| Term | Description |
|---|---|
| Agency | A public agency including departments of transportation, toll road agencies, transit agencies, and other State and local agencies responsible for developing and operating transportation projects. |
| Alternative Financial Concepts (AFC) | Structured in much the same way as ATCs, Alternative Financial Concepts (AFCs) are a mechanism to allow private sector proposers to submit for pre-approval, on a confidential basis, financial concepts that deviate from the RFP requirements. |
| Alternative Technical Concepts (ATC) | Modifications offered by proposers to technical requirements specified in the RFP that may be pre-approved by the agency for incorporation into such proposer's proposal. This process allows contractors to submit innovative concepts and solutions in a confidential manner. |
| Availability Payment | A periodic payment made to a concessionaire, typically commencing on completion of a project, a portion of which constitutes compensation for capital costs. Availability payments are subject to adjustment based on a payment scheme set forth in the concession agreement, including downward adjustments if the concessionaire fails to meet performance requirements under the agreement. Using an availability payment structure protects the interests of the public by giving the concessionaire a financial incentive to maintain the facility in satisfactory condition and operating at a specified level of performance. |
| Best value | A procurement process where price and other key factors are considered in the evaluation and selection process to minimize impacts and enhance the long-term performance and value of construction. |
| Buy America requirements | Requirements applicable to projects receiving U.S. DOT assistance, requiring certain goods and materials used in the project to be produced in the United States. Requirements vary depending on which Federal agency is providing assistance. For information about Buy America requirements applicable to FHWA-funded projects, see https://www.fhwa.dot.gov/construction/cqit/buyam.cfm. For information about FTA requirements see https://www.transit.dot.gov/buyamerica. |
| Categorical exclusion | A category of actions that do not individually or cumulatively have a significant effect on the human environment, and for which neither an environmental assessment nor an environmental impact statement is required under NEPA. |
| Competitive range | A list of proposers whose proposals have a reasonable chance of being selected for award based on their relative technical strengths and weaknesses, and their relative prices as determined by the procuring agency. Refer to Section 4.3.3.5 of FTA's BPPM for a discussion regarding how to set the competitive range. |
| Concession | A contractual right granted by an agency to a developer to design, build, finance, operate and maintain a particular asset owned by the agency, as documented and governed by the terms of a concession agreement. |
| Concession agreement | A contractual agreement whereby a public agency engages a private entity to design, build, finance, operate and maintain a facility for a specified time period in exchange for the right to collect revenues generated by the facility or receive availability payments. This document is also sometimes known in the market as a "comprehensive agreement," a "concession and lease agreement," a "franchise agreement, a "public-private partnership agreement," or a P3 agreement." |
| Concession Period | The duration of a concession, either commencing upon execution of the agreement or completion of the project, and ending upon handback of the facility to the public agency. |
| Concessionaire | The private sector party to a P3 agreement. Also called a developer or the "private partner" (although it should be noted that a P3 does not create a legal partnership between the public and private sector parties). |
| Condemnation counsel | The attorney(s) representing the project with respect to eminent domain/condemnation actions required to obtain project rights-of-way. |
| Credit enhancement | Financing tools (e.g., letters of credit, lines of credit, bond insurance, debt service reserves, and debt service guarantees) that improve the credit quality of underlying financial commitments. Credit enhancements have the effect of lowering interest costs and improving the marketability or liquidity of bond issues. |
| Davis-Bacon requirements | Prevailing wage and other requirements imposed by the 1931 Davis Bacon Act, 40 U.S.C. 3141, et seq., as amended. |
| Design-build (DB) | A procurement or project delivery method or arrangement in which a single entity (a contractor with subconsultants or a team of contractors and engineers, often with subconsultants) is entrusted with both design and construction of a project. This contrasts with traditional procurement where one contract is awarded for the design phase based on qualifications and then a second contract is bid for the construction phase of the project. |
| Design-build-finance (DBF) | A project delivery method that includes a component of financing provided by the design-build contractor in addition to DB services. The contractor provides the necessary up-front capital to address the project's cash flow needs and is generally repaid by the public agency in a series of installments funded by taxes, fees, or tolls. |
| Design-build-finance-operate-maintain (DBFOM) | A project delivery method that combines design, construction, financing, and either long-term or short-term operations and maintenance services. |
| Direct agreement | An agreement between the developer, public agency and lender under which, among other things, the agency permits the developer to grant a security interest in its rights under the concession agreement to a lender and grants the lender step-in rights and cure rights in the event of a developer default under the concession agreement. |
