The Army Corps of Engineers Seeks to Use More Public-Private Partnerships
On February 1, 2019, the U.S. Army Corps of Engineers (USACE) rolled out a program seeking pitches from private industry for possible public-private partnership projects. The USACE, looking to add efficiency and value to infrastructure projects, announced in the Federal Register a 60-day period for the submission of information on conceptual Public-Private Partnership (P3) delivery of specific USACE Civil Works projects.
The pitch program derives from President Donald J. Trump’s initiative on building U.S. infrastructure and the direction provided by Congress in the Fiscal 2018 Appropriations Act Conference Report, and the establishment of a Public-Private Partnership (P3) pilot program. Interested parties must submit their proposed projects to the USACE Headquarters, on or before midnight on April 2 to be eligible for consideration.
The USACE screening criteria require proposed P3 candidates to: (1) have construction costs in excess of $50 million; of non-federal sponsor support; (2) involve a design, build, finance, operation and maintenance (DBFOM) or some combination for federally authorized projects; (3) accelerate project delivery; and (4) have the ability to generate revenue or leverage non-federal funding sources.
Selection from the proposed project pool will be based on: (1) return on federal investment—calculated by annualizing the total project benefits and Federal costs utilizing the current discount rate, and applying the formula: (Benefits − Federal Costs)/(Federal Costs); (2) replicable—meaning the “proposed P3 structure or underlying concepts may be applied to other prospective projects;” (3) reliable funding sources “for the design, construction, operation and maintenance of Federally authorized water resource projects are identified;” and (4) risk allocation that “effectively allocates delivery and performance risk to non-Federal entities and minimizes Federal direct and contingent liabilities associated with the project.”
The P3 concept continues to gain more and more momentum as a preferred delivery platform for public infrastructure projects. The pilot program aims to identify “new delivery methods that can significantly reduce the cost and time of project delivery,” and is “part of the Revolutionize USACE Civil Works initiative which is transforming how USACE delivers infrastructure for the nation through authorized Civil Works projects and permitting of infrastructure projects.”
The USACE Director of Civil Works, Mr. James C. Dalton, hopes that “P3 [will] . . . accelerate project delivery and lower project costs” and the program seeks to “identify as many as ten P3 pilot projects.”
The complete screening and selection protocol is available in the Federal Register notice and can be found here.
Contact Eric Whytsell for more information.