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Value for Money Assessment

Highway 427 Expansion Project
March 14, 2017
 Table of Contents

I. EXECUTIVE SUMMARY 2
• Infrastructure Ontario 2
• Alternative Financing and Procurement in Ontario 2
• Achieving Value for Money 2
• External Review 3

II. PROJECT HIGHLIGHTS 4

• Highway 427 Expansion 4
• Background 4
• Objectives 5
• Project Scope 5
• Economic Benefits & Job Creation 5

III. ACHIEVING VALUE FOR MONEY 6

• Value for Money Concept 6
• Calculating Value for Money – Inputs & Assumptions 6
• Highway 427 Expansion – Value for Money Results 9
• External Review 10

IV. PROJECT AGREEMENT 11

V. COMPETITIVE SELECTION PROCESS 12

• Procurement Process 12
• Construction and Maintenance Phases 13

VI. CONCLUSION 14

VII. EXTERNAL CONSULTANT LETTERS 15

Infrastructure Ontario
1 Value for Money Assessment – Highway 427 Expansion
 I. EXECUTIVE SUMMARY

This report provides a summary of the procurement process for the Highway 427 Expansion project and
demonstrates how value for money was achieved by delivering the project using Infrastructure Ontario’s (IO)
Alternative Financing and Procurement approach.

• Infrastructure Ontario
IO is a Crown agency owned by the Province of Ontario that provides a wide range of services to support
the Ontario government’s initiatives to modernize and maximize the value of public infrastructure and realty.
Projects delivered by IO are guided by five key principles: transparency, accountability, value for money, public
ownership and control, and public interest are paramount.

• Alternative Financing and Procurement in Ontario

IO delivers public infrastructure projects using a project delivery model called Alternative Financing and
Procurement (AFP). The AFP model brings together private and public sector expertise in a unique structure
that transfers to the private sector partner the risk of project cost increases and scheduling delays typically
associated with traditional project delivery. The goal of the AFP approach is to deliver a project on time and on
budget and to provide real cost savings for the public sector.

All projects with a cost greater than $100 million are screened for their suitability in being delivered as an AFP
project. The decision to proceed with an AFP delivery model is based on both qualitative considerations (e.g.,
size and complexity of the project) and a quantitative assessment. The quantitative assessment, called Value
for Money (VFM), is used to assess whether the AFP delivery model will achieve greater value to the public
compared to a traditional public sector delivery model. VFM compares the estimated total project costs of
delivering public infrastructure using AFP relative to the traditional delivery model.

• Achieving Value for Money

The VFM assessment of the Highway 427 Expansion indicates an estimated cost savings of $103 million or
15.4% percent (in present value terms) by using the AFP approach compared to traditional delivery.

$800
$700 $668 $565
VFM of
$600 $103 million or 15.4%
Retained Risks
$220 $12.6 $10 million
$500
AFP Ancillary costs
$400
Base Project costs
$300
$200 $448 $518

$100
* $ Millions, Present Value
$-
Traditional AFP

Infrastructure Ontario
2 Value for Money Assessment – Highway 427 Expansion
 I. EXECUTIVE SUMMARY

• External Review
As part of the procurement process and VFM assessment, two external parties were retained by IO:

• KPMG was retained to complete the VFM assessment; and,

• P1 Consulting acted as the Fairness Monitor for the project.

Infrastructure Ontario
3 Value for Money Assessment – Highway 427 Expansion
 II. PROJECT HIGHLIGHTS

• Highway 427 Expansion

Extending Highway 427 is a key priority

in addressing the efficient movement of
Purpose people and goods within the context of
the province’s Growth Plan for the Greater
Golden Horseshoe.

