Dr. Joe Saviak, Dr. Wendell Lawther & Dr. Lawrence Martin IPPC6 2014

Public-Private Partnerships for Transportation Infrastructure Challenges for State & Local Government Public Procurement in the United States

P3 & DBFOM Challenges

for U.S. Public Procurement

• Majority of U.S. infrastructure

“mediocre” or “poor”

$3.6 trillion needed

• Benefits of P3s

• Types of P3s - DBFOM

• State Enabling Legislation – type of authority, unsolicited proposals, availability payments & shadow tolls, lower level authority, prior legislative approval & non-compete clause

P3 & DBFOM Challenges

for U.S. Public Procurement

• Use of SPV

• 3 Case Examples:

Port of Miami Tunnel

I-495 Capital Beltway

Texas State Highway

• Need to re-design public procurement policies & procedures in the U.S. to facilitate greater use of P3s & DBFOMs & ensure their success

• P3s & DBFOMs do not fit neatly into traditional public procurement policies and procedures in the U.S. – pose specific set of challenges – draw upon international experience for solutions

• Institutional capacity

• Adapting traditional public procurement to the partnership model for P3s – private sector partner providing the $ in DBFOM

P3 & DBFOM Challenges

for U.S. Public Procurement

Specific Challenges

• Project size must be sufficient to attract private sector partners (e.g. US $100M) – use of bundling

• Competitive dialogue instead of traditional RFQ and RFP processes

• Designing/implementing long term contracts (e.g. 30-50-99 years) – treat as “incomplete contracts” - enhanced flexibility, periodic review by partners, user-friendly contract amendment process, dispute resolution mechanism, emphasis on PBC

P3 & DBFOM Challenges

for U.S. Public Procurement

Specific Challenges

• No progress payments – don’t change the incentive structure of the P3

• Need to utilize international best practices for public procurement & P3s to rethink & re-engineer traditional public procurement policies & procedures among state & local govts. in the U.S. to ensure positive outcomes with P3s and DBFOMs

P3 & DBFOM Challenges

for U.S. Public Procurement

Specific Challenges

[1] New York Times (2013). “In Collapse of Bridge, Vulnerability is Highlighted.” Saturday, May 25, p. A10.

[2] American Society of Civil Engineers (ASCE). “ASCE’s New Report Card Bumps the Nation’s Infrastructure up to a D+.” ASCENews. www.asce.org/ascenews/featured.aspx. (accessed April 6. 2013).

[3] U. S. Government Accountability Office (USGAO) (2013). State & local Governments’ Fiscal Outlook (April 2013 Update). Washington DC: USGAO.

[4] L. L. Martin, R. Levey & J. Cawley (2012). “The New Normal for Local Government.” State & Local Government Review 44 (IS):17-28.[5] National Council for Public-Private Partnerships (NCPPP). (2013). Public-Private Partnerships Defined. http://ncpp.org/howpart/ (accessed April 9, 2013).

[5] National Council for Public-Private Partnerships (NCPPP). (2013). Public-Private Partnerships Defined. http://ncpp.org/howpart/ (accessed April 9, 2013).

[6] W. Eggers & T. Dovey (2007). Closing America’s infrastructure gap: The Role of Public-Private Partnerships. New York: Deloitte Research.

[7] Yescombe, E. (2007). Public-Private Partnerships: Principles of Policy and Finance. Oxford, UK: Butterworth-Heinemann.

[8] J. Evans & D. Bowman (2005). “Getting the Contract Right.” In G. Hodge & C. Greve (Eds.) The Challenge of Public-Private Partnerships: Learning from International Experience (pp. 62-80). Cheltenham, UK: Edward Elgar.

[9] S. Araujo & D. Suterland (2010). Public-Private Partnerships & Investment in Infrastructure. Paris: Office of Economic Cooperation & Development (OECD).

[10] L. L. Martin, W. Lawther, G. Hodge & C. Greve, G. (2013). “Internationally Recommended Best Practices in Transportation Financing Public-Private Partnerships (P3s).” Public Administrate Research 2 (2):15-25.

References

[11] J. A. Parker & Associated (2010). The Port of Miami Tunnel and Access Improvement Project. Tallahassee: Florida Department of Transportation.

