Solving Challenges Others Cannot

Statutory Frameworks for

Public Private Partnerships

NCPPP/AGC ConferencePhoenix, AZ

Christopher D. LloydJanuary 27, 2009

Presentation Overview

• What is a Public Private Partnership?

• Virginia’s PPEA• Benefits of PPP• PPP Success Stories

What is a Public Private Partnership?What is it?

- An alternative procurement tool that allows public entities to more efficiently develop infrastructure and achieve better value for the taxpayer- Vehicle to use design-build contracting practices- Leverage private sector expertise to meet public goals- Opportunity to foster innovative financing

What it is NOT?- A panacea that resolves all procurement issues- A way to get something for nothing- Privatization

What is a Public-Private Partnership?

• Does not require a formal statutory framework

• Does require a willingness to innovate and use “non-traditional” procurement methods

• Transparency and accountability are vital

Virginia’s PPEA • Allows for solicited and unsolicited

proposals to develop or operate a qualifying project

• A qualifying project is:– education facility (public school and higher ed)– equipment to enhance public safety and security at public buildings– utility and telecommunications and other communications infrastructure – recreational facilities – Technology infrastructure, services, and applications– any building or facility that meets a public purpose and is developed or

operated by or for any public entity– any improvements necessary or desirable to any unimproved locally- or

state-owned real estate

PPEA Process• Public body adopts PPEA guidelines• Private entity submits proposal to public body or public

body issues a solicitation for proposals• Public body makes a written determination whether the

project is developed using competitive bid or competitive negotiation

• Competitive negotiation can proceed if the public body determines that this method is “likely to be advantageous” because of the “probable scope, complexity or urgency of the project” or “risk sharing, added value, an increase in funding or economic benefit from the project that would not otherwise be available”

PPEA Process• Private entity secures confidentiality agreement for FOIA

protection• Private entity submits a conceptual proposal for review

(qualifications and experience, conceptual schedule and cost, public benefit)

• Open competition period of not less than 45 days (no minimum for solicited projects)

• Public body determines whether or how to proceed• If public body moves forward, asks for a detailed

submission (accelerated process permitted)• At this phase, schedule and price become locked in• One proposer is elevated to the interim/comprehensive

agreement stage

PPEA Project Structure

• “Turn-key” project delivery• Contractor assumes project cost and schedule

risk• Opportunity for other revenue generating

activities to reduce government cost• Team members provide free advice that helps

the government even if project is not developed• Often achieves project cost savings through

value engineering and faster schedule• Innovative financing permitted, but government

owns in the end

Benefits of PPEA Delivery• Private sector participation permits use of tax

credits and other financing vehicles that have no value to the public sector

• PPEA and design-build are nationally recognized procurement tools with accepted contract structures

• Allows for more local government participation in the procurement decision – not managed by a “one-off” entity

• Public disclosure requirements may insulate against criticism of closed door negotiations

PPEA Success Stories

• New education facilities• State and regional correctional

facilities• Water and wastewater• Public safety centers• Information technology infrastructure• IT services

PPEA Success Stories

NCPPP National Award - 2005

Fredericksburg Parking Deck

NCPPP Award Winner - 2006

•Savings in land cost

•Community input in design during contract negotiations

•Guaranteed price – no change orders

PPEA Trends

• 100+ projects completed or under review• 2/3 unsolicited, 1/3 solicited• First submission usually wins in

unsolicited, but competition helps reduce price

• More innovative financing• Focus on use of surplus land or facilities

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