Project Owner Ministry of Transportation (MTO)

Private Partner LINK 427

Location Toronto

Project Type Design-Build-Finance-Maintain (DBFM)

Infrastructure Type Highway

Contract Value $616 million (nominal/including inflation)

Construction Period 2017 to 2020

Length of Project 34 years: 4 years construction + 30 years

Agreement maintenance and rehabilitation

Estimated Value for Money

$103 Million or 15.4%
(Present Value)

• Background
The Highway 427 Expansion project includes a new 6.6 kilometer extension from Highway 7 to Major
Mackenzie Drive, a 4.0 kilometer road widening from Finch Avenue to Highway 7 and new median High
Occupancy Toll (HOT) lanes in each direction.

• Objectives
Ontario is making the largest infrastructure investment in hospitals, schools, public transit, roads and bridges
in the province’s history.

Once complete, the expansion will provide economic benefits to the province by offering an enhanced freeway
route into York Region, the Vaughan Business area and the CPR Vaughan Intermodal Facility.

Overall key objectives of the Highway 427 Expansion include:

• Increase urban transit capacity • A maintained asset for the long-term

• Manage congestion • Deliver on-time, on budget
• Minimize disruption during construction • Public ownership
• Design excellence

Infrastructure Ontario
4 Value for Money Assessment – Highway 427 Expansion
 II. PROJECT HIGHLIGHTS

• Project Scope
The project agreement with LINK 427 contains their requirements to:

• Design and Construct – lead the design and construction of the Highway for final completion in 2021;
• Finance – secure sufficient financing to finance the construction and capital costs over the term of
the project;
• Maintain – provide maintenance, lifecycle repair and renewal of the highway for a 30-year service period
as per maintenance performance standards in the project agreement; and
• Third-Party Certification – obtain a third-party independent certification that the requirements of the
project agreement are met.

• Economic Benefits & Job Creation

The project is generating economic stimulus by creating and supporting jobs. LINK 427 estimates the
majority of the labour will come from the Greater Toronto Area. There will be 250 workers on site at
the peak of construction.

Infrastructure Ontario
5 Value for Money Assessment – Highway 427 Expansion
 III. ACHIEVING VALUE FOR MONEY

Value for money assessment for the Highway 427

Expansion Project demonstrates a project cost savings of: $103 million or 15.4%

The VFM assessment methodology is outlined in Assessing Value for Money – An Updated Guide to
Infrastructure Ontario’s Methodology, which can be found at www.infrastructureontario.ca

• Value for Money Concept

The VFM compares the estimated total-risk adjusted project costs, expressed in dollars measured at the same
point in time, of delivering the same infrastructure project under two delivery models: the Traditional Design,
Bid, Build (DBB) model and the AFP model.

MODEL # 1: MODEL # 2:
Traditional DBB Delivery (PSC) AFP Delivery

Estimated costs to the public sector of delivering Estimated costs to the public sector of delivering
an infrastructure project using a traditional the same project to the identical specifications
procurement delivery model. using the AFP delivery model.

Total risk-adjusted costs are known as the Public Total risk-adjusted costs are known as AFP
Sector Comparator or PSC Costs. Costs.

{ Value for Money $ = PSC Costs - AFP Costs or Value for Money % = (PSC Costs - AFP Costs)
PSC Cost Costs }
The difference between the total estimated PSC costs and the total estimated AFP costs is referred to as
VFM. Positive VFM is demonstrated when the cost of delivery under AFP is less than PSC.

• Calculating Value for Money – Inputs & Assumptions

The VFM is assessed and refined throughout the entire procurement process to reflect updated information
and LINK 427’s actual bid costs. All costs and risks in this report are expressed in present value terms and
have been discounted back to present terms.

