Search

The U.S. transportation industry has long called for a schedule and cost benchmark tool to assist project sponsors with developing project delivery plans benchmarked in reference to similar past projects across the nation. Such a benchmark tool has recently been developed in response to the industry demand and a mandate of the Fixing America’s Surface Transportation Act. The tool capitalized on the Information Source for Major Projects database, which adopted standard processes and uniform terminology for documenting critical milestones throughout the project lifecycle. Based on 137 major transportation projects, the benchmark model produces schedule benchmarks on environmental study, procurement, and implementation processes. Also, the benchmark tool recommends a cost benchmark based on the Federal Highway Administration’s standard. Users have the flexibility to define a benchmark level and a suite of project features including type, size, class of action required under the National Environmental Policy Act, and delivery method such as design-bid-build, design-build or public–private partnerships. Benchmark level is the percentage of projects that outperform the other projects with the same selected features. The tool promises immense potential for milestone planning and can provide insightful expectation of project milestones in support of delivery method selection. Included in the tool are benchmark charts, a handy reference from which schedule benchmarks can be read. This paper demonstrates the use of the tool in a case example.

Pushback for public–private partnerships (P3s) comes in part from their purported favoritism toward large firms. However, no study has empirically verified this claim. This paper examined the Disadvantaged Business Enterprise (DBE) program to assess whether delivery methods play a role in the participation of minority- and women-owned firms in federally assisted transportation contracts. A sample of 134 contracts from the US Major Transportation Project Database served as the dataset to run linear regressions. Results revealed that P3 associates with higher DBE goals than design–bid–build (DBB). Plausible explanations include P3 being associated with a larger contract size, more public attention, more potential subcontracting opportunities with design included in the package, and intensified agency desire for greater diversity in DBE subcontracts. Moreover, the delivery method has an insignificant effect on DBE attainment. This paper also introduces the DBE envelope, a radar plot capable of graphically assessing DBE program implementation.

Private investment through revenue bonds has become an important source of financing for public agencies seeking to implement public–private partnership (P3) projects. It has been a long-standing assumption that private financing exceeds the limited investment opportunity attributed to P3 projects in the pipeline. This assumption, however, remains unexamined. Basic economics theory states that prices go up if demand exceeds supply. Therefore, this study presents the construction and performance of the P3 surface transportation bond index to evaluate private capital for P3 projects. The index will help encourage private investment in P3 projects in addition to measuring the return of such investment on a market basis. The index can also disclose the risks of P3 revenue bonds and potentially offer an investment instrument in the secondary market.

Public–Private Partnership (P3) handback experience is very limited in the U.S. and internationally. This paper analyzes the handback experience in three highway P3 projects: East-Link Bridge in Dublin, Ireland, Highway 4 (VT4 Järvenpää-Lahti) in Finland, and M4 Tollway in New South Wales, Australia. Two of the projects did not have any material handback clauses in their P3 contracts. Still, the handback processes and outcomes of all three projects are considered successful. The projects experienced a relatively smooth handback process, mainly because of very good working relationships between the contracting authority and the P3 concessionaire. There have not been significant technical quality concerns or problems in the years immediately following the handback. Other drivers for successful P3 handback include clear definition of handback requirements, sufficient incentives and protections, clear procedures and joint inspection processes, a collaborative approach, and workforce sustainment. These contractual requirements and financial incentives and protections are very beneficial as working relationships between P3 agencies and concessionaires will not always be excellent, which could lead to less smooth handback processes.

