John F. Williams, SVP

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P3
PROJECT MANAGEMENT
John F. Williams, SVP National Director -
Governmental Consulting and Planning HDR
Engineering, Inc. New York City
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P3
P R O J E C T M A N A G E M E N T
Beginning with a Common Understanding

• Definitions
• Variations
• Dimensions

United Nations SU/SSC Training Course
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Source Hermann Scheer, author of A Solar
Manifesto
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P3
P R O J E C T M A N A G E M E N T
In the U.S. We Call It
P3
United Nations SU/SSC Training Course
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Source Hermann Scheer, author of A Solar
Manifesto
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P3
P R O J E C T M A N A G E M E N T
In Canada We Call it
3P
United Nations SU/SSC Training Course
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Source Hermann Scheer, author of A Solar
Manifesto
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P3
P R O J E C T M A N A G E M E N T
In Europe We Call It ...
PFI
United Nations SU/SSC Training Course
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Source Hermann Scheer, author of A Solar
Manifesto
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P3
P R O J E C T M A N A G E M E N T
What Do You Call It?
?
United Nations SU/SSC Training Course
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Source Hermann Scheer, author of A Solar
Manifesto
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P3
P R O J E C T M A N A G E M E N T
Different Acronyms Same Process With Many
Variations
United Nations SU/SSC Training Course
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Source Hermann Scheer, author of A Solar
Manifesto
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P3
P R O J E C T M A N A G E M E N T
P3 What is It?
A public-private partnership exists when public
sector agencies (federal, state, or local) join
with private sector entities (companies,
foundations, academic institutions or citizens)
and enter into a business relationship to attain
a commonly shared goal that also achieves
objectives of the individual partners.
United Nations SU/SSC Training Course
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Source Hermann Scheer, author of A Solar
Manifesto
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P3
P R O J E C T M A N A G E M E N T
Three Basic Dimensions of P3

• Although each is unique, all P3s include three
  basic characteristics
• shared goals
• shared resources (time, money, expertise,
  people)
• shared risks and benefits
• Without all three there is no reason to create or
  continue a partnership.

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United Nations SU/SSC Training Course
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Source Hermann Scheer, author of A Solar
Manifesto
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P3
P R O J E C T M A N A G E M E N T
Why?
Governments can bring private sector efficiency,
expertise and competitiveness into projects and
operations, while still being responsible for
public interest issues and ensuring delivery at
specified service levels. In short, P3 is a
tool that can help governments meet demands for
the development of modern and efficient
facilities, infrastructure and services while
providing value for taxpayers.
United Nations SU/SSC Training Course
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Source Hermann Scheer, author of A Solar
Manifesto
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P3
P R O J E C T M A N A G E M E N T
Getting Started

• How do you create one?
• How do you implement one?
• A Public entitys perspective of finding and
  contracting with the best private sector partner.

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P3
P R O J E C T M A N A G E M E N T
How Is It Done?
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P3PMSM Process
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P3
P R O J E C T M A N A G E M E N T
Two Major Steps

• Crafting the Partnership
• Implementing the Partnership

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P3
P R O J E C T M A N A G E M E N T
Two Steps Down to Six Phases