The VFM assessment relies on a number of inputs and assumptions, including:

• 1. Base Project Costs
• 1.1. Adjusted Base Costs (design, construction, lifecycle and maintenance)
• 1.2. Financing Costs
• 2. AFP Ancillary Costs
• 3. Retained Risks

Infrastructure Ontario
6 Value for Money Assessment – Highway 427 Expansion
 III. ACHIEVING VALUE FOR MONEY

1. Base Project Costs

• 1.1. Calculation of Base Costs

Traditional Delivery Model (PSC) AFP Delivery Model

Base Costs ($) Base Costs ($)

adjusted for: adjusted for:

Innovation Factor N/A Innovation Factor ↓ to Construction

Costs

Lifecycle Cost ↓ to Lifecycle Costs Lifecycle Cost N/A

Adjustment Factor Adjustment Factor

Competitive Neutrality ↑ to Lifecycle Costs Competitive Neutrality N/A

Adjusted Base Costs Base Costs ($) +/- Adjusted Base Costs Base Costs ($) +/-
Adjustments Adjustments

Estimated Savings / (Costs) in Base Costs under the AFP Model PSC – AFP

Base costs include design, construction, and maintenance and lifecycle costs. In the estimation of base costs,
IO relies on external cost consultants to estimate the costs of the project. This becomes the starting point for
both the PSC and AFP models. These costs are then adjusted for:

• An innovation factor – the VFM methodology includes an innovation factor which recognizes that the
base cost of the AFP model will be lower than the PSC model as a result of:
• the use of performance-based specifications in AFP projects allow contractors to consider innovative
and alternative ways to deliver a project, such that project costs are lower as compared to a traditional
delivery which uses more prescriptive specifications; and,

• an increased competitive environment on AFP projects which have resulted in cost reductions.

• A lifecycle cost adjustment factor – experience suggests that typically governments will under-spend
on lifecycle maintenance for projects delivered under traditional delivery methods. Whereas, for DBFM
projects, the AFP model requires the private sector partner to meet specifications which ensures the
asset is well maintained over the project term. The VFM methodology captures this by reducing the
actual spend on lifecycle costs in the PSC model over the 30-year operating term and quantifying the
expected impact and costs of this deferred maintenance in the risk assessment. The net impact results
in an overall increase in PSC costs.
• Competitive neutrality – the base costs under AFP delivery will also include a provision for certain
taxes payable by the private sector, namely taxes paid by the equity developers. The equivalent costs
will not appear under the PSC. These perceived cost advantages could be misleading. As a result,
an adjustment called the “competitive neutrality adjustment” is required to negate this potentially
misleading cost of AFP delivery. The adjustment consists of adding such costs to the PSC.

Infrastructure Ontario
7 Value for Money Assessment – Highway 427 Expansion
 III. ACHIEVING VALUE FOR MONEY

• 1.2. Financing Costs

Traditional Delivery Model (PSC) AFP Delivery Model

Financing Costs Public sector notional Financing Costs Private sector

financing costs financing costs

Estimated Savings / (Costs) from Financing under the AFP Model PSC – AFP

One of the common elements of the AFP model is the use of private finance for some or all of the project
period. Under the traditional delivery model, the public sector makes progress payments throughout
construction. Whereas under the AFP model, the government pays a portion of construction costs during
construction as interim payments and/or pays the entire amount at the end of the construction period and/or
through a series of regular service payments over the term of the concession agreement (for DBFM projects).
Financing costs are reflected as follows:

• Traditional Delivery Model or PSC - the public sector notionally incurs an “opportunity cost” for having
paid earlier as compared to the AFP model. The notional public sector financing cost is calculated at the
current Provincial cost of borrowing or weighted average cost of capital. This cost is also is reflected in
the discount rate used to assess and compare the project costs.
• AFP Delivery Model – the private sector party borrows at private financing rates to pay for the project costs
during construction and carries that financing until fully repaid by the public sector. This private sector
financing cost is ultimately passed through to the public sector as a cost and reflected in the AFP model.

2. AFP Ancillary Costs

Traditional Delivery Model (PSC) AFP Delivery Model

AFP Ancillary Costs N/A AFP Ancillary Costs ↑AFP costs

Estimated Savings / (Costs) from Financing under the AFP Model PSC – AFP

There are significant costs associated with the planning and delivery of a large complex project. The VFM
methodology quantifies the incremental ancillary costs arising under the AFP delivery model only. Ancillary
costs typically incurred include legal, capital markets, fairness, transaction, and the cost of IO services.

