Once the transportation agency has established a PPP program, it can more effectively proceed to develop and implement PPP projects that offer the potential to cost-effectively expedite needed transportation projects by involving the private sector to a greater extent than in the past. These are a number of requirements for transportation agencies to meet to have an effective PPP program. Among these, the most significant requirements are listed in Exhibit 18 below.
Exhibit 18 - Transportation Agency Requirements for an Effective PPP Program
• PPP program development and refinement - policy, authority, and responsibility• Program management - strategic planning, guidance, monitoring, evaluation. And reporting processes• Resource management - organization, staffing, and procedures• Technical capabilities- Legal and regulatory review and analysis capabilities - Innovative procurement and contract administration techniques - Innovative funding approaches and financial management practices • Project prioritization and selection criteria and processes• RFP development and/or bidder evaluation processes- Solicited and/or unsolicited proposals - Brownfield (existing) and/or greenfield (new) projects • Legal assessment of bidding process, bids, and contracts• Effective contract administration and project oversight to ensure accountability |
A transportation agency should consider the key issues framed in terms of the five questions listed in Exhibit 19 to successfully develop a PPP program.
Exhibit 19 - Key Issues to Consider in Developing a Transportation Agency PPP Program
| • What is the institutional context for the PPP program? - Focus of PPP initiative (e.g., mega projects, inadequate funding, strong private interest) - Primary reasons to consider PPPs for project/asset delivery - Relationship of PPP approaches to the agency's mission and responsibilities • Does the sponsoring agency have the statutory and regulatory authority for PPPs? - Review existing statutes and regulations to assess authority for PPP projects - Assess legal context and capability for PPP project proposals - solicited and unsolicited - Eligibility for PPP delivery by project type based on project selection criteria • What are the potential public and private partner responsibilities, risks, and returns? - Project development - financing - operations - preservation - Toll schedule - Asset ownership - Contract duration and renewal potential • Does the sponsoring agency have the capabilities and resources to develop and manage a PPP program and the resulting projects? - Organizational placement and structure - In-house staffing levels and qualifications - Specialized staff resources • What kind of procurement approach should be used to select qualified PPP teams? - Procurement method ■ solicited - unsolicited ■ one-step - two-step (prequalification leading to short list) ■ prequalification process - criteria ■ performance-based versus prescriptive standards - Selection basis ■ project price - level of third party financing - other considerations ■ best value - lowest responsible bidder - lowest bid - Contract type ■ DB, DBOM, DBOM-F, BOT, long-term concession lease ■ performance-based versus prescription based ■ project delivery - service levels - asset conditions ■ shared risks - shared rewards ■ duration - renewal potential - Extent and sources of competition for PPP assignments ■ local ■ national ■ international - Contract administration responsibility and approach ■ quality control - quality assurance |