• Genesis
• Feasibility
• Plan Test

• Procure
• Design Build
• Operate Maintain

OPERATE MAINTAIN
PLAN TEST
DESIGN BUILD
GENESIS
PROCURE
FEASIBILITY
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P3
P R O J E C T M A N A G E M E N T
Six Phases to 18 Sub Phases
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P3
P R O J E C T M A N A G E M E N T
18 Phases to 40 Milestones
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P3
P R O J E C T M A N A G E M E N T
40 Milestones to 100s of tasks
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P3
P R O J E C T M A N A G E M E N T
P3 Project Management A Process Linked to
Critical Path Scheduling
IMPLEMENTATION
CRAFT
OPERATE
DEVELOP
PROCURE
PLAN TEST
FEASIBILITY
GENESIS
Pre-Qualify
Definition
Rationale
Pro Forma
Master Plan
Market Research
Economic Analysis
Confirm Demand
Program Budget Schedule
Select Negotiate
Design
Maintain
Delivery/ Deal Structure
Risk Assess- ment
Risk/Deal Structure
Start-up
Disposal
Build
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P3
P R O J E C T M A N A G E M E N T
Practical Guide for P3 Program Management
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P3
P R O J E C T M A N A G E M E N T
Six Distinct Phases
Genesis Whats the need, whats driving the
need, and is there a need for a Public/Private
Partnership?
GENESIS
Feasibility Is a Public/Private Partnership
feasible, not only financially, but practically?
Can it be done?
FEASIBILITY
Plan Test What is the best way to complete
the project? Has the plan been thoroughly tested
to assess market demand, public and stakeholder
feedback, economics and potential fatal flaws
that could derail the project?
PLAN TEST
Procure How do you choose and contract with the
best-value private partner? Whats the best
method and what do current statutes allow?
PROCURE
Implement How can the project best be
delivered financed, designed, built, operated
and maintained?
IMPLEMENT
Operations Is the private sector partner
fulfilling its obligations, and is it necessary
to negotiate changes to the contract? Is
everything running smoothly?
OPERATE
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P3
P R O J E C T M A N A G E M E N T
Genesis Whats the Need?

• Will a P3 Satisfy It?
• Kick-off and Vision Overview
• Data Collection and Analysis
• On-site Tours/Condition Survey and Analysis
• Vision Refinement
• Objectives Setting

United Nations SU/SSC Training Course
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P3
P R O J E C T M A N A G E M E N T
Genesis Preliminary Project Definition

• Preliminary Test Plan
• Preliminary Risk Analysis (RAP)
• Development Options/Frame of Reference (FoR)

United Nations SU/SSC Training Course
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P3
P R O J E C T M A N A G E M E N T
Genesis Preliminary Feasibility Check/Validation

• Fatal Flaws
• Development Options Testing
• Process Map and Strategy
• Master Schedule

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P3
P R O J E C T M A N A G E M E N T
Genesis Phase 1 Process Map
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P3
P R O J E C T M A N A G E M E N T
Feasibility Can It Be Done?

• Is a P3 Practical?
• Call for Ideas
• Request for Expression of Interest
• Case Study Tours
• Environmental and Geotechnical Analysis
• Infrastructure Analysis

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P3
P R O J E C T M A N A G E M E N T
Feasibility Return on Investment

• Master Development Budget
• Preliminary Development Pro-Forma
• Market Focused Interviews
• Input Workshops
• Economic Analysis
• RAP Session

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P3
P R O J E C T M A N A G E M E N T
Feasibility Risk

• P3 Delivery Risk Management Workshop
• Final Test Plan
• Fatal Flaw Update
• Sales and Communications Strategy
• Risk-Allocation, Procurement Strategy Delivery
  Methodology
• Commercial Terms Contract Principles

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P3
P R O J E C T M A N A G E M E N T
Feasibility Phase 2 Process Map
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P3
P R O J E C T M A N A G E M E N T
Plan and Test

• Market Based Feedback
• Are Concepts Sufficient?
• Constant Check for Fatal Flaws
• Is the Project Real?
• Feedback Based Adjustments

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P3
P R O J E C T M A N A G E M E N T
Plan and Test Is There a Sound Business Case?
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P3
P R O J E C T M A N A G E M E N T
Plan and Test - Phase 3 Process Map
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P3
P R O J E C T M A N A G E M E N T
Procurement and Contracting

• Delivery/Deal Structure
• Pre-Qualify
• Select Negotiate

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United Nations SU/SSC Training Course
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P3
P R O J E C T M A N A G E M E N T
Structural Framework

• A Matter of Balance
• Financing
• Ownership/Occupancy
• Project Delivery
• Procurement Approach
• Contracting Methodology

• Structure Drivers
• Project Goals
• Public Entities Characteristics
• Marketplace Realities

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P3
P R O J E C T M A N A G E M E N T
Ownership/Occupancy

• Direct Ownership
• Traditional Lease
• Build-to-suit Lease
• Lease/Purchase (fixed or variable)
• Synthetic Lease

United Nations SU/SSC Training Course
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P3
P R O J E C T M A N A G E M E N T
Financing

• Cash Purchase
• Debt Financing (bonds/mortgage)
• Leasing (many variations)
• Lease/purchase

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P3
P R O J E C T M A N A G E M E N T
Project Delivery Mainstream

