Exploring the Growth of Public-Private Partnerships by Examining Enabling Legislation

With an estimated 10-year funding gap of $2-trillion required to repair and maintain U.S. infrastructure, governing agencies are forced to explore alternative contracting approaches to the traditional, high first-cost method of design-bid-build (DBB). One such approach is the public-private partnership (P3). While not new in concept, P3s facilitate a shared risk and reward environment that removes the initial financial burden of capital improvement from the governing agency. This arrangement encourages the private sector to develop public projects by providing long-term profit potential over the operational life of the project. However, most alternative contracting approaches, including P3s, are difficult to procure and more susceptible to problems and failures due to a lack of established laws and procedures. This paper reviews and compares state and federal laws that helped mold the current adoption of transportation related P3 in the U.S., from its initial enabling legislation to present day usage at the federal level. The growth of state legislation is examined both from the perspective of allowable P3 project types and the relative value of work put in-place by P3 contracts over time. By considering a time component, we review the directionality of federal legislation and how project initiation is affected. This paper recognizes the benefits of enabling legislation for P3s that have led to its current status in the U.S. today and provides direction regarding the driving force behind P3 policy change for future growth in the transportation industry.