Throughout the P3 process, keep these principles in mind to set the project up for success.

• The process is more important than the product: Culture trumps strategy, creating a culture based on trust and transparency is essential to achieve the best outcomes. Engaging with internal decision makers and key stakeholders early on, and throughout the process, can help break down barriers, pinpoint solutions, and explore new ways of doing things.
• Demonstrate preparedness: Make sure internal resourcing and knowledge is aligned before pursuing this process and stay aligned throughout the project. An agency’s credibility will suffer if bidders perceive that internal functions are operating in a disjointed way.
• Specificity rules: High-quality RFPs are built in a bespoke way. They provide specific details and describe the unique expertise, knowledge, and skillsets required to achieve project deliverables requires in a P3 delivery model. Avoid reusing any stock templates as-is. Take the care and time to develop well thought-out and customized RFPs, and this will be reflected in the quality of candidates who bid on the project.
• Seek local expertise, wherever available: Local advisors understand the social, economic, and political environmental of the area. With a boots-on-the-ground presence, local advisors can promote and foster relationships with local stakeholders and agency partners who best understand the context within which the project operates.
• Agencies decide; advisors advise: Advisors should not be expected to run the project, keep costs under control, or make major decisions. Agencies must ensure they have a culture that allows for efficient and transparent decision-making throughout a P3 project and have people in place available to provide this function (more details in Section 2.4 Outlining roles and responsibilities).

Before embarking on this process, agencies should have the following internal elements in place.

• A clear vision for the project:e., defining your aspirations, reviewing the current state of project delivery, building the delivery team/unit and establishing a guiding mission, etc.
• Clear opportunity that requires use of a P3: i.e., evaluating past and present performance, articulating why a P3 would improve project delivery and long-term performance, etc.
• Clear targets and scope: i.e., determining the strategy, visualizing the delivery chain (e.g., individuals and partners involved in delivering a specific task, product, service or change, etc.), setting targets and establishing critical paths, etc.
• An engaged and streamlined oversight function: i.e., establishing routines to drive and monitor performance, empowered decision-makers to quickly resolve issues, etc.
• Dedicated resourcing: i.e., consistent resource capacity, communicating the delivery objectives/message, building internal relationships through accountability, trust and transparency, etc.

Agency-specific capabilities

Agencies are expected to have core internal capabilities to successfully manage the P3 project. Agencies should determine how to allocate resourcing for these capabilities throughout the project prior to procuring advisory services.

Some of these include (but are not limited to) the following:

• Oversight (decision-making) function: Senior leaders responsible for signing off on key deliverables and milestones.
  • This should be limited to a small number of decision-makers accountable for project success—ideally, there will be a single sign-off authority throughout the project, and/or for each key deliverable or milestone to ensure efficiency.
  • While many agencies employ steering committees to provide this function, an alternative function is recommended, i.e., assigning project champion(s). A project champion can help streamline the approvals process for selecting advisors and optimize the time available to deliver key milestones at each stage of the project.

• Project champion(s): Empowered senior administrator(s) who has sign-off authority and oversees the work of the project manager and project team.
  • Project champion(s) should be kept informed at every phase of the project and sign off on decisions at key milestones, as needed.
  • They should also have sufficient internal agency knowledge to direct the project manager/project team to people or resources inside the agency when additional expertise or input is needed.

• Project management: Have experience in both overseeing and coordinating complex project work and managing resources/personnel throughout the project.
  • Project managers are there to ensure project timelines are met and are responsible for evaluating whether key milestones/deliverables meet expected requirements determined through the RFP process.

• In-house expertise (may include staff from internal departments like legal, financial, communications, risk management, etc.): Should have experience and literacy in their field of expertise and be available to consult throughout the procurement process.
  • While they are not responsible for P3-specific deliverables, input from in-house experts will be useful to project managers and decision-makers when evaluating the proposals submitted through the RFP process.
  • These resources should also expect to be available in post-procurement activities to consult, as needed.

Agencies should outline clear roles and responsibilities at the start of the project in the form of a well-defined Project charter to foster alignment and collaboration across all parties. This will enable more efficient delegation of authority, decision making and problem solving, and ensure accountable parties are responsive and engaged at key project milestones.  Moreover, the Project Charter ensures there is a roadmap for successfully executing a P3 on the Project.

