Skip to content

Early Involvement of Private Developers in the Consideration of Long-Term Public-Private Partnership Concession Options: A Discussion Paper

February 2017
Table of Contents

« Previous

Appendices

Appendix A Bibliography

  1. Federal Highway Administration (FHWA) and Build America Transportation Investment Center (March 2016), Successful Practices for P3s: A Review of What Works When Delivering Transportation via Public-Private Partnerships.
  2. HDR (2016), Accelerated Project Delivery Methods, Preliminary Findings and Recommendations, Nebraska Department of Roads.
  3. Parsons Brinkerhoff, Nossaman LLP, and HS Public Affairs (2015), Effect of Public-Private Partnerships and Nontraditional Procurement Processes on Highway Planning, Environmental Review, and Collaborative Decision Making, SHRP 2 Report #S2-C12-RW- 1.
  4. FHWA Office of Innovative Program Delivery (2014), P3 Peer Exchange, November 5-6, 2014.
  5. The Colorado Department of Transportation (CDOT), Office of Major Project Development.
  6. Eno Foundation (2014), Partnership Financing: Improving Transportation Infrastructure through Public Private Partnerships, Eno Center for Transportation.
  7. Shukla, Shyamala (N.D.), A Framework for Disclosure in Public-Private Partnerships, Technical Guidance for Systemic, Proactive Pre- & Post Procurement Disclosure of Information in Public-Private Partnership Programs. World Bank Group Public-Private Partnerships, Washington, D.C.
  8. World Economic Group (2013), Strategic Infrastructure Steps to Prepare and Accelerate Public-Private Partnerships.
  9. Leendertse, Wim, Lenferink, Sander, and Arts Jos (2012), Public-Private Collaboration: How Private Involvement Can Contribute to Network Performance, Transport Research Arena, Procedia Social and Behavioral Sciences 48, 2917 - 2929.
  10. Farquharson, Edward, Torres de Mästle, Clemencia, Yescombe, E.R. and Encinas, Javier, (2011) How to Engage with the Private Sector in Public-Private Partnerships in Emerging Markets, PFIAF, The World Bank, Washington, D.C.
  11. PriceWaterhouseCoopers (PwC) (2010), Public Private Partnerships: The U.S. Perspective.
  12. The World Bank, (2009) Attracting Investors to African Public-Private Partnerships: A Project Preparation Guide.
  13. Ahadzi, Marcus and Bowles, Graeme (2004), Public-Private Partnerships and Contract Negotiations: An Empirical Study, Construction Management and Economics 22, 967-978.
  14. The General Services Administration, (GSA), Federal Acquisition Regulation (FAR) 2.101 Subpart 15.6, Washington, DC.
  15. Kane, Christopher, (2010) Using PPPs in the US to Develop, Finance and Operate Infrastructure Projects, TRB 49th Annual Workshop on Transportation Law, Newport, Rhode Island.
  16. Johnson (HDR) and Zeltner (HDR), Alternative Delivery: Progressive Design Build.
  17. National Conference of State Legislatures, Public-Private Partnerships for Transportation: A Toolkit for Legislators, October 2010.
  18. National Conference of State Legislatures, Public-Private Partnerships for Transportation: A Toolkit for Legislators, May 2015 Update and Corrections.
  19. FHWA, Challenges and Opportunity Series: Public and Private Partnerships in Transportation Delivery (2012).
  20. Connecticut P3 Statute: Conn. Gen Stat. §4-255
  21. District of Columbia: P3 Statute: D.C. Act 20-550
  22. Illinois P3 Statute: Ill Rev. Stat. Ch. 605 §§5/10-802, 5/10-602(4)(1), 130/1 to 130/135, Ch. 20 §3501/825-105, Ch.30 §§550/1.5, 570/2.5, 575/2.5, Ch.35 §§ 120/1q, 200/15-55, Ch. 820 §130/2
  23. Maine P3 Statute: Me. Rev. Stat. Ann. tit. 23, §4251
  24. Ohio P3 Statute: Ohio Rev. Code Ann. §§5501.70 to 5501.83
  25. Pennsylvania P3 Statute: Act No. 2012-88
  26. Puerto Rico P3 Statute: 9 L.R.P.A. §§ 2001 to 2021, P.R. 2009 Act No.29
  27. West Virginia P3 Statute: W. Va. Code §§17-27-1 to 18
  28. Wisconsin P3 Statute: Wis. Stat. Ann. §84.01(30)
  29. Virginia Department of Transportation, Office of Transportation Public-Private Partnerships. PPTA Project Identification and Screening Guide, 2012. Accessed April 28, 2014.
  30. European PPP Expertise Centre (EPEC), Procurement of PPP and the Use of Competitive Dialogue in Europe, 2009.

