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Monday, August 18, 2008

Public Private Partnerships -- The new frontier

The National Council for Public-Private Partnerships holds events often in co-operation with public agencies to expand the scope and awareness of PPP opportunities.

This morning, I will be writing a comprehensive article for The SMPS Marketer about the marketing challenges in winning participation in Public-Private Partnerships. PPPs offer AEC businesses some exciting opportunities -- and truly significant challenges -- as they change the dynamics of how you achieve and win work. Notably, I've learned, in U.S. states where PPPs are actively encouraged, contractors, developers, professional consultants, and financiers can essentially design their own projects and, if they are approved by the relevant public authorities, create their own opportunities.

The obvious advantage of this process is that the marketing process becomes proactive rather than reactive -- instead of hoping for a project to materialize, and then (like lemmings) rushing to bid the work and hoping you are the 'lucky' low bidder, you can actually go about creating value and business for your business.

The other side of the coin, of course, is that you can risk significant resources and time in bid preparation and project development -- perhaps $25,000 or more per project -- before finding that you aren't going to get anywhere. And the rules of the game for PPP vary from encouraging the process (in Virginia) to virtually banning it (in Arkansas).

Richard Norment, Executive Director of the National Council of Public Private Partnerships told me yesterday that PPPs have been around for eons, but the recent explosion in interest relates to the fact that, in some markets and states, accessibility and opportunity for PPP initiatives have increased at the same time as the other model for local/regional public project financing --tax exempt bonds -- has become more difficult. I've talked as well with several SMPS members who have discovered the opportunities and challenges of PPP initiatives -- these will be reported in the upcoming article.

Norment told me there is no simple, one size fits all model for PPP participation, and no centralized database or resource service outlining where and how to access PPP information. He suggested if you are interested in PPP opportunities, you should check with your local governing authorities. The consensus is, even where unsolicited PPPs are possible and even encouraged, it is helpful to have your ear to the ground and healthy relationships with local governing officials, as they can disapprove your proposal or, in many cases, post it publicly and you will find a competitor 'steals' your initiative -- one which had the good relationships with the local authorities in the first place.

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