"The best contractors in the world are in Texas right now, and they are in Texas because the state is building more highways than anywhere else in the nation," says Michael Morris, NTCOG director of transportation. "These are sophisticated, private-sector companies who recognize the advantages of Texas' approach."

An example is LBJ Infrastructure Group (LBJIG), which is building the $2.7-billion upgrade to IH-635 in Dallas. The firm says TxDOT's ownership approach is a key factor in ensuring the project will be a success.

"We highly value our partnership with TxDOT. Developing and reconstructing the infrastructure of IH-635 in Dallas is a large undertaking, so collaboration is critical to our ability to deliver a project of this magnitude to North Texas," says LBJIG CEO Antonio Alvarez Cedron. "TxDOT's leadership, combined with focused strategic guidance, has not only ensured that we have a solid plan, but that it will be expertly implemented."

The LBJ Express, as the project is known, is one of 16 major projects TxDOT has undertaken in the past decade. Five of those are under active procurement, including the $1.2-billion SH 99 Grand Parkway in the Houston area and the $1.3-billion 183 Managed Lanes project in Dallas County. In North Texas alone, there are a half-dozen ongoing P3 projects valued at more than $8.35 billion.

Infrastructure Conundrum

The infrastructure improvements are necessary because of the state's dramatic population growth. According to the latest numbers from the U.S. Census Bureau, Houston was the fastest-growing urban area in the nation last year, while Dallas/Fort Worth ranked third. Odessa/Midland and Austin placed in the top 10.

Much of Texas' population boom is a result of domestic migration, as the state's booming economy lures new residents. Unfortunately, that growth comes as budgetary restraints have tempered efforts to bolster the state's road and rail systems.

The funding gap for transportation infrastructure stands at $4 billion, according to a recent report by the Texas A&M Transportation Institute.

For TxDOT, the solution has been a growing reliance on P3 and design-build. Each of these must be approved by the state Legislature in the form of a binding agreement between TxDOT and the private companies working on a particular project.

Comprehensive development agreements, or CDAs, clearly establish baseline expectations such as performance standards, audit processes and contract requirements. The CDAs help both sides better manage the risks that big-ticket construction projects produce.