Guidebook for P3 Projects’ Arrangements and Performance Metrics
infrastructure in the United States, as in many other
countries, is aging and limited public funds are available to maintain the
current infrastructure and foster future growth. A potential mechanism to finance
a portion of the ongoing transportation infrastructure needs is public-private
partnerships (P3). A P3 is defined as a contract between the public and private
sectors for the delivery of a project or service in which the private partner provides
the majority of the necessary financing. There are many
examples of successful P3s in the United States and in other parts of the
world. In recent years, establishment of the USDOT Build America Bureau and
enabling legislation in many states have facilitated implementation of P3 projects
in the transportation sector. However, the selection of P3 implementation, just
like any other project delivery methods is driven primarily by the goals and
objectives of the DOT and the specific project. DOTs are still faced with many
challenges in aligning these goals and objective to the delivery methods of
choice. In addition, once a project delivery selection is made, monitoring project
performance over the length of the project, given this decision becomes vital
for assessing and improving future projects’ performance and delivery
metrics in P3 projects should address the public client’s overall strategic
plan and mission objectives, as well as overall quality and performance of a
given asset. These performance metrics
should include key indicators of travel time reliability, safety, overall
project physical condition, as well as other project elements. Despite the importance of performance
metrics, knowledge is relatively limited about the most effective practices for
selecting metrics, setting metrics performance levels, and reasonable
approaches to deductions and/or point systems for failure of the Concessionaire
to meet contract requirements, that ultimately align with the DOT’s goals and
objective of this project is, thus, to develop a structured decision-making
model for DOTs on implementing an effective P3 project from inception to
operations, that is driven by the DOT goals and priorities, and assessed by
performance metrics pertinent to the selected P3 arrangement (from availability
payments, to sharing revenue, to full privatization, among others). The
decision-making model should take into consideration factors such as various P3
arrangements and financing options and resources and time constraints._
Based on the results of this study, a guidebook will then be developed to
provide information on practices that may assist in selecting various P3 arrangements,
as well as assessing the project using key performance metrics that align with
the project goals and objectives._
The proposed research
should address the following questions:
· What are the different arrangements of
P3s used in the transportation industry? What are the key selection parameters
for each, in light of DOTs’ project goals and objectives?
· What are the key performance metrics
for P3 projects? How can they be measured? How effective are they?
· What are effective ways to tie
performance metrics to payment mechanisms (i.e. lane availability, route
performance, condition criteria, safety performance, unplanned events, etc.) to
the P3 contractor?
· If the P3 concessionaire does not
comply with performance standards, what actions (e.g., nonconformance reports,
penalty point notices, etc.) should be taken?
· If the P3 concessionaire
maintains or exceeds the level of performance specified for the majority of the
contract term, what incentives, if any, should be provided?
· What techniques have been used to avoid
and resolve disputes? Which have been
most effective and which have been less effective?
The purpose of this project
is to (1) investigate the different
P3s arrangements used in the transportation industry, and link them to DOTs’
project goals and objectives, (2) examine performance metrics for P3 projects
used by DOTs, as well as other countries in the delivery of transportation infrastructure;
(2) document lessons learned; and (3) make implementation recommendations that
will improve U.S. policy and practice. This
project will produce an empirical guide based on effective practices regarding selection
of performance measures for P3 projects, and provide guidance on selecting different P3 arrangements/structures
given DOT goals and objectives, as well as effective practices for implementing
Specific tasks of the
research to accomplish the main objective include:
· – Conduct comprehensive literature review of
studies related to P3 arrangements, how they are linked to DOTs and projects'
goals and objectives, as well as to performance measurement.
· – Benchmark the state-of-the-practice,
across the various transportation agencies, related to P3 selection choices and
establishing project performance metrics for P3 projects.
· – Prepare a research work plan that
describes the details of the research methodology and methods for identifying
effective practices and developing conclusions.
· – Conduct representative detailed case
studies on current and completed
P3 projects to identify selection mechanisms and constraints, as well as effective
performance measurement practices and lessons learned.
· - Execute the research work plan and
prepare an interim research report that articulates the data collection and
analysis, as well as emerging conclusions, effective practices, lessons learned;
develop a proposed outline for the guidebook,
the case study report and draft language.
· - Publish the guidebook to assist DOTs in implementing
an effective P3 project from inception to operations, that is driven by the DOT
goals and priorities, and assessed by performance metrics pertinent to the
selected P3 framework and based on proven effective practices.
· - Prepare a final research report detailing
the complete results of the research.
the development and operation phases of a project, performance metrics will be
compared with established performance
objectives that serve as a baseline, to determine how successful organizations (and
the private sector partner) have been in attaining project objectives. The
payoff of this research will be improved decision making for DOT on various P3 arrangements,
as well as administration and control of P3 projects, which ultimately will result
in higher public satisfaction. The guidelines will become available to transportation
agencies through the traditional NCHRP distribution processes.
|Sponsoring Committee:||AFH15, Project Delivery Methods
|Research Period:||24 - 36 months|
|RNS Developer:||Behzad Esmaeili, Darryl VanMeter, Steve Dewitt, Ghada M. Gad|
|Source Info:||Federal Highway Administration (2009). “Public-private partnerships for highway infrastructure: Capitalizing on international experience.” International Technology Scanning Program. |
Yuan, J. F., Zeng, A. J. Y., Skibniewski, M. J., and Li, Q. M. (2009). “Selection of performance objectives and key performance indicators in public-private partnership projects to achieve value for money.” Constr. Manage. Econom., 27(3), 253–270.
Yuan, J., Skibniewski, J., Li, Q., & Zheng, L. (2009). “Performance objectives selection model in public-private partnership projects based on the perspective of stakeholders.” Journal of Management in Engineering, 26(2), 89–104.
|Index Terms:||Public private partnerships, Performance measurement, Project delivery, Decision making, Disputes, |
Administration and Management|