April 01, 2015 Urban Lawyer

Public-Private Partnership: An Innovative Solution for a Declining Infrastructure

by Anika Guevara

Anika Guevara is has a B.A., Florida International University (2012); J.D., St. Thomas University School of Law (2015).

I.  Introduction

Deteriorating infrastructure conditions in the United States beg for an increase in funding, which, due to the current economic conditions, would be difficult to attain without the help of the private sector.1 Public-Private Partnerships (“PPPs” or “P3s”) are a way for federal, state, and local governments to fund infrastructure projects that they may not otherwise be able to afford.2 However, PPPs are not likely to solve the problem of funding infrastructure on the scale that is needed until there is a statutory definition and regulatory framework for PPPs, clarifying the nature of these agreements and the associated legal ramifications.3 When implementing PPPs, the following questions arise and there are no clear answers: (1) are PPPs subject to procurement laws;4 (2)   are PPPs subject to prevailing wage laws;5 (3) are PPPs subject to § 1983 claims;6 and (4) are PPPs subject to bonding requirements.7 

To answer these questions, this article explores the deficiencies in governmental regulations regarding PPPs and the associated legal ramifications.8 Part II of this article lays the foundation for understanding PPPs by defining the term and providing a historical overview of their development.9 Part III serves to explain the difference between PPPs and privatization, clarifying a common misconception – PPPs are not a form of privatization.10 Part IV explores the infrastructure crisis facing the United States, explaining why this crisis is the driving factor responsible for the increase in PPPs across the nation.11 Part V examines the various legal issues that arise out of the federal government’s lack of regulation in the area of PPPs,12 including the conflict between PPPs and procurement law,13 the effect of prevailing wage laws and other laws on PPPs,14 and the applicability of bonding requirements.15 Finally, this article provides a solution to the legal issues discussed, recommending that the federal government enact PPP-friendly legislation that defines the term and sets certain parameters in order to serve as a framework for future PPP agreements.16

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