Appendix B Summary of Literature Review

  1. Federal Highway Administration (FHWA) and Build America Transportation Investment Center (March 2016), Successful Practices for P3s: A Review of What Works When Delivering Transportation via Public-Private Partnerships.

    This report identifies successful practices and issues in developing and implementing P3 programs and projects. Based primarily on discussions with public and private sector practitioners, the report offers suggestions for public agencies in the early stages of establishing a P3 program. The report is organized around four phases of P3 program/project development to identify practices related to: legislation and policy, project development, procurement, and performance monitoring and oversight. To supplement the chronological nature of the report framework, potential trade-offs and cross-cutting issues are also discussed.
  2. HDR (2016), Accelerated Project Delivery Methods, Preliminary Findings and Recommendations, Nebraska Department of Roads.

    This report provides an overview of best practices for design-build procurement as well as the legal and regulatory barriers for delivering projects through this mechanism. It provides guidance for expanding options to improve efficiency and accelerate project delivery.
  3. Parsons Brinkerhoff, Nossaman LLP, and HS Public Affairs (2015), Effect of Public-Private Partnerships and Nontraditional Procurement Processes on Highway Planning, Environmental Review, and Collaborative Decision Making, SHRP 2 Report #S2-C12-RW- 1.

    This report summarizes how the timing 12 and uncertainties related to the NEPA review and the long-range planning process conducted by Metropolitan Planning Organizations (MPOs) and state DOTs have formed barriers to the early involvement of the private sector in the definition of P3 projects. Specifically, when P3 contracts are awarded after the NEPA process has been completed, private developers are usually reluctant to significantly change the project definition due to the uncertainty associated with required environmental reevaluations. The level of design required to complete the NEPA process typically represents about 30 percent of the total project design. In environmentally sensitive areas, 70 percent of design may be completed to address potential impacts. Even in cases when projects have already gained environmental clearance, private parties typically forgo opportunities for innovation because of schedule risk associated with project approvals, which may outweigh the benefits of innovation. The report notes that it is important to strike a balance between the level of design included in a final environmental impact statement (FEIS) and maximizing the flexibility of the private sector during final design.
  4. Shukla, Shyamala (2015), A Framework for Disclosure in Public-Private Partnerships, Technical Guidance for Systemic, Proactive Pre- & Post Procurement Disclosure of Information in Public-Private Partnership Programs. World Bank Group Public-Private Partnerships, Washington, D.C.

    The authors highlight the importance of the drivers for disclosing information in P3s - mobilizing private investment capital, increasing public confidence in P3 projects, achieving better value for money, and reducing the risk of corruption - to maximize value and to ensure that disclosure policy is aligned with project objectives. Underlying factors that can result in greater public disclosure are the wider government policy on transparency and the enactment of supportive legislation, e.g., freedom of information (FOI) legislation, P3 legislation, public financial management, and budget transparency.
  5. FHWA Office of Innovative Program Delivery (2014), P3 Peer Exchange, November 5-6, 2014.

    The Colorado Department of Transportation (CDOT) Office of Major Project Development (OMPD) and the CDOT High Performance Transportation Enterprise (HPTE) requested that FHWA organize a peer exchange after completing the procurement of the US 36 Managed Lanes/BRT Project. HPTE obtained insights from representatives from the public and private sectors regarding procurement process, risk transfer, oversight and monitoring, transparency, and the public involvement process.
  6. Eno Foundation (2014), Partnership Financing: Improving Transportation Infrastructure through Public Private Partnerships, Eno Center for Transportation.

