Florida Governor Ron DeSantis recently signed a bill into law that will enable procurement authorities in Florida to accept unsolicited proposals for public-private partnerships (P3s) without undertaking a public bidding process. The new law goes into effect on July 1 and is expected to expedite implementation of infrastructure projects that are a priority for the State as well as local governments.
P3s have become a recognized model for the development and long-term operation of infrastructure assets across the United States. However, prior to launching a procurement process, governmental authorities must deploy often scarce human resources and invest time and money to establish the outcomes to be achieved as well as to determine whether the project is feasible. This requires defining the project scope, completing a cost/benefit analysis, defining minimum project requirements and construction, operation and maintenance standards, and assessing the implications of potential financing and tax arrangements, among other procurement related threshold issues. However, numerous budget constrained governmental authorities in need of reaping the benefits of a P3 procurement, such as accelerated project delivery, life cycle optimization and cost certainty as well as improved asset performance and service quality over the economic useful life of an infrastructure asset, are not able to make the upfront investment that a P3 delivery model demands.
The State of Florida recently took a step towards reversing this scenario. Florida's Public Private Partnership Law (Section 255.065, Florida Statutes) authorizes "responsible public entities" to receive and evaluate unsolicited proposals for qualifying projects. However, if the responsible public entity intends to enter into a comprehensive agreement for the project described in the unsolicited proposal, the responsible public entity must publish notice that the responsible public entity will accept other proposals for the same project for at least 21 but no more than 120 days, as the responsible public entity determines based on the complexity of the project and the public benefit to be gained by allowing a longer or shorter period (such period being a so-called "go shop" period).
A private party submitting an unsolicited proposal is the one making an upfront investment of capital, human resources and proprietary information to propose optimization of a project's specifications, funding plan and delivery approach and to demonstrate its feasibility and desirability to the public party. The unsolicited proposal process has generally been underutilized by private parties given the risk of a private party expending significant resources to shape a proposal only to lose the opportunity if a competitor's proposal for the same project is later selected at the subsequent, mandatory public bidding process required under Florida's Public Private Partnership Law.
Governor Ron DeSantis recently signed legislation into law that amends Florida's Public Private Partnership Law and enables responsible public entities to accept unsolicited proposals for P3s from private parties without subsequently undertaking such a public bidding process. The amended law goes into effect on July 1, 2024, thirteen years after Florida's Public Private Partnership Law originally came into effect.
The amended law authorizes responsible public entities to proceed with an unsolicited proposal without engaging in a public bidding process if the responsible public entity determines that the proposal is in the public's interest. To utilize this fast-track process for accepting unsolicited proposals, responsible public entities will be required to hold a public meeting to present the unsolicited proposal to the public for comment and subsequently hold a second public meeting to determine that such unsolicited proposal is in the public's interest.
A responsible public entity must consider all of the following factors in making such a determination:
- Benefits to the public1
- Financial structure of and economic efficiencies achieved by the proposal
- Qualifications and experience of the private entity that submitted the proposal and its ability to perform the project
- The project's compatibility with regional infrastructure plans
- Public comments submitted at the first meeting
In addition, the responsible public entity must publish a report in the Florida Administrative Register for at least seven days that includes the:
- public interest determination
- factors considered in making the public interest determination
- responsible public entity's findings with respect to each factor
The amended law will both reduce the government's upfront expenditure associated with public bidding processes and enable faster implementation of infrastructure projects in Florida by eliminating the second, time consuming mandatory "go shop" period before responsible public entities can accept an unsolicited proposal. The amended law will also incentivize the submission of more comprehensive unsolicited proposals, which could serve to further expedite project implementation.
1 If ownership will not be conveyed to the responsible public entity within ten years following public operations begins, such benefits must include benefits apart from ownership.
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