Bidder - A respondent to a Request for Expressions of Interest or an invitation to submit a bid in response to a project brief. Typically, a bidder will be a consortium of parties, each responsible for a specific element, such as constructing the infrastructure, supplying the equipment, or operating the business. The government normally contracts with only one lead party (bidder), who is responsible for the provision of all contracted services on behalf of the consortium.
Brownfield - Projects that focus on improving, operating, and/or maintaining an existing asset (contrast to greenfield). P3 brownfield projects in transportation typically are long-term operation and maintenance contracts or lease concessions. Blended greenfield-brownfield projects also exist, for example, improving an existing asset by adding new capacity (e.g., more lanes).
Concession Period - Total construction and operating periods.
Concessionaire - Private entity that assumes ownership and/or operations of a given public asset (i.e., train station, bus operation) under the terms of a contract with the public sector.
Contingency - An allowance included in the estimated cost of a project to cover unforeseen circumstances.
CPI - Consumer Price Index.
DB - Design-build. Under a DB, the private sector delivers the design and construction (build) of a project to the public sector. The public sector maintains ownership and operations and maintenance of the asset. Build refers to constructing the project, which includes reviewing conditions at the building site, providing construction staff and materials, selecting equipment, and when necessary, amending the design to address problems discovered during the construction phase.
DBFOM - Design-build-finance-operate-maintain. Under DBFOM, the private sector delivers the design and construction (build) of a project to the public sector. It also obtains project financing and assumes operations and maintenance of an asset upon its completion.
Debt Tranche Interest-Only Period - Interest-only period for project bond.
Debt Tranche Maturity - Maturity date for project bond.
Discount Rate - Percentage by which a cash flow element in the future (i.e., project costs and revenues) is reduced for each year that cash flow is expected to occur.
Discount Rate Nominal - Discount rate that factors in the inflation rate.
Discount Rate Real - Discount rate that does not account for inflation.
DSCR - Debt service coverage ratio.
Finance - Phase or delivery aspect of the project that includes providing capital for the project, which may include issuing debt or equity and verifying the feasibility of plans for repaying debt or providing returns on investment.
Greenfield - Projects that focus on developing and/or building a new asset (contrast with brownfield). Many P3 structures are available for greenfield projects, including design-build, design-build-operate-maintain (DBOM), design-build-finance-operate-maintain/manage (DBFOM), and others. Blended greenfield-brownfield projects also exist.
Inflation Consumer Price Index - Used as a base rate for inflation assumptions.
IPD - The Center for Innovative Finance Support (formerly Innovative Program Delivery), a part of the Federal Highway Administration, provides tools and expertise in use of different public-private partnership (P3) approaches.
Leveraging - Degree to which an investor or business is utilizing borrowed money.
Maintenance - This phase includes keeping the project in a state of good repair, which includes filling potholes, repaving or rebuilding roadways, and ensuring the integrity of bridges and highways.
Net Present Cost (NPC) - Estimated present value of expected future cash flows associated with PSC and shadow bid analysis without considering revenues.
Net Present Value (NPV) - Present value of the expected future revenues minus the net present cost.
Private Activity Bond - New type of financing that provides private developers and operators with access to the tax-
exempt bond market, lowering the cost of capital significantly.
Public Sector Comparator (PSC) - Represents the most efficient public procurement cost (including all capital and operating costs and share of overheads) after adjustments for competitive neutrality, retained risk, and transferrable risk to achieve the required service delivery outcomes. This benchmark is used as the baseline for assessing the potential value for money of private party bids in projects.
Retained Risk - The value of those risks or parts of a risk that government proposes to bear itself under a partnership arrangement.
Revenue Leakage - Assumed annual revenue losses for a tolling facility.
RFP - Request for proposal.
ROW - Right of way.
Risk Allocation - The process of assigning operational and financial responsibility for specific risks to parties involved in the provision of services under P3. See also risk transfer.
Risk Transfer - The process of moving the responsibility for the financial consequences of a risk from the public to the private sector.
Routine Maintenance - Work that is planned and performed on a routine basis to maintain and preserve the condition of the highway system or to respond to specific conditions and events that restore the highway system to an adequate level of service.
Technical Risk - Risks arising from deviations from the project's original technical assumptions, specifications,
or requirements.
T&R - Traffic and revenue.
Transportation Infrastructure Finance and Innovation Act (TIFIA) - This program provides Federal credit assistance in the form of direct loans, loan guarantees, and standby lines of credit to finance surface transportation projects of national and regional significance (FHWA, 2013).
Transferrable Risk - The value of any risk that is transferrable to the bidder.
Value for Money (VfM) - The procurement of a P3 project represents VfM when - relative to a public sector procurement option - it delivers the optimum combination of net life-cycle costs and quality that will meet the objectives of the project (Virginia Office of Transportation Public-Private Partnerships, April 2011).
