Creating and optimizing new forms of public-private partnerships in Seattle

Abstract

Seattle Public Utilities is pioneering a new form of public-private partnership in North America in the development of two new large water treatment plants. The Tolt and Cedar Treatment Plants, which provide drinking water for 1.3 million people, are being implemented using a design-build-operate (DBO) approach. This process has resulted in savings of 40% for the Tolt and 30% for the Cedar, relative to the estimated cost of implementing the projects using a conventional design-bid-build procurement with City operations for 25 years. In using the DBO approach, owners seek to optimize efficiency and the potential for innovation by conducting a competition to supply a bundled set of services including permitting, design, construction,and long-term operations. Benefits from this approach arise through design-build synergies, design-operate synergies, and through more focused competition than exists in the segmented design-bid-build model typically used. This paper will focus not only on the DBO approach and its resulting benefits, but perhaps more importantly on the critical issue of risk allocation. Finally, a discussion of our experience with these two premier projects will highlight the importance of a thoughtful procurement process and adherence to partnering approach to contract management in assuring the integrity of risk management principles.

Impact of funding on cost-time aspects of public and social buildings

“…The key question is whether the PPP model can really enable a more successful realisation of the public building construction program, as compared to the traditional model. Numerous studies have been conducted worldwide to answer this question (Table 1) [13][14][15][16][17][18][19][20][21][22]. In addition to public service buildings, these studies also focus on other infrastructure projects.…”

“…In case of PPP model, the client incurs costs during the use of the building and this in form of a fee that is dependent on the extent of services that have been agreed upon [2]. International research focusing on comparison of construction projects as related to procurement model used, reveals greater success of PPP projects in terms of costs, time, quality aspects and maintenance of buildings, when compared to the traditional model [13][14][15][16][17][18][19][20][21][22]. This research is also of interest to the Republic of Croatia, and the present paper is a contribution in this direction.…”

From design to operations: a process management life-cycle performance measurement system for Public-Private Partnerships

“…Table 1 presents a summary of key studies that have examined PPP performance measurement. 2002Cost Haskins et al (2002) Cost National Audit Office 2003Time and cost Amos 2004Cost, quality and technical efficiency Fitzgerald (2004) Cost Sachs et al (2005) Cost Blanc-Brude et al 2006Cost Anastasopoulos et al (2010) Cost Raisbeck et al (2010) Time and cost Anastasopoulos et al (2011) Cost Such studies have attempted to evaluate whether PPPs are capable of benefiting the input (cost) or output (time) of infrastructure projects. However, limited attention is being paid to PPP performance measurement from a "process" perspective, which is concerning with the project's life-cycle deliverables (e.g., initiation and planning, construction, operation and maintenance) (Yuan et al, 2009;Liu et al, 2015a).…”

How To Attain Value for Money

“…As discussed in further detail in Section 5 below, several studies have been undertaken for Australia, the United Kingdom and the United States to establish whether or not PPPs deliver improved value for money compared to traditional procurement (cf. Allen Consulting Group, 2007; Arthur Andersen and Enterprise LSE, 2000;Fitzgerald, 2004;Haskins, Gale and Kelly, 2002;Mott MacDonald, 2002;National Audit Office, 2003;and University of Melbourne, 2008). These studies compared the performance of PPPs to that of traditional infrastructure procurement, especially comparing the actual cost and time spent putting the project into operation.…”