    The objective of this report is to improve understanding of the barriers to U.S. P3s including: (i) insufficient revenues, funding and financing; (ii) federal, state, and local legislative hurdles; (iii) U.S. tax-exempt municipal bond markets that create disincentives to develop P3s and to secure capital in private markets; (iv) P3 project eligibility and selection; (v) funding regulation; (vi) political review and approval; and (vii) contract provisions. Additional barriers cited include the lack of multi-modal contracts and standard project appraisal mechanisms.
  7. World Economic Group (2013), Strategic Infrastructure Steps to Prepare and Accelerate Public-Private Partnerships.

    This report draws from interviews with senior management from public and private entities as well as P3 practitioners from around the world to provide an overview of international best practices related to P3 procurements. This report has contributed additional information on the market sounding process, which is described in Section 2.2.
  8. Leendertse, Wim, Lenferink, Sander, and Arts Jos (2012), Public-Private Collaboration: How Private Involvement Can Contribute to Network Performance, Transport Research Arena, Procedia Social and Behavioral Sciences 48, 2917 - 2929.

    This report reviews the approaches used to engage the private sector in delivery of P3 and non-P3 transportation projects in the Netherlands from 2006 to 2010, including Market Consultation, Early Design Contests, Market Reconnaissance, Interweaving, and Unsolicited Proposals. The main finding is that early private involvement can add value in project planning and programming, provide useful insights, and help the procuring agency make better informed and realistic programming decisions. It can add valuable information on project design and construction, provide a more robust life-cycle perspective, and help to optimize project definition. The "conceptual creativity" generated through competition can offer different perspectives on project development issues leading to more optimal solutions.

    Two early involvement mechanisms discussed in this report have been included in the Discussion Paper: Market Consultation and Interweaving. Similar to Market Sounding (discussed in Chapter 2), Market Consultation is a two-stage process that involves multi-party discussions through industry forums as well as bilateral discussions. With Interweaving, discussed in Chapter 3, the procurement process begins prior to the final determination of the alignment. The two processes are coordinated to encourage the explicit and transparent exchange of information. Interweaving has been used to develop creative solutions and gain insight of proposed solutions during procurement. Interweaving can help to reduce project schedule, clarify impacts, and improve risk allocation.

    Table B-1. Non-Competitive & Competitive Private Involvement Instruments, Netherlands
      Market Consultation Early Design Contest Market Reconnaissance Interweaving Unsolicited Proposal
    Goal Opinions on project or process Best design for defined problem Conceptual solutions for defined problem Best quality at a competitive price Project concept without a pre-defined problem
    Timing Planning stage Planning stage Planning stage Planning process Depends on proposal
    Scope Specific Limited Broad Detailed Depends on proposal
    Incentive Future procurement Future procurement Future procurement Contract award Contract award
    Public Sector Role Program Manager Program Manager Program Manager Procuring agency Program Manager
    Private Sector Role Delivery of knowledge and experience Designer Planner, designer, and engineer Designer, engineer, proposer, and contractor Planner and designer
    Examples Main road network Dam and causeway rehabilitation Renovation of steel bridges A2 Tunnel, Maastricht Rail Connection Breda-Utrecht

    Source: Adapted from Leendertse, Wim, Lenferink, Sander, and Arts Jos (2012), Public-Private Collaboration: How Private Involvement Can Contribute to Network Performance.

    A third technique, Market Reconnaissance by public sector project sponsors, has had limited applications. The approach is "an early design concept without price competition in which the goal is to get unique and feasible concepts from the private sector. The government provides a problem definition, a general scope, constraints and ambition, which the private participants can use to develop and elaborate unique concepts. Private participants are requested to deliver a detailed elaboration on technical and financial feasibility, with compensation for their engineering costs." The limited application to date and the potentially higher costs associated with a wider pool of eligible firms precludes its usage for P3s in the US. As a result, this approach has not been included.
  9. Farquharson, Edward, Torres de Mästle, Clemencia, Yescombe, E.R. and Encinas, Javier, (2011) How to Engage with the Private Sector in Public-Private Partnerships in Emerging Markets, PFIAF, The World Bank, Washington, D.C.