In complex projects with multiple parties like a P3, it is critical that everyone is clear on what will be expected of them. Various internal agency resources will play a different role than the advisors hired into the project.

A well-defined project charter will ensure all parties understand their roles and responsibilities at the start of the project.  It should include high-level project plan details, including key deliverables, milestones, and timelines.  Table 1 provides Agencies a roadmap for developing a Project Charter.Table 1: Project Charter – Sample Table of Contents

AIAI is available to provide agencies with more information on the purpose and need of a Project Charter and can play a pivotal role in their development.

Below is a high-level summary of the capabilities and roles/responsibilities required from agency and advisory partners in the context of a P3 project. Agencies can use this as a starting point for the project charter and build in additional project and sector-specific details.

Please also reference the following sections available in this guide:

• Section 3: Additional specifications for advisory partners
• Appendix A: Detailed scopes of work for advisory services
• Appendix B: Evaluation score cards
• Appendix C: Sector-specific scopes of work

*Composition of the evaluation committee

The formation of an evaluation committee is a vitally important process in selecting P3 advisory services. Agencies should form this committee and meet in advance of receiving proposals to create evaluation criteria (i.e., rating system—see appendix B), and agree on how the criteria will be applied (i.e., scoring system—see appendix B).

When determining the composition and size of the committee, agencies should carefully consider the key internal capabilities required to perform the function to operate in an efficient manner. The size of the evaluation committee should not be so large that it becomes difficult and time-consuming to manage.

Agencies should aim to limit the size of the committee to no less than three (3) and no more than five (5). Larger, more complex, or more politically-sensitive projects may require larger evaluation committees.

The composition of the committee should include the project manager, as well as individuals that can evaluate the qualifications and experiences of the advisors against the scope of work and the evaluation criteria. This may include pulling in in-house agency expertise as needed, like legal, financial, communications, risk management, etc. The composition of the committee may vary, depending on the advisor or RFP bid being assessed.

In some cases, if the agency has no P3 experience, they should identify an impartial evaluator (e.g., from a partner agency, or experienced P3 office) proficient in P3s to participate in or advise on the committee.

Agencies should define advisory budgets after a draft scope of work has completed and the type of advisors required has been determined.

Typically, budgets for external advisors are determined during the budgetary planning cycle or at the start of the fiscal year, long before there is a precise idea of the scope of work and scale of the advisory services required. This cycle can lead to a mismatch of resources needed to pay the level of work and high-quality advisors. In some cases, it steers agencies toward using selection processes based on lowest cost only (for more details, see Section 2.7, Evaluation approaches to consider).

Instead, agencies should determine the maximum budget that should be allocated to the payment of advisory services. This can be done at the same time they set the timeline for the project.

Agencies should keep budget constraints in mind when drawing up scopes of work to avoid having to make difficult compromises later to meet an affordability threshold. It is a best practice for the agency to reach out to other agencies who have undertaken similar scopes of work to discuss pricing. AIAI can play a vital role in facilitating such discussions.

Fee rates for each position are based on expected years and type of experience. It is possible for someone with limited experience to set up a company and call themselves a partner. This does not mean that they should be given the fee rates quoted for partners or directors in this table.

RFPs should clearly state the payment method and structure with which the agency will reimburse advisors. Agencies must plan and control advisors’ costs carefully to prevent cost overruns.

There are various payment mechanisms and structures that agencies might consider. Before deciding, agencies should review any previously completed advisory contracts in their jurisdiction for reference, and then consider the specific circumstances of their project to select the most appropriate approach.

Agencies may consider a combination of one or more approaches, outlined in Table 3.

Note that in some instances, there may be a need to make modifications relating to fees or the range of services that the advisors agree to provide.

Note: Contingent / Success Fee Structures are not recommended

Agencies should avoid paying advisors on a contingent / success fee structure.

A contingency fee structure is a compensation arrangement, contingent upon successfully completing a transaction. Deciding whether to use contingent fee structures requires a defensible estimate of what result was potentially achievable, and what more could have been accomplished through increased effort.

Paying contingent fees have “long been considered contrary to public policy because such arrangements may lead to attempted or actual exercise of improper influence[1].” In 10 U.S.C.2306(b) and 41 U.S.C.3901, Congress affirmed this public policy, which is why it is not recommended.