[12] L. L. Martin, L. & J. Saviak, J. (2014). Contracting and Public-Private Partnerships: A Guide for State and Local Government Officials and Administrators. Jacksonville, FL: Government Services Partnership Institute.

[13] New York Times (2013). “Obama Pushes Plan to Build Roads and Bridges.” http://www.nytimes.com/2013/03/03/us/politics/obama-promotes-ambitious . . . (retrieved April 10, 2013.

[14] J. Lynch (2010). “Virginia Megaprojects.” http://www.vamegaprojhects.com (accessed April 20, 2013).

[15] T. Craig (2007). “Deals Clinched on HOT Lanes.” The Washington Post, December 21.

[16] B. Wear (2013). “TXDot Mum on Use of New Tollway Section.” Austin American Statesman (January 27). http://www.reformandfreedom.org. (accessed April 21, 2013).

[17] State Highway 130 (undated). “Project Profiles: SH 130 Segments 5 and 6.” http://www.fhwa.dot.gov/ipd/project.profiles/tx_sh130.htm (accessed April 21, 2013).

[18] Public Works Financing (February, 2008). “Texas SH 130 Toll Road First PPP in Texas.” www.PWFinance.net (accessed April 26, 2013).

[19] National Conference of State Legislatures (NCSL). (2010). 2010 State Legislation Concerning PPPs for Transportation Projects. Appendix B. “State PPP Enabling Statutes for Transportation Projects as of October 2010.” Washington, DC: NCSL.

[20] National Conference of State Legislatures (NCSL) (2013). Public-Private Partnerships for Transportation: A Toolkit for Legislators: January 2013 Updates and Corrections. Washington, DC. NCSL

References

[21] U. S. Department of Transportation (USDOT) (2013). Federal Highway Administration, “State legislation – Key elements.” http://www.fhwa.dot/ipd/p3state_legislation/ state-legislation_key_elements.htm (accessed Jul 1, 2013).

[22] Pew Center on the States (2009). Driven by dollars: What States Should Know When Considering Public-Private Partnerships to Fund Transportation. Washington, DC: Pew Center on the States.

[23] PriceWaterhouseCoopers (2010). Public-Private Partnerships: The US Perspective. http://www.pwc.com.en-US/us/capitalprojects (accessed January 12, 2012).

[24] Public Works Financing (October, 2011). “2011 Survey of Public-Private Partnerships Worldwide.” www.PWFinance.net (accessed December 21, 2011).

[25] R. Istrate, & R. Puentes (2011). Moving Forward on Public Private Partnerships: U.S. and International Experience with PPP Units. Washington, DC: The Brookings Institution.

[26] P. Kettner, R. Moroney, & L. Martin (2013). Designing and Managing Programs (4th Edition). Los Angeles: Sage.

[27] U.S. Department of Transportation (USDOT). (2009). Public-Private Partnerships for Highway Infrastructure: Capitalizing on International Experience. Washington, DC: USDOT.

[28] S. Arrowsmith & S. Treumer (2012). “Competitive Dialogue in EU Law: A Critical Review.” In their Competitive Dialogue in EU Procurement (pp. 3-143). Cambridge, UK: Cambridge University Press.

[29] European PPP Expertise Center (EPPC). (2010). Procurement of PPP and the Use of Competitive Dialogue in Europe: A Review of Public Sector Practices Across the EU. Luxembourg: EPEC.

[30] HM Treasury (2007). Operational Task Force Note 2: Project Transition Guidance. London: HMSO.

[31] G. Rausser, & A. Ameden (2013). “Incomplete Contracts and Public-Private Partnerships.” In P. de Vries & E. Yehouse (Eds.) The Routledge Companion to Public-Private Partnerships. New York: Routledge, pp. 127-147

References

Dr. Joe Saviak

Flagler College

jsaviak@flagler.edu

Dr. Lawrence Martin

University of Central Florida

lawrence.martin@ucf.edu

Dr. Wendell Lawther

University of Central Florida wendell.lawther@ucf.edu

Contact Information

Dr. Joe Saviak, Dr. Wendell Lawther & Dr. Lawrence Martin IPPC6 2014

Public-Private Partnerships for Transportation Infrastructure Challenges for State & Local Government Public Procurement in the United States