined in Sections 72-1-102 and 63G-6a-712. The following additional terms are defined for this rule:

(1) "Contractor" means a Proposer who is awarded a contract with the Department.

(2) "Days" means calendar days.

(3) The "Department" means the Department of Transportation.

(4) "Proposer" means a person that submits a letter of interest, qualifications, or a proposal under a solicitation for the purposes of entering into a Public-private partnership agreement with the Department, and may include a person, a firm, a partnership, a company, a public corporation, quasi-public corporation, or any legal combination or consortium thereof.

(5) "Submitter" means a person that submits an unsolicited proposal that complies with the requirements of Section 63G-6a-712.

(6) "Transportation Infrastructure" means any infrastructure element that is associated with the state transportation system and is the responsibility of the Department.

(7) "Public-private partnership" means, in addition to the definition of a PPP included in Subsection 63G-6a-103(66), a PPP involving UDOT as a government service or private business venture, funded and operated through a partnership including government and one or more Contractor. A PPP involving UDOT requires a contract between it and a Contractor, in which the Contractor provides a public service or product and assumes a substantial financial, technical, and operational risk in a project.

R926-16-3. Unsolicited Proposal Requirements.

(1) The Department is not required to accept, review, or evaluate an unsolicited proposal.

(2) If the unsolicited proposal is related to construction of a highway facility over sovereign lakebed lands, it will be subject to the requirements outlined in Section 72-6-303 and administrative Rule R940-5 Approval of Highway Facilities on Sovereign Lands.

(3) Should the Department accept delivery of an unsolicited proposal it will provide an acknowledgement of receipt to the Submitter, but is not obligated to consider, evaluate, or advance an unsolicited proposal.

(4) The Department is not required to accept, review, or evaluate an unsolicited proposal that directly competes with or substantially impacts an ongoing project such as an active environmental study or active construction project.

(5) The Department is not required to accept, review, or evaluate an unsolicited proposal that appears to circumvent existing Department processes used to prioritize projects.

(6) TIPPPs must submit Unsolicited Proposals to the Department using the system the Department has established to accept solicited proposals. An unsolicited proposal submittal must, at a minimum, include:

(a) a statement establishing the period during which the unsolicited proposal will remain valid, which may be not less than 12 months following initial delivery. A renewal statement may be required as determined solely by the Department;

(b) information required for unsolicited proposals set forth in Section 63G-6a-712;

(d) a description of the organizations representing the Submitter and the organizations who would develop, finance, construct, operate and maintain the facility;

(e) a description of the Submitter's plan to develop, finance, construct, operate, maintain, or any combination of these elements, including identifying any revenue needed to support the project and proposed debt or equity investment proposed by the Submitter;

(f) a description of how the unsolicited proposal is consistent with the goals of the Department and addresses a demonstrated need for the state;

(g) an estimate of the amount of funding, if any, the State must invest;

(h) a list of the major permits and approvals required by state and local governments,, and federal agencies to develop or operate a project or facility resulting from an unsolicited proposal along with a projected schedule for obtaining the permits and approvals;

(i) a statement acknowledging that the Department has no obligation to advance or compensate a Submitter for any environmental studies needed, including the National Environmental Policy Act (NEPA), and other work associated with an unsolicited proposal;

(j) a description of the types of public utility facility, if any, that may be impacted by a project originating from the unsolicited proposal and a statement of the plans to accommodate the impact;

(k) identification of any elements of an unsolicited proposal or associated documentation that the Submitter claims as trade secrets or confidential information that meet the requirements of Subsection 63G-2-309(1)(a)(i), together with justification of the same and a properly completed Claim of Business Confidentiality as described by Section 63G-2-309; and

(l) any additional information the Department determines is necessary to evaluate an unsolicited proposal. The Department will notify the Submitter of any such additional information needed.

R926-16-4. Unsolicited Proposal Initial Threshold Review, Stage One -- Screening, and Stage Two -- Detailed Evaluation.

(1) Evaluation. The Department may appoint an individual or an evaluation committee, as it deems appropriate and after any required fee is paid, to conduct reviews of unsolicited proposals to determine whether to request competing proposals and qualifications, request additional information to facilitate further evaluation, or reject the unsolicited proposal.

(2)(a) Review Procedure. The review procedure for unsolicited proposals includes the initial threshold review followed by two additional stages of evaluation, Stage One -- Screening, and Stage Two -- Detailed Evaluation.

