Public Private Partnerships

Typically, a private sector consortium forms a special company called a "special purpose vehicle" (SPV) to build and maintain an asset. The consortium is usually made up of a building contractor, a maintenance company and a bank lender. It is the SPV that signs the contract with the government and with subcontractors to build the facility and then maintain it. One form of transportation P3 would be a highway, bridge or transit facility that was financed and constructed by a private developer and then leased to a transportation authority that would would operate and maintain the facility. A more sophisticated model would see the same facility financed, constructed and then operated and maintained by the private sector SPV. Financing, operating and maintenance costs are repaid over the life of the agreement [typically 30 years] through system tolls or fares or a shadow toll.
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Concession Agreement

In the case of a public service concession, a private company enters into an agreement with the government to have the exclusive right to operate, maintain and carry out investment in a public utility (such as a transportation system) for a given number of years.
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Request for Proposal

A Request for Proposal (RFP) is an invitation for suppliers, through a bidding process, to submit a proposal on a specific product or service. An RFP typically involves more than the price. Other requested information may include basic corporate information and history, financial information, technical capability (used on major procurements of services, where the item has not previously been made or where the requirement could be met by varying technical means), product information such as stock availability and estimated completion period, and customer references that can be checked to determine a company's suitability.
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Types of Project Delivery Methods

Common project delivery methods include:

Design-Bid-Build (DBB) or Design-Award-Build (DAB)

An owner, in consultation with an architect, creates documents consisting of a set of blueprints and a detailed specification. Bids are solicited from contractors based on these documents; a contract is then awarded to the lowest responsive and responsible bidder.

DBB with Construction Management (DBB with CM)

With partially completed contract documents, an owner will hire a construction manager to act as an agent. As substantial portions of the documents are completed, the construction manager will solicit bids from suitable subcontractors. This allows construction to proceed more quickly and allows the owner to share some of the risk inherent in the project with the construction manager.

Design-Build (DB) or Design-Construct (DC)

An owner develops a conceptual plan for a project and then solicits bids from joint ventures of architects and builders for the design and construction of the project.

Design-Build-Operate-Maintain (DBOM)

DBOM takes DB one step further by including the operations and maintenance of the completed project in the same original contract.

Build-Operate-Transfer (BOT)

BOT represents complete integration of the project delivery: the same contract governs the design, construction, operations, maintenance and financing of the project. After some concessionary period, the facility is transferred back to the owner.
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