Using the PPEA for Infrastructure Development

1. Using the PPEA for Infrastructure Development Design-Build Institute of America Mid-Atlantic Chapter Christopher D. Lloyd March 27, 2008

2. Presentation Overview • Legislative History • Overview and Process • Virginia Experience • Procurement Strategies

3. PPEA Overview What is it? - An alternative procurement tool that allows public entities to more efficiently develop infrastructure and achieve better value for the taxpayer - Vehicle to use design-build practices What it is NOT? - A panacea that resolves all procurement issues - A way to get something for nothing

4. PPEA History • Built on the successes of the PPTA (895, 288, 28, Coalfields Expressway) • Design-Build Review Board created in 1996, overly cumbersome process • Passed General Assembly in 2002 • Model Guidelines issued in October 2002, state guidelines in December • First comprehensive agreement signed July 1, 2003 (Stafford County) • Amendments occur in 2003, 2004, and 2005 • Additional changes in 2006 regarding FOIA, public disclosure, oversight • 2007 amendments require greater participation by the “appropriating body”

5. PPEA History – 2008 updates • Require public hearing at least 30 days prior to executing a comprehensive agreement • Broadens “technology infrastructure” to include services and applications that improve governmental efficiency or productivity

6. PPEA Overview • Allows for solicited and unsolicited proposals to develop or operate a qualifying project • A qualifying project is: • education facility (public school and higher ed) • equipment to enhance public safety and security at public buildings • utility and telecommunications and other communications infrastructure • recreational facilities • Technology infrastructure, services, and applications • any building or facility that meets a public purpose and is developed or operated by or for any public entity • any improvements necessary or desirable to any unimproved locally- or state-owned real estate

7. PPEA Process • Public body adopts PPEA guidelines • Private entity submits proposal to public body or public body issues a solicitation for proposals • Public body makes a written determination whether the project is developed using competitive bid or competitive negotiation • Competitive negotiationcan proceedif the public body determines that this method is “likely to be advantageous” because of the “probable scope, complexity or urgency of the project” or “risk sharing, added value, an increase in funding or economic benefit from the project that would not otherwise be available”

8. PPEA Process • Private entity secures confidentiality agreement for FOIA protection • Private entity submits a conceptual proposal for review (qualifications and experience, conceptual schedule and cost, public benefit) • Open competition period of not less than 45 days (no minimum for solicited projects) • Public body determines whether or how to proceed • If public body moves forward, asks for a detailed submission (accelerated process permitted) • At this phase, schedule and price become locked in • One proposer is elevated to the interim/comprehensive agreement stage

9. Benefits of PPEA Delivery • Private sector participation permits use of tax credits and other financing vehicles that have no value to the public sector • PPEA and design-build are nationally recognized procurement tools with accepted contract structures • Allows for more local government participation in the procurement decision – not managed by a “one-off” entity • Public disclosure requirements may insulate against criticism of closed door negotiations

10. PPEA Implementation What is happening across Virginia? • School facilities in Falls Church, Fredericksburg, Chesterfield, Winchester, Bedford County, Warren County, Stafford County, City of Harrisonburg, Frederick County - agreements signed • Pending school projects in Cumberland and Northumberland Counties • Public safety facilities in Roanoke, Stafford, and Frederick Counties • Capitol Square redevelopment • James City County recreational facilities • DOC Prison construction program (Balfour Beatty), regional jails • Parking decks (Fredericksburg, Roanoke, Winchester) • Technology projects (VITA) • Prince William and Chesapeake human services offices • Water and wastewater projects in Bedford, Prince William, Fredericksburg, Southampton, and Chesapeake • Northern Virginia Forensic Lab • State employee health plan IT review project • Loudoun County government complex • Virginia Department of Taxation headquarters

11. Emerging PPEA Opportunities • Redevelopment of state owned properties • Water and wastewater • University projects • Local government offices/courthouses

12. PPEA Implementation What Makes Projects Go Well • Open and collaborative process between public and private sectors • Atmosphere that encourages innovation and creativity • Include public, press and other stakeholders • Objectives (cost savings, time, limits on risk) are clear from the beginning

13. PPEA Implementation What Makes Projects Go Bad • Unnecessary closed door discussions • Public sector shifts all risk, not willing to pay for it • Staff objections to process • Cost overruns and scope creep • Public sentiment turns away from development • Negotiations never end • Project is overly defined or restricted

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