Update on Public-Private Partnership Legislation

SB 84 and HB 85, as amended to reflect the merger with a competing bill, continues to pick up momentum. The House Bill passed the Government Operations Subcommittee three days ago by a vote of 11 to 1 and the Senate Bill is set for the Governmental Oversight and Accountability Committee today. Many interested parties have raised very good suggestions for changes in the statutory language and we’re addressing as many of them as we can. We’re excited that this legislation has garnered so much attention, as that indicates people are preparing themselves to implement it upon passage. Keep up the support!

I was recently interviewed by Carolina Bolado at Law360 about the legislation and the portion of her article addressing it is reprinted below. In the meantime, the newly formed Florida Council of Public-Private Partnerships is putting the final touches on our P3 conference set for May 16 and 17 in Orlando, which will coincide with the statewide launch of that trade association to the public. If you want to be on the e-mailing list to receive notice of the seminar when registration opens shortly, let me know.

In the meantime, keep up the P3 momentum! Here is the segment of the Law360 article on P3:

Focus on Public-Private Partnerships
All eyes are on S.B. 84 and H.B. 85, a public-private partnership bill that has been gaining momentum and has passed its first Senate committee with unanimous support, according to the bill's drafter Lee Weintraub of Becker & Poliakoff PA.

The bill establishes a uniform method for public-private partnerships throughout the state, which provides the stability that lenders have been looking for, Weintraub said.

It also allows private companies to pitch unsolicited proposals to government entities. Once an agency has accepted a proposal, a competitive bidding process is opened up to other companies, according to Weintraub.

Supporters say the bill could open up the state to investors and help fund some critical infrastructure needs, particularly to the state's aging water and sewer systems, Weintraub said.

“We haven't done [public-private partnerships] much because we've been a wealthy country so we've had enough money to fund this stuff,” Weintraub said. “But now we're facing a budget crunch. It's been going on as a beautiful system in Europe, Canada and Australia.”

P3 - The Evolution of Public Procurement

Historically, public agencies have had the funds to construct public works. They usually procured plans prior to hiring a contractor as well. Considering ongoing budgetary constraints, public agencies continue to look for ways to streamline the procurement process. As a result, traditional procurement methods continue to evolve.

In the past, public agencies in Florida typically used a three step - "design-bid-build" model for construction of public works. Following this model, an agency first hires a design professional to create plans, and then advertises for bids from contractors. The contractor which submits the low price and is otherwise "responsive and responsible" would typically win the contract. Over time, agencies began to use the "design-build" model, which combined, the responsibility for design and construction into one contract.

In both of the above models, however, the public agency usually paid for all of the costs up front. Nowadays, public agencies are looking for ways to finance projects or bring in private partners to make up for a lack of capital improvement funds. Thus, the era of the "public private partnership" is upon us. The partnership may range from assistance with financing, and up to and including outright privatization of a project or services.

In order to compete in the marketplace for public contract awards, contractors will need to evolve with the changing procurement methods and be prepared to engage public agencies in longer term relationships to assist with the funding and operation of public works and improvements. In turn, the contractors may realize their profit from operational costs or user fees associated with the public improvement instead of being paid up front