Crowdfunding is a tool to raise capital for a project or venture from individuals (the crowd) through an intermediary online platform. In the United States, the passage of the Jumpstart Our Business Startups Act in 2012 has led to a rapidly changing legislative and regulatory environment that provides the flexibility to use crowdfunding as a financial mechanism for project funding. This flexibility used in public–private partnership (PPP) projects provides the opportunity to engage institutional and individual investors as direct equity investors. This crowdfunded PPP model results in an enhanced version of the current PPP model and creates value beyond just the financing benefits. Because of the novelty of the approach and the potential impact on taxpayers, a comprehensive look at the approach is needed. This paper introduces a crowdfunded PPP model and begins a policy review on the model by using an analysis of strengths, weaknesses, opportunities, and threats (SWOT). This analysis looks through the lenses of various prisms, including SWOT. The strengths are equal investment opportunities, return on equity, enhanced stakeholder support, and increased transparency. The weaknesses are induced complexity, administrative and accounting challenges, third-party confidential information, and social equity. The opportunities are enhanced prioritization and idea exchange. The threats are business failure, potential for fraud, and possible misconceptions. Future research will be needed for further development and study of the implications and implementation of an enhanced PPP model that uses crowdfunding.

Crowdfunding is a tool to raise capital for a project or venture from individuals (the crowd) through an intermediary online platform. In the United States, the passage of the Jumpstart Our Business Startups Act in 2012 has led to a rapidly changing legislative and regulatory environment that provides the flexibility to use crowdfunding as a financial mechanism for project funding. This flexibility used in public–private partnership (PPP) projects provides the opportunity to engage institutional and individual investors as direct equity investors. This crowd-funded PPP model results in an enhanced version of the current PPP model and creates value beyond just the financing benefits. Because of the novelty of the approach and the potential impact on taxpayers, a comprehensive look at the approach is needed. This paper introduces a crowdfunded PPP model and begins a policy review on the model by using an analysis of strengths, weaknesses, opportunities, and threats (SWOT). This analysis looks through the lenses of various prisms, including SWOT. The strengths are equal investment opportunities, return on equity, enhanced stakeholder support, and increased transparency. The weaknesses are induced complexity, administrative and accounting challenges, third-party confidential information, and social equity. The opportunities are enhanced prioritization and idea exchange. The threats are business failure, potential for fraud, and possible misconceptions. Future research will be needed for further development and study of the implications and implementation of an enhanced PPP model that uses crowdfunding.

As public-private partnership (PPP) to address a significant funding shortage for transportation gains momentum in the United States, public agencies are also under pressure to demonstrate value for money and to deliver more for less on PPP deals. One critical challenge is how to optimize the concession length and amount of public subsidies so that a successful partnership can be established without undue sacrifice of the public interest. This paper presents an option game model for optimizing the concession length and public subsidy on a PPP project. The model integrates the flexibility of project expansion into the lifecycle analysis of project value, in addition to considering key factors, including subsidies, toll rate, and traffic uncertainty. The First Coast Outer Beltway project is used as an example to illustrate the process and merit of the option game model. In particular, by analyzing the trade-off between concession length and public subsidy, the paper provides new insights and implications for better PPP deal design.

Subsurface explorations are performed to provide necessary information on soil characteristics and properties. Timely completion of the subsurface explorations is important for successful project development and design. Failure to deliver geotechnical information may cause project delay and damage project performance. Previous literature has seldom examined schedule performance and delay of subsurface exploration. This study aimed to evaluate the operational performance of subsurface exploration by analyzing empirical data on 77 subsurface exploration projects collected between October 2009 and June 2011. The delay analysis identified the primary effects on operational performance of subsurface exploration, namely, unclear data requirements, scope change, permitting, and unexpected conditions. A forecasting model to predict project duration from variables such as number of borings, boring types, early performance warnings, driller issues, and risk events is proposed, and a series of preliminary recommendations to mitigate delay risk is suggested.

Subsurface explorations are performed to provide necessary information on soil characteristics and properties. Timely completion of the subsurface explorations is important for successful project development and design. Failure to deliver geotechnical information may cause project delay and damage project performance. Previous literature has seldom examined schedule performance and delay of subsurface exploration. This study aimed to evaluate the operational performance of subsurface exploration by analyzing empirical data on 77 subsurface exploration projects collected between October 2009 and June 2011. The delay analysis identified the primary effects on operational performance of subsurface exploration, namely, unclear data requirements, scope change, permitting, and unexpected conditions. A forecasting model to predict project duration from variables such as number of borings, boring types, early performance warnings, driller issues, and risk events is proposed, and a series of preliminary recommendations to mitigate delay risk is suggested.

