P3: The Importance of Autonomy

I had started out to write yet another Article about public-private-partnerships (aka PPP or P3). In aid thereof, I put together the infographic above which lays out in the most generic way possible the P3 ecosystem. In trying to draft the article itself, however, I became challenged as to what new and / or critical idea I could convey that I had not already done during the now more than two decades of conference presentations, industry publications, white papers, blog posts, grad school theses (yes, that long ago!) wherein I have been discussing this topic. In the end, I decided that my key message here really needed to come down to one specific concept: Autonomy.

In this context I am, for once, not talking about driverless vehicles. Rather I refer to the need for the P3 to exist to the largest extent possible as a separate legal entity (coining the acronym “SLE” at least for purposes of this discussion). This was a topic that some of us who attended TRB back in January ended up raising in a few sessions around partnerships and governance. Creating an SLE allows for more rapid decision making and greater focus, and to at least some extent isolates the P3 from rapidly changing forces, especially in non-parliamentary government ecosystems like the United States where fixed terms for legislative and executive branches allows what might be best termed a clearly definable “run time” to accomplish the P3s discrete objectives.

Towards that end there is a requirement for specific commitment on both sides of the transaction in essentially the same manner that governmental and commercial interests already collaborate with each other in their separate silos—because only in doing so will the necessary binding commitment be achieved.

It is also important going forward that both industry and government properly identify legitimate P3s as such. All too often what have been routine "on call" or other indefinite delivery - indefinite quantity (IDIQ) type procurements have been branded from one or both sides of the table as public-private partnerships as part of a marketing strategy to drive current quarter sales by vendors and / or in support of a near-term political agenda versus being indicative of a sustained commitment to work together with commensurate mutual investment. This level of clear recognition by investors and the public will be essential in their support of the differentiated value that true, standalone, P3s can offer. 

By whatever means achieved, P3 cannot be achieved on the basis of rhetoric, even at the highest level of government and industry. Neither can it be achieved by unilateral action even from the top down. By whatever means, legislative action, executive order, corporate board ratification, etc., the commitments must be solid, binding, multilateral and legally enforceable in the courts. Of course, lining up this level of consensus is hardly easy, but in closing I would suggest that the continued cost of not doing so socially, politically and, yes, in terms of real money, has already far exceeded the price of the solution. 

NOTE: This brief article was subsequently developed into a feature for the August 2017 North American edition of Thinking Highways, "P3: Cutting the Tape." The interactive online version of the article may be found here and a printable excerpt is also available on Slideshare.

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