UPDATE: November 20, 2018: The Metropolitan Council has made a formal award to the joint venture of Tutor Perini subsidiary Lunda Construction and C.S. McCrossan in the amount of $799.5 million to build the Minneapolis-area, 14.5-mile, $2 billion Southwest LRT.
The Council said it was able to make the award after its receipt of a Letter of No Prejudice (LONP) from the Federal Transit Administration, which makes the Southwest LRT's early construction work eligible for federal reimbursement upon award of a $929 million Full Funding Grant Agreement, which the Council anticipates receiving in spring 2019 and after submitting its application.
While the grant application is in process, the Council expects to issue Lunda/McCrossan a limited notice to proceed so that it can begin some elements of the project. The joint venture's contract includes:
- Twenty-nine new bridges and modifications to seven existing bridges
- Six pedestrian tunnels
- Two “cut-and-cover” tunnels
- More than 100 retaining walls
The Council said the project should generate 7,500 construction jobs with $350 million in payroll.
Dive Brief:
- The field of bidders for the $2 billion Minneapolis-area Southwest Light Rail Transit (LRT) project has been narrowed to just one, according to the Star Tribune, after one of the two joint ventures remaining did not meet a deadline agreeing to a pushed-back award date. The project will see the extension of the Metro Green Line 14.5 miles from downtown Minneapolis to the suburb of Eden Prairie, Minnesota.
- The team of Lunda Construction and C.S. McCrossan submitted the low bid of $799 million, while Ames Construction and Kraemer North America bid $812 million. The Metropolitan Council, the operating agency and authority behind the Southwest LRT, gave both teams until Sept. 28 to agree to a delay in the award process, according to the Southwest Journal, but Lunda/C.S. McCrossan was the only one to respond. Because the council did not hear back from Ames/Kraemer, it declared that team's bid "no longer valid."
- The new deadline for the award is Nov. 15. In May, Tutor Perini, Lunda's parent company, announced that it expected a contract to come through for the project by the council's original Aug. 1 deadline. The November deadline represents the third time the agency has pushed back the award date.
Dive Insight:
Since the council has essentially declared the Lunda/C.S. McCrossan team the only responsive bidder, November should see the council make an official award to the joint venture, although it is doubtful the council will meet its planned 2018 construction start date. The project will include construction of 16 new stations, in addition to the rail infrastructure itself, and is expected to generate approximately 7,500 temporary construction jobs.
Another piece of the Southwest LRT project is not yet finalized, and that is an almost $929 million New Starts grant from the Federal Transit Administration. According to the Star Tribune, the FTA has not yet issued a "Letter of No Prejudice," which would allow the council to start spending local funds on the project with the guarantee of federal reimbursement.
When contractors bid on projects with such a significant federal grant component that has not yet come through, one hiccup could delay funding, meaning that construction companies need to be ready for the possibility of delays. In August 2016, a federal judge revoked federal and state approval for the $5.6 billion, 16-mile Purple Line project in Maryland on the basis of a lawsuit questioning environmental and ridership issues when the line was one day away from receiving a $900 million FTA grant. The Purple Line was on hold for a year until another court reversed that decision, finally allowing construction to begin.