3. Retained Risks

Traditional Delivery Model (PSC) AFP Delivery Model

Retained Risks ↑PSC costs Retained Risks ↑AFP costs

Estimated Savings / (Costs) from Retained Risks under the AFP Model PSC – AFP

The concepts of risk transfer and mitigation are key to understanding the overall VFM assessment. To
estimate and compare the total cost of delivering a project under the traditional delivery model versus the AFP
model, the risks borne by the public sector, which are called “retained risks”, are identified and quantified.

Infrastructure Ontario
8 Value for Money Assessment – Highway 427 Expansion
 III. ACHIEVING VALUE FOR MONEY

Details on how retained risks are identified and quantified are in Assessing Value for Money – An Updated
Guide to Infrastructure Ontario’s Methodology, which can be found at www.infrastructureontario.ca

Project risks are defined as potential adverse events that may have a direct impact on project costs. To the
extent that the public sector retains these risks under both delivery models, they are included in the estimated
cost under the PSC and AFP model as “retained risks”. Risks retained under the AFP model are lower than
risks retained by the public sector under the PSC model. This reflects the transfer of certain project risks from
the public sector to the private sector and the appropriate allocation of risk between the public and private
sectors based on the party best able to manage, mitigate, and/or eliminate the project risk.

As a result of a comprehensive risk assessment, the following are examples of key project risks that have been
transferred or mitigated under the project agreement to LINK 427:

• Project Schedule – risk of a longer construction period and resulting in a higher total program cost.

• Asset Residual Risk – risk that at the end of the lifecycle, the asset residual value is less than
expected because the quality of the asset is not equivalent to the handback requirements under
a concession contract.

• Latent Defects – Risk that latent defects result in operational difficulties, additional lifecycle
maintenance costs.

• Quality Management – risk associated with meeting design standards and codes as they relate to
long-term asset performance.

• Highway 427 Expansion Value for Money Results

The VFM assessment of the Highway 427 Expansion indicates an estimated cost savings of $103 million or
15.4 per cent by using the AFP approach compared to traditional delivery.

$ Millions, $ Millions,
Traditional Delivery Model (PSC) Present Value
AFP Delivery Model Present Value

I. Base Project Costs $448 I. Base Project Costs $518

(Adjusted Base Costs + Financing) (Adjusted Base Costs + Financing)

II. AFP Ancillary Costs N/A II. AFP Ancillary Costs $10

III. Retained Risks $220 III. Retained Risks $37

Total $668 Total $565

Estimated Value for Money (cost difference) $103 million

Estimated Percentage Savings 15.4%

Infrastructure Ontario
9 Value for Money Assessment – Highway 427 Expansion
 III. ACHIEVING VALUE FOR MONEY

$800
$700 $668 $565
VFM of
$600 $103 million or 15.4%
Retained Risks
$220 $12.6 $10 million
$500
AFP Ancillary costs
$400
Base Project costs
$300
$200 $448 $518

$100
* $ Millions, Present Value
$-
Traditional AFP

• External Review
KPMG completed the VFM assessment for the project. Their assessment demonstrates projected cost
savings of 15.4 percent by delivering the project using the AFP model versus what it would have cost to
deliver the project using a traditional delivery model (see letter on page 15).

P1 Consulting acted as the Fairness Monitor for the project. They reviewed and monitored the
communications, evaluations and decision-making processes associated with the project, ensuring the
fairness, equity, objectivity, transparency and adequate documentation of the process. P1 Consulting certified
that these principles were maintained throughout the procurement process (see letter on page 17).