(b) The Department will make the decision to review or reject an unsolicited proposal and decisions regarding proceeding through the review procedure unilaterally, however, the Department will consult with the Submitter before deciding to reject a proposal or move to the next stage in the review procedure.

(c) The Department will reject a proposal or continue to the next stage in the review procedure within a reasonable time, but not more than:

(i) 60 days after the date the initial unsolicited proposal is received;

(ii) 60 days after the date of notification to the Submitter of the Department's intent to advance to Stage One -- Screening; or

(iii) 90 days after the date an unsolicited proposal is received for Stage Two -- Detailed Review in response to the Department's instructions.

(d) The Department and the Submitter may agree to extend a review period beyond the defined days after a consultation. Review periods may be temporarily suspended to allow the Department to request clarifications from a Submitter and for the Submitter to respond to such a request.

(e) The Department and the Submitter must cooperate and proceed through the review procedure as expeditiously as practicable.

(3) Initial Threshold Review. The initial threshold review will consider whether the unsolicited proposal meets the minimum statutory and regulatory requirements, includes the required minimum content, and satisfies the definition of an unsolicited proposal. If the Department determines it will consider the unsolicited proposal further following the initial threshold review, the further review will be conducted in two stages, Stage One -- Screening, and Stage Two -- Detailed Evaluation.

(4) Stage One -- Screening. The Stage One -- Screening will be a summary review to determine whether the unsolicited proposal merits proceeding to Stage Two -- Detailed Evaluation.

(a) The Stage One -- Screening may consider whether the unsolicited proposal sufficiently addresses the following criteria:

(i) the proposal offers direct or anticipated benefits to the state;

(ii) is consistent with the Department's objectives and goals;

(iii) satisfies a need for the state that can be reasonably accommodated in annual long-term capital and operating budgets without displacing other planned expenditures, and without placing other committed projects at risk;

(iv) is within the Department's jurisdiction and authority;

(v) effectively leverages private sector innovation or expertise;

(vi) allows for the strategic transfer of project risk;

(vii) provides a cost savings to the Department or provides an opportunity to raise capital or provides revenue generation or revenue sharing with the Department; and

(viii) has other benefits specific to the unsolicited proposal.

(b) The Department may reject proposals that do not sufficiently address the Stage One -- Screening criteria or generally fail to meet the minimum requirements established under statute and this rule or that the Department otherwise determines do not merit further review.

(i) the unsolicited proposal fails to meet Stage One screening requirements, and in the sole discretion of the Department, it cannot be revised so that compliance is possible, or

(ii) further information is needed before the Department can determine whether to proceed with Stage Two -- Detailed Evaluation, or

(iii) the unsolicited proposal will be subject to Stage Two -- Detailed Evaluation, subject to the satisfactory receipt by the Department of additional information and receipt of the fee described in Section R926-16-7.

(5) Stage Two -- Detailed Evaluation. The purpose of the Stage Two -- Detailed Evaluation of the unsolicited proposal is to allow the Department to determine whether to issue a request for competing proposals and qualifications related to the unsolicited proposal.

(a) The Department will begin the Stage Two -- Detailed Evaluation upon the later of (i) the date of the receipt of any additional detailed information requested to supplement the unsolicited proposal, or (ii) the date of receipt of the fee described in Section R926-16-7.

(b) Where an unsolicited proposal is selected to proceed to Stage Two -- Detailed Evaluation, the Department may request from the Submitter more detailed information regarding the unsolicited proposal. Additional detailed information requested for the unsolicited proposal may include:

(i) the types of support required from the state including facilities, equipment, property and personnel;

(ii) a sufficiently detailed description of the scope of work and commercial terms the Submitter anticipates in the Public-private partnership to allow the Department to assess the value provided;

(iii) a cash flow analysis showing capital, maintenance and operating costs and revenues;

(iv) conceptual finance plan; and

(v) the availability of payment or form of a TIPPP and a schedule for implementation showing the dates for property or services to be provided by the state.

(c) The Submitter must provide information to assist the Department to incorporate any concepts the Submitter considers to be proprietary, confidential, or trade secret within the solicited procurement in a manner that will be acceptable to the Submitter.

