Hogan Pumps Brakes On Traffic Relief Plan

In response to concerns about the appearance of conflict, Governor Larry Hogan pulled the Maryland Department of Transportation (MDOT)’s proposal to pay $68.5 million to a consortium of engineering firms led by Transportation Secretary Pete Rahn’s former employer, HNTB. MDOT had proposed bypassing traditional procurement methods to award the contract for the Governor’s touted “Traffic Relief Plan” to to add new lanes to I-270 and the Capital Beltway (I-495).

From The Baltimore Sun:

The HNTB-led consortium was selected in an expedited process that took less than a month after Rahn decided to use the waiver under a system approved by the General Assembly last year as an alternative way to bid public-private partnership contracts. It allows the state to forgo traditional procurement when efficiency and the stakes of the project demand it.

Governor Hogan has directed MDOT to restart the bidding process for the Traffic Relief Plan, with an eye toward assuring “the full and complete transparency that the taxpayers of Maryland expect and deserve,” according to a letter to Secretary Rahn from Governor Hogan. Rahn agreed to recuse himself from the procurement moving forward.

MDOT sought to waive the traditional procurement approach because it was unable to adequately provide a complete scope of work for the project. Additionally, according to MDOT’s “Rationale for the Procurement Method” to the Board of Public Works (BPW), MDOT sought to expedite the process because the project is so large.

The Maryland Department of Transportation (MDOT) is undertaking the largest ever proposed highway P3 in North America and the first highway P3 in Maryland as part of the I-495 and I-270 corridor congestion relief improvements. …. It is this “first of” nature project that has caused MDOT to look at innovative ways to bolster its ability to oversee and manage a project so large and complex.

…To meet the demands of the public, address and reduce the rising traffic congestion in Maryland’s most heavily traveled roads, to offer a more advantageous environment which attracts new businesses such as Amazon, and to control expenditures by innovatively using performance-based design and contracting methods for the design and construction phases of the project, an expedited selection outweighs the benefits of a formal competitive process for the selection of the Programmatic Owners Representative General Engineering Consultant (GEC).

In a particularly sharply-worded essay in Maryland Matters, Regional Policy Advisors President and former Charles County Commissioner Gary Hodge points out that:

Projects of this magnitude and complexity require more consideration, not less.

Expressing the same view, The Baltimore Sun’s editorial board opines:

The public-private partnership Mr. Hogan is pursuing to add new toll lanes to the Capital Beltway and I-270 is unprecedented in scale for Maryland — the administration claims it would be the biggest P3 in North America — and we will be dealing with the consequences for generations. This should not be a rush job, even for this initial, $68.5 million contract to oversee part of the project. Mr. Hogan was right to direct Mr. Rahn to start over with a new procurement.

The project was originally touted to have no financial impact on the State’s Transportation Trust Fund, which is comprised of gas tax revenues and other transportation user fees. However, the BPW item MDOT originally proposed called for $68.5 million from that fund, as well as the opportunity for extensions over 10 years.