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Public Private Partnerships for SchoolPublic Private Partnerships for SchoolPublic Private Partnerships for SchoolPublic Private Partnerships for School

DevelopmentDevelopmentDevelopmentDevelopment

CONFIDENTIAL

www.mcguirewoodsconsulting.com

Montgomery County School Board

Christopher D. Lloyd

December 7, 2010

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Virginia Procurement Opportunities

Design-bid-build

Design-build

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PPEA

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Design-Bid-Build

Traditional procurement method allowed under the Virginia Procurement Act

Begins with selection of engineer and design team through competitive

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Selected firm designs project to near complete drawings

Design and bid specifications are put out for bid

Some public entities start with RFQ, then proceed to RFP to help narrow list

of potentially qualified contractors

Contractor selection based on lowest responsible bid

Construction is to the plans

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Design-Build

Design-Build Review Board created in 1996 to grant project specific approvals

Law amended in 2006 to allow one-time Board approval to public entities

(Montgomery County NOT allowed to participate)

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Engineer and contractor propose as a common team with shared risks andrewards

Public entity often uses on-call or in-house expertise to scope project and

assist with team evaluation

Widely used by VDOT with about 20-30 other projects statewide

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PPEA

Law passed in 2002

Based on PPTA (Transportation) of 1995

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ows or ot so c te an unso c te proposa s or eve opment an or

operation of qualifying projects

Public entity must adopt guidelines to consider project proposals

2 phase process conceptual and detailed

Results in a de facto design-build procurement

Over 100 projects completed or underway statewide

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PPEA: Dispelling the Myths

Not a panacea

Not free money

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ot a nance too

Not secret negotiations

Not necessarily cheaper

Not privatization

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PPEA: Process

Public entity solicits for proposals or accepts unsolicited proposals

Minimum of 45 day open competition period for unsolicited proposals

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protect ons or con ent a n ormat on are negot ate

Conceptual proposal outlines team qualifications, proposed scope, proposed

scope and public benefits

Public entity may levy a proposal review fee on both solicited and unsolicited

proposals

Proposal review fee is used to cover procurement costs

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PPEA: Process

All competing proposals are reviewed, followed by a downselect

Detailed proposals are requested often relies on recommendations of

outside/inside advisors

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Detailed proposals start to lock in project scope, costs, schedule

Leads to an interim or comprehensive agreement with one firm

School Board MUST secure Board of Supervisors approval before executing

contracts

Significant requirements for public notification and hearings

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PPEA: Pros

Many of the same benefits as design-build

Provides opportunities for creative and innovative approaches to addressing

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PPEA has a certain cachet with state regulatory and funding bodies

No non-Montgomery County approvals necessary

School Board retains right to reject, modify, expand, or amend proposals at

any time

Project costs can be covered by proposers

Staff augmentation and single point responsibility

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PPEA: Cons

Project scope and cost may not be defined until late in the negotiation

process

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Suspicions about competitive negotiations

Did I get the best possible price?

Negotiations can be lengthy and complex

Currently not an authorized procurement vehicle for USDA funding programs

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Mitigating PPEA Risks

Use of strong outside advisors with PPEA experience

Two step solicitation process

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sta s ng c ear goa s, part cu ar y re ate to pr ce

County and School Board must be on the same page

Use of interim agreement process

Circulate proposed comprehensive agreement at detailed review phase

Prepare contingency budgets and plans that share risk and rewards

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PPEA: Why Unsolicited Proposals?

Greater acceptance of use of project review fees

Greater flexibility to develop a project with undefined scope

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pportun ty to get wor c ass eas

Opportunity to get the dream team

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PPEA: Why Solicit Proposals?

Public entity is in proactive, not reactive mode

Greater opportunity to narrow or define scope

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ay ncrease compet t on, num er o proposa s

Reduces requirements for staff time to meet with proposers

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PPEA Implementation

What Makes Projects Go Well

Open and collaborative process between public and private sectors

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Atmosphere that encourages innovation and creativity

Include public, press and other stakeholders

Objectives (cost savings, time, limits on risk) are clear from the beginning

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PPEA Implementation

What Makes Projects Go Bad

Unnecessary closed door discussions

Public sector shifts all risk, not willing to pay for it

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Staff objections to process

Owner did not establish clear criteria and goals upfront to properly assess

performance and success at end

Cost overruns and scope creep

Public sentiment turns away from development

Negotiations never end

Project is overly defined or restricted

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PPEA: Project Examples - Schools

Stafford County (2 schools)

City of Falls Church

Northumberland County

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City of Fredericksburg (2 schools) Frederick County

Chesterfield County

Cumberland County

City of Winchester

Warren County

Bedford County

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Project Examples

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Project Examples

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Praise for the PPEA

You have to do a lot of work up front, Francis said of the PPEA process.

We made adjustments as we went along. In the end, the project was early

and under bud et. - Bedford Count

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Both projects were completed on time, Lafayette opening in September 2005

and James Monroe HS in September 2006, within 26 months, for a

Guaranteed Maximum Price (GMP). Moreover, both have received design

awards from Virginia school organizations. City of Fredericksburg

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THE END

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