| Disadvantaged Business Enterprise (DBE) | DBEs are for-profit small business concerns where socially and economically disadvantaged individuals own at least a 51% interest and also control management and daily business operations. African Americans, Hispanics, Native Americans, Asian-Pacific and Subcontinent Asian Americans, and women are presumed to be socially and economically disadvantaged. Other individuals can also qualify as socially and economically disadvantaged on a case-by-case basis. |
| Environmental Assessment (EA) | A concise public document, for which a Federal agency is responsible, that provides sufficient evidence and analysis for determining whether to prepare an environmental impact statement or finding of no significant impact for a proposed transportation improvement pursuant to NEPA. An environmental assessment includes brief discussions of the need for the proposed improvement, the alternatives, and the anticipated environmental impacts of the proposed action and alternatives, and a listing of agencies and persons consulted. |
| Environmental Impact Statement (EIS) | An EIS is a detailed written statement required by NEPA for major Federal actions that significantly affect the quality of the human environment. An EIS details the process through which a transportation project was developed, includes consideration of a range of reasonable alternatives, analyzes the potential impacts resulting from the alternatives, and demonstrates compliance with other applicable environmental laws and Executive Orders. |
| Equity investors | The entities that directly or indirectly own the developer and invest equity into the Project, also known as "sponsors" or "shareholders." |
| Financial close date | The date on which the financing to fund the project closes. Conditions precedent to financial close typically include execution of the concession agreement documents, delivery of the base case financial model, delivery of requisite legal opinions, and confirmation that the requisite equity investment or shareholder loans have been made. |
| Finding of No Significant Impact (FONSI) | A finding of no significant impact under NEPA is a document prepared by a Federal agency that briefly presents the reasons why a proposed project not otherwise categorically excluded will not have a significant effect on the human environment and for which an EIS will not be prepared. It is issued subsequent to and includes the environmental assessment. |
| Formulaic approach | An approach to evaluation of SOQs or proposals that uses a formula or algorithm (if applicable) to combine price and non-price criteria. |
| Form FHWA-1273 | The provisions of the FHWA-1273 generally apply to all Federal-aid highway construction projects and therefore, must be physically incorporated into the construction contract (including design-build contracts) and, if required, appropriate subcontracts and purchase orders. The form may be found online at: https://www.fhwa.dot.gov/programadmin/contracts/1273/1273.pdf. |
| Full funding grant agreement (FFGA) | The agreement used to provide Federal financial assistance under FTA's Capital Investment Grants Program (49 U.S.C. §5309) for a New Starts project. |
| Greenfield Project | In a P3 context, a greenfield project is a project that requires the construction of a new asset. The concession agreement obligates the concessionaire to design and construct the new asset, and also to perform operations and maintenance. |
| High-Occupancy Toll (HOT) lanes | Managed highway lanes open to buses and high-occupancy vehicles at no cost, as well as non-HOV vehicles that pay a variably priced toll. Tolls are adjusted using fixed or dynamic rates to maintain free-flow traffic conditions. |
| Interfaces | In the context of P3 risk, project interfaces with other transportation infrastructure and utilities during the term of the concession, which may include freight rail, highway facilities, transit facilities and local agency facilities. |
| Letter of No Prejudice (LONP) | The LONP authority allows an applicant at its own risk to incur costs for a Project using its own funding sources with the understanding that the costs incurred subsequent to the issuance of the LONP may be eligible for Federal reimbursement or as credit toward the Grantee's local match should FTA award an FFGA for the Project at a later date. |
| Long-range Statewide Transportation Plan | The official, statewide, multimodal, transportation plan covering a period of no less than 20 years developed through the statewide transportation planning process. |
| Metropolitan planning organization (MPO) | The policy board of an organization created and designed to carry out the metropolitan transportation planning process. The MPO is responsible for planning and programming Federal highway and transit investments in its metropolitan planning area. Federal transportation statutes require that urbanized areas of 50,000 people or more must designate an MPO as a condition for spending Federal highway or transit funds. MPOs are responsible for developing a metropolitan transportation plan and a transportation improvement program. MPOs in nonattainment and maintenance areas also conduct a conformity analysis. |
| Metropolitan Transportation Plan (MTP) | The official multimodal transportation plan addressing no less than a 20-year planning horizon that the metropolitan planning organization develops, adopts, and updates through the metropolitan transportation planning process. |