Infrastructure Ontario
10 Value for Money Assessment – Highway 427 Expansion
 IV. PROJECT AGREEMENT

• Highlights of the Project Agreement

The Project Agreement signed between IO (on behalf of MTO) and LINK 427 defines the obligations and risks of
all parties involved. Key highlights that pertain to the construction and maintenance terms are below:

• Contract Price Certainty – A $687M fixed-price contract (includes inflation at contractually determined
rate on certain maintenance and lifecycle costs) to design, build, finance and maintain the Highway 427
Expansion for a 30-year period. Any extra costs incurred as a result of a schedule overrun caused by
the contractor will not be paid by the Province.
• Scheduling, Project Completion and Delays – LINK 427 has agreed to a substantial completion
date in 2020. The schedule can be modified in limited circumstances in accordance with the project
agreement. A sizeable payment will be made by the Province at substantial completion, providing
further incentive for LINK 427 to complete construction on time.
• Site conditions and contamination – LINK 427 is responsible for managing and where required,
remediating any contamination at the site. This includes contamination that was disclosed or
reasonably anticipated from site condition reports, or that is caused by LINK 427 or any of its parties.
• Construction Financing – LINK 427 is required to finance the construction of the project and is
responsible for any additional financing costs if there is a delay reaching substantial completion of
the project.
• Ongoing Maintenance and Lifecycle – LINK 427 must meet the requirements as outlined in the project
agreement, for the maintenance and lifecycle renewal. LINK 427 will face deductions to their monthly
payments if they do not meet the performance obligations during the 30-year maintenance term.
• Asset Hand Back – upon expiry of the 30-year maintenance term, LINK 427 must hand back the
infrastructure to the Province in good working order within specific prescribed standards. Financial
penalties can be levied if the asset condition does not meet the prescribed requirements.

Infrastructure Ontario
11 Value for Money Assessment – Highway 427 Expansion
 V. COMPETITIVE SELECTION PROCESS

The procurement process for the Highway 427 Expansion project, from RFQ to Financial Close, took
20 months to complete.

After concluding a fair and competitive procurement process, MTO and IO entered into a project agreement
with LINK 427 to design, build, finance and maintain the project.

• Procurement Process

i. Request for Qualifications | July 8, 2015

• MTO and IO issued a request for qualifications (RFQ) to solicit interested parties to design, build,
finance and maintain the Highway 427 Expansion project.
• In October 2015, the RFQ period closed and the Sponsors received statements of qualifications from
six interested teams.
• RFQ submissions were evaluated by IO and MTO. High standards were set to ensure the pre-qualified
consortia exceeded the technical and financial standards required for this complex and large project.
The evaluation process resulted in three proponents being pre-qualified.
427 Link Blackbird Infrastructure Group LINK 427
• Plenary • Cintra • ACS
• Aecon • CRH • Brennan Infrastructure Inc.
• Walsh • Ferrovial Agroman • Dragados
• Hatch Mott MacDonald • Dufferin • BOT
• AIA Engineers • MMM Group
• Urban Systems Ltd.

ii. Request for Proposals | March 3, 2016

• A request for proposals (RFP) was issued to the pre-qualified proponents, setting out the bid process
and proposed project agreement for the project.
• The proponents spent seven months to prepare high-quality, competitive submissions.

iii. Proposal Submission | September 30, 2016

• The RFP period closed on September 30, 2016. All three proponents submitted bids on time.
• October, 2016 – December, 2016: bids were evaluated using criteria as set out in the RFP by an Evaluation
Committee comprised of subject matter experts from IO, MTO and technical consultants enlisted by the
Sponsors. The extensive evaluation process resulted in LINK 427 receiving the highest score.
• On December 15, 2016, the ‘first-ranked proponent’ – also referred to as the First Negotiations
Proponent – LINK 427, was then notified of their standing.

iv. Preferred Proponent Notification | January 24, 2017

• After successful negotiations with the First Negotiations Proponent, LINK 427 was selected as the
preferred proponent. LINK 427 best demonstrated the ability to meet the specifications outlined in the
RFP, including technical requirements, construction schedule, price and financial backing, as well as
maintenance and rehabilitation plans.

