MAJOR BUSINESS TERMS I-64 HAMPTON ROADS BRIDGE-TUNNEL EXPANSION PROJECT IN THE COMMONWEALTH OF VIRGINIA. March 14, 2019

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1 MAJOR BUSINESS TERMS I-64 HAMPTON ROADS BRIDGE-TUNNEL EXPANSION PROJECT IN THE COMMONWEALTH OF VIRGINIA This Term Sheet ( Term Sheet ) sets out a summary of major business terms for the I-64 Hampton Roads Bridge-Tunnel Expansion Project (the Project ). For detailed information on the scope of the Project, refer to the Request for Proposals ( RFP ) for the Project. Capitalized terms used in this Term Sheet but not otherwise defined herein have the meanings set forth in the RFP. The Department intends to include the major business terms set forth in this Term Sheet in the Comprehensive Agreement ( CA ) for the Project. Hampton Roads Bridge-Tunnel Expansion Page 1 Commonwealth of Virginia

2 1. Summary of the Project The Project includes the following improvements to the I-64 corridor between Settler s Landing Road in the City of Hampton and I-564 in the City of Norfolk, that includes the addition of a third lane to I-64 in each direction, with a roadway section sufficient to accommodate a part-time median shoulder lane. For the marine crossing, the new bridge-tunnel complex will accommodate four (4) lanes of traffic for a total of eight (8) lanes of capacity across the water. (i) (ii) the design and construction of a new tunnel generally parallel to the existing Hampton Roads Bridge-Tunnel; and the design and construction of additional highway capacity on portions of the Project corridor that currently have only two lanes in each direction. The final configuration of the Project will support the incorporation of the Project into a regional Express Lanes network. 2. Responsibility for Tolling Operations The Design-Builder will not be responsible for carrying out tolling operations with respect to the Project. 3. Contract Price The Design-Builder will design and construct the Project for a lump sum contract price (the Contract Price ). 4. Completion Deadlines 5. No Excuses Incentive Payment The Design-Builder will be required to achieve Substantial Completion of the Project on or before September 1, 2025, and Final Completion on or before November 1, The Design-Builder will pay delay liquidated damages to the Department if the Design-Builder fails to achieve Substantial Completion or Final Completion by the applicable deadline. The Design-Builder will be entitled to earn a no excuses incentive payment for the early achievement of Substantial Completion of the Project in an amount not to exceed $90,000,000 (the No Excuses Incentive Payment ). The Amount of the No Excuses Incentive Payment will decline progressively to $0 over a five-month period during which the Design-Builder may achieve Substantial Completion, with no incentive payable if Substantial Completion is achieved on or after September 1, If the Design-Builder is eligible for and elects to be paid the No Excuses Incentive Payment, the Design-Builder will be required to waive all claims for all cost and schedule impacts incurred by the Design-Builder. Hampton Roads Bridge-Tunnel Expansion Page 2 Commonwealth of Virginia

3 6. Limited Notices to Proceed The Design-Builder may only undertake limited work prior to receiving approval of the Joint Permit Application for the Project (the Early Work ). Construction cannot begin until the Department issues the Notice to Proceed, which will occur following approval of the Joint Permit Application. The scope of Early Work includes: (i) design and other activities in support of the Joint Permit Application; (ii) the procurement of the tunnel boring machine; and (iii) the delivery and assembly of the tunnel boring machine (including site improvements needed to accommodate the assembly and setup of the tunnel boring machine). 7. Right-of-Way The Department, at its sole cost and expense, is to obtain and provide Design-Builder with access to the site (i.e., the real property within the rightof-way limits shown on the Department s concept plans for the Project). The Department is responsible for the costs of acquiring additional right-ofway required for the Project, if any; provided Design-Builder will be responsible for all costs and risks (including re-evaluations of the NEPA Document) if such right-of-way is required because the Design-Builder s final design deviates from the right-of-way limits shown on the Department s concept plans for the Project. 8. Utility Relocation The Design-Builder will be responsible for all costs of utility relocations or adjustments and all activities and services necessary for such utility relocations or adjustments. The Department will reasonably assist the Design-Builder in obtaining the benefit of all rights the Department has under any utility easement, permit, or other right in real property relating to utility relocations. 9. Governmental Approvals 10. Differing Site Conditions The Department will obtain required NEPA approvals, CTB approvals, and approval by FHWA of the CA. The Design-Builder will be responsible for obtaining all other permits and governmental approvals, and will be responsible for all cost and schedule impacts relating to any re-evaluation of the NEPA Document or new or amended governmental approvals required as a result of the Design- Builder s approved alternative technical concepts and/or final design, to the extent the Design-Builder s final design differs from the design on which the NEPA Document was based. The CA will include separate mechanisms for addressing differing site conditions as between (i) the roadway and bridge sections of the Project (the Roadway and Bridge Improvements ) and (ii) the new tunnel (the Tunnel Improvements ). Hampton Roads Bridge-Tunnel Expansion Page 3 Commonwealth of Virginia

4 With respect to the Roadway and Bridge Improvements, Design-Builder may make a claim for cost and schedule relief (via the Compensation Event process) only if Design-Builder discovers any differing site condition (including the presence of unknown utilities) during the scope validation period. With respect to the Tunnel Improvements, Design-Builder is entitled to make a claim for cost and schedule relief (via the Compensation Event process) if Design-Builder encounters conditions that vary materially from the conditions described in the geotechnical data report and the geotechnical baseline report to be appended to the CA. A condition is not considered to be a differing site condition if it could have been discovered by a qualified and experienced engineer or contractor using good industry practice, including through review and analysis of the geotechnical baseline report and the geotechnical data report. 11. Performance Security The Department will require a performance bond, a payment bond, and parent company guarantees to secure the Design-Builder s obligations under the CA. 12. Insurance The Design-Builder will obtain and maintain the insurance coverages described in the CA. 13. Civil Rights The Design-Builder shall use good faith efforts to achieve the goals for DBE participation and SWaM participation set forth in the CA. Failure to do so with respect to the DBE participation goals may result in increased Department oversight, debarment, or disqualification from participating in other Commonwealth procurements. 14. Indemnification The Design-Builder shall indemnify, defend, protect, and hold harmless the Department against any claims or losses resulting or accruing from the Design-Builder s responsibilities and liabilities under the CA. 15. Force Majeure Events Force majeure events will be listed in the CA and will be typical for projects of similar scope and purpose. 16. Delay Events Delay Events will be listed in the CA and will be typical for projects of similar scope and purpose. The CA will describe the procedural and claims submission process. 17. Compensation Events 18. Contract Price Adjustment Compensation Events will be typical for projects of similar scope and purpose. The CA will describe the procedural and claims submission process for administering compensation events and calculating damages. In accordance with the Department s special provisions generally applicable to design-build projects, the Contract Price may be adjusted Hampton Roads Bridge-Tunnel Expansion Page 4 Commonwealth of Virginia

5 Relating to Certain Commodities (up or down) to reflect changes in prices for asphalt, fuel, and steel as between a baseline price and the price(s) for such commodities at the time they consumed or incorporated into the Project, as applicable. 19. Termination Termination events will be listed in the CA, will be typical for projects of similar scope and purpose, and will include, among other things, termination for convenience of the Department. 20. Governing Law Laws of the Commonwealth 21. Federal and State Law The Design-Builder shall comply and require its contractors to comply with all federal and state laws and regulations applicable to transportation projects that receive federal or state funds. Federal or state laws and regulations will prevail over any conflicting provisions in the CA. Hampton Roads Bridge-Tunnel Expansion Page 5 Commonwealth of Virginia