As public–private partnership (PPP) to address a significant funding shortage for transportation gains momentum in the United States, public agencies are also under pressure to demonstrate value for money and to deliver more for less on PPP deals. One critical challenge is how to optimize the concession length and amount of public subsidies so that a successful partnership can be established without undue sacrifice of the public interest. This paper presents an option game model for optimizing the concession length and public subsidy on a PPP project. The model integrates the flexibility of project expansion into the life-cycle analysis of project value, in addition to considering key factors, including subsidies, toll rate, and traffic uncertainty. The First Coast Outer Beltway project is used as an example to illustrate the process and merit of the option game model. In particular, by analyzing the trade-off between concession length and public subsidy, the paper provides new insights and implications for better PPP deal design.

Growing public awareness of climate change requires transportation professionals to integrate green concepts into the transportation planning, design, construction, and operation processes. For the past decade, although many studies have been done on carbon emission reduction strategies for on-road and off-road operations, few studies have dealt with emission reduction issues in highway project delivery. This paper, based on a survey of 39 state departments of transportation, reports the green contracting practice for delivering highway projects in the United States. Four levels of green contracting strategies and their application procedures are identified. Organizational reasons for successful implementation of green contracting are presented and discussed. More important, the study discovers there is a substantial lack of consistent methodology and processes for implementing green contracting. Nor is there a common vocabulary in this field. In an effort to promote green contracting in highway construction, the study suggests that state highway agencies (a) establish organizationwide green initiatives, (b) develop green specifications and standards, and (c) encourage broader industry participation.

Growing public awareness of climate change requires transportation professionals to integrate green concepts into the transportation planning, design, construction, and operation processes. For the past decade, although many studies have been done on carbon emission reduction strategies for on-road and off-road operations, few studies have dealt with emission reduction issues in highway project delivery. This paper, based on a survey of 39 state departments of transportation, reports the green contracting practice for delivering highway projects in the United States. Four levels of green contracting strategies and their application procedures are identified. Organizational reasons for successful implementation of green contracting are presented and discussed. More important, the study discovers there is a substantial lack of consistent methodology and processes for implementing green contracting. Nor is there a common vocabulary in this field. In an effort to promote green contracting in highway construction, the study suggests that state highway agencies (a) establish organizationwide green initiatives, (b) develop green specifications and standards, and (c) encourage broader industry participation.

Capital structure and revenue-sharing agreements lie in the essence of balancing public and private interests in public-private partnership (PPP) contracts. In the United States, many PPP projects may not be fully self-financed through tolls or other user fees because of insufficient revenue streams. With a limited debt capacity secured by toll revenues, most PPP projects must be supported by both private equity investments and public funds. The equity structure is critical in a PPP contract because it implies risk and profit sharing and therefore provides a mechanism for private incentive and protection of the public interest. This paper presents a structured approach to determining the debt-equity investment in PPP projects. Scenarios are generated by using linear programming and probability programming models to reach the optimal equity structure under risk and uncertainty. The I-10 connector project is used as a case study to demonstrate the optimization process. The model is especially useful for public agencies to (a) estimate the range of private equity investment, (b) determine the target equity structure, and (c) document the benefits and costs of private financing for a successful PPP contract.

Capital structure and revenue-sharing agreements lie in the essence of balancing public and private interests in public–private partnership (PPP) contracts. In the United States, many PPP projects may not be fully self-financed through tolls or other user fees because of insufficient revenue streams. With a limited debt capacity secured by toll revenues, most PPP projects must be supported by both private equity investments and public funds. The equity structure is critical in a PPP contract because it implies risk and profit sharing and therefore provides a mechanism for private incentive and protection of the public interest. This paper presents a structured approach to determining the debt–equity investment in PPP projects. Scenarios are generated by using linear programming and probability programming models to reach the optimal equity structure under risk and uncertainty. The I-10 connector project is used as a case study to demonstrate the optimization process. The model is especially useful for public agencies to (a) estimate the range of private equity investment, (b) determine the target equity structure, and (c) document the benefits and costs of private financing for a successful PPP contract.