A New Public-Private Partnership in Chicago: The O’Hare Express Train
Infrastructure Alert 12/08/17 Adam T. Margolin
The City of Chicago is pursuing a public-private partnership to build an express train between downtown Chicago and O’Hare Airport. Last week, the Chicago Infrastructure Trust (Trust) issued a Request for Qualifications (RFQ) from private entities interested in designing, constructing, financing, operating, and maintaining a train that can make the approximate 20-mile trip in 20 minutes or less. The City, with the assistance of current Quarles & Brady lawyers, formed the Trust in 2012 to partner with the private sector to develop large-scale infrastructure projects such as this one.
According to the RFQ, the project’s private partner will be responsible for financing all project costs, and neither the City nor Trust will contribute public dollars to the project. Chicago Mayor Rahm Emanuel issued a statement confirming this point: “Strengthening connections between the economic engines of downtown Chicago and O’Hare airport, at no cost to taxpayers, will build on Chicago’s legacy of innovation and pay dividends for generations to come.” The City and Trust expect that project-specific revenues such as fare charges and advertising receipts will cover project costs. Announced expectations for the project extend beyond financing. For example, the RFQ states that the trains must run every 15 minutes for the majority of the day and have modern passenger amenities, and fares must be less than the current cost of taxi or ride-sharing services to the airport.
The 125-page RFQ document sets up a two-step procurement process, with the first step being to solicit responses to the RFQ and the second step being a subsequent Request for Proposals (RFP). During the RFQ stage, respondents must submit a Statement of Qualifications (SOQ) that includes:
- An executive summary explaining in a non-technical fashion why the respondent should be selected as the private partner for the project;
- Identification and explanation of up to three comparable projects such as public-private partnerships and design-build projects that demonstrate the respondent’s relevant experience;
- The respondent’s conceptual plan for designing, constructing, financing, operating, and maintaining the train, including identification of the major risks associated with the various phases of the project (e.g., design-build, operations, and maintenance) and an explanation of the respondent’s general approach to issues such as fare collection, environmental protection, health and safety, and utility relocation;
- A description of the respondent’s management structure, including teaming arrangements, allocation of roles and responsibilities, and organizational charts;
- The respondent’s preliminary financing plan, which is intended to provide the respondent with an opportunity to demonstrate its knowledge and understanding of the tools, requirements, and considerations involved in developing and implementing the project’s financing plan, and relevant financing experience;
- Financial statements for the respondent’s equity members and lead contractor;
- Equity funding letters for each equity member; and
- A plan for participation by minority-owned and women-owned businesses.
The City and Trust will evaluate and score the SOQs according to their responsiveness and other criteria (e.g., the respondent’s financing capability, relevant experience, and approach to project development). Based on those scores, a sub-group or “shortlist” of respondents will be invited to participate in the procurement’s second step, the RFP, which will determine the final project partner. The RFQ document states that the City and Trust may create two committees, an evaluation committee and a selection committee, to perform the evaluation, scoring, and short-listing functions.
The City and Trust have asked for a quick turnaround on the SOQs. They are due on January 24, 2018. Prior to that date, a pre-submission conference will be held on December 20, 2017. Although the City and Trust have not released details on the pre-submission conference, such conferences are relatively standard for City procurements, and they typically serve as helpful forums for participants to direct questions to City officials and receive their feedback.
For more information about the procurement and Quarles & Brady’s infrastructure team, which has helped private companies successfully partner with governmental entities on large-scale infrastructure projects, please contact Adam Margolin at [email protected]/(312) 715-5089 or your Quarles & Brady attorney.