Establishing Specialized P3 Offices
DC’s Office of Public-Private Partnerships
Some local governments, including the District, are creating dedicated offices to consider and implement alternative project delivery approaches in their capital programs. Examples include:
- The City of Denver, Colorado, which is currently designing a new municipal P3 office and program;
- The Office of Extraordinary Innovation (OEI) recently created by the Los Angeles County Metropolitan Transportation Authority (“LA Metro”) to manage alternative procurements like P3s and also to facilitate the adoption of new technologies for the County’s transportation system; and
- The Mayor’s Office of Civic Innovations (MOCI) established in 2012 by the City of San Francisco to introduce new approaches, resources, and technology for meeting the City’s priorities, including using P3 delivery option for the one-of-a-kind FTTH and broadband network with universal coverage; and
- The City of Chicago created the Chicago Infrastructure Trust, a nonprofit dedicated to pursuing alternative procurement approaches for city infrastructure.
Dedicated P3 and alternative procurement offices have multiple benefits. They can:
- Facilitate a programmatic approach to alternative project delivery, analyzing a city’s project pipeline holistically to identify projects that may benefit from alternative approaches;
- Reduce the transaction costs associated with alternative delivery models, by creating model analysis and agreement frameworks that can be reused for multiple projects;
- Build internal P3 capacity, since dedicated P3 staff are involved in multiple transactions internally (while sponsoring agencies often only have one or two P3s a year at most);
- Coordinate complex government endeavors like infrastructure projects that involve multiple public agencies or offices; and
- Serve as a relatively neutral party in identifying and resolving any interagency conflicts.
- Protect confidentiality of private partners, with information protection and handling policies that may not be required for more typical procurements; and
- Balance confidentiality with transparency by providing centralized public reporting on project structures and outcomes.
Like many other P3 offices, OP3 currently serves as an advisor to other parts of the city government as opposed to a direct signatory to a P3 transaction. Along with the OCFO and other agencies, OP3’s procedures include designating an “owner agency” for each procurement, which OP3 will work with to manage the procurement and develop a project agreement. The owner agency may also provide funding to cover the costs of the procurement process. In addition to drafting the final project agreement, OP3’s role involves working with the owner agency to draft the RFQ and RFP for the procurement and manage the evaluation process. OP3 also provides reports for the City Council before releasing the RFP and finalizing the project agreement. The Council must approve both documents during the procurement process.
For more information about the DC OP3 office and other municipal P3 efforts, see the report commissioned by OP3 with funding from the City Accelerator, from which this case study was adapted. The District of Columbia P3 Project Delivery: A Case Example, by Julie Kim (Senior Fellow, Stanford Global Projects Center, and Urban Infrastructure Finance Fellow, New Cities Foundation, and Mike Bennon, (Managing Director and Director of P3 Financial Literacy in the Public Sector (P3 FLIPS) Initiative, Stanford Global Projects Center (GPC).
The first project undertaken by the District of Columbia’s Office of Public-Private Partnerships was a streetlight modernization program.