Transit Public-Private Partnerships: Legal Issues (2014) / Chapter Skim
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25 cate project risk,"288 as well as to compensate a private partner for capital or operating expenses.289 Availability payments typically begin when construction is complete and a facility is operational to "smooth [the] upfront capital expense" over the life of an asset.290 Availability payments may make it possible for a private partner to have a higher credit rating, thus improving its access to capital markets and private lenders.291 If availability payments are authorized, a proposed PPP project may attract more investors and contractors.292 Availability payments may make it possible to have a PPP project that otherwise would not be built.293 An availability payment structure may be used to reduce a project's risk profile, permit a transit agency to control user fees, and cap a public sponsor's total payment obligation.294 The payments may include credits for "enhanced performance" or deductions for a failure to meet required performance standards.295 Availability or performance-based payments may be used, for example, with DBOM and DBFOM forms of project delivery.296 For example, if availability payments are to be made in connection with a DBFOM contract, a transit agency would pay the private partner a preestablished, maximum periodic payment.297 PPPs for projects partially funded by an availability payment structure include the Oakland 288 Implementation of PPPs for Transit, supra note 24, at 7.
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26 build approach."303 There have been delays while project sponsors wait for federal approvals, delays that caused additional expense and loss of efficiency and quality.304 However, MAP-21 repealed or consolidated several FTA programs and provided for the streamlining, discussed below, of FTA's New Starts program,305 but "[s] imilar to SAFETEA-LU, New Starts projects are defined as projects with a total capital cost of $250 million or greater or that are seeking $75 million or more in section 5309 funding."306 As a result of MAP-21, Core Capacity Improvement projects are eligible for § 5309 funding.307 Core capacity improvement projects are projects that expand capacity by at least 10 percent in existing fixed guideway transit corridors that are at or above capacity or that are expected to be at capacity within 5 years.308 New Starts and Core Capacity Improvement projects receive construction funds through a Full Funding Grant Agreement (FFGA)
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27 provide opportunities for public-private partnerships."317 Also, [u] nder certain conditions, MAP-21 allows for the use of ‘warrants,' in other words, ways in which projects may qualify for automatic ratings on the project justification criteria.
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28 ess.329 FTA's Interim Guidance allows agencies to proceed with the prequalification of proposers, "but in general does not permit an RFP to be issued until a ROD or Finding of No Significant Impact (FONSI) has been issued by FTA.
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29 Section 20023(b) of MAP-21, amending § 5332, provides that the Government Accountability Office (GAO)
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30 more than the market rate is because union wages, among other wage sources and information, are used to calculate the prevailing wage and 25 percent of the prevailing wages provided by DOL are based entirely on union wage rates.357 Finally, some states have enacted "little Bacon Acts" to cover state and local construction projects. There is evidence of a decline in wage rates in those states that have repealed their little Bacon Acts.358 4.
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