P3s – ODOT Public/Private Partnerships
Kegler Brown Construction Newsletter April 1, 2013
The funding of construction projects for public use through public-private partnerships (known as P3s) is increasing at all levels, including on federal and federally funded projects. Typically, the public entity will provide the land and authorize the private entity to design, build and frequently operate the resulting public work. In trying to maximize the incentives for the participation of private investment in P3 projects, federal agencies, as well as state and local governments using federal funds to help finance construction, try to minimize government “red tape.” The zeal to reduce “red tape” has damaging consequences, however, when it eliminates traditional requirements related to public procurement, such as the statutory payment protections for work performed, provided by the federal Miller Act and state and local so-called “little Miller Acts,” enacted by all the states, including Ohio.
The Ohio General Assembly has authorized ODOT to enter into P3s with private entities after soliciting proposals. The selection process may be based upon sealed bids or qualifications/best value. ODOT has been given rule-making authority to carry out the purposes of the P3 statutes at R.C. §5501.70-5501.83.
Those providing labor or material to a P3 project should not necessarily conclude that the work is protected by a payment bond in the usual public fashion. Further investigation is recommended on such projects. It is hoped that ODOT adopts a rule guaranteeing payment bond protection.