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P3 Defined

Private Contract Fee Service [ New Build Facilities ]

Under a private contract fee service arrangement, a public sector transportation owner transfers their program management responsibilities to a private sector firm. This is particularly true with larger and more complex projects and even entire capital programs which benefit from strategic planning. In addition to coordinating environmental studies and approvals, engineering tasks, and construction activities, private program management contracts can involve financial planning as well.

Integrating Financial and Program Management

While the types of activities and analyses public agencies require from their private program managers vary, they often involve a combination of financial management, engineering, and construction expertise. They also involve identifying information needs and developing the strategies to bridge information gaps. Assignments may focus on ways to consolidate multiyear capital programs into shorter implementation periods. Specific activities could be likely to include strategic planning, financial management, and the coordination of design and construction activities. Program management consultants have also developed project and cash management software and procedures to manage capital funds and bond proceeds.

Developing Capital Programs

In other cases, infrastructure owners are turning to private program managers to develop their capital investment programs. This may involve calibrating and phasing the implementation of physical improvements to maximize their revenue potential. This enables owners to develop capital investment strategies that the financial markets will find attractive when these agencies place the bonds needed to underwrite them. Owners must demonstrate that they have a rational and financially balanced capital program, as well as the capability of managing the complex environmental, engineering, and construction programs they will support.

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