Under guidelines established in a 2001 amendment to the PPTA, VDOT formed an Internal Review Committee composed of agency staff to review Fluor's proposal. After finding that it was consistent with legal and policy requirements, VDOT issued a request for competing proposals. VDOT did not receive any competing offers and ultimately made the decision to accept the company's conceptual proposal for the Capital Beltway Project.
At the time that VDOT accepted Fluor's conceptual proposal, the company developed a relationship with Transurban, a private-sector Australian toll road operator. Transurban was interested in entering the American market and establishing new business. Meanwhile, Fluor was looking to act on a suggestion from VDOT to improve its position relative to toll road operation and its ability to finance the project.
The remaining steps in the procurement process were prescribed by the PPTA Act. Fluor and Transurban submitted a Detailed Proposal to VDOT in October 2003. VDOT then incorporated Fluor's design concept into the formal environmental review process. VDOT approved Fluor's detailed proposal in June 2004 and entered into negotiations in August. In October 2004, Transurban was acknowledged as a formal participant in negotiations.
In January 2005, the Commonwealth Transportation Board selected the HOT lanes plan for the Capital Beltway as its preferred alternative. An Interim Comprehensive Agreement was executed in April 2005 between VDOT, Fluor and Transurban to develop, design, finance, construct, maintain and operate the Capital Beltway HOT Lanes. The agreement acknowledged that the project would be privately funded and the state would not be responsible for any major project costs. However, through ongoing negotiations, the scope of the project continued to expand to include several major changes including: altering the project's northern and southern termini, changing the I-66 interchange configuration, substituting direct access to Route 123 in Tyson's Corner with three new direct access interchanges and making other alignment changes to the HOT lanes.
In addition, VDOT required Fluor to support the robust public outreach efforts it had established for the Capital Beltway project. There were also federally mandated design requirements that needed to be met, including additional sound walls and signage mounted on standalone structures.
These changes resulted in cost escalations. By May 2007, VDOT and Fluor-Transurban agreed to "freeze" the project and defer any decisions on possible scope changes so that Fluor-Transurban could establish its fixed- price cost for the design-build contract and arrange it's financing.
Ultimately, the state agreed to contribute $409 million in public funds to the project to cover the changes to the project design. In addition, the VDOT agreed to compensate Fluor-Transurban if HOV traffic levels exceeded an established benchmark. This was important because HOVs would be allowed to use the HOT lanes at no cost. It also validated VDOT's policy goal of encouraging HOV traffic on the Beltway.
In December 2007, VDOT formally awarded the DBFOM Capital Beltway concession to Capital Beltway Express, LLC-the special purpose entity established by Fluor and Transurban to implement the project. The contract period included five (non-operational) years for construction and 75 years for operations and maintenance of the facility. In addition to being a partner in Capital Beltway Express, Fluor served as the prime design-build contractor that would build the project for a fixed price. Similarly, Transurban is serving as the toll operator of the managed lanes.