If a state is ready to move forward with a public-private partnership, it must conduct the competition and negotiation according to procurement rules, which vary from state to state. The rules often include requirements for the number of bidders, the process for submitting bids and the process for awarding a winner.
Private firms' upfront bids are based, to a large extent, on the parameters the state establishes when requesting bids and on the tradeoffs the parties agree to during the final stages of negotiation. Some of the parameters that drive the value of the bid include the length of the lease term, required maintenance of the piece of infrastructure by the private firm, and the ability of the private firm to generate revenue through tolls or other fees.
Although governments may eye public-private partnerships for the money they generate, these are not inexpensive deals to develop and finalize. Typically, the state retains external advisors, which add to the transaction costs of the deal, as do the multitude of studies conducted and legal fees associated with writing and negotiating the proposal. Of course, the amount of fees varies with every situation.