• Traditional (design-bid-build)
• Multi-prime
• Construction Management at Risk
• Design-Build

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United Nations SU/SSC Training Course
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P3
P R O J E C T M A N A G E M E N T
Project Delivery Variations on a Theme

• Finance-Design-Build (turnkey)
• Finance-Design-Build-Leaseback (typical)
• Finance-Design-Build-Operate
• Finance-Design-Build-Operate Maintain
• Sale-Leaseback (user develops)
• Build-Operate
• Build-Operate-Transfer
• Build-Own-Operate-Transfer

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P3
P R O J E C T M A N A G E M E N T
Project Delivery Many Acronyms

• DBB
• DB
• FDB or DBF
• DBO

• DBOM
• BO
• BOT
• BOOT

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P3
P R O J E C T M A N A G E M E N T
Procurement Approach

• Price
• A Key Factor?
• The Only Factor?
• How Much Can Be Done Before Price is Set?

• Selection
• Low-Bid
• Weighed Criteria
• Equivalent Design/Lower-Bid
• Fixed Budget/Best Design
• Meets Criteria/Low Bid
• Best Value (adjusted low bid, weighted
  criteria including price)

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P3
P R O J E C T M A N A G E M E N T
Best Value Weighted Criteria
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P3
P R O J E C T M A N A G E M E N T
Best Value Adjusted Low-Bid
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P3
P R O J E C T M A N A G E M E N T
Procurement Approach

• Sole Source
• RFP
• RFQ/RFP (pre-qualify, then select)
• RFEOI/RFQ/RFP (determine interest, pre-qualify,
  select)
• Contingent Designation and Simultaneous
  Negotiations

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P3
P R O J E C T M A N A G E M E N T
Contract Methods

• Lump Sum
• Cost Plus
• Cost Plus with GMP
• Unit Price
• Bonus/Merit Awards

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P3
P R O J E C T M A N A G E M E N T
Procurement Contracting Phase 4 Process Map
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P3
P R O J E C T M A N A G E M E N T
Implementation Phase 5

• Design Compliance
• Construction Oversight
• Commissioning and Administration

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United Nations SU/SSC Training Course
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P3
P R O J E C T M A N A G E M E N T
Operations - Phase 6

• Startup
• Monitoring
• Assessment
• Enhancement
• Contract Modifications
• Contract Renegotiations

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United Nations SU/SSC Training Course
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P3
P R O J E C T M A N A G E M E N T
P3 Process Players

• Sponsors/Users
• Finance/Accounting
• Legal
• Owner/Developer
• Program Manager

• Brokerage/Marketing
• Design/Engineering
• Construction
• Relocation
• Property/Facility Management

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P3
P R O J E C T M A N A G E M E N T
P3 Process Responsibilities
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P3
P R O J E C T M A N A G E M E N T
P3 Program Management Summary
OPERATE
IMPLEMENT
PROCURE
PLAN TEST
FEASIBILITY
GENESIS

• Risk Assessment/ Allocation
• Delivery Methodology
• Commercial Terms
• /Contract Principles
• Deal Structuring
• Concept Design/ Performance Specs
• Procurement Documents
• Vendor Pre- Qualification
• Vendor Proposal Evaluation
• Contract Negotiations

• Startup
• Monitoring
• Assessment
• Enhancement
• Contract Mods
• Contract Renegotiations

• Objectives Register
• Alternatives Index
• Prelim Schedule/ Budget
• Prelim Economic/ Financial Analysis
• Qualitative Analysis
• Fatal Flaw Analysis
• Process Map Strategy
• Feasibility Report/ Project Approval

• Asset/System Evaluation
• Site Selection/ Analysis
• Environmental/ Permitting Analysis
• Final Project Definition
• Master Schedule/ Budget
• Political Climate Assessment
• Procurement Strategy
• Prelim Business Plan
• Public/Vendor Outreach Stakeholder
  Consultation
• Business Plan

• Design Compliance
• Construction Oversight
• Commissioning Administration

• Prelim Project Definition
• Seed Funding

United Nations SU/SSC Training Course
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P3
PROJECT MANAGEMENT
John F. Williams, SVP National Director -
Governmental Consulting and Planning HDR
Engineering, Inc. New York City