Project scope, phases and elements such as design-build, operate and maintain, toll operations/services, etc. to be included in the project.
Initial risk allocation among the agency and the proposer/private partner, project subsidies and/or funding approach.
Key elements of the Value for Money (VfM) analysis.
Anticipated funding partners.
Anticipated public involvement and outreach effort
Source: Adapted from CDOT High Performance Transportation Enterprise (HPTE) P3 Management Manual
Management of Procurement Team
Schedule Management
Identify the phases, corresponding activities, timelines, dependencies, key decision points and activities on the critical path.
Involves risk identification and management of activities that have potential to negatively impact procurement schedule.
Cost Management
Develop and manage costs for each phase of the procurement.
Key considerations include cost of financing, cost of engaging specialized consultants, conducting a VfM analysis, payment of stipends.
Staff and Consultant Management
Establish and manage the various teams, including activities such as:
staffing
appointing team leads
delegating tasks
ensuring coordinated functioning of the teams
Leadership Engagement
Provide periodic briefing updates on the progress of the P3 project development.
Make decisions regarding the need to "bump-up" key issues to leadership and decision-makers at scheduled or unscheduled points during the procurement.
Industry/ Proposer Engagement
Industry forum and one-on-one sessions.
Communications and negotiations with the proposers through the RFQ and RFP process.
Determining stipends for unsuccessful bidders.
Other activities involved with engagement of proposers.
Public Outreach
Education of the public on the P3 approach.
Conducting workshops and public hearings.
Outreach to elected officials and other stakeholders.
Other outreach to public and the media for a specific project.
Securing External Advisor Support
Consideration: staff capacity; volume of P3 projects; maturity/ experience of the organization with
procuring P3s
Financial, technical, and legal consultants; possibly a commercial advisor to help
negotiate the deal
Manage advisors
Set a term and amount for the contract
Staff to manage the contract and budget
Monitor the budget, work, and performance
Establishing Confidentiality and Organizational Conflict Policies
Financial, technical, and legal consultants; possibly a commercial advisor to help negotiate the deal
Manage advisors
Set a term and amount for the contract
Staff to manage the contract and budget
Monitor the budget, work, and performance
Significant level of disclosure, e.g. posting information on project websites
Concerns that ideas may be disclosed to competitors over the course of the procurement process
Organizational Conflict of Interest (OCI)
If the OCI is not identified early, a problem may arise that cannot be cured, and in some cases the validity of the procurement may be affected, requiring the entire procurement to be re-done (Sections 4.3, 4.4)
Federal rules requiring measures to avoid OCIs, including perceived conflicts of interest
Situations raising potential OCI issues:
Agency consultants providing project recommendations while also seeking to join proposer teams - bias affecting consultant's advice
Proposer team members with information about the project not available to other proposers - unfair competitive advantage
Agency personnel and consultants involved in the procurement who have a financial interest or other business or personal relationship with a team member - appearance of bias
Uniform Guidance/"Super Circular", FTA's Best Practices Procurement Manual (BPPM), FHWA's Design-Build Rule and State law
Organizational Conflict of Interest (OCI) - Mitigation/ Avoidance Strategies
Identify existing agency consultants who will be precluded from participating on proposer teams
Consider whether current or former agency consultants have access to information about the project that should be made available to proposers
Adopt an OCI policy establishing rules applicable to proposers, consultants, and agency personnel involved
Test Your Knowledge
It is advisable to begin discussions with the regional Federal office and state and local entities early, prior to starting procurement.
☐ True
☐ False
Which strategies would you put in place to keep leadership involved in key decisions along the procurement process?
☐ Provide periodic briefing updates
☐ Make decisions to "bump-up" specific decisions
Test Your Knowledge (Answers)
It is advisable to begin discussions with the regional Federal office and state and local entities early, prior to starting procurement.
☑ True
☐ False
Which strategies would you put in place to keep leadership involved in key decisions along the procurement process?
☑ Provide periodic briefing updates
☑ Make decisions to "bump-up" specific decisions
Part 3: Setting the Stage for Successful Project Delivery
Webinar 2: P3 Procurement Guide
Setting the Stage for Successful Project Delivery
Project Suitability: Is the project suitable for a P3?
Project Screening: Has a Value for Money (VfM) and financial viability assessment been completed?
Project Definition: Have project goals and scope been defined? Have scope and term of concession been determined?
SHRP2, "Effect of Public-Private Partnerships and Nontraditional Procurement Processes on Highway Planning, Environmental Review, and Collaborative Decision Making"
Project Risk: Has initial risk assessment and allocation been completed?
FHWA, "Guidebook for Risk Assessment in Public Private Partnerships"
Has legal compliance analysis been completed?