Infrastructure Ontario
12 Value for Money Assessment – Highway 427 Expansion
 V. COMPETITIVE SELECTION PROCESS

v. Commercial and Financial Close | March 10, 2017

• Upon conclusion of negotiations and once a financing rate was set, a Project Agreement (contract) was
executed between LINK 427, IO (on behalf of MTO) on March 7, 2017 and financial close was reached
on March 10, 2017.
• The entire LINK 427 team, including identified subcontractors, comprises more than 11 companies:

Developers Design and Construction

• ACS Infrastructure Canada Inc. • Brennan Infrastructure Inc.
• Brennan Infrastructure Inc. (a member of the Miller • Dragados Canada Inc.
Group of Companies). • Bot Infrastructure Ltd.
Maintenance and Rehabilitation • MMM Group Ltd
• ACS Infrastructure Canada Inc. • Thurber Engineering Ltd.

• Brennan Infrastructure Inc. Lenders

Financial Advisors • Manulife
• Bank of Tokyo-Mitsubishi UFJ
• National Bank Financial
• Fédération Des Caisses Desjardins du Québec
• Korea Development Bank
• Bank of China

• Construction and Maintenance Phases

vi. Construction Phase | 2017 – 2020

• The design and construction phase began in spring 2017 upon signing of the contract and will be carried
out in accordance with the project agreement and the builder’s schedule as approved by the Sponsors.
• During the construction period, the builder’s construction costs will be funded through their own equity,
bond and lending arrangements, which will be paid in monthly installments based on the construction
program set out by LINK 427.
• Project construction will be overseen by MTO with IO providing contract management oversight.

vii. Maintenance Phase | 2020 – 2050

• Following construction, the Highway 427 Expansion is expected to become operational in 2020 and
later completed in 2021. According to the project agreement, LINK 427 will provide maintenance,
lifecycle, repair and rehabilitation services for a 30-year period.
• Highway maintenance will be overseen by MTO.

vii. Payment
• LINK 427 will receive monthly construction period payments and a substantial completion payment
expected in 2020.
• During the 30-year maintenance and rehabilitation phase, annual service payments (by way of monthly
availability payments) will be paid to LINK 427. Payments will cover the capital and service portions,
lifecycle payments minus any performance deductions.

Infrastructure Ontario
13 Value for Money Assessment – Highway 427 Expansion
 VI. CONCLUSION

This report provides a project overview and summary of the procurement process for the Highway 427
Expansion project, and demonstrates that a VFM of $103 million or 15.4% percent will be achieved by using
the AFP approach compared to traditional delivery.

Going forward, IO, MTO and LINK 427 will continue to work together to ensure the successful delivery of the
Highway 427 Expansion.

Infrastructure Ontario
14 Value for Money Assessment – Highway 427 Expansion
 VII. EXTERNAL CONSULTANT LETTERS

KPMG LLP Telephone (416) 777-8500

Suite 4600, 333 Bay Street Fax (416) 777-8818
Toronto, ON M5H 2S5 Internet www.kpmg.ca

PRIVATE & CONFIDENTIAL

Ms. Divya Shah

Infrastructure Ontario
777 Bay Street
Toronto, Ontario
M5G 2C8

Re: Value for Money Assessment – Highway 427 Expansion Project

Dear Ms. Shah:

KPMG LLP (“KPMG”) has prepared the Value for Money (“VFM”) assessment for the
Highway 427 Expansion Project (“Project”) at the Financial Close stage, in accordance
with our letter of engagement with Infrastructure Ontario (“IO”) and IO’s methodology
Assessing Value for Money: An Updated Guide to Infrastructure Ontario's Methodology –
March 2015.

The VFM assessment is based on a comparison of the total project costs for the Project
under:

1. The traditional delivery approach, as reflected in the Public Sector Comparator

(“PSC”) model; and

2. The Alternative Finance and Procurement approach (“AFP”), incorporating the

Successful Bidder’s proposed costs.