Agencies should assess various evaluation approaches and align on one to ensure that the procurement process leads to the selection of the most appropriate advisors for the project. It is important to ensure that the evaluation approach is compliant with Mini-Brooks Act requirements[1] (i.e., agencies select advisors’ firms based on their competency, qualifications, and experience rather and price), where applicable.

The following table represents some of the most common approaches used to evaluate proposals, from a fiscal and budgeting lens.

Selecting the best evaluation approach

Each agency will have a distinct set of circumstances to determine which approach is best.

The following flowchart describes suggested evaluation approaches based on typical circumstances that agencies may encounter.

Table 5: Selecting the best evaluation approach

Additional best practices in evaluation

• Once the agency selects an evaluation approach to follow, they should not deviate from it; otherwise, the integrity of the process will be compromised, and the agency may be subject to legal challenges by bidders.
• Post-contract negotiations should be kept to a minimum; otherwise, the agency loses much of its negotiation power with the selected advisors.
• To maintain the agency’s negotiating position, unsuccessful bidders should not be informed of the evaluation results until a contract has been signed.

To maintain integrity of the evaluation process, it is essential that the evaluation is itself transparent. Evaluators should first score the submissions independently, and then have a general discussion to reach a final consensus score, with the presence of the agency’s procurement officer. The procurement office is also responsible for taking meeting minutes to document the process.

It is a best practice that the procurement officer debriefs with unsuccessful bidders and provide a clear explanation of why they were not successful after the results have been released and the contract with the winning bidder has been signed. This ensures transparency is maintained and provides unsuccessful bidders with an opportunity to learn about their proposal’s strengths and weaknesses. This supports the development of better-quality bids in future procurements with the agency and elsewhere.

Agencies should set realistic timelines and expectations for key deliverables when preparing the RFP. Advisors tend to lose faith in the process and project if they feel the agency is being too aggressive or unrealistic in its expectations.

The table below illustrates expected timelines for various project milestones. Note the following nuances:

• Complex linear or civil infrastructure projects such as bridges, roads, railways, transit, and highways are likely to be on the upper limit of the timeline range, versus vertical or social infrastructure projects such as courthouses, administrative buildings, schools, or water/wastewater.
• Projects involving environmental approvals, stakeholder consultations, utility agreements, property acquisitions, etc. could prolong timelines.
• Delays can occur in the early phases of project development: agencies should account for this when setting timelines and identify critical paths/contingencies early on to resolve potential bottlenecks.

Table 6: Approximate P3 project timelines

Agencies should include not just conflicts of interest, but also unfair advantage clauses to ensure competition during the procurement process.

It is crucial to have competitive tension during the procurement process. If advisors hired to support this process also obtain a role with potential proponents competing for the project work, then this creates both a conflict of interest, and an unfair advantage for those advisors.

Agencies usually have conflict of interest clauses, but they often do not include an unfair advantage clause in their RFP. The following language should be included when hiring advisors that may have access to sensitive information of the project:

“In agreeing to take on the role of advisor for the project, the advisor, its firm, and potential affiliates will not be eligible to provide services, directly or indirectly, to any potential bidder in relation to the project. Signing of the contract will restrict the advisor’s future involvement with teams competing in any selection process for some or all the work related to the delivery of the project. Please note that a team bidding for delivery of the project will be disqualified from participating in the project’s competitive selection process if the advisor were to become a member of their team. An individual or organization would be considered to be a member of a team if they have a direct financial interest in the success of a proposal or assist in the development of a proposal.”

There may be instances where an advisor or their sub-consultants have performed work that does not constitute an unfair advantage. If the advisor or their sub-consultants request a relief of this clause, the agency should consult their legal counsel or procurement officer to assess the proposed unfair advantage, as well as the measures that can be adopted to minimize this risk, such as sharing relevant information with the other bidders.

Depending on the complexity of the project and certainty about whether the project will go ahead, agencies might consider hiring advisors in phases. If a phased approach is needed to hire advisors, agencies should limit this to no more than two phases after an initial appointment. Agencies should synchronize approval processes within each phase the greatest extent possible to prevent delays.