| National Environmental Policy Act (NEPA) | United States environmental law, codified at 42 U.S.C. § 4321 et seq., requiring Federal agencies to study the environmental effects of their proposals, document the analysis, and make the information available to the public for comment. For transportation projects, NEPA requires examination and avoidance of potential impacts to the social and natural environment when considering approval of proposed projects. It provides an interdisciplinary framework for Federal agencies to prevent environmental damage and contains "action-forcing" procedures to ensure that Federal agency decision-makers take environmental factors into account. For additional information, access https://www.environment.fhwa.dot.gov/nepa/nepa_projDev.aspx. (Source: Transportation for Communities - Advancing Projects through Partnerships (TCAPP)) |
| Option | An offer made by one party to a contract to the other, on terms permitting the other party to accept the offer in accordance with the terms and conditions specified in the contract. P3 agreements may include the right for an agency to exercise an option requiring the concessionaire to proceed with certain work, with the price for that work set by the concessionaire's original proposal |
| Organizational conflicts of interest (OCI) | An organizational conflict of interest occurs where a contractor is unable, or potentially unable, to render impartial assistance or advice to the recipient (i) due to activities, relationships, contracts, or circumstances that may impair the contractor's objectivity or that may be perceived to impair the contractor's objectivity; or (ii) a contractor has an unfair competitive advantage. |
| Pre-development Agreement (PDA) | An agreement that allows a developer to participate in project planning at either a reduced or a deferred cost, in exchange for the right of first negotiation to develop the project on a design-build-operate-maintain or design-build-finance-operate-maintain basis. |
| Private Activity Bonds (PAB) | A form of tax-exempt bond financing that can be issued by or on behalf of State or local governments for privately developed and operated projects. This allows concessionaires to obtain tax-exempt interest rates for the project financing. Under current law, the total amount of such bonds is limited to $15 billion. |
| Project concept | A transportation improvement idea that, when advanced through the stages of planning, environment, design, and construction, would satisfy an identified need, and that was considered in the context of the local area socioeconomics and topography, future travel demand, and infrastructure improvements in the area. |
| Project sponsor | An agency that advances and procures a transportation improvement project. |
| Proposal | A written document submitted by a private entity to a public agency for a P3 project that may be solicited (in response to a request for proposal issued by the agency) or unsolicited (not in response to any request for proposal issued by the agency). |
| Proposal security | Bid bond or other security for a proposer's obligations under the proposal. |
| Public involvement | The act of communicating and engaging with the public to inform them about an agency's activities (e.g., the development of highway improvements) to gain feedback. |
| Race conscious/ race neutral | DBE participation is reported as race conscious when the contract has a DBE goal. DBE participation is reported as race neutral when the contract does not have a DBE goal or when the prime contractor is a DBE. |
| Railroad Rehabilitation and Improvement Financing (RRIF) | Under this program the Federal Railroad Administration (FRA) Administrator is authorized to provide direct loans and loan guarantees up to $35.0 billion to finance development of railroad infrastructure. Not less than $7.0 billion is reserved for projects benefiting freight railroads other than Class I carriers. |
| Record of decision (ROD) | A concise public record issued by a Federal agency subsequent to an EIS that explains the basis for the project decision, identifies all alternatives considered, and summarizes mitigation measures incorporated into the project. |
| Request for Proposals (RFP) | The entire set of documents issued to proposers for purposes of soliciting proposals. The RFP documents typically include instructions to proposers (ITP), contract terms and conditions, multiple volumes of technical provisions and other documents that are also considered part of the contract, and reference information documents that are outside of the contract. |
| Request for Qualifications (RFQ) | The set of documents issued for the purpose of soliciting qualifications and establishing a list of qualified proposers. The RFQ documents typically include the goals and objectives of the project and the procurement, procurement rules, including communications, conflicts of interest and confidentiality, submittal requirements, and the evaluation criteria for determining which teams are most highly qualified and will be permitted to submit proposals |
| Resource agencies | Federal agencies with regulatory or permitting authority related to protection of natural or cultural resources. Examples include (but are not limited to) the U.S. Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers. (Source: TCAPP) |
| Revenue risk | The risk that revenues for a project during the concession term do not match projections. "Revenue risk concessions" refer to P3s for which the developer bears the risk that it will fail to achieve its expected rate of return due to failure of project revenues to meet projections. |
| Statute of limitations | A statute that sets the maximum time after an event within which legal proceedings may be initiated. |
| Statute of repose | A statute that cuts off certain legal rights if they are not acted on by a specified deadline. |
