Transcript Public Private Partnerships

Public Private Partnerships
P3s
What the Public S ec tor Cons iders
When Selecting the Right Private
Partner
JoseA.Galan-Division Director
Miami-DadeCounty–InternalServices Department
RealEstateDevelopment Division
Introduction
A P3 project includes a public agency contracting with a private party to provide a
public purpose
Each project is unique and no one method will work for every project
Projects typically include some or all of the following: finance, design, construct,
operate, maintain a facility or system in whole or in part
Seven keys to success include: public agency champion, statutory environment, public
agencies organized structure, detailed contract/business plan, clearly defined
revenue stream, stakeholder support and partner selection
Partner selection may be the most critical
The Selection Process
Expressions of Interest (EOI), Request for Qualifications (RFQ) and a
Request for Proposals (RFP)
Importance of the Public agency providing project parameters, public
contribution of funds, timeline, current condition of the facility or
proposed facility location
Importance of the Public agency requesting the following information
from prospective partners: Description of the proposed partner,
qualifications and experiences, financial capability, references,
transfer of risk, and litigation and controversy
The goal is select a partner that will bring the best value to the project
as opposed to the lowest bidder
Partner Selection Criteria
Review description of the proposed partner’s proposal which should include
Identification of the proposed partner as well as the proposed
management style
Overview of the proposed partner including history of the organization,
ownership and corporate structure
Additional information that conveys the potential partner’s plan to fulfill
the agencies objectives
This information should provide the agency with a comfort level with who
the prospective partner is
Agencies should have their legal council should review all agreements to
ensure their rights and remedies are well represented and legally
enforceable agreements provide the basis for the P3 and protect all
parties
Partner Selection Criteria
Review the partner’s qualifications and experience
Depending on the structure of the proposed P3, the agency should be
considering the relevancy and extent of specific technical experience and
expertise of key staff members of the proposed partner and not just the
entity as a whole
Benefits can include: accelerated project delivery, greater access to
technology and innovation, transfer of risk, alternative financing methods
and cost efficiencies
Review a list of the prospective partner’s projects completed and under
construction
Schedule interviews to meet prospective partners one-on-one with all parties
involved in the selection process present
Past performance can serve as an indicator of future performance
Partner Selection Criteria
Financial capability
Review the most recent financial data, including audited
financial statements
Confirm available net working capital and net worth of
submission team
Review proposed alternative funding approaches
An independent financial consultant chosen by the agency prior
to final prospective partner selection
Partner Selection Criteria
References
Request and contact references
The public agency should confirm that the person listed as a
reference actually worked directly with the prospective
partner in question and their capacity
List of references should include projects and agencies which are
similar to the proposed project
Partner Selection Criteria
Transfer of risk
Agencies should select a prospective partner that is better
equipped or more experienced than it to handle certain risks
associated with the project
These could include project costs, financing, construction
schedule and quality assurance
The goal should be to combine the best capabilities of the public
and private sectors for mutual benefit
Partner Selection Criteria
Litigation and controversy
Another issue of due diligence to be performed by the public
agency is to ensure the prospective partner is not involved in
any litigation and free of controversy that might jeopardize
the P3 project
The potential partner should provide a written statement that
the proposed company and individual team members are not
the subject of any litigation or material controversy
Conclusion
The selection process should identify and pre-qualify those
prospective partners that have the greatest potential for
developing and delivering the proposed project as a P3. A
successful partnership should ensure that both the public
agency and private partner will have an effective business
relationship
References
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Contracting & Public-Private Partnerships – A guide for State & Local Government Officials &
Administrators, 2014 Edition. Dr. Lawrence Martin & Dr. Joe Saviak
Deloitte Research Study – Partnering for Value Structuring Effective Public-Private Partnerships for
Infrastructure
Agency for Public Private Partnership – A Step-By-Step Guide to Public Private Partnerships, July
2009. Zagreb
California Debt & Investment Advisory Commission - Public-Private Partnerships: A Guide to
Selecting A Private Partner, March 2008
OECD Better Policies for Better Lives – Public Governance and Territorial Development Public
Management Committee, 32nd Annual Meeting of Working Party of Senior Budget Officials. June 67, Luxembourg