House Transportation and Infrastructure Panel Acknowledges Benefits of Public Private Partnerships, Makes Recommendations

Earlier this week the House Transportation and Infrastructure Committee’s Panel on Public-Private Partnerships (P3s) issued a report stemming from its review of the “use of public-private partnerships in the United States and internationally to identify: 1) the role such partnerships play in the development and delivery of transportation and infrastructure projects; 2) whether public-private partnerships enhance the delivery and management of infrastructure projects beyond the capabilities of government agencies or the private sector acting independently; and 3) how to balance the needs of the public and private sectors when identifying, developing, and implementing public-private partnership projects.”  The panel found that P3s “can enhance the delivery and management of transportation and infrastructure projects beyond the capabilities of government agencies or the private sector acting independently” and acknowledged that the “participation of the private sector in financing a project can bring discipline and efficiency to project delivery, which is too often lacking in the traditional public procurement process.”

The report offered a variety of recommendations “to balance the needs of public and private sectors when considering, developing, and implementing P3s to finance important infrastructure projects across the United States.”  First, the panel recommended “several ways to improve the traditional design-bid-build procurement process and better structure P3 processes and agreements to maximize benefits to both public and private sector participants and to improve the capacity of the public sector to negotiate good agreements that result in benefits to the public.”  Second, the panel recommended “several changes to federal programs to ensure fair consideration of P3 projects, where appropriate, and that the federal oversight processes take the realities of P3 procurements into account.”  Third, the panel recommended “ways to ensure that there is an accurate accounting of the costs and benefits of the agreement and the total federal investment.”

Finally, and significantly, the report acknowledged that the current OMB scoring rules “deter lower-cost, long-term leases and discounted purchase options.”  The panel recommended that the House Transportation And Infrastructure Committee “review whether such scoring rules should be modified to allow more innovative financing solutions to be used to tackle federal real estate challenges” – a position that we have advocated for through our work with the ABA PCLS Privatization Committee.

We will continue to monitor the Panel’s activities, and we are hopeful that this report will help foster P3s in the federal space.

Dentons Government Contracts Group

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