The legal implications on transit capital projects delivered using PPPs since 2000 include the following, as discussed above:
• The nature of enabling legislation to permit application of a PPP;
• The quality of the contract employed to govern the partnership;
• Regulations imposed by project funding sources such as state and Federal governments; and
• Contractors' claims following project completion.
Denver's T- REX project required the passage of specific legislation allowing CDOT to use a design-build project delivery approach and select a contractor on a basis other than cost. RTD already had the ability to apply design-build but CDOT did not, and the coupling of highway and transit improvements was essential to the project's advancement.
In some instances, structures enabling PPPs may provide legal advantages. For example, the California Infrastructure Finance Act, which BART is applying to advance its Oakland Airport Connector project, provides flexibility in contract procedures relative to the regulations that govern typical project delivery approaches. Other than requiring the project to pay laborers' prevailing wages, the law exempts projects advanced under the act from several other state regulations governing public works projects. Most importantly, the law allows project sponsors to pick a consortium based on best value instead of low bid, which is essential when selecting a team that will assume the large degree of risk that is typical of DBFO projects.
Several agencies cited the importance of having a well-written contract and experienced counsel to avoid legal tangles with the contractor. RTD and CDOT hired outside attorneys that have been involved in many innovative project delivery projects to write their contract for T- REX, as many agencies do. BART is currently working with an international law firm experienced with DBFO projects around the world to advise the agency as it issues its RFP, evaluates proposals, and negotiates a contract for the Oakland Airport Connector project.
South Florida RTA faced a significant number of claims and litigation associated with its South Florida Commuter Rail Upgrades project, in part related to the application of a design-build delivery approach. Issues were related to the length of the project and the fast-tracking process, and the size of the project allowed for issues between the project sponsors and the contactor to be magnified.