The VFM assessment was calculated using the following information (collectively the
“Information”) within the VFM model:

i. A Risk Matrix developed for IO by Altus Group and adapted by IO to reflect Project
specific risks; and

ii. Cost and other input assumptions extracted from the bid submitted by the Successful
Bidder and other VFM model assumptions as provided by IO.

We have not audited or attempted to independently verify the reasonableness, accuracy or

completeness of the Information.

KPMG LLP, a Canadian limited liability partnership is the Canadian

Member firm of KPMG International, a Swiss cooperative
Based on our understanding of IO’s VFM methodology, we can confirm that, the
Information has been appropriately used in the VFM model, and that the VFM assessment
demonstrates the AFP approach provides estimated cost savings of 15.44% in comparison
to the traditional delivery approach.

Yours very truly,

KPMG LLP

Will Lipson
Partner
Toronto, Ontario
March 10, 2017

KPMG LLP, a Canadian limited liability partnership is the Canadian

Member firm of KPMG International, a Swiss cooperative
December 14th, 2016

Mr. Michael Inch

Vice President, Procurement
Infrastructure Ontario
1 Dundas Street West, Suite 2000
Toronto, Ontario, M5G 2L5

Subject: Fairness Attestation - Request for Proposals for Highway 427 Expansion (RFP No. 15-
407)

Dear Mr. Inch:

P1Consulting acted as the Fairness Monitor to review and monitor the communications, evaluations
and decision-making processes associated with the procurement process for the Request for
Proposals (“RFP”) in connection with the Highway 427 Expansion Project (the “Project”). This
was done with the aim of ensuring fairness, equity, objectivity, transparency and adequate
documentation in the evaluation process.

The Request for Qualifications (“RFQ”) preceded the RFP process, with the intent of identifying the
Pre-qualified Proponents who would be eligible to participate in RFP process, with the intent of
identifying a Negotiations Proponent. P1 Consulting was engaged in the procurement process prior
to the release of the RFQ, and monitored and reviewed the process up until the selection of the First
Negotiations Proponent.

To date, in our role as Fairness Monitor, P1 Consulting has made certain that the following steps were
taken to ensure a fair and transparent process:
• Clarity and consistency of the RFQ and RFP, Evaluation Framework and related documentation;
• Adherence to the processes described in the RFQ and RFP and Evaluation Framework, including
the evaluation process;
• Objectivity and diligence during the procurement process in order to ensure that it was
conducted in a transparent manner;
• Compliance of participants with strict requirements regarding conflict of interest and
confidentiality during the procurement and evaluation processes;
• Security of information; and
• Oversight to provide a process where the Proponents are treated fairly.

The Fairness Monitor actively participated in the following steps in the process to ensure that
fairness was maintained throughout:
• Participation in the project kick-off meeting;
• Review of the draft RFQ and RFP and related documentation;
• Review of the Evaluation Frameworks;

P1 Consulting Inc.
86 Centrepointe Drive, Ottawa, Ontario, Canada K2G 6B1 T: (613) 723-0060 F: (613) 723-9720
Mr. Inch
December 14th, 2016
P1 Consulting Inc.
Page 2 of 2

• Overseeing Commercially Confidential Meetings;

• Overseeing the receipt of Proposals; and
• Overseeing the proposal evaluation and the selection of the First Negotiations Proponent.

As the Fairness Monitor for the Request for Proposals for the Highway 427 Expansion Project,
we certify that, up until the date of this letter, the principles of fairness, consistency and transparency
have been, in our opinion, maintained throughout the procurement process. Furthermore, no issues
have emerged during the procurement process, of which we were aware, that would have impaired
the fairness of this initiative.

Yours truly,

Stephanie Braithwaite
Lead Fairness Monitor
P1 Consulting

Cc: Louise Panneton,

President, P1 Consulting
 Infrastructure Ontario
1 Dundas Street West, Suite 2000,
Toronto Ontario M5G 2L5
www.infrastructureontario.ca