A basic understanding of the legal Ps and Qs should be required before planning to pursue a PPP. Because the legislation allowing public-private partnerships differs from state to state and may even exclude municipalities, it is critical to make sure that the proposed project is actually legal. For instance, PPP transportation projects in California are limited to the state Department of Transportation or regional transit authorities. Municipal projects are not enabled and buildings cannot generally be included in transportation PPPs in California.
Definitions need to be crafted and evaluated from both the legal standpoint and the marketing perspective for the public agency, the private developer, and within the developer's team. For example, the difference between "privatization", and public-private partnership, while generally glossed over in the United States, can be profound.
In a series of three blog articles during February and March of 2009, Sheppard Mullin lawyer Edward B. Lozowicki covered the growth of PPPs, potential conflicts with prevailing wage rates, and competitive bidding laws-all good information to study prior to submitting a PPP. The issues with prevailing wage rates center on defining the term "public", with regard to usage of public assets. Legislation frequently specifies (and limits) how and where public funds can be used throughout the PPP process.