SAME Perspectives: Public-Private Partnerships

On Sept. 29, 2016, SAME hosted a CEO Round Table in Washington, D.C., to discuss industry and government perspectives on the viability of Public-Private Partnerships (P3s) as a tool to assist the federal government in funding infrastructure projects.

Given the unmet funding needs of military projects, the defense community and the private sector have discussed the use of P3s to reduce the backlog of neglected infrastructure requirements. Within the federal government, the Department of Defense (DOD) is often at the leading edge of executing new programs and implementing programmatic efficiencies.

But a major question remains as to whether P3s will be viable to solve the infrastructure problems of both DOD and the country.

Recommendations for Infrastructure Investment

America’s national security depends on an infrastructure that fuels our economy and assures the readiness of our military installations to protect Americans anywhere from any threat. The urgency to do something now requires a hard look at the barriers to fully leveraging P3s or any form of alternative financing. At the same time, we need to look forward and establish a long-term vision that assures the resilience of our infrastructure.

  • Establish a broad vision for the nation that will set the course for more effective use of government and private resources. We need to build it better, not merely repair to old standards. For instance, is now the time to invest in high-speed rail to connect America’s economic and population mega-regions?
  • Issue revised scoring guidance that encourages use of P3s while avoiding creating large, off-book obligations.
  • Issue revised guidance on the federal laws, procurement clauses, and regulations that are required in P3s. The goal should be to minimize the number of restrictions in P3s.
  • Develop training courses for the federal workforce in order to ensure that P3s are developed in a manner that will encourage private sector investment while ensuring the military obtains the facilities they require.
  • DOD and national leadership must champion the use of P3s. Among other tasks, they must change the culture of the military that is accustomed to using traditional processes to purchase construction. Finally, in some cases, changes to statute are required.
  • Identify projects across multiple categories (real property, inland waterways, lock and dam facilities) and require DOD and the Corps of Engineers to prioritize those projects based upon physical needs and national value and suitability for P3. Execute a set number of P3s across these categories and based upon the priorities identified.
  • Adopt a portfolio approach for leveraging private capital. Mitigation Banks have been an
    especially useful tool for furthering environmental projects, many of which could not have met mitigation requirements without the banks. The spirit of this tool can be replicated in a creative approach to resourcing infrastructure improvements.