- Briefing Room
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.
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.
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.
A key component of P3 procurement involves the transfer of certain risks from the public agency procuring the project to the private sector partner.