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Program to incentivize participation in bidding process

February 11, 2009

NEWARK, NJ — The NJ TRANSIT Board of Directors today approved "innovation stipends" to encourage more firms to participate in the bid process for portions of the Mass Transit Tunnel project.

The use of Innovation Stipends—an approach encouraged by the Federal Transit Administration—helps contractors cover a portion of their expenses preparing costly bid proposals for complex design/build projects. This approach enables firms to devote the staffing and financial resources necessary to bid, resulting in greater competition in the procurement process.

By expanding the field of competition, stipends are also expected to promote participation of small and disadvantaged business enterprises, particularly as subcontractors.

The stipend enables NJ TRANSIT to retain the rights to all submissions and the agency can adapt or adopt design elements and other innovations contained within unsuccessful bids.

"We believe these Innovation Stipends will foster robust competition for the Mass Transit Tunnel construction contracts, prompting firms to move quickly and put forth their very best ideas," said NJ TRANSIT Chairman and Transportation Commissioner Stephen Dilts.

"The ability to incorporate innovations that might be found in unsuccessful bids is a very appealing feature of our Innovation Stipend program, and will ensure that all good ideas are incorporated into the tunnel," said NJ TRANSIT Executive Director Richard Sarles.

"Ultimately, this approach will promote small and minority business participation, save scarce funds and provide our talented team of experienced professionals with a greater range of design options to help us produce the best project possible."

Tunnel construction will be divided into three contracts: one segment in New Jersey, a second under the Hudson River and a third in Manhattan.

Bids will be accepted for each of the three tunnel segments, with unsuccessful bidders receiving up to $375,000 for their submissions. Even with a rich field of bids, stipends are expected to amount to less than two-tenths of one percent of anticipated construction costs.

The use of innovation stipends is considered a "best practice" by the Federal Transit Administration. In December, 2008, the FTA agreed that an offer of stipends would be appropriate for the Mass Transit Tunnel project.


BID VALUE (millions)



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Arizona State Route 51




Arizona US Route 60




S. Nevada Water Authority
Lake Mead Tunnel




Colorado I-25 Road/Rail




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Texas SH 130




Utah I-15




About the Mass Transit Tunnel Team

NJ TRANSIT and the Port Authority of NY & NJ have recruited a world-class team of experts to carry the project through construction. Led by Arthur D. Silber, a 34-year veteran of transportation projects, the team is composed of leading professionals in tunnel design, geology, planning, financial analysis and project management. The team is backed by the resources of two consultant teams with global experience in engineering, design, construction and construction management of large-scale transportation and railroad infrastructure projects.


NJ TRANSIT is the nation's largest statewide public transportation system providing more than 895,000 weekday trips on 240 bus routes, three light rail lines and 11 commuter rail lines. It is the third largest transit system in the country with 164 rail stations, 60 light rail stations and more than 18,000 bus stops linking major points in New Jersey, New York and Philadelphia.