A trend to watch in 2010
by Mary Scott Nabers, CEO of Strategic Partnerships, Inc.
As we watch what is happening throughout the nation, one thing is clear. There will be more P3s in the future.
A P3 is a contractual agreement between a public agency and a private sector entity. These engagements combine the skills and assets of both parties to reach objectives without a large cash outlay. P3s are different from privatization primarily because of the level of public control and oversight.
There are many advantages. A P3 offers the following benefits:
- Combines strengths of both parties
- Reduces risk
- Lessens capital outlay
- Improves efficiencies
- Allows for quicker completion of the project
- Better environmental compliance
- Mutual rewards
Many government contractors are approaching governmental entities with unsolicited P3 proposals. Such proposals must be presented with a detailed business plan, a guarantee of very little or no risk to the public entity and an outline of what would be expected by both parties.
P3s are often championed by elected officials and there are examples of extremely popular and highly successful P3s throughout the country. Success is almost always a result of contractual agreements that have clearly written policies, clear benefit and risks statements, strong leadership and commitments to quality from both parties.
The types of projects that have qualified best as P3s to date have involved transportation, public works and/or construction. However, many governmental entities now are looking at projects related to technology consolidation, security systems and constituent outreach efforts.
Governmental organizations choose partners carefully. They look closely at past experience, financial stability, references and shared business values. Private sector firms also search for governmental entities where there is a total commitment at the executive level, a mandate that the public can embrace and the assurance and a staff buy-in for the project. Peer relationships should be forged around common values and objectives. Neither side wants to find themselves working with a partner that is less than enthusiastic about the project or the outcome. P3s are far too visible to run any risk of failure.
This is an interesting trend to watch and one expected to become even more attractive in the months ahead.
Mary Scott Nabers is president and CEO of Strategic Partnerships, Inc., a 15-year-old procurement consulting and procurement research firm headquartered in Austin, Texas.
