Home » Contributors » John Baxter » Issues in Public–Private Partnerships (Part 2)

Issues in Public–Private Partnerships (Part 2)

By: John Baxter and Rick Moffat

In Part 1, we introduced public–private partnerships as a delivery model, and we discussed the risks involved in interpreting details. In this post, we will discuss user groups and potential solutions to risks.

User Groups

Another issue that arises after award of a project involves user groups. In some cases, after the winning bidder is selected, there is a period of time during which the bidder must refine its initial design. One aspect of this involves having user-group sessions to provide more detail on how people will actually use the space. During these sessions, it is often discovered that the accepted proposal did not meet the requirements of a particular department, due to the requirement not being either listed or initially considered during the bid phase. Many issues could be resolved prior to the closing of the bid process if user groups had more access to short-listed bidders. User groups would have an opportunity to explain their requirements to bidders before submission of proposals.

Solutions

In both situations discussed above, the solution involves providing as much information as possible to the bidders prior to choosing the successful proposal. The bidders could, depending on the proposal process, submit a request for clarification on issues for which they were unsure of the owner’s intent. However, the bidders are involved in a competitive bid situation, wherein they achieve their competitive advantage by implementing creative design solutions. If the owner’s policy was to share requests for information (RFIs) or design clarifications with all bidders, this would dissuade some bidders from submitting RFIs so that their design is not exposed to their competitors. Alternatively, if the owner decided all RFIs would be kept confidential or anonymous, bidders would more likely submit more RFIs, reducing the risk of a conflict later in the design construction phases of the project.

There are pros and cons to both approaches, but at the end of the day it is in the best interests of all parties to understand specifications and requirements prior to submitting bids. This will reduce the risk for all stakeholders involved in the project. The risk management solution is to engage owners and bidders in an open dialogue that ensures the owners get the product they want while allowing the competitive bidding advantage that is one of the main appeals of the P3 contracting model.

The views expressed in this article are those of the authors and do not necessarily reflect the position or policy of Berkeley Research Group, LLC.

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