Title: DBOM Contract: Proper Delegation of Major Tasks

Phase(s): Pre-Preliminary Engineering, Preliminary Engineering, Final Design, Construction and Start-Up

Category: Management

Date: N/A

1. Background

The Hudson-Bergen Light Rail Transit System (HBLRTS) is a 20.3-mile rail facility that links New Jersey’s growing Hudson River waterfront communities. The 20.3-mile corridor extends through some of the nation’s most densely populated municipalities, a region noted for its significant dependence on rail transit.

The HBLRTS is being constructed in three Minimum Operable Segments (MOS) designated as MOS-1, MOS-2, and MOS-3. The First Minimum Operable Segment (MOS-1) is a 9.3 mile system extending from 34th Street, Bayonne to Hoboken, with a West Side extension in Jersey City; MOS-2 is a 6.1 mile system extending from Hoboken to Tonnelle Avenue Park-and-Ride in North Bergen, and the extension to 21st Street in Bayonne; MOS-3 is a 4.9 mile system extending from Tonnelle Avenue to the New Jersey Turnpike’s Vince Lombardi Park-and-Ride, including both an extension to 5th Street in Bayonne, and an extension to Route 440 in Jersey City.

A major portion of MOS-1 has been in revenue service since April 2000 with full operation scheduled for Fall 2002. MOS-2 is currently in the design/build phase, and the southern extension is scheduled to open in Fall 2003 as well as the single-track operation to the north. The full operation is scheduled for mid-2005. MOS-3 is forecasted to open in 2010.

Conceived as a conventional design-bid-build project, the HBLRTS was converted to a DBOM to advance the completion date and to place more ultimate responsibility for the project with the Contractor. New Jersey Transit Corporation (NJTC) endorses the Design-Build-Operate-Maintain (DBOM) concept, which includes 15 years of operation and maintenance and the acquisition of Light Rail Vehicles. On a lump sum, guaranteed completion basis, the Contractor is to complete the final design and construction, to acquire the light rail vehicles and to perform 15 years of operation and maintenance.

2. The Lessons

NJTC endorses the DBOM approach to major transit projects. This concept has, to date, been successful in the construction and operation of the HBLRTS and the project has benefited greatly from the DBOM contractor’s design philosophy and construction methodology while optimizing capital expenditures and making design decisions that affected operations.

The HBLRTS project benefited from crucial input of the DBOM Contractor in confronting design complexities of utility relocations, integration of the project’s drainage system with the regional drainage system, system wide facilities and other similar work. This phase of the project implementation required continuous coordination and communication with local agencies, utilities, and adjacent businesses/residents/developers to ensure all project concerns were addressed in a timely manner.

The inclusion of the operator as part of the DBOM Contractor’s team also benefited the HBLRTS project. The DBOM Contractor is responsible for 15 years of operation and is, therefore, responsible for optimizing capital expenditure decisions with the knowledge that many design decisions will affect operations. The DBOM Contractor needed to consider capital investment vs. operating efficiency.

Finally, for the HBLRTS, NJTC decided to assign the acquisition of the Light Rail Transit vehicles to the DBOM Contractor scope. The vehicle interfaces with several components of the system infrastructure, including track, catenaries, traction power and signals. The DBOM Contractor is completely responsible for the design, construction, integration testing, demonstration, start-up, operation and maintenance of the entire system, thus eliminating a significant risk to NJTC.

The approach used by NJTC in the selection of the DBOM contractor was similar to that used for a conventional design-bid-build delivery type contract.

One evaluation criterion that was not used in the HBLRTS selection process, but has since been identified as important, is the contractual relationship between the prime contractor and the designer. NJTC has learned that the best way to solicit a DBOM contract is to have the prospective bidders address the criterion that either the prime contractor or the first tier sub-consultant to the prime contractor performs the design function. The proposals should be evaluated and rated on how the prospective DBOM Contractor addresses this criterion.

The lesson learned in the implementation of MOS-1 was associated with a lower tier sub-consultant performing major design functions. In view of the reporting relationships within the DBOM team, as well as the contractual relationship with NJTC this approach resulted in delays in responding to owner concerns due to lack of control by the prime contractor over engineering decisions and responsibilities. In the implementation of the MOS-2, the prime contractor is performing and has full control of the design function and NJTC concerns and other project issues are addressed in a more timely and effective manner.

3. Applicability

This lesson applies to any major transportation projects implemented under the Design-Build delivery type contracts.

4. References

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