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55Â Â A list of terms and definitions mentioned in the report follow. Alternative (also termed as âalternateâ in many sources) technical concepts (ATC)â A request by a proposer to modify a contract requirement specifically for that proposerâs use in gaining competitive benefit during the bidding or proposal process. An ATC must provide a solution that is equal to or better than the ownerâs base design requirements in the invitation for bid (IFB; for DBB) or request for proposal (RFP; for DB) document. (Actis et al. 2012). Availability paymentâThe Concessionaire/Developer will be reimbursed for financing pro- vided using a long-term payment scheme that assigns future public funding as it becomes available from the funding sources. Availability payment concessionâIn availability payment concessions, the sponsor (public owner) provides the private partner with availability payments to compensate it for designing, constructing, financing, operating, and maintaining the facility for a set concession period. During this time, the private partner receives predictable periodic payments. Availability payments may be used on non-tolled projects, or on tolled projects where the revenue may not be sufficient to cover the debt repayment, or in cases where the project sponsor wants to retain control of the toll risk (typically to keep toll rates minimized). Concessionaire/DeveloperâThe private entity in a P3 contract. Design-Bid-Build (DBB)ââThe âtraditionalâ project delivery approach where the owner com- missions a designer [or uses its own in-house design assets] to prepare drawings and specifica- tions under a design services contract, and separately contracts for construction, by engaging a Contractor through competitive bidding or negotiation.â (DBIA 2009). Design-Build (DB)ââThe system of contracting under which one entity performs both architecture/engineering and construction under a single contract with the owner.â (DBIA 2009). Design-Build Finance (DBF)âIn DBF, âthe responsibilities for designing, building, and financing are bundled together and transferred to private sector partners. There is a great deal of variety in DBF arrangements in the United States, and especially the degree to which finan- cial responsibilities are transferred to the private sector. One commonality that cuts across all DBF projects is that they are either partly or wholly financed by debt leveraging revenue streams dedicated to the projectâ (National Council for PublicâPrivate Partnerships 2017). Design-Build-Finance-Operate-Maintain (DBFOM)âA P3 contract structure that includes private financing and long-term operations and maintenance responsibilities on the part of the private partner. DeveloperâThe entity that furnishes the technical and financial assets to plan, design, build, and finance (operate and maintain as applicable) a highway project in a P3 project. Glossary
56 Performance Metrics for PublicâPrivate Partnerships Handback criteriaâProject condition criteria used at the conclusion of the P3 agreement to transfer the facility back to the agency. Hybrid concessionâA concession in which there is a mix of availability payment obligations on the part of the sponsor and revenue risk obligations on the part of the developer. These may be used on cases when the sponsor desires to transfer a certain level of project revenue risk to the developer but the revenue isnât necessarily strong enough to cover all applicable project costs. This hybrid concept can be for the length of the concession term or for specified periods based on certain project performance metrics. Performance measurementââThe process of quantifying the efficiency and effectiveness of actionâ (Neely et al. 2005). Performance metricsâMetrics used to measure the behavior, activities, and performance of a project. This could be in the form of data that measure required data within a range, allow- ing a basis to be formed supporting the achievement of overall project performance goals/ objectives. Post-construction servicesâProvision of labor, materials, equipment, and other services required to operate and maintain the transportation project after construction is completed. ProcurementâThe combined functions of purchasing, inventory control, traffic and trans- portation, receiving, inspection, storekeeping, and salvage and disposal operations (State of Minnesota 2011). âAll stages involved in the process of acquiring supplies or services, beginning with the determination of a need for supplies of services and ending with contract completion or closeoutâ (Shields 1998). Publicâprivate partnership (P3)âP3s are contractual agreements between public agencies and private entities that allow for greater private-sector participation and responsibility in the design, delivery, financing, operation, and maintenance of transportation improvements as compared with the traditional design-bid-build process that involves public sector financing, operations, and maintenance. (FHWA 2012). Request for proposals (RFP)ââA solicitation for offers under negotiation proceduresâ (Shields 1998). Request for qualifications (RFQ)ââThe document issued by the Owner prior to the RFP that typically: describes the project in enough detail to let potential proposers determine if they wish to compete; and forms the basis for requesting Qualifications Submissions in a âtwo- phaseâ or prequalification processâ (DBIA 2009). Revenue riskâThe Project Agreement assigns the risk for actual revenues generated through tolling or other revenue streams to the Concessionaire/Developer. Revenue risk concessionâWith toll concessions, tolls generated by the project are the primary revenue source for the P3 transaction. The private sector partner maintains the right to collect the revenues during the concession period but bears the risk that the project toll revenues may not be adequate to pay the underlying project loanâs financing costs, and operations and main- tenance costs and make a fair return on its investment. To protect the public sector interest in the event of robust revenue generation, most concession agreements include a revenue-sharing provision between the private partner and public sector if revenues exceed certain specified thresholds. SolicitationââThe process used to communicate procurement requirements and to request responses from interested vendors. A solicitation may be, but is not limited to a request for bid and request for proposal.â (State of Minnesota 2011). â(1) A document sent to prospective Contractors by a Government agency requesting submission of an offer, quote, or information. (2) The process of issuing a document requesting submission of an offer, quote, or information and obtaining responses.â (Shields 1998).