(d) The Stage Two -- Detailed Evaluation will consider the overall costs for delivery of the project over the term of the proposed agreement described in the unsolicited proposal and the proposed approach to financing and funding the project described in the unsolicited proposal, including potential revenue streams. Additionally, the Stage Two -- Detailed Evaluation will consider the potential risks and reasonableness of assumptions associated with implementing the proposal and modifications to project scope, risk allocation, and commercial terms that would need to be incorporated within a solicited proposal.

(e) The Department will complete the Stage Two -- Detailed Evaluation, make its decision, and notify the Submitter as follows:

(i) the unsolicited proposal, or certain concepts included therein is suitable to form the basis of a competitive solicitation. The Department intends to provide the Submitter with the opportunity to discuss a potential solicitation. Subject to a satisfactory conclusion of this discussion, the Submitter will be waived from certain fees and requirements with respect to its response to a forthcoming competitive solicitation; or

(ii) the unsolicited proposal is not suitable to form the basis of a competitive solicitation. The Department does not intend to issue a competitive solicitation at this time. The Submitter will not be excluded from participating in any future solicitation, and the Department will not waive any fees or requirements in response to a future solicitation.

(6) The Department may, in its sole discretion, adopt or reject concepts contained within an unsolicited proposal.

(7) The Department may, in its sole discretion, make significant modifications to the concepts in an original or updated unsolicited proposal.

(8) The Department will notify the Submitter of the original or updated unsolicited proposal of the concepts it intends to adopt within a solicitation and will provide the Submitter with a reasonable opportunity to object to the way such concepts are incorporated and to suggest modifications to avoid disclosure of content that the Submitter considers proprietary, confidential, or trade secret.

R926-16-5. Solicitation of Competing Proposals.

(1) The Department may, at any time, rather than rejecting the unsolicited proposal and terminating the process, elect to issue a request for competing proposals based on the unsolicited proposal, including modifications made consistent with Section R926-16-4. If the Department issues a request for competing proposals, the Submitter will be offered the opportunity to participate in the competition provided the Submitter agrees in writing to continue participating throughout the entirety of the competition process. The process for soliciting competing proposals and qualifications must meet the requirements of applicable Utah law.

(2) If the Department elects to move forward and issue a request for competing proposals, the Department will provide public notice of the proposed project according to Section R926-16-6.

R926-16-6. Public Notice.

(1) Public notice regarding solicitations originating from Section R926-16-5 must be posted on the Department's website and must also be published following the requirements of Section 63G-6a-112.

(2) Notice of a solicitation will indicate where, when, and how to obtain the solicitation documents when responses are due and will generally describe the project scope or service desired and may contain other information such as the desired schedule or financial model.

(3) Where the executive director or a deputy director determines appropriate, the Department may require payment of a fee or a deposit for the supplying of the solicitation package.

(4) A copy of the solicitation documents will be made available for public inspection at the Department's primary offices in the Calvin Rampton Building.

R926-16-7. Fees Related to Unsolicited Proposals.

(1) As authorized by Subsection 63G-6a-712(5), the Department will assess fees to cover the actual costs of processing, considering, and evaluating unsolicited proposals as follows:

(a) a fee for every unsolicited proposal the Department receives to perform the initial threshold review to determine if it may enter the Stage One -- Screening process, and to perform the Stage One -- Screening process.

(b) a fee for every unsolicited proposal that is subject to the Stage Two -- Detailed Evaluation.

(2)(a) The unsolicited proposal must be accompanied by a check, which must be a cashier's, certified, or official check drawn by a federally insured financial institution in the amount of $20,000. This fee will be refunded to the Submitter if the unsolicited proposal does not pass the initial threshold review.

(b) The Department will assess an additional fee for every unsolicited proposal that is subject to the Stage Two -- Detailed Evaluation. Fees must be paid by a cashier's, certified, or official check drawn by a federally insured financial institution in an initial amount of $20,000 plus .01% of the total estimated cost of design and construction of the project.

(c) The Department will provide the Submitter with periodic updates of expenses and will request additional funds to cover the actual costs of processing, considering, and evaluating the unsolicited proposal if additional funds are needed.

(d) Unused funds from the fee for Stage One -- Screening may be carried over and used for Stage Two -- Detailed Review if the Submitter advances to Stage Two -- Detailed Review. The fee associated with Stage Two - Detailed Review will be reduced by any amount carried over from Stage One -- Screening. Any unused funds at the conclusion of Stage Two -- Detailed Review will be refunded to the Submitter.

(e) The Submitter may elect to discontinue its pursuit of the unsolicited proposal at any time and avoid paying the additional funds. No refund will be issued for expenses already incurred.