Federal requirements concerning P3s; issues related to project planning and environmental analysis; State and local laws
Was (formal/informal) market sounding done?
Industry forum/ workshop, RFI, information memorandum, discussions with industry re potential use of TIFIA/PABs
Has internal/external communications strategy been established?
Have measures been put into place maximizing flexibility for innovation?
Review available data regarding project area and determine whether additional studies are needed
Identify
Applicable standards
Data and reports
Any available preliminary design drawings
Service requirements
Handback requirements
ROW, utility and access information
Other technical considerations
Traffic/Ridership and Revenue Projections
Agency's initial projections need to clearly articulate the methodology for data collection and modeling, major assumptions, and sensitivity testing, but are for information only
Issues to consider: toll/ fare policy, limitations on toll/fare increases through concession term
Assessing Site Conditions
Site conditions and utility risks can affect project costs, schedule and success
Early geotechnical studies and subsurface utility engineering (SUE) can help mitigate these risks
Proposers' input regarding data needed to efficiently price the project
Determine extent to which proposers may rely on information provided
2015 NCHRP legal digest entitled "Liability of Design- Builders for Design, Construction, and Acquisition Claims."
Consultation with Stakeholders, Utility Owners and Other Third Parties
Identify the project stakeholders, affected utility owners and other third parties
Assess level of risk associated with approvals required from project stakeholders and third parties (e.g., delays in actions/ approvals by third parties)
Mitigation strategies include
early negotiation of agreements with utility owners / third parties
establishing "rules of the game" and including risk-sharing provisions in contract
Determining ROW Strategies
Consider how to address ROW risk / responsibility
Significant acquisition responsibility can be transferred to private sector, but power of eminent domain can only be exercised by the government
Identify required parcels and set the stage for acquisition to commence after NEPA approval
Contract provisions need to address Uniform Relocation Act restrictions
Early and effective federal engagement is recommended (Florida's I-4 procurement was the first project to implement streamlined TIFIA procedure)
FHWA's Special Experimental Project SEP-14 and SEP-15 - Experimental programs relevant to innovation that benefits P3 projects
FTA's "Private Investment Project Procedures" (PIPP) (rule promulgated May 2018)
Early Contractor Involvement / PDA
Successful example: Texas NTE
No single way in which Project Development Agreements (PDAs) have been deployed: may involve qualifications-based or best value selection process
FHWA and Build America Bureau, "Early Contractor Involvement of Private Developers in the Consideration of Long Term Public Private Partnership Concession Options: A Discussion Paper"
Document Control
Importance of document control
Different players involved in document development
Confidentiality is needed for certain types of communications
Approaches:
Colorado DOT's Electronic Document Management System (EDMS) (ProjectWise) or HPTE's (Aconex)
Use data systems, standards and procedures
Provide secure locations to use systems
Train personnel
Upload data and regularly back up all documents
Test Your Knowledge
Project activities during the early stages of the procurement include:
☐ Defining project
☐ Developing traffic/ridership and revenue projections
☐ Assessing site conditions
☐ Consulting stakeholders
☐ Determining right-of-way strategies
☐ Federal engagement
☐ Document control
Test Your Knowledge (Answers)
Project activities during the early stages of the procurement include:
☑ Defining project
☑ Developing traffic/ridership and revenue projections
☑ Assessing site conditions
☑ Consulting stakeholders
☑ Determining right-of-way strategies
☑ Federal engagement
☑ Document control
Part 5: Transparency
Webinar 2: P3 Procurement Guide
Public Transparency
Different agencies subject to different procedures/rules for public disclosure of information
Public Interest in Transparency
Information may be kept confidential during the procurement process
Preserves competitive tension
Ensures that proposers are willing to engage in open discussions
Public interest in confidentiality Is outweighed by public interest in disclosure after award
Public Transparency
(49 U.S.C. § 116(e)(3)(A))
Build America Bureau ensures transparency of a project receiving credit assistance by
Requiring VfM or a comparable analysis by sponsor
Requiring analysis and other key terms of P3 agreement to be made publicly available by the project sponsor at an appropriate time
Requiring sponsor to conduct a review of whether private partner is meeting terms of P3 agreement within 3 years of project completion
Providing a publicly available summary of the total level of Federal assistance in the project
Confidentiality Agreements
Confidentiality and non-disclosure agreements may be required during procurement for:
Individuals involved in discussions with proposers
Participants in proposal evaluation
Outside consultants and observers
Exemptions from public disclosure:
Aspects of financial proposals
Financial model
Cost and pricing data (potentially)
TxDOT Example
Proposers must provide executive summaries suitable for immediate disclosure
Following selection of a proposer for negotiations ("conditional award"), its price proposal is subject to disclosure
After final award, all portions of the proposals (including those of the unsuccessful proposers), except certain non-public financial statements, are subject to disclosure
FDOT Example
Port of Miami Tunnel (POMT)
Sunshine Law request was made shortly after proposals were received, resulting in the public disclosure of technical proposals early in the evaluation process. Problematic for proposal revisions (aka BAFOs)
Test Your Knowledge
State whether true or false:
Public interest in transparency ensures that proposers are willing to engage in open discussions and preserves competitive tension.
