Virginia’s First Report on Streamlining the Public-Private Partnership Process

Governor Bob McDonnell in his campaign for Governor emphasized the importance of public private partnerships (P3’s) particularly in transportation. As Governor, he requested a review of the public-private partnership process in Virginia under the Virginia’s statute, the Public Private Partnership Act (PPTA) of 1995. The legislation is the longest standing and consistent legislation in the country. (PPTA in Virginia is the same as public-private partnership (P3) in the rest of the world.)

I was Deputy Secretary of Transportation in Virginia, when we wrote the legislation and began the implementation on July 1, 1995. The legislation had several innovative ideas at the time including, 1) using the PPTA procurement process for not only capital projects but for maintenance and operations as well, 2) allowing for both solicited and unsolicited proposals, (we thought the private sector had better ideas than us bureaucrats) and 3) a procurement process that could be used for all modes of transportation.

The KPMG report is a good review of the process and has good suggestions to move PPTA projects along faster. Over the years, the process in Virginia may have become “tired.”

One of the consultant’s suggestions is to establish an office to be responsible for PPTA projects as well as being the champion to bring the PPTA projects to fruition. This makes great sense. Without making excuses, in 1995 we did not establish that office because we had no idea if we would receive or develop even one proposal. My usual characterization is “1995 was the stone age of public-private partnerships.” Today’s market is much different and more robust. I am pleased to see this as a recommendation and hopefully the process will indeed be streamlined. And staffing with the right advocates will be important.

Virginia has a 15 year history of successful public-private transportation projects. I agree that the PPTA projects should be “mainstreamed” however, I would be cautious about over bureaucratizing the process. All of the projects that have been done to date in Virginia have been unsolicited. Streamlining the “unsolicited” process may help Virginia to move them along quickly and continue their record.

Adding the PPTA as an option to the considerations for project solicitation process will help Virginia explore the great opportunity the Commonwealth has with its legislation. While it will not replace the normal procurement process for the “regular” projects it can be an added tool in the tool box to bring some new ideas, strategies, and funding options to the table.

The report is a good first step in a review of Virginia’s process. While an up-dating of the process is probably needed, Virginia still has a great track record. I would recommend that the necessary changes be made for streamlining and not over bureaucratize any part of the process.