    This report provides an overview of the P3 strategies used in developed and emerging markets, makes recommendations for engaging the private sector prior to project procurement, provides tips for conducting market sounding discussions, and identifies issues relating to the exchange of information between the public and private sector.
  10. PriceWaterhouseCoopers (PwC) (2010), Public Private Partnerships: The U.S. Perspective.

    This report provides an overview of the P3 market, lists the advantages and disadvantages of various P3 agreements, and summarizes the legal, regulatory and political barriers.
  11. Ahadzi, Marcus and Bowles, Graeme (2004), Public-Private Partnerships and Contract Negotiations: An Empirical Study, Construction Management and Economics 22, 967-978.

    This study evaluates various issues affecting P3 negotiations with the goal of coming to agreement and shortening the timeframe between contract award and commercial close. Given the focus on the post-contract award process, the report only tangentially deals with early involvement mechanisms but does highlight barriers to private involvement that affect the project downstream. The report concludes that proper organizational structure, effective internal lines of communication, and aligned objectives are required from an early stage.

Appendix C Key Features of P3 Enabling Legislation by Jurisdiction

Table C-1. Key Features of P3 Enabling Legislation by Jurisdiction
Jurisdiction Broad Statutory Authority Limited or Project- Specific Authority Public Funding Combined with Private Financing Authority to Issue Revenue Bonds or Notes Long- Term Leases of Toll Facilities Allowed Outsourcing of Long-Term O&M and Asset Mgmt. Multiple Types of P3 Project Delivery Types Allowed Acceptance of Solicited & Unsolicited Proposals
Alabama          
Alaska      
Arizona        
Arkansas              
California      
Colorado  
Connecticut      
Delaware    
DC  
Florida  
Georgia    
Illinois      
Indiana    
Louisiana  
Maine      
Maryland      
Massachusetts              
Minnesota      
Mississippi    
Missouri    
Nevada      
North Carolina  
North Dakota  
Oregon  
Ohio  
Pennsylvania  
Puerto Rico  
South Carolina          
Tennessee      
Texas  
Utah  
Virginia    
Washington  
West Virginia  
Wisconsin      

Sources: National Conference of State Legislatures, Public-Private Partnerships for Transportation: A Toolkit for Legislators, October 2010. and May 2015 Update and Corrections; PwC, Public Private Partnerships: The U.S. Perspective, June 2010, and P3 statutes for Connecticut, District of Columbia, Illinois, Maine, Ohio, Pennsylvania, Puerto Rico, West Virginia and Wisconsin.

Appendix D Agencies and Organizations Contacted

  • Arizona Department of Transportation, Public-Private Partnership Program
  • California Department of Transportation (Caltrans) Public-Private Partnership Program
  • Colorado DOT, High Performance Transportation Enterprise (HPTE)
  • Florida Department of Transportation, Office of Comptroller, Project Finance Office, Public- Private Partnerships
  • Maryland Transit Administration, Office of Transit Development and Delivery
  • Texas Department of Transportation
  • Virginia Office of Public-Private Partnerships
  • Denver Regional Transportation District (Denver RTD)
  • District of Columbia Office of Public Private Partnerships (OP3)
  • Los Angeles County Metropolitan Transportation Authority (LA Metro)
  • National Capitol Region Transportation Planning Board
  • Cintra U.S.
  • Meridiam
  • Plenary Concessions U.S.
  • Star America Infrastructure Partners, LLC
  • Table Rock Capital, LLC
  • Nossaman, LLP
  • WSP/Parsons Brinckerhoff
  • American Association of State Highway and Transportation Officials (AASHTO)
  • American Public Transportation Association (APTA)
  • Association for the Improvement of American Infrastructure (AIAI)
  • National Association of Regional Councils
  • US Department of Transportation - Build America Transportation Investment Center (BATIC)
  • US Department of Transportation - Federal Highway Administration

Footnotes

12 Transportation Improvement Plans (TIPs) and State Transportation Improvement Plans (STIPs) must be updated every four years but can be revised or amended between updates.

« Previous

back to top