Principle 1: Be informed

State decision makers need access to fact-based information that supports sound decisions.

Ultimately, each state must determine for itself whether and how to pursue transportation PPPs. A key principle throughout the decision-making process is for both legislators and executive agencies to have access to fact-based information that supports educated, thoughtful decisions.

When deciding whether to authorize transportation PPPs, legislators will need to be informed about their state's context and goals for PPPs, alternative revenue and financing options for transportation infrastructure, and-if relevant-the advantages and risks of potential projects. When crafting enabling legislation, legislators need additional information about the possible effects of various policy options on PPP implementation. Executive agencies need information about PPP programs, project selection, procurement, contracting, and contract management and oversight.

Recent reports from the National Cooperative Highway Research Program and the Pew Center on the States have identified information that public policymakers need to properly evaluate the benefits and risks of PPPs; broad policy decisions are addressed, as are programs, projects, procurement, contracting and contract management. The Pew analysis lists 30 questions to which states should have clear, data-driven answers when considering transportation PPPs (Appendix H).119

Although each situation is unique, there is no need to entirely reinvent the wheel. A growing body of information exists about international and U.S. PPP experiences, legislative options and best practices. A nationwide knowledge and experience gap about PPPs also exists, however, partly because some types of PPPs are relatively new in the United States. According to a 2009 McGraw-Hill survey, 61 percent of state and local officials had no experience with PPPs and did not fully understand their characteristics.120 Further, PPPs can be complex and may entail a steep learning curve.121 Failing to tap available knowledge may lead to costly and avoidable mistakes or inadequate protection of the public interest.

To better inform themselves about PPPs and relevant policy options, legislators can independently leverage existing resources or create an independent commission to advise the legislature and the governor.122 Executive agencies can build in-house expertise and hire specialized advisors. Agencies that use such advisors, however, must take care to be an educated client, to avoid conflicts of interest and to ensure adequate state oversight.123 Both legislators and executive agency personnel also can reach out to counterparts in other jurisdictions who have had experience with PPPs, either directly or through an appropriate organization, for peer-to-peer exchange.124

A public PPP advisory body or "center of excellence" also can provide expertise and guidance to executive agencies and bring consistency to the PPP process for both the public and private sectors.125 More than 85 such centers exist globally126 including those in Canada, Australia and the United Kingdom (see Table 4 for examples). Their functions and structures vary considerably. In addition to sharing best practices and lessons learned, some actively develop PPP programs, evaluate and select projects, and standardize or manage contracts.127 Many have published comprehensive guidance documents that serve as informational resources.128 In most cases, these centers help agencies choose and manage legal, financial and technical advisors but do not replace those advisors.129 Some also help executive agencies develop their internal capacity and skill set.