October 29, 2013 · 1:00 PM
This past summer, the N.C. General Assembly passed and Governor McCrory signed into law groundbreaking legislation authorizing the use of design-build, design-build bridging and public-private partnerships in the delivery and financing of public construction projects in the state. The legislation is sure to alter North Carolina’s public procurement landscape drastically and influence the complexion of the state’s construction industry, particularly at the design and prime contractor levels.
Last Wednesday, October 23, I attended an excellent panel discussion covering key aspects of House Bill 857 (“HB 857”) sponsored by Carolinas AGC Foundation, AIA North Carolina (@AIA_NC), the Professional Engineers of NC (@ProfEngNC), United Minority Contractors of North Carolina and the American Council of Engineering Companies of North Carolina. Based on that discussion and my own review and analysis of the legislation, here are my top ten observations:
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Filed under Feature story, Local law, policy & news, Payment Bonds, Project Delivery Systems, Public Bidding, State law, policy & news
Tagged as alternative project delivery, alternative project financing, construction surety, contract surety bonds, contractor prequalification, contractor prequalification nc, contractor prequalification north carolina, design-bid-build, design-build, design-build bridging, hard bid, Mini-Brooks Act, nc public construction, nc public works, payment bonds, performance bonds, project delivery systems, public-private partnerships, Quality-Based Selection, surety bonds
October 15, 2013 · 9:45 AM
1. Now that North Carolina lawmakers have embraced public-private partnerships as a project delivery option for public works, what size projects might we see developed via P3? Well, if the $4.8 billion (yes, that’s billion, with a “b”) expansion of I-35E in Texas is any indication, the sky’s the limit. Here’s AGC SmartBrief editor Jennifer Hicks’ tweet about the big news from the Lone Star State:
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Filed under Bid Protests, Federal case law, Federal law, policy & news, Federal Procurement, Highway Contracts, Project Delivery Systems
Tagged as federal bid protests, forum selection clauses, hospitality industry North Carolina, hotel development Raleigh, hotel development Triangle, project delivery systems, public-private partnerships
October 7, 2013 · 9:00 AM
Alright, faithful readers, it’s time to launch a new feature here at N.C. Construction Law, Policy & News, a little something I’m christening the “Construction Tweets of the Week.”
The construction industry at all levels — local, state and national — enjoys an increasingly vibrant presence on Twitter. I aim to showcase some of the voices that left an impression on me in the preceding week, as well as to facilitate ongoing discussion, whether in the Comments section of this blog and/or in the Twitterverse beyond.
You’ll note the tweets embedded here are fully interactive, with hotlinks to each Tweep’s profile, linked content and “Follow” button. The reply, retweet and “favorite” functions are also fully operational. Click early, click often, and become a part of the Construction Twitterati.
Without further ado, here are the Construction Tweets of the Week for the week ending Saturday, October 5, 2013:
1. Dave Simpson of CarolinasAGC blasted out this tweet about six not-to-be-missed, CAGC-sponsored seminars concerning the North Carolina Legislature’s recent adoption of the design-build and public-private partnership (“P3”) project delivery systems for public projects in North Carolina:
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December 28, 2012 · 10:19 AM
I recently came across this blog post from The Council of State Governments’ “Knowledge Center” blog. The post forecasts the 2013 transportation funding challenges and priorities in 20 different states, North Carolina included. Here’s what the post had to say about what might be expected once former Charlotte Mayor Pat McCrory (R) becomes our governor in January:
The Associated Press recently looked at where incoming Gov. Pat McCrory (the longtime Charlotte Mayor) stands on transportation issues: “Don’t punish cities that must spend lots of money improving interstates, he says. Develop decades-long construction plans. Keep politics out of funding road projects and work with the private sector. And don’t be afraid to try something risky, like the Republican did in 1998 by lobbying for a referendum by voters that raised the local sales tax to help build Charlotte’s first light rail line.” Transportation advocates in the state are reportedly encouraged that the governor-elect, who championed transportation’s ability to improve the economy as Mayor of Charlotte, could endorse more sustainable transportation revenue sources and win support from legislators. But, as a Business Journal article pointed out earlier this fall, North Carolina’s gas tax is already among the highest in the nation and while the state has turned to tolling to help finance some projects, they have faced challenges with a couple of toll road projects.
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Filed under State law, policy & news
Tagged as General Assembly infrastructure policy, Governor McCrory, infrastructure, infrastructure improvements, NC construction attorney, NC construction law, NC construction lawyer, North Carolina infrastructure, P3, public-private partnerships, raleigh construction attorney, raleigh construction law
April 5, 2012 · 9:24 AM
Image by digitalart via FreeDigitalPhotos.net
I commend to your reading the current issue of NC Construction News, which includes this feature article on public-private partnerships (“PPPs” or “P3s”). As those who regularly follow this blog know, I’ve dedicated a fair amount of cyber-ink recently to the utilization of P3s in the construction of public facilities (particularly highways); after reading the linked article, my thinking on the subject has coalesced around this admittedly simplistic notion: P3s have enormous potential for good, for bad and for ugly, and it likely will be up to the General Assembly to determine which of those adjectives ultimately will apply to this unique project financing and delivery system.