(3) The executive director or a deputy director may waive or modify the fee structure for an unsolicited proposal, in whole or in part, if the executive director or a deputy director determines the Department's costs have been substantially covered by a portion of the fee or if it is otherwise determined a waiver or modification is reasonable and in the best interests of the state.

(4) When the Department solicits competing proposals, the Department may require each Proposer that submits a competing proposal to submit a fee with the competing proposal. The amount of the fee will be identified in the solicitation documents and will not exceed the amount of the fees for the original unsolicited proposal stated in Subsection R926-16-7(2).

(5) The Submitter that submitted the original unsolicited proposal triggering the solicitation will be exempt from this fee provided that, in the sole discretion of the Department, the requirements of the solicitation are sufficiently similar to the content of the original unsolicited proposal.

R926-16-8. Predevelopment Agreements.

(1) An unsolicited proposal may be used to establish a predevelopment agreement that may become a TIPPP. The first phase of a predevelopment agreement will result in a determination of feasibility and ultimately result in a project development plan and financing plan.

(2) An unsolicited proposal for the first phase of a predevelopment agreement shall include applicable elements from Section R926-16-3 and the following:

(a) overall approach to the predevelopment agreement process and a demonstration of how the project can be effectively and efficiently developed, financed and completed;

(b) proposed initial scope of work to advance and define a feasible project that can be ultimately scoped, priced and financing secured;

(d) the payment structure, terms and conditions under which the Proposer will be compensated for undertaking the predevelopment agreement scope of work; and

(e) schedule and milestones applicable to the predevelopment agreement scope activities.

(3) The subsequent phase or phases may be for any of the remaining services necessary to deliver the proposed project and may include, design services, construction services, operation or maintenance services, traffic, ridership and revenue estimates, financing and toll or user fee collection services, or any other requirement the Department deems necessary. Each subsequent phase will commence after the preceding phase has been completed.

(4) Award of the first phase will be based on the Department's competitive solicitation in accordance with Section R926-16-5, subject to Section R926-16-7.

(5) The entity awarded the first phase may have the first opportunity to submit a proposal for the subsequent phase or phases, as set forth in the predevelopment agreement. The entity awarded the first phase must provide any supporting documentation used to determine the scope, schedule, and cost in its proposal for each subsequent phase to the Department for review, along with any other information and requirements set forth in the predevelopment agreement.

(6) The Department may accept or reject the proposal. If the Department rejects the proposal, the Department may provide a counteroffer or negotiate with the entity awarded the first or prior phase, or in lieu of providing a counteroffer or if the negotiations are unsuccessful, choose to solicit competitive proposals for the subsequent phase or phases.

R926-16-9. Rights Related to Proposals; Release of Rights and Indemnification.

(1) A Submitter of an unsolicited proposal will not obtain any claim or have any right or expectation to use any route, corridor, rights of way, public property, or public facility by virtue of having submitted a proposal that proposes to use such route, corridor, rights of way, public property or public facility or otherwise, involves or affects such. By submitting an unsolicited proposal, a Submitter thereby waives and relinquishes any claim, right, or expectation to occupy, use, profit from, or otherwise exercise any prerogative with respect to any route, corridor, rights of way, public property or public facility identified in the proposal as being necessary for or part of the proposed project.

(2) By submitting such a proposal, a Submitter thereby waives and relinquishes any right, claim, copyright, proprietary interest or other right in any proposed location, site, route, corridor, rights of way, alignment, or transportation mode or configuration identified in the proposal as being involved in or related to the proposed project, and Submitter must include in the

proposal an indemnity that holds the state harmless against any such claim made by any entity that is a member of the Submitter's proposal team, including their agents, employees, and assigns.

(3) The waiver and release of rights in this section do not apply to a Submitter's rights in any documents, designs and other information and records that are otherwise classified as protected records under Sections 63G-2-305 and 63G-2-309.

R926-16-10. Negotiating with Public Entities.

So long as an active solicitation for a Transportation Infrastructure Public-private partnership agreement is pending, the Department will not separately negotiate with a public entity for the project that is the subject of that solicitation.

KEY: transportation, highways, public-private partnerships, unsolicited proposals, sovereign lands, lakebed

Date of Last Change: October 10, 2022

Notice of Continuation: September 5, 2023

Authorizing, and Implemented or Interpreted Law: 72-1-201; 63G-6a-712