Hiring advisors in phases will have the primary benefit of minimizing the agency’s financial exposure if the project is delayed or cancelled for any reason during the pre-procurement phase.

If the agency decides to hire advisors in this manner, they should include a clause like the one below to reserve their rights to award advisors any future scope of work to maximize the benefits of procuring advisors in a phased approach.

“The [Insert Agency Name] may in its sole discretion and on an as required basis extend the [Advisory] services contract entered pursuant to this RFP to include services in addition to the [Insert prior scope of work].  However, the [Insert Agency Name] is not committed to solicit or purchase any such additional services from the [Advisor] retained pursuant to this RFP.  In addition, the [Insert Agency Name] retains its right (if may chooses) to initiate a subsequent procurement process to retain an [Advisor] for any additional scope of work.”

If future phases of work are expected to take place over multiple years, the agency may want to insert a market-relevant inflationary indexation factor (e.g., 5%/yr.) for bidders to apply as part of their financial proposals to reduce pricing risk on their end.

Agencies should request at least three (3) and no more than five (5) references from bidders to support past projects listed in the statement of firm qualifications and/or on curriculum vitae (CVs) of their individual team members.

All firm qualifications and their associated references should be no more than seven (7) years old to ensure qualifications and experiences are relevant and current. Agencies should allocate an appropriate amount of time to verify all references listed in the proposal.

Reference checks are an invaluable way to gain independent validation about the quality, commitment, experience, and speed at which the advisory firm and its team members completed their previous work. Agencies should incorporate references as a part of their overall evaluation criteria (please refer to Appendix B for more detail).

There are multiple ways agencies can approach conducting advisor reference checks, two of which are outlined below.

Table 7: Approaches to Conducting Reference Checks

Approach when checking references

When conducting reference checks, agencies should probe on the following topics:

• Referee’s role and relationship to the bidder, including how closely they collaborated with the advisor on the work.
• Description of the work the referee and bidder participated in, including specific project details to verify their relationship and what the bidder claims in their RFP application.
• Highlights about the bidder’s delivery of the work, including specifics around project successes, as well as challenges they encountered and how they resolved those challenges.
• Questions about the bidders’ specific expertise and how they demonstrated their expertise/knowledge throughout the project to the referee.

In the RFP, agencies should include details about the procedures that advisors will be required to follow to itemize and report on their work throughout the project.

It is a best practice from both a transparency and accountability standpoint to ensure advisors’ work throughout the project matches with the expected project deliverables outlined in the RFP.

Agencies can use various methods to accomplish this, including (but not limited to) the following:

• Requesting a detailed breakdown of specific tasks, approximate timing, and expected deliverables at each phase outlined in the proposal.
  • Monitoring progress and deliverables throughout the project against this proposal.
• Requesting progress reports that attach to each invoice to assess the earned value in the invoices.
  • Asking for a description of tasks and associated hours being charged for each team member listed in the invoice.
• Verifying attendance during meetings or on-site visits.

Examples of best practice templates for payment structures and invoicing are available in Appendices E and F.

Agencies should specify requirements in the proposal to prevent or minimize turnover or substitutions of key personnel throughout the project.

Some projects have exceptionally long durations. Regardless of how well a project is managed and progressing, at times, advisors’ firms may experience either attrition, or increased work volumes that requires them to prioritize other projects, based on demand.

Agencies can prevent (or at least minimize) excessive disruptions that may occur due to turnover by including clauses in their advisory contracts that specify only the individuals named in their respective proposal can perform work. If a substitution must be made over the course of the work, a process should be outlined in the contract that specifies that a mutually agreed-upon replacement would be provided who has equal or greater qualifications and/or experiences.

The following clause is suggested to be included in the agency’s RFP documents when managing substitutions of key personnel.

“The advisor should not substitute key personnel (e.g., Project Manager and others listed by name in the price proposal) or subconsultant without prior written approval from [Insert Agency Name]. The advisor must request and justify the need for the substitution and obtain approval from [Insert Agency Name] prior to use of a different key personnel. The proposed substituted person must be as qualified as the original and cannot alter the advisor’s price proposal.”

Agencies can request that individuals listed in the proposals must attend regular meetings and calls. This gives the agency frequent opportunities to ensure that individuals listed in the proposal are consistently performing the work.