SECTION 27.3. General Rules for Private Involvement

(a) Solicited and unsolicited proposals. The rules in this subchapter address the manner by which the department intends to evaluate submissions received from private entities in response to requests for qualifications and proposals issued by the department, as well as unsolicited proposals received by the department.

(b) Reservation of rights. The department reserves all rights available to it by law in administering these rules, including without limitation the right in its sole discretion to:

(1) withdraw a request for qualifications or a request for proposals at any time, and issue a new request;

(2) reject any and all qualifications submittals or proposals, whether solicited or unsolicited, at any time;

(3) terminate evaluation of any and all qualifications submittals or proposals, whether solicited or unsolicited, at any time;

(4) issue a request for qualifications relating to a project described in an unsolicited proposal after the rejection or termination of the evaluation of the proposal and any competing proposals;

(5) suspend, discontinue, or terminate comprehensive development agreement negotiations with any proposer at any time prior to the actual authorized execution of such agreement by all parties;

(6) negotiate with a proposer without being bound by any provision in its proposal, whether solicited or unsolicited;

(7) negotiate with a proposer to include aspects of unsuccessful proposals for that project in the comprehensive development agreement;

(8) request or obtain additional information about any proposal from any source;

(9) modify, issue addenda to, or cancel any request for qualifications or request for proposals;

(10) waive deficiencies in a qualifications submittal or proposal, accept and review a non-conforming qualifications submittal or proposal, or permit clarifications or supplements to a qualifications submittal or proposal;

(11) revise, supplement, or make substitutions for all or any part of these rules; or

(12) retain or return all or any portion of the fees required to be paid by proposers under this subchapter, as provided in subsection (h) of this section.

(c) Costs incurred by proposers. Except as provided in §27.4(f) of this subchapter (relating to Solicited Proposals), under no circumstances will the state, the department, or any of their agents, representatives, consultants, directors, officers, or employees be liable for, or otherwise obligated to, reimburse the costs incurred by proposers, whether or not selected for negotiations, in developing solicited or unsolicited proposals or in negotiating agreements.

(d) Department information. Any and all information the department makes available to proposers shall be as a convenience to the proposer and without representation or warranty of any kind except as may be expressly specified in the request for qualifications or request for proposals. Proposers may not rely upon any oral responses to inquiries.

(e) Procedure for communications. If a proposer has a question or request for clarification regarding these rules or any request for qualifications or request for proposals issued by the department, the proposer shall submit the question or request for clarification in writing to the person responsible for receiving those submissions, as designated in the request for qualifications or request for proposals, and the department will provide the responses in writing. The proposer shall also comply with any other provisions in the request for qualifications or request for proposals regulating communications.

(f) Compliance with rules. In submitting any proposal, the proposer shall be deemed to have unconditionally and irrevocably consented and agreed to the foregoing provisions and all other provisions of this subchapter.

(g) Proposer information submitted to department. All qualifications submittals or proposals submitted to the department become the property of the department and may be, except as provided by Transportation Code, §223.204, subject to the Public Information Act, Government Code, Chapter 552. Proposers should familiarize themselves with the provisions of Transportation Code, §223.204 and the Public Information Act. In no event shall the state, the department, or any of their agents, representatives, consultants, directors, officers, or employees be liable to a proposer for the disclosure of all or a portion of a proposal submitted under this subchapter. If the department receives a request for public disclosure of all or any portion of a proposal, the department will notify the applicable proposer of the request and inform such proposer that it has an opportunity to assert, in writing, a claimed exception under the Public Information Act or other applicable law within the time period specified in the department's notice and allowed under the Public Information Act. If a proposer has special concerns about information it desires to make available to the department, but which it believes constitutes a trade secret, proprietary information or other information excepted from disclosure, the proposer should specifically and conspicuously designate that information as such in its proposal. The proposer's designation shall not be dispositive of the trade secret, proprietary, or exempted nature of the information so designated.

(h) Proposal review fee. A nonnegotiable proposal review fee shall be required for any unsolicited proposal submitted under this subchapter and applied by the department to offset the cost of processing and reviewing the proposal. An unsolicited proposal for a project in the department's unified transportation program must be accompanied by a proposal review fee of $5,000. An unsolicited proposal for a project that is not in the department's unified transportation program must be accompanied by a proposal review fee of $10,000. The executive director may approve a proposal review fee for a particular project in a lower amount. In approving a lower fee, the executive director shall consider the complexity of the project. Failure to submit the required proposal review fee shall bar the department's consideration of the applicable proposal. All fees shall be submitted in the form of a cashier's check made payable to the department. A proposal review fee that is submitted with a proposal for a project that is not an eligible project, or that the department is not otherwise legally authorized to accept shall be returned to the proposer. All other proposal review fees are nonrefundable.

(i) Sufficiency of proposal. All proposals, whether solicited or unsolicited, should be as thorough and detailed as possible so that the department may properly evaluate the potential feasibility of the proposed project as well as the capabilities of the proposer and its team members to provide the proposed services and complete the proposed project.

(j) Project studies. Studies that the department deems necessary as to route designation, civil engineering, traffic and revenue, environmental compliance, and any other matters will be assigned, conducted, and paid for as negotiated between the department and the successful proposer and set forth in the comprehensive development agreement or in any separate contract for consultant services. Unless otherwise provided in the request for proposals, the department will favor proposals in which the costs for studies will be advanced by the private entity, particularly if the advance is at the private entity's risk. The department may elect to pay, in whole or in part, the costs for such studies in its sole discretion. The department may require that the financial plan for each proposal provide for reimbursement of all related expenses incurred by the department, as well as any department study funds utilized in connection with the project.

