filing in Davidson County Chancery Court

A road-building group that lost out on Tennessee’s toll lane project is challenging the state’s award to a consortium led by a Spain-based company that promised the state a massive amount of money.

A group of companies called 24 Choice Lanes Partners says in the filing the Tennessee Department of Transportation gave its competitor an edge by allowing it to change the terms of a record-setting payout after bidding took place.

The group filed a petition Thursday in Davidson County Chancery Court requesting a review of the Tennessee Department of Transportation decision to award the I-24 toll lanes project to DriveTN, a group that guaranteed it would give the state more than $24 billion to land the contract for a $9.2 billion project.

24 Choice Lanes Partners says the state selected DriveTN, which is headed by the Spanish company Ferrovial, “based on an outlier financial proposal that TDOT knew, or through its own post-selection diligence should have known, could not be carried through to contract on the terms offered.”

The group says the state’s “subsequent error” in entering a final agreement on the $24.8 billion payment deviates from DriveTN’s first payment terms in which it promised to pay the state within seven years of closing the deal. 

24 Choice Lanes Partners and another group both promised to pay the state around $7 billion to take on the project, which runs from southeast Nashville to Murfreesboro.

The plaintiff says the state is allowing DriveTN to “reduce, defer or stretch those payments far beyond the construction period,” of seven years, according to the filing. “Any change to the payment amount or timing of payment proposed and evaluated in the DriveTN proposal is material — and prohibited.”

The group challenging the bid furthers its argument by saying DriveTn received an advantage over other bidders.

24 Choice Lanes Partners says TDOT disclosed every competitor’s financial proposals at a public meeting, then made their financial offers available for review by DriveTN before executing the “concession” agreement, giving the winning consortium the opportunity to renegotiate its financial terms knowing “exactly how far it could cut its commitments and still sit above the field.”

In contrast, other bidders made their offers “blind” and were held to it, the filing says.

The filing adds that the process “strikes at the integrity of the procurement and undermines any competition” that might have existed. 

Asked if the state was concerned about a potential challenge before the lawsuit was filed, a Transportation Department spokesperson told the Lookout the Transportation Modernization Act does not include a protest provision for P3 procurements.

Lawmakers passed the act in 2023 to allow for a public-private toll lane project and setting up the board that awarded the bid to DriveTN. It also approved $3.3 billion from the state’s general fund for road projects.

The lawsuit