Pre-Procurement Publications

Introductory

Fact Sheets:

FHWA P3 Toolkit

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.

Risk Valuation and Allocation

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

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.

Financial Structuring

With highway P3 projects, the private partner may participate in some combination of design, construction, financing, operations and maintenance, including collection of toll revenues.

Benefit-Cost Analysis

Benefit-Cost Analysis is a process used to compare the societal impacts of a P3 project against those for the traditional public delivery alternative.

Analytical Studies

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.

Primers:

Risk Assessment for Public-Private Partnerships: A Primer

January 2014

This primer addresses risk assessment for P3s and has been prepared as a companion document to the FHWA primers on Value for Money Analysis, Establishing a Public-Private Partnership Program, and Financial Structuring and Assessment for P3s. Project risk management involves systematically considering all possible outcomes before they happen and defining procedures to accept, avoid, or minimize the impact of risk on the project.

The primer:

  • Discusses how the extent of risk transfer varies by type of project and type of P3 contract
  • Outlines the key types of risks faced in P3 projects
  • Presents analysis of project risks to assess their cost impacts
  • Explains how risks are optimally allocated between the public and private sectors to minimize total project life-cycle costs
  • Discusses how costs of risks under traditional and P3 procurements may be incorporated into Value for Money analyses often used to compare the two procurement options

Financial Structuring and Assessment for Public-Private Partnerships: A Primer

December 2013

This primer addresses Financial Structuring and Assessment for Public-Private Partnerships and has been prepared as a companion document to the FHWA primers on Value for Money Analysis, Establishing a Public-Private Partnership Program, and Risk Assessment for P3s. Most P3 projects are financed with a combination of private equity, debt, and (often) public subsidies. For financial assessment of P3s, it is important to understand these sources of capital, how they are combined (referred to as "financial structure"), and how funds invested in a project are repaid.

The primer addresses:

  • Basic concepts of project finance for P3s, P3 revenue sources, sources of public sector financing for P3s, and sources of private capital, including how debt repayments may be scheduled to match projected cash flows to help make the project financially viable
  • The role of financial models, focusing on what is analyzed and interpretation of results
  • Metrics used for financial evaluation by public agencies, equity investors and lenders How financial assessments are used by project sponsors and private developers as P3 projects advance through the procurement and implementation processes

Value for Money Assessment for Public-Private Partnerships: A Primer

December 2012

This primer addresses Value for Money Assessment for P3s and has been prepared as a companion document to the FHWA primers on Risk Assessment, Establishing a Public-Private Partnership Program and Financial Structuring and Assessment for P3s. The VfM analysis process is used to compare the aggregate benefits and the aggregate costs of a P3 procurement against those of the traditional public alternative. VfM assessment is different from benefit-cost analysis, which determines whether investing in a public sector project is a good use of societal resources. It is also distinct from the process of establishing whether a project is actually affordable to the government.

Public-Private Partnership Concessions for Highway Projects: A Primer

This primer provides a brief introduction to DBFOM P3 concessions for transportation project finance. Although many types of P3s exist, this primer focuses on P3s that involve assumption of financing risk by the private sector, as well as long term (10+ years) operations and maintenance. The primer reviews the basic structure of P3 project finance concessions and introduces the key public and private project participants and their roles. It also describes the motivations of both public and private partners for entering into P3s, presents typical P3 concession characteristics, and clarifies common misconceptions of what P3s can and cannot accomplish. Finally, the primer outlines typical P3 implementation steps and provides recent examples of P3 concessions.

Establishing a Public-Private Partnership Program: A Primer

November 2012

Establishing a P3 program within a public agency involves issues from enabling legislation through identification, evaluation, negotiation and management of P3 projects. This primer explores key issues involved in establishing a P3 program within a public agency to develop new highway capacity and infrastructure on a P3 basis.

The following topics are covered:

  • Key challenges to successful program development—organization/cultural changes, coordination, and conserving institutional knowledge
  • Strategies for implementation, including roles, staff building/hiring/training and specialized P3 units
  • Legal and statutory issues
  • Methods for identifying, evaluating and structuring P3 projects
  • Information on conducting procurement
  • Recommendations for oversight and monitoring
  • Responsibilities and considerations of policymakers as they assume the new role of a performance-based contract manager

Other Reports:

U.S. DOT Report to Congress on Public-Private Partnerships

December 2004

This U.S. DOT responds to a Congressional request to prepare a report identifying the impediments to the formation of large, capital-intensive highway and transit projects involving public-private partnerships. The report covers history and initiatives, value of public-private partnerships, impediments to their formation, stakeholder comments, and recommendations for removing those impediments. The value section is designed to help States considering public-private partnerships develop a better understand the potential benefits of this approach, as well as the possible the downside.

Advanced

Guides:

Guidebook on Financing of Highway Public-Private Partnership Projects

December 2016

This Guidebook is for transportation professionals who may be involved in P3 projects. The document increase the readers' knowledge of the concepts and skills needed to finance transportation projects using a P3 approach. The Guidebook describes many standard techniques used to conduct a P3 financial assessment.

Benefit-Cost Analysis for Public-Private Partnership Project Delivery: A Framework

January 2016

This report provides a framework to evaluate the societal benefits and costs of P3 delivery, including the net societal benefits from accelerating project delivery. In addition to this guide, FHWA's P3 Toolkit the P3-VALUE 2.0 Tool and User Guide also addresses benefit-cost analysis.

