Impact of HB 781 on Public-Private Partnerships in Florida

Author: Lucas Pizzutti

Introduction

Florida is a state that has embraced Public-Private Partnerships (P3s) as a delivery model and, as such, has developed a statutory framework for not only enabling but facilitating P3s. This legislative session, the Florida legislature has worked to expand the statutory framework for P3s  through the adoption of HB 781, which has been approved by both houses of the legislature and will become law upon signature by the Governor. This bill introduces changes to the existing regulations governing unsolicited proposals for P3 projects. In this overview, we will explore the key provisions of HB 781 and analyze its potential impact on future development projects in Florida.

In Florida, public-private partnerships have been utilized for various projects, and using many different procurement methodologies. The starting point from a procurement perspective may often be a government’s identification of the public need, but on some occasions, the private sector can approach the government with an idea for a potential project; these are called unsolicited proposals. Typically governments at this point can either reject the idea, or agree that is has merits and develop a competitive solicitation for that project. It is crucial to note that the unsolicited proposer from the private sector would still have to participate in the competitive solicitation process, and would not be directly awarded the contract just because they were the ones who first proposed it. What HB 781 does is streamline the process for unsolicited proposals and provides more flexibility to public entities in Florida. The bill introduces changes to the procurement procedures, project qualification, and comprehensive agreement approval process. 

Procurement Procedures

To start, the bill allows public entities to proceed with an unsolicited proposal for a qualifying project without engaging in a public bidding process. Should a government decide to forego the competitive process for a particular project, it must hold an initial public meeting where the proposal is presented and affected public entities and members of the public are allowed to provide comments. Following this, a second public meeting must be held, where the government determines if the proposal is in the public's interest based on specified factors. These factors are:

1. The benefits to the public.
2. Financial structure and economic efficiencies.
3. Qualifications and experience of the private entity.
4. Compatibility with regional infrastructure plans.
5. Public comments.

If a government decides to proceed with an unsolicited proposal without engaging in a public bidding process, it must also publish a report in the Florida Administrative Register for at least seven days. This report should include the public interest determination, the factors considered in making the determination, and the government's findings based on each considered factor. HB 781 also revises the requirements for approving a comprehensive agreement. Previously, public entities had to determine that the proposed project would be owned by the government upon completion, expiration, or termination of the agreement. However, the bill removes this requirement for unsolicited proposals. Instead, public entities only need to ensure that the proposed project is in the public's best interest or will be conveyed to the government upon completion and payment of the financed amounts, which provides more flexibility in the financing of the project.

Potential Implications of HB 781

The passage of HB 781 presents several potential implications for future development projects in Florida under P3 arrangements, that ultimately give local governments more flexibility to pursue their goals. One of the potential benefits of the legislation is that, due to the new streamlined process for unsolicited proposals, projects will be able to be delivered more quickly than before if governments choose to utilize this option. This could also reduce administrative burdens, further enabling quicker implementation of infrastructure projects. Closely related to this is all of the associated cost savings for both the public entity and the private sector, since a formal competitive solicitation process can be avoided when justified, while still maintaining certain safeguards. Further, this undoubtedly serves as a powerful incentive to the private sector to introduce meritorious projects to the public sector for consideration. Another impact that will be interesting to monitor is the public input that would come from the public meetings prior to project approval. The meetings and the considerations of the public comments can help maintain trust and accountability in the development of public projects throughout this alternative process, and might therefore serve as a valuable teaching tool to the general public on P3s. 

However, it has to be noted that this bill does not eliminate the previous competitive framework, but only creates this new process as an alternative. Without a doubt, there are times where a local government receives best value from the full competitive solicitation process; the process is comprehensive, eminently transparent, and allows a government to benefit from the open marketplace of proposers’ ideas. Under this new bill, that avenue remains open to them. The importance of the bill is that it creates the flexibility for governments to decide on a case-by-case basis which procurement tool is best suited for the particular situation

Conclusion

HB 781 marks a significant step toward giving governments in Florida further flexibility in the procurement and delivery of P3s. By opening up this new avenue for unsolicited proposals, a government can now choose between two different types of processes. As Florida continues to pave the way in terms of P3 legal frameworks, HB 781 serves as an example of giving governments the tools and options they need to craft their success.