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