Public-Private Partnership Oversight: How FHWA Reviews P3s

January 2015

This document provides guidance on Federal-aid stewardship and oversight practices for P3 projects. Differences in the procurement, construction and financing of P3s vis-à-vis traditional Federal-aid projects raise important issues for FHWA stewardship. The guidance describes FHWA activities when a state DOT—or a local public agency for which the state DOT is responsible—allocates to a private partner the long term obligation for some combination of designing, financing, constructing, operating, and maintaining a highway project.

Guidebook for Risk Assessment in Public Private Partnerships

December 2013

Risk assessment is one of the inputs to the quantitative analysis in value for money assessment. This guidebook provides a detailed follow-on to the P3 Toolkit primer on Risk Assessment for Public-Private Partnerships and covers more challenging and advanced risk assessment topics. It is designed to enhance the overall understanding of the relationship between risk assessment and value for money analysis and to provide hands-on guidance for practitioners in the field. In addition to this guide, the P3-VALUE 2.0 Tool and User Guide also covers risk assessment.

Guidebook for Value for Money Assessment

December 2013

Value for money assessments are used to compare P3 and conventional delivery methods and answer the question, "Which delivery method provides the 'best deal' for implementing a specific project from the perspective of the government?" The Guidebook describes the process that can be used on a case-by-case basis to compare the aggregate benefits and costs of a P3 against those of the conventional alternative, from the perspective of the public agency procuring the project. In addition to this guidebook, FHWA's P3 Toolkit includes two other documents that address value for money analysis: Value for Money Assessment for Public-Private Partnerships: A Primer, and the P3-VALUE 2.0 Tool and User Guide.

Public Policy Considerations in Public-Private Partnership Arrangements

January 2009

This 2009 FHWA report addresses public policy considerations associated with P3 arrangements. The ways in which individual states deal with these issues depend on a number of factors including the public sector's policy objectives, the interests of the users, the characteristics of the project, and specific risk factors. This report examines how different states have responded to the issues most frequently raised by examining provisions in state law and P3 agreements. The report identifies and addresses 14 public policy issues related to P3s, based on a review of Congressional and state legislative hearings, publications, and discussions with key federal, state and local decision makers.

User Guidebook on Implementing Public-Private Partnerships for Transportation Infrastructure Projects in the United States

July 2007

This Guidebook is intended to assist sponsors of transportation projects take the necessary steps and precautions to promote the successful delivery of P3 projects while protecting the public interest, especially a facility's ultimate users.

Predevelopment Costs for Public-Private Partnership Projects - Federal-aid Highway Program Eligibilities

This set of questions and answers provides guidance on the use of Federal-aid highway funds for predevelopment costs. Predevelopment costs include those associated with activities that provide decision-makers the opportunity to identify, assess, and modify potential infrastructure projects and modifications to existing infrastructure projects, and to advance those projects from the conceptual phase to actual construction. These early phase activities are particularly important in identifying opportunities for public-private collaboration in the financing and delivery of infrastructure projects.

Other Reports:

Early Involvement of Private Developers in the Consideration of Long-Term Public-Private Partnership Concession Options

February 2017

This discussion paper draws upon past and current experience to examine different mechanisms used by public agencies for involving private developers during the early stages of a project delivered through a P3. The document provides an overview of the experiences of state DOTs, metropolitan planning organizations, local agencies, private developers, and financial institutions in soliciting potential innovations of private companies during project planning and procurement. The document also evaluates consultative mechanisms used during project procurement and after contract award, and considers introducing these types of activities earlier in the project development and programming process to encourage private sector input. The findings are used to identify approaches that have been effective in securing early input from the private sector to enhance opportunities for P3s.

Revenue Risk Sharing for Highway Public Private Partnerships

December 2016

During the last decade, several U.S. P3 projects experienced significant financial stress requiring restructuring. Lately, some private concessionaires have avoided revenue risk P3s, preferring those in which public agencies retain the responsibility for revenues, typically through availability payments. To ensure robust private participation in U.S. P3s—and explore whether there is a "middle ground" between availability payment and revenue risk toll P3s—this paper aims to foster a discussion about sharing downside revenue risk between the public and private partners. The discussion paper evaluates revenue risk sharing mechanisms from both the public and private sector perspectives, applying four criteria—value for money, fiscal impacts, financeability and ease of implementation.

Successful Practices for P3s: A Review of What Works When Delivering Transportation Via Public-Private Partnerships

March 2016

This report identifies best practices in the use of P3s where private sector concession companies design, build, finance, operate and maintain new highways and other transportation improvements. The report was prepared by U.S. DOT to describe how public agencies can best work with the private sector to implement new transportation improvements. The document is organized around the following phases in implementing and operating P3 projects: legislation and policy, project development, procurement, and performance monitoring and oversight.

Value for Money State of the Practice

December 2011

The 2011 Value for Money State-of-the Practice document was created to assist state practitioners in their P3 program efforts. Value for Money is a uniform process utilized on a case-by-case basis to compare the aggregate benefits and the aggregate costs of a P3 project against those of the traditional public alternative. In addition to the introductory chapter (Chapter 1), the report includes two separate sections: International Methodology and Practice and Methodology and Practice in the United States. The report is a state-of-the practice document. FHWA does not recommend any single approach to analyzing procurement options. FHWA does highly encourage that state practitioners consider some type of analysis when considering P3 procurement options.

 
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