Public-private partnerships, or P3 arrangements, are being used in place of direct public financing for the many infrastructure and other public improvement projects. Under a P3 agreement, a government entity grants a private organization a concession to implement a public project or service, such as developing or renovating public facilities, expanding infrastructure, or providing new utilities, usually along with the management and maintenance of the project for a specific period. Terms of financing, construction, operation, and maintenance of the project are set forth in the P3 agreement in accordance with jurisdictional statutes and regulations.
The highly specific innovative project implementation procedures are made possible by contractual arrangements that usually are carefully negotiated to protect the public interest while providing private concessionaires with incentives to provide the financing and coordinate the construction and operation of the project. The P3 contract often includes financing, design, construction, operations, and maintenance of the public improvement in exchange for cash flow generated by the public improvement.
To assist in the negotiation of a comprehensive agreement, the Engineers Joint Contract Documents Committee (EJCDC) created EJCDC P3-508, Public-Private Partnership Agreement, which is a template of the issues for consideration in finalizing a specific agreement for a public-private partnership. P3-508 provides for the attachment and incorporation of additional terms and contract documents as exhibits to address project-specific requirements relating to financing, design, construction, operation, maintenance, revenue, and management. P3-508 is drafted with this format to provide the flexibility required for the users to tailor their agreement to meet the requirements of the specific jurisdiction, and the nature and subject matter of their anticipated concession.
The EJCDC developed the documents following reviews of P3 agreements already in use, and with the advice of owners, attorneys, financiers, developers, contractors, and design professionals experienced with P3 delivery both in the U.S. and abroad. The result is a new EJCDC document that presents a framework of contractual conditions typical among P3 agreements, and is flexible enough to meet the needs of most public and private entities. Since developing P3 agreements on a case-by-case basis can involve significant time and expense, EJCDC P3-508 will be valuable to any public or private entity considering the P3 project delivery model.
To find more information on documents or to purchase P3-508 or other EJCDC documents contact the sponsoring organizations or access the EJCDC online at www.ejcdc.org.