If you’re short on budget, staff, time — or all three — a public-private partnership (P3) may be the tool you need to build your next facility. Here are answers to six common questions about P3s.
A P3 is a commonly used project delivery method involving the use of a private company to deliver a public facility. A P3 enables the public sector to harness the expertise and efficiencies of the private sector. A P3 is structured to provide the public sector client with more flexible terms and less risk than more traditional project delivery methods. In most cases the private sector partner provides the project design, construction and funding, with ownership ultimately transferred to the public sector at the end of the contract term.
P3s are used to deliver a wide range of public facilities, public buildings and public infrastructure projects. Common examples include municipal facilities (fire stations, police, city hall, libraries, convention centers, and more), education, transportation, recreation, public utilities, wastewater treatment, redevelopment of neighborhoods and riverfront, public housing, energy savings programs, defense, telecommunications, and public healthcare projects.
Yes. In fact, 36 states have enacted laws enabling and supporting public-private partnerships. A P3 must be established properly and is generally considered a real estate transaction. Thus, it is not subject to the same selection requirements often used for design services or construction procurement.
P3 project delivery is a valuable development tool that may be considered by state and local municipalities, public works, non-profits, economic development boards, alumni boards, transportation boards, port authorities, school districts, public housing, military branches and federal agencies.
Design-build and construction management services are creative project delivery methods used primarily for the design and construction of capital improvements. A P3 is not a construction delivery process, it is a contractual arrangement between a public agency and a private sector entity that often includes the design, construction and financing of a public facility. Many times the maintenance and operation of the public facility are also included in the contract.
There are many benefits to partnering with the private sector on a project. Here are a few.