Maryland transportation officials have again rejected a bid protest from a losing proposer on a contract to design billions of dollars worth of toll lanes for Interstate 270 and part of the Capital Beltway.
MDOT had to reconsider the protest after a Montgomery County Circuit Court judge ruled in February that the agency had wrongly dismissed three of the four allegations for being filed too late. The judge required MDOT to reconsider the claims on their merits, including whether the winning bid had assumed unrealistically low construction costs that could result in massive building delays and cost overruns.
A protracted legal battle would complicate Republican Maryland Gov. Larry Hogan’s signature traffic relief project in the months before he leaves office.
In its latest decision, MDOT again said it had properly awarded the contract, known as a predevelopment agreement, last year to a team led by Australian toll road operator Transurban and Australian investment bank Macquarie.
Deputy Transportation Secretary R. Earl Lewis Jr. wrote that the state properly selected the proposal with the best overall value. The losing-bid team, led by Spanish firm Cintra, had not proved that the bid selection process was biased, “arbitrary,” “capricious” or “unreasonable,” as required, Lewis wrote.
Lewis said the state permitted the bid teams to decide how much to allow for construction companies’ markups for profits and overhead costs based on how much financial risk they wanted to assume.
“The fact that [the Cintra bid team] made a different choice, had a different risk tolerance, or even understood the [bid requirements] differently than [the winning proposer] does not render [the winning team’s] proposal improper,” Lewis wrote.
Under the predevelopment agreement, the Transurban team is designing the lanes at up to $54 million of its own expense. However, the deal is most significant because it also gave Transurban the right of first refusal on a 50-year contract to build the lanes, valued at up to $9 billion, and operate them in exchange for keeping most of the toll revenue. Maryland officials have said the lanes will come at no net cost to the state.
The 50-year contract is expected to be one of the largest ever in Maryland and among the biggest for U.S. highway projects governed by public-private partnerships.
Douglas Gansler, a lawyer for Cintra and a Democratic candidate for governor, declined to comment Saturday, saying he was not allowed to under the bid solicitation rules.
However, Gansler said during a previous Circuit Court hearing that he expected MDOT would again uphold its awarding of the contract even on the merits — a decision that his client probably would appeal again in court.
Both the Cintra team and the state also have appealed different parts of the February Circuit Court ruling to Maryland’s Court of Special Appeals, which has yet to issue a decision.
The Cintra team, known as Capital Express Mobility Partners, has said MDOT should disqualify the Transurban proposal or reopen the bid competition.
MDOT plans to add two toll lanes in each direction to the Beltway between the Virginia side of the American Legion Bridge and the I-270 spur and then on I-270 up to Frederick. One of the toll lanes on lower I-270 would come from a converted carpool lane, while the lane configuration on the northern section hasn’t been determined. The aging American Legion Bridge would be replaced and expanded. The highways’ regular lanes would be rebuilt and remain free.