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Filed under Project Delivery Systems, State law, policy & news
Tagged as American Society of Civil Engineers Report Card, American Subcontractors Association public-private partnerships, ASCE Report Card, cashflow is the lifeblood of construction, competitive bidding, Dave Simpson, financing infrastructure improvements, General Assembly infrastructure policy, infrastructure improvements, NC infrastructure needs, NC mechanics liens, NC payment bonds, North Carolina infrastructure, North Carolina infrastructure needs, P3s, pay for highways, payment assurance, PPP's, public bidding, public-private partnerships, sealed bidding, unsolicited bids
February 21, 2012 · 7:16 AM
A couple of my blog posts have mentioned the use of public-private partnerships (“PPPs”) as an alternative source of highway construction financing, including my February 6, 2012 story about NCDOT’s plans to widen I-95 (by the way, last Friday, the Federal Highway Administration gave tentative approval to tolling on I-95).
It remains unclear whether any private money might be utilized to finance the I-95 widening project. What is clear is that PPPs present a host of legal issues that all project participants (and their attorneys) would need to wrestle with should the NCDOT seek private money for I-95, or any other state highway project.
The purpose of this blawg post is to supply three resources for enhancing our collective understanding of the practical implications of PPP financing. A good place to start is this blog post from the blawg “Best Practices Construction Law,” authored by attorney Matthew J. DeVries, who practices in Virginia and Tennessee. Mr. DeVries links to the second resource you should consider, and that’s the AGC’s White Paper on Public-Private Partnerships. Contractors may want to jump to page 13 of the White Paper, which includes a chart summarizing how a PPP could shift typical risk allocations:
For additional depth, consult the National Cooperative Highway Research Program’s Major Legal Issues for Highway Public-Private Partnerships. It presents several representative case studies and concludes that several successful projects have given PPP participants the flexibility to select the optimal project delivery system for their particular project. Such flexibility, of course, could mean procurement outside the sealed bid process.
I’ll be keeping an eye on subsequent I-95 developments. Should the NCDOT begin exploring PPPs, it is hoped that these three resources will provide the contracting community with a foundation for understanding the legal ramifications of this alternative highway financing framework.
Filed under Feature story, Local law, policy & news, Project Delivery Systems, Projects of Interest, State law, policy & news
Tagged as AGC, alternative project financing, construction contract risk allocation, Highway construction, I-95 widening, NCDOT, PPP's, public bid, public-private partnerships
February 6, 2012 · 12:39 PM
As reported in the Fayetteville Observer over the weekend, the N.C. Department of Transportation (“NCDOT”) is moving forward with its $4.4 billion (yep, that’s “billion” with a “b”) plan to widen I-95 from four to six lanes through implementation of tolling on this critical 182-mile transportation corridor.
Why tolls? To quote the story:
The reason is money. [NCDOT] figures show the state has roughly $45 billion in projects to complete by 2020. But the state expects to have only about $9 billion to spend on those projects. The funding gap would mean many key projects would have to be postponed for years.
To the extent current conditions, anticipated usage and a comparison of the available alternatives dictate that lane expansion is necessary — issues I have not researched thoroughly and therefore cannot opine upon — I can understand why NCDOT officials are seeking federal approval for converting I-95 to a toll road. The divisive political environment pervading our nation’s capital virtually guarantees that no new federal infrastructure investment, beyond what the state is already receiving year-in and year-out on average, can be expected anytime soon. That means end-users, and not taxpayers, are going to have to foot the bill if this ambitious widening project is to move forward now.
However, with the price of 87-octane currently hovering around $3.70 per gallon, I suspect the public’s reaction to the tolling plan could be vocally negative. We’ll know shortly whether these suspicions are confirmed, as the NCDOT is conducting informal hearings up and down the corridor between tomorrow and February 27. If you’re interested in attending, a complete calendar of the hearings can be found here. And for more information, including a chance to review the “I-95 Corridor Planning & Finance Study Environmental Assessment” recently authored by NCDOT’s consultants, head on over to www.driving95.com.
What’s my view on this as a construction law matter, as opposed to a public policy and/or political matter? Well, I’ve spent a bit of time perusing those portions of the Study related to the financing of the project, keeping in mind that other states have utilized public-private partnerships (“PPPs”) in the design and construction of new toll facilities. Under a PPP, one or more private partners invests up-front in the design and construction of the infrastructure in question, and is subsequently reimbursed though (and profits by) tolling. As best as I can tell, however, the Study does not indicate whether NCDOT is still considering the PPP option.
I’m curious about this angle to the story, since PPP’s introduce a host of issues of interest to construction law attorneys: Would the construction contract(s) be awarded to the “lowest responsible bidder” within the statutory sealed bid framework, or by some other competitive or negotiated process? How transparent would the procurement process be? Would statutory bonding requirements for public projects apply? What project-level communications challenges might be created through the involvement of a private partner? Would the government, its private partner or both have authority to terminate a contractor for cause? How might typical contractual risk allocations be shifted? I’m sure my fellow construction law practitioners could suggest a score of others.
I’ll be keeping my eyes on both the PPP-angle to this story and other developments, so please stay tuned.
Filed under Events, Feature story, Local law, policy & news, State law, policy & news
Tagged as competitive bidding, highway procurement, I-95 corridor, I-95 toll road, I-95 widening, N.C. Department of Transportation, NCDOT, North Carolina construction law attorney, performance bonds for highway projects, PPP's, public-private partnerships