Performance Metrics for Public–Private Partnerships (2021)

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51   This chapter includes a summary of the overall findings and the gaps in the body of knowl- edge identified in the synthesis. Findings The following findings come as a result of the analyses detailed in the previous chapters. They are as follows: • Of the P3 projects surveyed, DBF and DBFOM were the most commonly used types. • Most of the current P3 programs utilize availability payment financing. • The survey respondents perceived their current set of metrics to be effective. One of the pub- lished lessons learned indicated that agencies look outside their state to determine whether the expectations portrayed in the metrics are indeed realistic. • Challenges faced by survey respondents in implementing performance metrics fell into two categories: quantifying asset performance and program implementation. Gaps in the Body of Knowledge The study found little existing research on the effectiveness of performance metrics in P3 projects. Therefore, a significant gap in the body of knowledge remains to be filled. The gap exists in three primary areas. The first gap is related to the effectiveness of performance metrics on an individual basis. The challenge of the “quantifying asset performance” conclusion cited above validates the gap. The literature review determined that an effective metric is focused on outcomes rather than merely outputs. At the theoretical level, this seems like a simple difference. However, in the world of complex megaprojects, the sheer magnitude of the requirement to develop and deploy metrics that cover everything from administrative procedures to reasonable residual lives for a plethora of asset classes is daunting. Therefore, practical guidance is needed to provide for differentiating between an output and an outcome. The effort would likely consist of sampling a variety of performance metrics for common elements of a given asset, like pave- ments or incident response, from a variety of P3 projects. The actual performance of each of these would then be measured against the standards found in the concession agreement and the actual payment adjustments to provide a measure of efficacy. Simultaneously, both the agency and Concessionaire would be surveyed to furnish perceptional data that could be compared to the quantitative data to identify trends and potential disconnects between actual and perceived effectiveness. The second gap regards the effectiveness of handback criteria. Because few projects have reached a point where the contractual handback criteria have been tested, it will be more difficult C H A P T E R 5 Summary of Findings

52 Performance Metrics for Public–Private Partnerships to conduct an empirical study to produce the necessary guidance. However, as was seen in the PennDOT case, various features of work in that program have different handback periods. Therefore, it might be possible to empirically study the shorter-termed features. As previously cited, the World Bank has used BOT delivery to build toll roads in developing countries for several decades (World Bank Group 2018). These development agreements are generally only 5 to 15 years long and contain a robust set of handback criteria that has been tested. The third gap is related to the lack of definitive guidance on computing incentive and dis- incentive (I/D) amounts for P3 projects. Although there has been past research on the overall topic, it has focused on the design and construction phase of a project’s life cycle and did not extend beyond construction completion. One well-documented benefit of P3 is its life-cycle contract that imposes a fiduciary responsibility on the Concessionaire for the performance of the designed and constructed product after it is put in service. As a result, there is a need to tie the O&M period to the preconstruction and construction phases in a manner that encourages life-cycle decision making. I/D schemes have proven to be quite effective in non-P3 projects and are in use on most P3 projects. Thus, research to determine the manner in which non-P3 I/D schemes can be better adapted to P3 projects would add value to the body of knowledge.