Roofing Law
Key Characteristics of Public-Private Partnerships Part 2
In part one of this two-part series, a roofing attorney in Tennessee discussed public-private partnerships, also referred to as PPPs or P3s. We began by discussing the definition of P3s provided by the United States Government Accountability Office (GAO); however, this is not the only definition available, the National Council for Public-Private Partnerships (NCPPP) defines a P3 as “a contractual agreement between a public agency (federal, state, or local) and a private sector entity…[where] the skills and assets of each sector (public and private) are shared in delivering a service or facility for the use of the general public.”
As we mentioned in the first part of this article, P3s require both parties to acknowledge and accept the risks and rewards of a project. This limits the types of contractors best suited for these types of partnerships. If your cash flow is limited, consult a roofing attorney in Tennessee before you sign a contract for a P3.
Types of P3s
There are two primary categories of P3s:
- Existing facilities, known as “brownfields”
- New-capacity facilities, known as “greenfield” projects
Regardless of which type of project you plan to take on, it’s important to realize one chief commonality between brownfields and greenfield projects: the critical need for a dedicated revenue stream. Since the contractor is oftentimes required to be the primary contributor of upfront funding, a fair method of compensation must be established to help refill the contractor’s coffers over the course of the P3. Generally, the revenue stream can be derived from fees, tolls, shadow tolls, availability payments, and local taxation.
P3s: Liberating Contractors Despite Some Restrictions
In some cases, the contractor may be required to take on an expanded role during the course of a P3 project. This includes selecting the Design-Build delivery system and taking on additional services. This gives the contractor more freedom to approach the project as they see fit, but it also increases their liability. To help cover your bases, it’s important to:
- Define project goals
- Document existing conditions
- Develop a site program
- Advise budget considerations
- Coordinate the design phase
- Control the scope of work
- Obtain constructability reviews
The Keys to Successful P3s
P3s can either present a significant opportunity or risk depending on the state of your contracting business. In order for P3s to succeed, both our government and contractors must work together. The keys to successful P3s include:
- Facilitating institutional certainty
- Educating the public about P3s
- Prioritizing and screening projects
- Designating senior government champions
- Creating a hierarchy to streamline decision making
- Securing a standardized practice for project procurement
- Establishing accountability and transparency
- Procuring credit support for projects
If you would like to speak with a roofing lawyer in Tennessee, please contact us today.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.