☐ True
☐ False
Test Your Knowledge (Answers)
State whether true or false:
Public interest in transparency ensures that proposers are willing to engage in open discussions and preserves competitive tension.
☑ True
☐ False
Test Your Knowledge
For projects receiving Federal credit assistance, what are the Build America Bureau's requirements to ensure transparency:
☐ VfM or a comparable analysis by sponsor
☐ Analysis and other key terms of P3 agreement to be made publicly available by the project sponsor at an appropriate time
☐ Requirement for sponsor to conduct a review of whether private partner is meeting terms of P3 agreement within 3 years of project completion
☐ Provision of a publicly available summary of the total level of Federal assistance in such project
Test Your Knowledge (Answers)
For projects receiving Federal credit assistance, what are the Build America Bureau's requirements to ensure transparency:
☑ VfM or a comparable analysis by sponsor
☑ Analysis and other key terms of P3 agreement to be made publicly available by the project sponsor at an appropriate time
☑ Requirement for sponsor to conduct a review of whether private partner is meeting terms of P3 agreement within 3 years of project completion
☑ Provision of a publicly available summary of the total level of Federal assistance in such project
Part 6: Unsolicited Proposals, Protests and Third Party Risks
Webinar 2: P3 Procurement Guide
Unsolicited Proposal Definition
"a written proposal for a new or innovative idea that is submitted to an agency on the initiative of the offeror for the purpose of obtaining a contract with the government, and that is not in response to an request for proposals, Broad Agency Announcement, . . . or any other Government-initiated solicitation or program."
~48 C.F.R. § 2.101.
Unsolicited Proposal Rationale
Offers the opportunity to the private sector to identify projects that are good candidates for equity investment.
Allows the private sector to offer alternative and innovative approaches to construction, operations and financing to accelerate project delivery
Provides wide latitude to experienced private sector firms to innovate.
Provides opportunities to utilize existing public assets and facilities in non-traditional ways.
Unsolicited Proposal Example
Virginia I-495
At the time the Virginia DOT received the proposal in 2002, it was not considering priced managed lanes on the right-of-way, and HOT lane implementation in the United States was still in its nascent stage
The innovative proposal provided a solution to the congestion problem as well as a mechanism to finance the roadway expansion while minimizing externalities such as land acquisition
Unsolicited Proposal Disadvantages
Can be a burden on the public agency particularly if there are mandatory requirements to review and evaluate
Significant staff and/or specialized consultant resources may be required
Proposed project might displace agency priorities
Proprietary information provided by proposer vs. public interest in transparency
Protests
State laws governing procurement protests vary from jurisdiction to jurisdiction
Typical grounds for protest
Firm is not shortlisted/ selected for award
Proposer believes that solicitation terms are not clear, are unlawful, or favor one proposer
Agency fails to act according to its own procedures
Protest procedures
Adopt procedures for each type of protest
Deadline to file protest before proposal due date (for shortlist and for RFP terms)
Risks Associated with Utility Relocations and Other Third Parties
Failure to cooperate can quickly raise costs
Agreements with utility owners and third parties
Ideally Master Agreements and Third Party Agreements would be finalized before award of P3 agreement
Cost liability of relocations determined with reference to State law
P3 agreement provisions should identify
Existing utility/third party rights and agreements
Requirements that concessionaire must meet before it may call on agency for assistance or obtain relief
Questions?
Q&A Panel
Nancy Smith
Partner, Nossaman LLP Patricia de la Peña
Attorney at Law. Nossaman LLP Edward Kussy
Partner, Nossaman LLP Jonathan Gifford
Professor, George Mason University
Questions?
FHWA P3 Toolkit
Fact Sheets
Primers
Guidebooks
Analytical Tools
FHWA P3 Toolkit
Risk Valuation & Allocation
Value for Money Analysis
Financial Structuring
Analytical Studies
Conducting Procurements
Monitoring &Oversight
Establishing a P3 Program
Risk Assessment
Value for Money Assessment
Financial Structuring & Assessment
Risk Assessment
Value for Money Assessment
Benefit-Cost Analysis for P3 Delivery
P3 project Financing
Model Contracts
Successful P3 Practices
P3 Procurement
P3-SCREEN
P3 viability evaluation prior to project development
