Once the decision was made to deliver the I-595 project as a full P3 concession, FDOT completed the procurement process relatively rapidly, taking less than 13 months from start to finish. Following the precedent set by the Port of Miami Tunnel-which the state had begun to procure in 2006-FDOT issued a Request for Qualifications in October 2007 to identify the most qualified private firms to invite to submit detailed proposals. Four of six consortia that responded were shortlisted and received a draft Request for Proposals (RFP) in December. FDOT issued a final RFP in April 2008. It sought a partner that would provide a superior approach to project management, design, construction, and operations and maintenance, while minimizing an annual availability payment that FDOT would be required to pay to the private partner over the life of the concession. These availability payments are the primary means for compensating the private partner for its role on the project. They are based on the private partner's ability to make the facility "available" at a defined level of condition and performance.
Ultimately, two teams submitted proposals to FDOT in September 2008. One month later, FDOT selected I-595 Express LLC as the best value concessionaire based on technical merit and price. The I-595 Express LLC consortium is led by ACS Infrastructure Development, an American subsidiary of a large Spanish construction firm. Proposal bid prices were based on a maximum annual availability payment (MAP). I-595 Express LLC's winning MAP bid was substantially less than its competitor's and 8.3 percent less than FDOT's estimate from its VfM analysis. Although the competitor's technical score was superior, the difference in the MAP price more than made up for the difference in offering FDOT the "best value."
In addition to investing its own equity, the financial plan submitted with I-595 Express LLC's winning proposal assumed the use of $826 million in private activity bonds (PABs) to help pay for the project's construction. PABs allow a private entity to gain access to the tax-free municipal debt market. FDOT had obtained approval from the U.S. Department of Transportation in July 2008 to issue PABs for the project in part to help stimulate competition among the bidders in developing their financial plans. Similarly, FDOT also received pre-approval to use a federal credit program called TIFIA, which provides low cost, flexible loans to transportation projects of national and regional significance. I-595 Express LLC's financial plan also assumed receipt of a TIFIA loan.
However, in the fall of 2008 as the financial crisis worsened, FDOT questioned the capacity of the volatile bond market to absorb the proposed volume of PABs. By December 2008, FDOT and ACS reached an agreement to revise the financial plan and substitute a commercial bank loan for the PABs. The critical challenge was the ability to finance the project without increasing FDOT's maximum annual availability payment, particularly at a time when interest rates were uncertain. Ultimately, the TIFIA program ensured the project's affordability by lending the project funds at low U.S. government interest rates. TIFIA's payback flexibility also allowed the commercial bank debt to be repaid on an expedited schedule.
The private partner assumed full risks for the construction cost and schedule, as it did not receive any public funds until the project was completed. I-595 Express LLC relied solely on its own equity and the commercial bank loan and TIFIA loan to cover its costs during the construction period-incentivizing it to deliver the project efficiently.