Officials Following Up On Bridges Forum Suggestions

by Rick Howlett on March 4, 2011

More meetings will be held next month involving the bi-state bridges authority and private companies interested in taking part in the Ohio River Bridges Project.

A two-day industry forum last month drew about 800 participants to Louisville.

Louisville and Southern Indiana Bridges Authority Executive Director Steve Schultz says officials were unable to hold one-on-one meetings with all the companies that took part in the February event, so another two days of discussions will be held in April.

Schultz says in a summary of the February forum that leaders of construction and other companies have indicated that the 12-year schedule to build two new bridges and re-work Spaghetti Junction could be dramatically shortened, possibly by as much as half.

The governors of Kentucky and Indiana and Louisville Mayor Greg Fischer asked the authority to hold the forum to find ways to make the project more efficient.

It currently has a $4.1 billion price tag, but those leaders are proposing scaling down the project to save some $500 million.

The authority’s next meeting is April 7.

Here is LASIBA Executive Director Steve Schultz’s summary of the Feburary industry forum: 

March 3, 2011 

Mr. Charles Buddeke, Chairman 

Mr. Kerry Stemler, Co-Chair 

Louisville and Southern Indiana Bridges Authority 

305 N. Hurstborne Lane Suite 175 

Louisville, Kentucky 40223 

Dear Charles and Kerry: 

I want to share with you and the members of the Authority my observations and those of the Bi-State Management Team (Kentucky Transportation Cabinet and Indiana Department of Transportation) regarding the Industry Forum held February 16 and 17.   For starters, those close to the project and independent observers alike agreed that we met our dual objective of (a) communicating the status and vision of the project while (b) listening to and learning from those companies and individuals who have successfully delivered projects of this level of significance and/or who are interested in learning about the opportunities to participate in ours.   We were especially delighted to hear from several of the more seasoned industry participants that, for events of this type, the Forum was as good as, if not better than, others they had attended.  I’m sure we can improve even more next time around. 

While we learned a number of things that will aid the Authority and the state sponsors in advancing the project, I’d like to highlight five key points for your consideration: 

First, the presence and consistent message from Governor Beshear, Governor Daniels and Mayor Fischer underscoring the importance of the project and the need to move quickly and creatively sent a clear signal about the extraordinary partnership that is the project’s hallmark.  Unified and committed leadership is central to private sector interest in a project of this size. 

Second, the eight one-on-one meetings with several large developer/concessionaire/construction firms on the second day confirmed not only that there is strong market interest in the project, but also the opportunities for considering innovative approaches to drive cost reduction and schedule acceleration, as we expected.  In fact, we consistently heard that the current 12-year project construction schedule might be capable of being dramatically compressed – possibly by as much as half.  

Third, their feedback confirmed the necessity of the two states and the Authority considering some form of a public-private partnership model to deliver this project.  This would accelerate its completion and achieve cost savings and substantial schedule acceleration will greatly aid developers in offering committed bids on the project.  Most firms felt a single project delivery contract for the entire project (the bridges and the Kennedy Interchange) would allow the flexibility to deliver the most cost-effective solution.  In addition, the feedback consistently pointed to the need for a single project owner, fully supported and empowered by both states, as the optimal public sponsor for delivery of the project. 

Fourth, local firms and the local workforce will play a major role in delivering the project.  The strong interest displayed during the Day Two networking session helped us better understand what steps we need to take to allow the project to take full advantage of the talent we have in Kentuckiana and the region.  Of particular note was the message from the larger firms who made clear during the one-on-on sessions the importance they place on utilizing local workers and resources to complete a project of this size and complexity.  We heard that numerous local and DBE firms have already begun to form relationships with some of the larger firms, some of whom participated in the networking session on Day Two.  The strong commitment of both KYTC and INDOT to Disadvantaged Business Enterprises (DBEs) will prove complementary to this important element of the project. 

Fifth, let’s do the numbers.  We had more than 950 registrants; we estimate that somewhere between 750 and 800 actually attended at least part of the forum.  

  • About 70% of those registered were from our two states (40% from KY; 30% from IN).  

    o        The remaining approximately 30% were from 28 other states and 3 Canadian provinces.  

    o        Nearly 30% of the participants identified themselves as DBEs.  Dozens of industry fields and professions were represented.

     

    More than 100 of the participants took part in the structured networking session held on Day Two.  

    Through this exercise, we learned a great deal about the potential roles and expectations of small to medium-sized firms.  The participants were able to exchange contact details with a view toward doing some team-building of their own. (We also noted that there was significant informal networking outside of the formal networking session). These participants also, provided us with some very helpful feedback for future outreach efforts.  Recurring themes that surfaced during the discussion include:

     

    o        The need for state sponsors and the Authority to outline the process that will be used in selecting contracting services. 

    o        A better understanding of the role local and smaller firms will play and the opportunities for partnering with larger firms. 

    o        A clear process for submitting cost savings ideas. 

    o        The need to better understand how the project will be managed. 

    Finally, we were over-subscribed with requests for the one-on-one company meetings, so we are planning another two days in early April with other firms who met the criteria (e.g. experience in the lead role on projects greater than $500M). 

    On behalf of everyone involved in the planning and execution of the Forum, I thank you and our other colleagues on the Authority for your contributions to this successful event and for the continued service to this project that is so important to our two states. 

                                                                                                    Regards, 

                                                                                                    Steven R. Schultz 

    CC:          Governor Steve Beshear 

                    Governor Mitch Daniels 

                    Mayor Greg Fischer 

                    LSIBA Members 

                    Commissioner Mike Cline 

                    Secretary Mike Hancock 

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