- Briefing Room
Once public agencies have identified a project as having the potential to be procured as a P3, they typically conduct a series of progressively more rigorous evaluations to determine the best approach to delivering the project. These evaluations help decision makers choose how best to structure and procure a potential P3 project.
Benefit-cost analysis is a process used to compare the societal impacts of a P3 project against those for the traditional public delivery alternative.
Key issues that public agencies must consider in conducting a P3 project procurement are structuring the agreement, conducting a fair and competitive procurement process and negotiating a final agreement that is transparent and protects the public interest.
FHWA recently implemented a policy that will allow State Departments of Transportation to apply Federal-aid funds in towards availability payments to P3 partners.
The P3 Toolkit provides tools and guidance documents to assist in educating public sector policy-makers, legislative and executive staff, and transportation professionals in the use of P3 strategies.
With highway P3 projects, the private partner may participate in some combination of design, construction, financing, operations and maintenance, including collection of toll revenues.
To deliver P3 projects, public agencies will need to acquire or develop new knowledge, skills, and abilities that vary by the phase of the project, including: establishing a statutory and policy framework, identifying, evaluating, and developing potential P3 projects, conducting procurements, and monitoring and oversight.
After a P3 agreement is signed, the public agency must manage the contract to ensure that it achieves the performance standards established in the agreement. The performance monitoring and oversight phase will require building a strong set of skills within the sponsoring agency due to the need to maintain these oversight responsibilities in-house.
Three common payment mechanisms are used to repay private sector partners are repaid for their investment in P3 projects: tolls, availability payments, and shadow toll payments.
Three main types of highway P3s have been used for highway projects in the United States: design-build, design-build finance, and design-build-finance-operate-maintain.
P3s are contractual agreements between a public agency and a private entity that involve the private sector taking on additional project risks, such as design, construction, finance, long-term operation, and traffic revenue.
Building the organizational capacity needed to develop P3s while protecting the public interest presents a major challenge to transportation agencies and requires agencies to develop or acquire new policy, legal, technical, financial, and managerial skills.
A key component of P3 procurement involves the transfer of certain risks from the public agency procuring the project to the private sector partner.
Value for Money analysis is a process used to compare the financial impacts of a P3 project against those for the traditional public delivery alternative.