(k) Proposer's additional responsibilities. The department, in its sole discretion, may authorize the successful proposer to seek licensing, permitting, approvals, and participation required from other governmental entities and private parties, subject to such oversight and review by the department as specified in the comprehensive development agreement or in any separate contract for consultant services.

(l) Proposer's work on environmental review of eligible project. The department may solicit proposals or accept unsolicited proposals in which the proposer is responsible for providing assistance in the environmental review and clearance of an eligible project, including the preparation of environmental impact assessments and analyses and the provision of technical assistance and technical studies to the department or its environmental consultant relating to the environmental review and clearance of the proposed project. The environmental review and the documentation of that review shall at all times be conducted as directed by the department and subject to the oversight of the department, and shall comply with all requirements of state and federal law, applicable federal regulations, and the National Environmental Policy Act (42 U.S.C. §4321 et seq.), if applicable, including but not limited to the study of alternatives to the proposed project and any proposed alignments, procedural requirements, and the completion of any and all environmental documents required to be completed by the department and any federal agency acting as a lead agency. The department:

(1) shall determine the scope of work to be performed by the private entity or its consultants or subcontractors;

(2) shall specify the level of design, alternatives to be reviewed, impacts to consider, and other information to be provided by the private entity or its consultants or subcontractors; and

(3) shall independently review any studies and conclusions reached by the private entity or its consultants or subcontractors before their inclusion in an environmental document.

(m) Effect of environmental requirements on comprehensive development agreement. Completion of the environmental review is required before the private entity may be authorized to conduct and complete the final design and start construction of a project. Additionally, all applicable state and federal environmental permits and approvals must be obtained before the private entity may start construction of the portion of a project requiring the permit or approval. Unless and until that occurs, the department is not bound to any further development of the project. The department, and any federal agency acting as a lead agency, may select an alternative other than the one in the proposed project, including the "no-build" alternative. A comprehensive development agreement shall provide that the agreement will be modified as necessary to address requirements in the final environmental documents, and shall provide that the agreement may be terminated if the "no-build" alternative is selected or if another alternative is selected that is incompatible with the requirements of the agreement.

(n) Public meetings and hearings. All public meetings or hearings required to be held pursuant to applicable law or regulation will be directed and overseen by the department, with participation by such other parties as it deems appropriate.

(o) Additional matters. Any matter not specifically addressed in this subchapter which pertains to the acquisition, design, development, financing, construction, reconstruction, extension, expansion, maintenance, or operation of an eligible project pursuant to this subchapter, shall be deemed to be within the primary purview of the commission, and all decisions pertaining thereto, whether or not addressed in this subchapter, shall be as determined by the commission, subject to the provisions of applicable law.

(p) Performance and payment security. The department shall require a private entity entering into a comprehensive development agreement to provide a performance and payment bond or an alternative form of security in an amount that, in the department's sole determination, is sufficient to ensure the proper performance of the agreement, and to protect the department and payment bond beneficiaries supplying labor or materials to the private entity or a subcontractor of the private entity. Bonds and alternate forms of security shall be in the form and contain the provisions required in the request for proposals or the comprehensive development agreement, with such changes or modifications as the department determines to be in the best interest of the state. In addition to, or in lieu of, performance and payment bonds, the department may require:

(1) a cashier's check drawn on a federally insured financial institution, and drawn to the order of the department;

(2) United States bonds or notes, accompanied by a duly executed power of attorney and agreement authorizing the collection or sale of the bonds or notes in the event of the default of the private entity or a subcontractor of the private entity, or such other act or event that, under the terms of the comprehensive development agreement, would allow the department to draw upon or access such security;

(3) an irrevocable letter of credit issued or confirmed by a financial institution to the benefit of the department, meeting the credit rating and other requirements prescribed by the department, and providing coverage for a period of at least one year following final acceptance of the project and completion of any warranty period;

(4) an irrevocable letter signed by a guarantor meeting the net worth or other financial requirements prescribed in the request for proposals or comprehensive development agreement, and which guarantees, to the extent required under the request for proposals or comprehensive development agreement, the full and prompt payment and performance when due of the private entity's obligations under the comprehensive development agreement and other documents and agreements executed by the private entity in connection with the comprehensive development agreement; or

(5) any other form of security deemed suitable by the department.

(q) Performance evaluations. The department will evaluate the performance of a private entity that enters into a comprehensive development agreement, and will evaluate the performance of the private entity's major team members, consultants, and subcontractors, in accordance with the requirements of this subsection. Evaluations will be conducted annually at twelve month intervals during the term of the comprehensive development agreement, upon termination of the comprehensive development agreement, and when the department determines that work is materially behind schedule or not being performed according to the requirements of the comprehensive development agreement. Optional evaluations may be conducted as provided in the comprehensive development agreement. Acts or omissions that are the subject of a good faith dispute will not be considered. After a performance evaluation is conducted, and for at least 30 days before the evaluation becomes final and is used by the department, the department will provide for review and comment a copy of the performance evaluation report to the entity being evaluated and, if that entity is a consultant or subcontractor, to the entity that entered into the comprehensive development agreement. The department will consider and take into account any submitted comments in finalizing the performance evaluation report. The results of performance evaluations will be provided to the entity that was evaluated and may be used in the evaluation of qualifications submittals and proposals under §27.4 of this subchapter and §9.153 of this title (relating to Solicitation of Proposals) by proposers that include the major team members, consultants, and subcontractors evaluated.

Source Note: The provisions of this §27.3 adopted to be effective July 18, 2002, 27 TexReg 6377; amended to be effective September 18, 2003, 28 TexReg 8005; amended to be effective August 19, 2004, 29 TexReg 7998; amended to be effective January 5, 2006, 30 TexReg 9000; amended to be effective May 17, 2007, 32 TexReg 2670; amended to be effective July 19, 2012, 37 TexReg 5339